New organizing methods: Card check and neutrality agreements

By Eric Heubeck
web posted November 29, 1999

Faced with declining membership rolls, organized labor is searching for new ways to organize nonunion workplaces. Unions have come up with one new method: they urge employers to voluntarily adopt what are called "neutrality" and "card check" agreements. These organizing methods deny workers the right to vote in a secret ballot election on whether they want to join the union. Just as significant are the methods that unions use to persuade companies to agree to these provisions. Unions clearly regard these organizing methods as crucial to their future success. After he received the AFL-CIO endorsement for President, Vice President Al Gore made it a point to address the union federation and assure it of his support for neutrality and card check agreements.

According to federal labor law, an employer confronted by labor organizers is not permitted to threaten employees that it will move or shut down operations if they vote for union representation. An employer also cannot offer to reward employees with pay increases or bonuses if they do not join a union. In this sense, employers cannot influence worker decisions.

But a so-called neutrality agreement is different. It obligates an employer not only to accept a union's campaign to convince its employees about the merits of unionization but to refrain from offering them arguments against unionization. Currently, the free speech provisions of federal labor law permit an employer to explain to employees why they would be better off not joining a union and to call their attention to bad experiences that other workers have had after forming a union bargaining unit. However, under a neutrality agreement, the employer agrees to remain silent.

A card check agreement is permitted under current federal labor law. Invariably accompanying a neutrality agreement, the card check agreement requires the employer to recognize the union if at least 50 percent of the employees sign cards indicating that they support the union. It is generally understood that a workplace is as good as unionized if the employer has reached neutrality and a card check agreements with a union. By contrast, a union that cannot win a card check campaign at a workplace is probably wasting its time trying to organize it.

Neutrality Agreements

Some neutrality agreements do more than deny the employer the right to campaign against the union. They also extend preferential hiring rights to union members at unorganized facilities, grant union organizers access to employer facilities to hand out literature and meet with workers during company time, secure employer agreement that contract negotiations for the bargaining unit will begin shortly after it is formed, and submit points of contention to binding arbitration if no agreement is reached. Most importantly, many neutrality agreements extend coverage of its provisions to all affiliates of the company adopting the agreement.

Why would any employer voluntarily accept a neutrality and card check agreement? Unions have found ways to persuade them that it is in their narrow self-interest. One major way is "bargaining to organize." Here the union uses the collective bargaining process to obtain the employer's agreement to accept provisions that promote union organizing at the company. Unions argue that they can only win contract concessions among employers if they can achieve a threshhold level of membership density within a particular industry. They even may agree to short-term sacrifices in current contract negotiations in order to build up the union over the long term. This means that unions have to lobby their own members to understand the benefits of industry-wide organizing. In some cases, union members who already work at unionized work sites need to be persuaded to accept less generous benefits to serve what the union argues is their long-term self-interest.

The union must put a good deal of effort into convincing its own members that organizing is vital to their long-term well-being. For instance, the United Food and Commercial Workers International Union (UFCW) has produced a video entitled "Market Share: The Key to Security" which explains that "there is a direct connection between size of our market share and the kind of contract we can get during negotiations. When union market share is high, the stores are on a level playing field: their prices are about the same because their labor costs are the same. That means we can negotiate from a position of real strength. When nonunion stores move in with low wages and minimal benefits, our union employers can't compete, so at contract time, they ask us for concessions."

Neutrality agreements generally say that neither side will run a negative campaign against the other. This means that the union won't try to undermine the public image of the company, and in return the company won't attack the union's organizing drive. Some employers reach neutrality agreements in exchange for the union's promise not to strike. The company may also agree to give the union a list of the names and addresses of its employees.

The AFL-CIO publishes a weekly update called "Work in Progress" that gives some indication of how pervasive this sort of organizing has become. The updates, which summarize all organizing victories by AFL-CIO unions across the country, frequently mention that union certification was achieved through card check campaigns rather than through union representation elections supervised by the National Labor Relations Board (NLRB).

Neutrality agreements seem to be used most frequently by service sector unions like the Service Employees International Union (SEIU), although manufacturing unions like the United Auto Workers and the Steelworkers have also made neutrality a major priority in their collective bargaining negotiations. The Communications Workers of America (CWA) has worked hard to use these agreements to maintain its presence in the telecommunications industry. It is leveraging its strength to make sure that new and fast-growing industries like wireless and the internet will not be non-union. This strategy has been successful -- six of the seven major phone service providers have accepted neutrality agreements which cover all areas of their business.

