Decision Vision Episode 171: Should I Allow My Company to Unionize? – An Interview with Jonathan Hyman, Wickens Herzer Panza
Jonathan Hyman revisits the Decision Vision podcast to talk with host Mike Blake about unions and how companies should navigate an attempt to unionize by their employees. Jonathan defined exactly what a union is, how it looks different than the established unions that peaked in the 1950s, why it’s on the rise again today, what is motivating today’s employees, the implications for companies today, and much more.
Decision Vision is presented by Brady Ware & Company and produced by the North Fulton studio of Business RadioX®.
Wickens Herzer Panza
Wickens Herzer Panza has been committed to providing sound legal guidance to businesses of Lorain & Cuyahoga Counties since 1932. Wickens Herzer Panza provides legal counsel to family- and privately-owned businesses in the areas of Business Organizations & Tax, Probate & Estate Planning, Elder Law, and Business Litigation.
They are more than legal counsel, too. They’re a business partnership, an advocate for their clients, and advisors who support, give advice and protect those they work with. They are their clients’ trusted advisors and make it their mission to be responsive, accountable, proactive, and client-centered. They have offices in Avon, Ohio, and Sandusky, Ohio.
Jonathan Hyman, Attorney, Wickens Herzer Panza
Mr. Hyman is a member of the Firm’s Litigation Department and Employment & Labor practice group and serves on the Board of Directors. He focuses his practice on management-side labor and employment law, providing businesses proactive solutions to solve their workforce problems and reactive solutions when they find themselves litigating against an employee or group of employees.
Proactively, Mr. Hyman serves as outside in-house counsel for businesses. He is the voice on the other end of a phone when a business needs advice on firing an employee, a policy or agreement drafted, guidance on a leave of absence, disability accommodation, or internal complaint or investigation, or information on any number of other issues that plague human resources professionals and businesses daily. Mr. Hyman also has extensive experience on more specialized labor and employment law issues, such as wage and hour compliance, social media, cybersecurity, and other workplace technology concerns, affirmative action compliance, and union avoidance and labor relations.
Reactively, Mr. Hyman represents businesses in employment and labor litigation, including discrimination, retaliation, harassment, and claims, non-competition and trade-secret misappropriation disputes, wage-and-hour class and collective actions, and union certification and decertification matters.
He is also the author of the renowned and award-winning Ohio Employer Law Blog (www.ohioemployerlawblog.com, an American Bar Association Blawg Hall of Fame inductee), which he updates daily to provide businesses and human resources professionals breaking news and other updates on the ever-changing landscape of labor and employment law.
Mike Blake, Brady Ware & Company
Michael Blake is the host of the Decision Vision podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms, and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.
Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.
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Brady Ware & Company
Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth-minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.
Decision Vision Podcast Series
Decision Vision is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision-maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the Decision Vision podcast.
Past episodes of Decision Vision can be found at decisionvisionpodcast.com. Decision Vision is produced by John Ray and the North Fulton studio of Business RadioX®.
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TRANSCRIPT
Intro: [00:00:01] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.
Mike Blake: [00:00:21] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owners or executives’ perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.
Mike Blake: [00:00:42] My name is Mike Blake and I’m your host for today’s program. I’m the managing partner of Brady Ware Arpeggio, a data-driven management consultancy, which brings clarity to owners and managers of unique businesses facing unique strategic decisions. Our parent, Brady Ware & Company, is sponsoring this podcast. Brady Ware is a public accounting firm with offices in Dayton, Ohio; Alpharetta, Georgia; Columbus, Ohio; and Richmond, Indiana.
Mike Blake: [00:01:06] If you would like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself, and at @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. I also host a LinkedIn group called Unblakeable’s Group That Doesn’t Suck, so please join that as well if you would like to engage.
Mike Blake: [00:01:22] Today’s topic is should I allow or gasp, even encourage, my company to unionize? And I think this is an important topic and a very timely topic. And as we have discussed at various points since the pandemic started 5,000 years ago, our relationship with work or our society’s relationship with work and labor, I think, has changed, and I think very few people debate that. I think the only debate is whether or not that change is a good one or a bad one, and we’re not going to debate that here. That’s not our role, and I’m not even sure that there’s a right answer to it.
