Quick Stats

Quick Stats

    You are here

    INDEPENDENTS REPORT: State of the unions

    Shrinking labor unions are increasingly adopting a powerful strategy from which small retailers must learn to protect themselves.

    With their membership having plummeted over the past decade, labor unions are intensifying their organizing efforts. Lacking the people and funding needed to wage major campaigns against big companies like Wal-Mart, unions are targeting small businesses, which may be most vulnerable to the effects of the unions' most powerful weapon, the corporate campaign.

    According to attorney Glenn Olcerst, a nationally known labor specialist and partner at Pittsburgh-based Marcus & Shapira, a corporate campaign often takes place after a labor union has been unsuccessful at employing traditional methods of organizing workers. The union's goal is to get the company to capitulate to certain organizing demands, or to close down the business. Strategies include depleting a company's assets, draining personnel, and weakening corporate goodwill with customers, suppliers, and financial supporters.

    The union's campaign tactics include the following:

    -Community and grassroots outreach: The union seeks support from other unions, community organizations, schools, religious groups, local news media, local elected officials, women's and senior citizens groups, etc.

    -Boycotts and interference with financing: The union launches a consumer boycott of the bank providing financing to the target company, by withdrawing funds and imploring its members to do the same.

    -Proxy fights: "When possible, the union will purchase shares of a company's stock and can begin proxy battles. If the company is privately held, the union may buy shares of stock in companies that supply products to the company," Olcerst says. "Stock-based attacks are also used to scare off investors."

    -Legislative and administrative agency actions: According to Olcerst, phone banks and letter-writing campaigns are often used to involve legislators. "State and federal agencies, such as OSHA, the National Labor Relations Board (NLRB), the local health department, and others, are also contacted by the unions in an effort to disrupt the target's business," he says. "Legal attacks regarding safety and compliance issues, which are often unfounded, are used as leverage to create the impression of an unsafe workplace."

    -Instituting a work-to-rule strategy whereby employees do exactly what they're required to do, and no more: "It's in effect a work slowdown," Olcerst says. "The union may encourage its supporters to take sick days and personal days on a mass basis, which puts pressure on the company and distracts management from running the store."

    -Personal attacks: "Disparaging handbills can be distributed throughout a community about how the company executives have 'wronged the union,'" Olcerst notes. "Unions wish to portray the employer as the enemy and create feelings of mistrust among workers."

    "All these tactics are used by the union in a last-resort attempt to erode the target's business as much as possible," Olcerst observes. "That's not to say that the unions don't still engage in traditional forms of boycotts involving handbilling and picketing. But corporate campaigns, simply because they're so insidious, can create economic hardships which have a stunningly deleterious effect on a company.

    "In the end, unions will choose to attack those that are easier to organize and those that are unprepared," Olcerst says. "The union is a business, and it often takes the path of least resistance, which will allow it to grow its membership with the smallest investment in the least amount of time."

    He concludes: "Labor law, and responding to an organizing drive especially, is analogous to a multilevel game of chess. You must understand and anticipate the full range of tactics in the union's arsenal and never underestimate your adversary. It's essential for grocery store owners to go all out to defeat a union organizing drive. That's the only way to get the unions to turn their collective energies toward Wal-Mart and leave the small grocery store owner alone."

    Editor's note

    Based on my family's experience of operating nonunion grocery stores for over 32 years and responding to organizing drives, I believe that the best investment a company can make is to partner with a traditional labor attorney who specializes in and regularly responds to union organizing drives. This should be viewed not as a cost, but as an investment in the company's future.

    Studies indicate that where employees choose to be represented by a union, the value of a business drops more than 20 percent over its life.

    Independent Retailing editor Jane Olszeski Tortola can be reached at [email protected].

    Related Content

    Related Content