Card Check Agreements

A card check agreement allows a union to bypass the traditional NLRB certification process which establishes the procedures that lead to a secret ballot election for union representation. Unions claim that it's too easy for companies to file objections to the results of an NLRB election which, they say, can keep the union's status on hold for years. Unions prefer card checks because they are faster than NLRB elections; many card check campaigns take no more than a month. The card check campaign takes only as much time as is needed to get half the employees to sign cards which state that the employee wants to be represented by the union.

Unions object to what they perceive as the NLRB's lengthy appeals process and protracted court proceedings. Richard Bensinger, former director of the AFL-CIO's organizing department and a strong proponent of card check and neutrality agreements, has said that "Our position is that the National Labor Relations Act is outdated and virtually useless, and therefore we're choosing that route fewer and fewer times." However, according to San Francisco labor lawyer Patrick Jordan, NLRB guidelines say an election must be held within 42 days from the time that the union requests it, during which time all eligibility disputes must be resolved.

The real reason unions oppose certification elections is that they have found they lose them. When employers are allowed to state their own positions and when workers are allowed to vote in secret, unions lose elections around 50 percent of the time. Even when unions undertake a NLRB-supervised election they must conduct a preliminary card check or petition campaign to call for a secret ballot. The union may get well over 50 percent of the employees to sign cards or a petition asking for an election, but it will often fail to win 50 percent of their votes in a subsequent NLRB certification election. It's no wonder then that the union would much prefer to reduce its organizing activities to a single step that avoids the costs of a full-blown campaign. Unions believe the much higher level of union representation in Canada, where over 30 percent of employees are unionized compared to less than 14 percent in the US, is the result of labor laws there that provide for union recognition based on nothing more than the card check.

Labor unions are excited by this organizing strategy because they think it will increase the number of union workplaces and reduce the number of legal challenges from employers. Unions believe that the more success they have at organizing, the more success they will have at the bargaining table obtaining benefits for their members. Consequently, they are spending more resources on organizing. The most aggressive union locals will spend 40 percent of their budgets on organizing workplaces to increase union membership. This is quite dramatic compared to complacent union locals that may spend no more than 3 percent on organizing activities.

One UAW publication makes the point quite clearly. It says, "We must...understand that the percentage of union density in our industries/sectors has a direct relationship to what we can expect to win in bargaining. . . To meet our challenges, organizing must become a central part of our culture, not merely an afterthought to collective bargaining, servicing and political action."

The literature of the American Federation of State, County and Municipal Employees (AFSCME) is even more explicit in describing why it's necessary to wrest card check and neutrality agreements from employers: "Under the NLRA, employers can legally bar non-employee organizers from the workplace, give anti-union ‘captive audience' speeches during work time, send anti-union literature to workers' homes, and hold ‘one-on-one' or small group meetings with workers on union issues."

But attorney Patrick Jordan argues that companies are fully within their rights. "There's nothing wrong with an employer holding captive audience meetings, because it's paying wages. And if it chooses to talk to employers about unions rather than engaging in production, then that's its right. Just because the employer does that doesn't create a concomitant right on the part of a union to have access to employees on the company's property."

Union critics say card check agreements are popular with union officials because such agreements allow them to intimidate recalcitrant employees. After all, it's public knowledge when an employee refuses to sign a card. Employers also say card check elections do not truly represent employee opinions, and many are reluctant to allow their employees to be unionized under these conditions. If employers sell out their employees by negotiating the termination of their right to a secret ballot, they may find that they have purchased more employee conflicts for the price of union peace.

The deceptive use of the term "neutrality agreement" is particularly unfortunate. Most people equate neutrality with even-handed fairness. But neutrality assumes that there are countervailing forces. For instance, an employer might be required to stay neutral in the event that two union rivals sought to organize its employees. But in a certification election, the company is the other side; no other group has any incentive to offer employees arguments to oppose unionization. If any employees even attempted to oppose a card check campaign, they would lack the union's financial resources, the company could not give them funding or support, and the employees would have to avoid any appearance of speaking for the employer, lest it be charged with an unfair labor practice.

Employers are already neutral in any unionization campaign in the sense that they cannot use their position to pressure employees into rejecting a union. An employer campaign merely gives employees the opportunity to hear arguments against local union representation that is supported by a highly organized, sophisticated and well-funded national union.

