The Warfare of Politics and Reputations
The U.S. has come a long way from the era when union-employer cooperation was viewed as a hot labor trend. These days, conflict is back in the news, especially when it comes to union tactics such as corporate campaigns and card checks. Some experts argue that corporate campaigns harm both the reputations and the productivity of companies, but organized labor holds out hope that such tactics could stem or even reverse the erosion of union representation in the U.S.
Corporate campaigns have been around since the 1970s and became a more frequently used strategy in the 1990s. These campaigns are, in essence, multipronged assaults by union interests on the reputations of companies in order to win some kind of concessions from them. They are not the most common union tactic, but they are gaining the attention of business and the media alike (Haugh, 2006).
Prof. Jarol B. Manheim (2005), author of The Death of a Thousand Cuts, notes that corporate campaigns are implemented “through tactics that range from highly sophisticated financial and governance initiatives to street theater and even psychological warfare.” In a different venue, he refers to such campaigns as “reputational warfare waged through broadsides, half-truths, innuendo, and a staccato rhythm of castigation, litigation, legislation and regulation” (Manheim, 2002).
While some defend corporate campaigns – especially when used by activists – as legitimate “end runs” around the conventional political system (Hertsgaard, 2005), others consider many of the tactics used in union-backed corporate campaigns as little short of extortion. In 2005, attorney Mark Ross wrote, “Whatever the goal, through the use of such disruptive and damaging tactics, unions say to employers, ‘Do what we want, or we will dismantle your business.’”
Such campaigns employ various approaches. One is to use shareholder resolutions as a way to influence directors and senior managers (Manheim, 2005). Another is to make use of the media and public events to call into question an organization’s integrity. Consider the strategies that the Service Employees International Union (SEIU) have adopted in order to win healthcare workers to their cause. SEIU has produced various reports claiming that Advocate Health Care, based in Illinois, has overcharged uninsured patients. In 2005, organizers for the union also, according to Trustee magazine, “rounded up uninsured and homeless people, some from out of state, took them to emergency departments of Advocate and other local health systems, and instructed them to demand care” (Haugh, 2006). The idea, reportedly, was to overwhelm emergency care facilities to the point that patients were referred elsewhere for care, potentially harming Advocate’s standing in the community by rendering it vulnerable to charges of patient dumping.
Corporate campaigns can cost targeted companies in a lot of areas, including productivity and the potential demoralizing effect on employees. Ross (2005) notes that defending against such campaigns is often “expensive and time-consuming, for they require the retention of outside consultants and divert valuable management time and attention away from the running of a business to the waging of a political war.”
What’s the point of such campaigns? Prof. Manheim (2005) states that the most common goal is to pressure corporate managers into accepting card checks and neutrality agreements. Under neutrality agreements, which can take various forms, employers usually agree to “remain neutral” as unions try to convince workers to accept representation. That is, employers give up their legal right to oppose the unionization of the workplace (Nixon Peabody LLP, 2004).
Such agreements tend to make card-check processes more effective (“The Most,” 2006). If an employer agrees to a card-check process, once a majority of employees sign a union authorization card, the employer must recognize the union as a bargaining agent. This process tends to be favored by unions and resisted by employers. The U.S. House of Representatives recently showed support for the card-check process by passing the Employee Free Choice Act (H.R. 800). Currently, employers are not required to accept the results of a card check. Unions that do not get a card-check agreement in advance must win representation rights through a government-run secret-ballot election. If H.R. 800 were passed, employers would be required to recognize a union as an official bargaining agent if a majority of workers were to sign union authorization cards (Feldstein, 2007).
It seems unlikely, given the Democratic Party’s slim majority, that a similar bill will soon be passed in the Senate. Even if it were to be passed, President Bush has promised to veto it. Nonetheless, the passage of H.R. 800 in the House sends a clear signal that the law could become a reality in the future. Attorney Allison L. Feldstein (2007) writes, “Should that occur, employers will find their organizations navigating in waters more volatile than ever when it comes to facing the challenge of union organizing campaigns.”
Whether or not such a law passes, of course, organizations must still cope with the reality of corporate campaigns. When encountering such campaigns, an employer can take a number of steps, from quickly defending its reputation against union allegations to taking legal actions if corporate campaigns cross legal lines. Sutter Health, for example, was awarded $17 million in a libel-related case against Unite-Here (“State,” 2006).
In an increasingly networked world, where it is relatively easy to launch campaigns against companies via the Internet and other channels, organizations should expect corporate campaigns to become more common. And, if a bill such as H.R. 800 were to eventually become law, organizations could see a marked spike in union wins in the workplace. After all, employment lawyer Mark Jodon notes that unions become recognized in more than 90% of instances when a card-check process is used, compared with only 54% of the time when secret-ballot elections are used (Sixel, 2006).
For much more on labor trends, see the institute’s Labor Relations Knowledge Center, which contains a recently updated and published Highlight Report.
Corporate campaigns have been around since the 1970s and became a more frequently used strategy in the 1990s. These campaigns are, in essence, multipronged assaults by union interests on the reputations of companies in order to win some kind of concessions from them. They are not the most common union tactic, but they are gaining the attention of business and the media alike (Haugh, 2006).
Prof. Jarol B. Manheim (2005), author of The Death of a Thousand Cuts, notes that corporate campaigns are implemented “through tactics that range from highly sophisticated financial and governance initiatives to street theater and even psychological warfare.” In a different venue, he refers to such campaigns as “reputational warfare waged through broadsides, half-truths, innuendo, and a staccato rhythm of castigation, litigation, legislation and regulation” (Manheim, 2002).