Mike Blake: [00:02:10] But one of the ways in which the nature of work has changed is for the first time in a long time, maybe in my lifetime, and I’m 52 years old now, we are seeing an increased interest in unionization. For whatever reason, I suspect it has to do with a lot of things. I think it has to do with wage inequality. I think it has to do with a desire for people to self-actualize at work. I think it has to do with the fact that health care is tied to employment and other reasons as well, but there’s been an uptick in an interest to unionize.
Mike Blake: [00:03:02] One Amazon warehouse, I believe, in New York has successfully unionized or is on the verge of doing so, I’ve forgotten. Starbucks is, right now, fighting a mass unionization event, and the thought was that if they brought back their founder for a third time, Howard Schultz, that guy retires more than Brett Favre ever did, that they would be able to head off the unionization path, but that doesn’t seem to be cutting it.
Mike Blake: [00:03:29] And there does seem to be an uptick now in unionization, and for many of us, I think, particularly, if you’re under the age of 40 or maybe even 50, most of us don’t remember a world in which large parts of the economy were unionized. I’ve never worked in a union shop. I don’t think I’ve even had a client that has had a unionized labor force. Now, part of that is because I live in Georgia, so it’s a right to work state.
Mike Blake: [00:04:01] But the fact of the matter is—or at least just not the fact of that, my observation is that as unionization gains steam, I think we, as a society, are having to re-familiarize ourselves with unionization almost all over again. It’s been out there for government jobs, teacher’s unions, things like that. We encountered for good or ill with The Screen Actors Guild, oddly enough, Ronald Reagan was actually the chairman of The Screen Actors Guild for a while, and gosh, we sure do love it when professional sports leagues go on strike, and we just love their unions, and millionaires, and billionaires fighting over their vast sums of revenue.
Mike Blake: [00:04:43] But on a day-to-day basis, I think most of us don’t remember a world, and certainly, we’ve never had to manage a business in a world where unionization, for the most part, was a thing. And so, again, I’m not advocating for or against unionization, but I do think the topic is now timely, and we’re going to have to, as a society and as business people, come to grips with understanding what unionization is.
Mike Blake: [00:05:11] Is it fair to have a knee-jerk reaction, which many people do, that unions are automatically bad for business and they’re a disaster, or what does it actually mean? So, other than what I just told you, I don’t know very much about the topic, I’ve just spent the last five minutes basically revealing my ignorance.
Mike Blake: [00:07:24] So, joining us today and returning to the show, actually, is Jon Hyman, who’s a Partner at Wickens Herzer Panza. Jon is a nationally recognized author, speaker, blogger, and media source on employment and labor law. Jon’s legal practice provides proactive and results-driven solutions to employers’ workforce problems. He also works with businesses to help position them to best combat the ongoing risk of cyber crimes.
Mike Blake: [00:07:48] Jon serves as outside in-house counsel role for business. In this role, he drafts policies and handbooks, audits human resources and technology practices and procedures, advises companies on day-to-day human resource issues, and successfully litigate employee disputes. Jon has written two books, The Employer Bill of Rights and Manager’s Guide to Workplace Law, and Think Before You Click: Strategies for Managing Social Media in the Workplace.
Mike Blake: [00:08:14] Jon has appeared on the Fox Business Network, NPR, and locally on WEWS. He has also been quoted on workplace issues in publications such as the Wall Street Journal, NPR, msnbc.com, Business Insurance Magazine, Crain’s Cleveland Business, and The Cleveland Plain Dealer. Finally, Jon appeared on a November 1999 episode of Who Wants to Be a Millionaire, but sadly lacks the fastest fingers. Jon, welcome to the Decision Vision podcast.
Jon Hyman: [00:08:41] Thank you so much, Mike, both for the introduction and for the invite to have me back on. I really appreciate it.
Mike Blake: [00:08:47] So, we’re going to start really, really basic, because I don’t think this is necessarily obvious to everybody. What is a labor union?
Jon Hyman: [00:08:55] Yeah, it’s not obvious to everybody, and it’s a great starting question, because I think like you said in your intro, we live in a world where it’s something we haven’t thought about. Businesses haven’t thought about it. HR professionals haven’t thought about it. A lot of employees, frankly, haven’t thought about it. So, asking the very basic question like, what is a labor union? Great kind of foundational place to start.