Union supporters say neutrality agreements protect workers who want to organize a union from employer threats and intimidation. But federal labor law already makes these activities illegal. Neutrality agreements only stop employers from explaining why workers are better off remaining non-union. "Unions don't like employers to communicate with their employees. They only want it one way: their way," says Jordan. And regarding card check agreements, "The only issue is whether you've got the signature on the dotted line. The employee really hasn't voted. He has simply been handed a card that got one sales pitch, and they sign a piece of paper. That's not an election."

Card check and neutrality agreements also can stop employers from explaining how employees can be more productive by working in teams instead of according to union work rules. They prevent employers from explaining why a union may make the company less competitive in the global market.

Union Politics in Las Vegas and Minneapolis

Card check and neutrality agreements are particularly prevalent in the hotel and entertainment industries, and nowhere has organized labor had more organizing success than in Las Vegas whose tourism boom has produced a explosion of new hotel construction and hiring. Hotels are favorite union targets because employers facing a unionization campaign can hardly pack up and move. In addition, many hotel building projects are funded in part by city subsidies or are built on city-owned land. Under union pressure, local governments may require hotel owners to accept pro-labor contract provisions.

It is no coincidence that the Hotel Employees and Restaurant Employees International Union (HERE) is in the forefront of neutrality and card check organizing. Membership in HERE's Las Vegas local has increased from 18,000 in the late 1980s to over 45,000.

Washington, D.C. labor lawyer Jay Krupin explains that HERE can pressure hotel owners by finding people -- either union members or union sympathizers -- in the community who live near the future site of a hotel and who are willing to file zoning board objections during the period of public comment and review. Facing costly construction delays, owners often will accept a neutrality agreement in return for the withdrawal of the complaint. Krupin says unions have used these tactics to organize in Las Vegas and Boston, and in Washington, DC as recently as October. In addition to these cities, he says neutrality agreements are also widespread in San Francisco and New Haven.

Kirk Adams, the AFL-CIO's current organizing director, does not shrink from this kind of coercion. He has said that "Unions should look aggressively for situations where public money is being used to deny workers the right to organize. Our bargaining and our politics should be connected." The AFL-CIO says that "the unions that have effectively bargained to organize attribute their success to getting the organizing message to members, mobilizing members, building community coalitions, negotiating strategically and adding political action to the tactical mix."

In San Francisco, Mayor Willie Brown has often used his influence to convince business that they should not resist organizing campaigns. For example, when the United Food and Commercial Workers Union (UFCW) pushed to organize a proposed Bloomingdale's department store by card check, Brown threw the power of his office behind the union. The mayor has a say because the retail center anchored by Bloomingdale's is to be built on city property with partial city financing. Brown has also signed legislation that requires card check and neutrality agreements at hotels and restaurants if their business receives any benefits from the city government -- a step that makes HERE the sole beneficiary of the legislation.

The use of local governments to benefit labor unions bears resemblance to local government involvement in the living wage campaign (see the October issue of Labor Watch). In both instances, labor unions exploit their greatest area of strength: political activism at the local level. Unions realize that they have no certainty of success in any contest with employers where they must resort to prolonged negotiations under the threat of a strike. But the advantage of political activism is that it raises the likelihood of success while cutting the costs required by individual organizing campaigns.

Of course, the pressure of local politics is an old story. City councils have long required that construction projects be built by union labor. But forcing neutrality agreements on employers could lead to the unionizing of companies like Marriott that are primarily non-union. But this hardly bothers pro-union city council members who claim neutrality agreements are necessary to maintain "labor peace" so that the unions agree not to disrupt the employer's operations or attack its reputation.

Minneapolis offers an informative case study. In August 1998 the city council tried to force the developer of a downtown historic redevelopment area to have all businesses on the property covered by a neutrality agreement. The city claimed it had a say in the matter because it was paying $8.5 million for the cleanup and preservation of the historic site. A Marriott Courtyard hotel was ready to drop out of the project, but city councilmembers, who with one exception were labor-backed, persisted in demanding agreement to their terms. Although the developer vowed that the deal wouldn't go through if card check and neutrality agreements were required, the council passed by a vote of 11-2 the development plan requiring them. The project went forward without the agreements only after the city attorney said that the plan probably violated federal labor law because the city's spending was not a direct subsidy. Still, politicians friendly to labor would rather have killed the construction project than let it be nonunion.