While some defend corporate campaigns – especially when used by activists – as legitimate “end runs” around the conventional political system (Hertsgaard, 2005), others consider many of the tactics used in union-backed corporate campaigns as little short of extortion. In 2005, attorney Mark Ross wrote, “Whatever the goal, through the use of such disruptive and damaging tactics, unions say to employers, ‘Do what we want, or we will dismantle your business.’”
Such campaigns employ various approaches. One is to use shareholder resolutions as a way to influence directors and senior managers (Manheim, 2005). Another is to make use of the media and public events to call into question an organization’s integrity. Consider the strategies that the Service Employees International Union (SEIU) have adopted in order to win healthcare workers to their cause. SEIU has produced various reports claiming that Advocate Health Care, based in Illinois, has overcharged uninsured patients. In 2005, organizers for the union also, according to Trustee magazine, “rounded up uninsured and homeless people, some from out of state, took them to emergency departments of Advocate and other local health systems, and instructed them to demand care” (Haugh, 2006). The idea, reportedly, was to overwhelm emergency care facilities to the point that patients were referred elsewhere for care, potentially harming Advocate’s standing in the community by rendering it vulnerable to charges of patient dumping.
Corporate campaigns can cost targeted companies in a lot of areas, including productivity and the potential demoralizing effect on employees. Ross (2005) notes that defending against such campaigns is often “expensive and time-consuming, for they require the retention of outside consultants and divert valuable management time and attention away from the running of a business to the waging of a political war.”
What’s the point of such campaigns? Prof. Manheim (2005) states that the most common goal is to pressure corporate managers into accepting card checks and neutrality agreements. Under neutrality agreements, which can take various forms, employers usually agree to “remain neutral” as unions try to convince workers to accept representation. That is, employers give up their legal right to oppose the unionization of the workplace (Nixon Peabody LLP, 2004).
Such agreements tend to make card-check processes more effective (“The Most,” 2006). If an employer agrees to a card-check process, once a majority of employees sign a union authorization card, the employer must recognize the union as a bargaining agent. This process tends to be favored by unions and resisted by employers. The U.S. House of Representatives recently showed support for the card-check process by passing the Employee Free Choice Act (H.R. 800). Currently, employers are not required to accept the results of a card check. Unions that do not get a card-check agreement in advance must win representation rights through a government-run secret-ballot election. If H.R. 800 were passed, employers would be required to recognize a union as an official bargaining agent if a majority of workers were to sign union authorization cards (Feldstein, 2007).
It seems unlikely, given the Democratic Party’s slim majority, that a similar bill will soon be passed in the Senate. Even if it were to be passed, President Bush has promised to veto it. Nonetheless, the passage of H.R. 800 in the House sends a clear signal that the law could become a reality in the future. Attorney Allison L. Feldstein (2007) writes, “Should that occur, employers will find their organizations navigating in waters more volatile than ever when it comes to facing the challenge of union organizing campaigns.”
Whether or not such a law passes, of course, organizations must still cope with the reality of corporate campaigns. When encountering such campaigns, an employer can take a number of steps, from quickly defending its reputation against union allegations to taking legal actions if corporate campaigns cross legal lines. Sutter Health, for example, was awarded $17 million in a libel-related case against Unite-Here (“State,” 2006).
In an increasingly networked world, where it is relatively easy to launch campaigns against companies via the Internet and other channels, organizations should expect corporate campaigns to become more common. And, if a bill such as H.R. 800 were to eventually become law, organizations could see a marked spike in union wins in the workplace. After all, employment lawyer Mark Jodon notes that unions become recognized in more than 90% of instances when a card-check process is used, compared with only 54% of the time when secret-ballot elections are used (Sixel, 2006).
For much more on labor trends, see the institute’s Labor Relations Knowledge Center, which contains a recently updated and published Highlight Report.
For much more on corporate campaigns, please click here .
For an article called “The New Union Strategy,” click here .
For an article about H.R. 800, click here .
For a BusinessWeek article on card checks, click here .
Documents referenced in this TrendWatcher include the following:
Feldstein, Allison L. “New Union Rules Could Have Significant Impact on Workplace.” Pittsburgh Post-Gazette, March 6, 2007.
Haugh, Richard. “The New Union Strategy.” Trustee. ProQuest. November/December 2006.
Hertsgaard, Mark “Beyond Boycotts.” The Nation, March 7, 2005.
Koteff, Ellen. “Industry Must Be Proactive, Organized in Efforts to Stave Off Recruitment Campaigns by Unions.” Nation’s Restaurant News, June 19, 2006.
Manheim, Jarol B. “Corporate Campaigns: Labor’s Tactic of the ‘Death of a Thousand Cuts.’” Labor Watch, Capital Research Center, January 2002.
Manheim, Jarol B. Trends in Union Corporate Campaigns: A Briefing Book. U.S. Chamber of Commerce, 2005.
“The Most Common Tactics Being Deployed by Organized Labor.” Franchising World. Business Source Premier. June 2006.
Nixon Peabody LLP. “Understanding Union Neutrality Agreements.” Employment Law Alert, November 2004.
Ross, Mark. “Labor’s Dirty Campaign Tricks.” Workforce Management. EBSCO. April 2005.
Sixel, L.M. “Unions Hope Bill Energizes Organizing.” Knight Ridder Tribune Business News. November 16, 2006.
“State of the Unions.” Boxoffice. ProQuest. November 2006.