Jon Hyman: [00:09:19] And at its most basic level, a labor union is an organization that a majority of employees in a unit within a business agree to join, and then on behalf of those employees, that organization engages in collective bargaining with those employees’ employer regarding their members’ wages, hours, benefits, other terms and conditions of their employment.
Jon Hyman: [00:09:57] But the key aspect of a union, a labor union, and their relationship with both the employees and the employer, is that the union, once they’re in, they are the exclusive representative of the employees that they’re representing for all those issues, wages, hours, benefits, terms, conditions of employment. They are exclusive. They speak on behalf of the employees, and they are, in almost all cases, the only entity that can speak on behalf of the employees on those issues.
Mike Blake: [00:10:33] So, at my age, I kind of remember unions being a thing growing up. There are strikes. The UAW is pretty powerful. The Teamsters are pretty powerful. But since then, unions have declined sharply to the point of being barely noticeable, in my opinion, anyway. Why did labor unions decline across the United States over the last four decades?
Jon Hyman: [00:11:00] Yeah, they peaked in the ’50s. The number that I see most often cited is around 35% of American workers were collectively bargained in the 1950s. By the early ’80s, that dropped to around 20%. And then, if you look for like a historical event that started the real decline of labor unions, it’s interesting that you mentioned Ronald Reagan in your opening, because in addition to being president of The Screen Actors Guild, he was also the president when the air traffic controllers went on strike in 1981, and he famously busted that strike by replacing all 11,500 and so on air traffic controllers.
Jon Hyman: [00:11:45] He just fired them all and permanently replaced them, which an employer can do during a labor stoppage. And I think if you look for kind of a historical snapshot in time as to what started the decline of organized labor, that’s probably the event that, at least I look at, is really starting organized labor’s decline in the US. But if you look at it, that’s kind of on the micro level.
Jon Hyman: [00:12:16] If you look at it more on the macro level, I think if you look at all of the kind of alphabet soup of employment laws that protect employees in the workplace on a day-to-day basis, Title VII, ADA, Americans with Disabilities Act, ADEA, Age Discrimination in Employment Act, FLSA, Fair Labor Standards Act, OSHA, Occupational Safety and Health Administration, plug in your kind of alphabet soup of letters that form some federal protection for employees, and there are dozens upon dozens of them.
Jon Hyman: [00:12:54] The question is, the question that I always come back to is like our unions, I mean, what purpose do they serve in today’s workplace? Are they relevant? Are they necessary to provide employees the same level of protections that employees needed when organized labor really started in the 1920s and people were working 80 hours a week in sweatshops for pittance wages? Do they still serve that purpose? And my answer is no. And I think by and large, I think employees, at least over the last three or four decades, have seen that as well, and have said to themselves, why pay a union dues, why bring someone else in to speak for us when we can do this for ourselves?
Jon Hyman: [00:13:44] We have all these protections. Whether inherently, implicitly, or explicitly, I think employees just feel that unions don’t serve the purpose that they’ve historically needed them to serve. And then, on top of that, employers have gotten in the last 30 or 40 years very, very aggressive in what they’ve done to combat unions when unions try to organize employees that have helped prevent unions from taking hold as well. So, I think unions are kind of getting it from both sides.
Mike Blake: [00:14:21] So, that’s really interesting. I hadn’t thought about how worker protections as legislated made labor feel that unions became somehow obsolete. I actually expected a different answer, but that’s fine, I learned something. So, why now? First of all, I guess do you agree with my observation that unions may be making a little bit of a comeback? I don’t want to overstate it, but I certainly hear more about union activity than I’m used to hearing. And if so, why now?
Jon Hyman: [00:14:55] Unions are definitely having their moment. I think it remains to be seen how much of a foothold they will ultimately grab as a result of the push and momentum that they have. Unions right now are, and I’m going to take public sector out of the equation, because it’s somewhat different set of rules and public sector unions never really declined the same way that private sector unions did.
Jon Hyman: [00:15:24] But in the private sector, unions sit at about 6% of American workers are organized in the private sector. It remains to see kind of where that goes, but they’re definitely having their moment. They are very high-publicity-organizing campaigns that have garnered a lot of headlines. The JFK facility in Staten Island, New York, the first Amazon facility to organize, grabbed huge headlines. Starbucks right now, as you said, at the outset is facing hundreds of organizing petitions and has had tremendous success in the elections that have been held so far in getting Starbucks stores organized.