Corporate Campaigns

When unions do not use collective bargaining agreements, political pressure tactics, or the threat of strikes to obtain card check and neutrality agreements, they use corporate campaigns. A corporate campaign is a euphemism that masks what is essentially an effort to damage the reputation or public image of a company in order to bring it to the bargaining table or to accept the agreements. In corporate campaigns, unions enlist the support of religious and community groups. They sign petitions and appear at rallies attacking the employer's labor practices and lead boycotts of its products. Corporate campaigns can last for years as the union attempts to wear down the company and convince it that accepting the union is less costly than continued resistance.

Corporate campaigns are almost always used to achieve neutrality agreements. According to Jordan, "unions which engage in a corporate campaign usually don't want to file petitions for elections with the NLRB. They believe they can do better by exerting either political or economic pressure."

Unions use corporate campaigns to attack the employer's financial strength by going to shareholders with accusations of corporate mismanagement. (See August issue of Labor Watch.) They also can attack the employer's health and safety practices or harass it with lawsuits and charges of unfair labor practices. According to The Nation, a corporate campaign's "objective is to hit powerful and highly diversified companies on all fronts by investigating their affiliates, scrutinizing their environmental and investment records, organizing consumer boycotts, submitting shareholder resolutions, complaining to regulatory agencies and doing whatever else it takes to pressure management into a fair settlement."

In 1996, the organizing director of UFCW explained why unions had to attack non-union companies like grocery store chain Food Lion: "When the unionized share of the grocery dollar declines in any geographic area, our ability to produce at the bargaining table is diminished. . .Over the long run, we must either reduce these chains' market share enough so that they will abandon their deep-seated hatred of unions, or we must put them out of business. There is no other option." This is the logic behind a corporate campaign.

A peculiar illustration of a corporate campaign to force acceptance of neutrality agreements occurred last September in New York City. There union members from HERE protested outside Lincoln Center, where the Metropolitan Opera was performing "Pagliacci" and "Cavalleria Rusticana." The demonstrators tried to embarrass the Met's patrons by drawing attention to the discrepency between the wealth of the opera-goers and the wages of the contractor's employees, and in so doing, embarrass the Met into forcing a contractor to accept neutrality and card check agreements.

Or consider the Omni hotel chain's agreement late last year to accept card check neutrality at a proposed site for a hotel in downtown San Francisco. The city Planning Commission had successfully held up the project until the hotel agreed to HERE conditions. The president of the union local, referring to the bitter seven-year long corporate campaign against the San Francisco Marriott, interpreted his victory this way: "We were able to persuade them that it would be in everybody's interest to find a way to avoid a bitter labor dispute that would go on for years."

One of the most famous corporate campaigns is "Justice for Janitors." This was part of a successful effort by SEIU to make Somers Building Maintenance Inc. adopt a neutrality agreement. The campaign involved staging acts of civil disobedience, or "actions," including blocking major streets, in cities across the country.

Coalitions of labor unions and allied groups forced an Omni hotel in New Haven, Connecticut to accept a neutrality agreement after students and professors from nearby Yale University, as well as community, church and civil rights groups, picketed and threatened to boycott it. They also convinced the city to hold hearings on the matter. Sympathetic organizations cancelled events at the hotel, and the governor of Puerto Rico refused to attend a Yale-sponsored conference at the hotel. Omni eventually voluntarily agreed to a neutrality agreement.

Organized labor has also achieved neutrality agreements by taking advantage of the relationship between companies and their suppliers. According to an editorial in The Wall Street Journal, contracts recently negotiated by the United Auto Workers (UAW) with the Big Three automakers included provisions requiring the automakers to pressure their nonunion suppliers to adopt neutrality agreements. The suppliers have strongly resisted union organizing, and Big Three outsourcing to them has been so pressing a UAW concern that it was the main reason why the union initiated a major strike against GM last summer. It is illegal for the automakers to require their suppliers to unionize, but it is not illegal for them to "urge" them to be "neutral" during unionization campaigns.

Unions have managed to arrange for employer neutrality in other ways as well. For example, in 1997, the AFL-CIO and health-care provider Kaiser Permanente struck a deal in which Kaiser would be considered "the provider of choice" of health insurance for its members. In return Kaiser agreed to maintain neutrality in any union organizing drives.

Labor unions face serious challenges to maintain their power and increase their membership. But by leveraging their strengths -- namely, union-controlled city governments, and their skill at conducting comprehensive public relations campaigns against companies -- they are accumulating a growing list of organizing successes across the country. Will this be enough to revive organized labor as a national movement? At least in the cities where the new organizing methods are used, the power of labor unions can't be ignored.

Reprinted with the kind permission of the Capitol Research Center.

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