Jon Hyman: [00:16:06] I think as to why now, I think there’s a couple of factors that have come together at once. I think the pandemic has really played into the types of union talking point issues, where union organizers start talking to employees, the issues they’re talking about are things like workplace safety, and does management listen to you, do you have a voice in how things occur in the workplace, culture, respect, all the issues that the pandemic really brought to the forefront in the workplace, and that led to employees feeling a tremendous amount of dissatisfaction with their employers over the last two years.
Jon Hyman: [00:16:58] That really plays into the hands of the talking points that unions often use to kind of get traction with employees. I think when you couple that with, and I always hate to make generational generalizations, it’s hard to say, generational generalizations, because stereotypes, I mean, they always have kind of some basis in reality, but they’re always often overexaggerated, but here, I think it is actually fairly instructive.
Jon Hyman: [00:17:32] A lot of what’s going on, if you look at Amazon, if you look at Starbucks, these are not your grandfathers, steel workers labor unions. These are organizing drives that are being led by and large by educated, younger workers. And you have Gen Z that, I think, largely skews, at least in their belief structure, take a look at like a Bernie Sanders rally, for example, like who’s in the crowd? It’s a lot of young people, right?
Jon Hyman: [00:18:05] Gen Z skews, by and large, a lot more socialist in their beliefs than capitalist, and you have a generation that, over the last couple of years, cut their teeth organizing not around workplace issues, but around societal issues, Black Lives Matter rallies, George Floyd protest, LGBTQ rights. You’re seeing it now around the Roe v. Wade issues as well. You have a generation that has really cut their teeth learning how to organize around societal issues and they are now focusing that lens inward on the workplace. So, when you put that generational attitude together with the issues that we’ve seen the pandemic highlight, it’s really made a perfect storm for the current wave in organizing that we’re seeing.
Mike Blake: [00:18:57] So, I think unions are often portrayed as being anti-business, maybe even anathema to business. Is that a fair characterization?
Jon Hyman: [00:19:10] I think so, but I’m also an advocate for business. I think union organizers might disagree with that, but I believe they are. I think when you look from management’s perspective, what happens when a union comes in, it definitely makes it more difficult to manage employees. You can’t talk directly to employees anymore. You have to go through a union rep. Oftentimes, kind of the lowest common denominator in the workplace from a performance standpoint is protected, because they have just cause protections and collective bargaining agreements, so you can’t just fire an employee without cause for doing so, and sometimes, that protects not always the best performers in the workplace.
Jon Hyman: [00:19:58] Things like seniority and longevity are often valued over things like merit in promotions, raises, transfers, and the like. And so, does it make it harder to manage your business and manage your workforce when it’s collectively bargained? I think objectively, the answer is yes, although I understand that if you had someone coming from the union side, I mean, they would certainly give you a much different answer to that question.
Mike Blake: [00:20:29] So, question I want to ask, because I think this is going to gain a lot more visibility, back in the early 20th century, the way that you prevented a union was you hired a bunch of guys that would come in and just beat up the labor, beat up the workers or shoot them outright, which has happened. Now, I don’t think we’re going to go back to that, but who knows the way society is going? But I’d love you to kind of just sort of be expositional in what are some common tactics that businesses will take to discourage unionization of their workplace? And then, I’d love to get into a discussion as to where is the line between—where is the ethical line, where maybe it’s legal to do that, but maybe it’s unethical?
Jon Hyman: [00:21:28] I mean, you can take a look at, for example, what Starbucks is doing. You talked about Howard Schultz being back in at Starbucks, and he is stridently anti-union, and they have taken a very aggressive stance to try to squash the campaign that’s going on across the country at all these various Starbucks stores, and I think their efforts have been largely unsuccessful, because they are doing things like—allegedly, right?
Jon Hyman: [00:21:55] And there are challenges filed at stores all over the country, retaliating against organizers, firing them, cutting their hours, and the like, holding what are called captive audience speeches that is putting everyone in a room, and you’re going to listen to us tell you why you shouldn’t join the union. These are all things that may have worked 40, 50, 60 years ago.
Jon Hyman: [00:22:21] They’re not working today, and they’re not working because they’re playing right into the hands of the reasons why these organizers are telling workers they need to form a union in the first place, right? You need job protections. Your management is out to get you. They don’t have your best interests at heart. You don’t have a voice at the table. They’re not listening to your concerns. As soon as you start firing organizers, cutting their hours, or trying to force them out the door, you’re playing right into the hands of why the unions are telling these people, you should vote for us in the first place.
Jon Hyman: [00:22:57] And so, in my view, this is a different type of organizing than what we’ve seen in the past because of the generational issues I talked about before. I think employers need to take a much different, much softer approach to how they’re opposing union organizing. And I’m not saying that softer approach means you need to open the door and welcome the labor unions in, some employers choose to do that. Fair State Brewing, for example, in Minneapolis was organized a number of years ago.
Jon Hyman: [00:23:36] They were one of the first craft breweries in the US to be organized by a union and they chose to voluntarily recognize the union. Their ownership saw it as their like obligation as a democratic business to promote fairness and equity across their workers, and they chose to voluntarily recognize the union. Most employers don’t do that. Most employers oppose organizing drives. They fight hard on first collective bargaining agreements, the first contract they’re going to reach with their employees.
Jon Hyman: [00:24:14] I just think that the retaliation, the heavy-handed tactics that have historically worked in the past, illegal, right? Some of them, right? You can’t retaliate, that’s illegal, but there have been—even though illegal have proved to be successful, because you scare employees off who don’t want to lose their jobs, those just aren’t working anymore. So, I think what is going to work for businesses is taking a more inward look at culture, why is the union here in the first place? What are we doing wrong? Where are we failing our workers?
Jon Hyman: [00:24:54] And you can’t—and again, there’s fine legal lines you have to walk here, you can’t make promises to employees to fix things during union organizing. That’s an illegal promise. But it doesn’t mean you can’t do it on your own without promising employees you’re going to do it. And so, you’ve got to figure out why employees are upset, and then striving to do better for your employees. Culture has always been kind of the best way to fight union organizing, and it’s even more important today, because it’s exactly the types of issues these organizers are hitting on.
Mike Blake: [00:25:34] So, with respect to unionization in companies, how can I put this? Yeah. My question is, how do companies sell to employees that they shouldn’t unionize? What are the arguments that the companies make? Because it seems on the surface of labor, it seems like—I’m surprised unionization sort of hasn’t come back. It seems like it’s so clearly in their self-interest, why don’t they? How are companies able to convince workers not to organize?
Jon Hyman: [00:26:12] Yeah. I mean, there’s a number of things you can do. And again, there’s a fine legal line you have to walk, because you can’t threaten workers. You can’t interrogate workers about their union beliefs or how they’re going to vote. You can’t make them promises, right? And you can’t spy on them or surveil them to figure out who’s meeting with whom, and what people are saying, and whatever.
Jon Hyman: [00:26:37] So, there is a fine line you have to walk in terms of what you can do legally, and what you can say legally, and what you can’t. But it is factual, for example, that if employees are telling you what—one of the union messages is that we need more money, it is factual to say, there is one pie that’s going to be divvied up and that pie is not going to get bigger just because of unions coming in.
Jon Hyman: [00:27:08] And in fact, your pie might get smaller, because in addition to the benefits that come out of your paycheck and other things, you’re paying union dues as well. You’re paying union dues whether you vote for the union, whether you support the union or not, right? And so, we just can’t magically create greater profits because a union comes in, and in fact, it’s reported to suggest that profits actually decrease when unions come in.
Jon Hyman: [00:27:41] There’s a number of reports, I was looking at one this morning by the National Bureau of Economic Research that suggests that share value, if you look at share value as a measure of profits, decreases 10 to 14% once a company is organized by labor. And so, if they’re coming in looking for money, for higher wages, for example, if our share value is going to decrease 10 to 14% if we organize, where is that extra money going to come from to pay wages?
Jon Hyman: [00:28:12] And on top of that, you’re going to be paying union dues on top of that to the union. And so, there are a number of talking points that you can’t threaten employees by saying we will decrease your wages if you organize, but there is an economic reality of the situation that employees need to understand as well. Telling employees that you’re not going to be able to talk to us anymore, you’re going to lose communication, because the labor union becomes your exclusive representatives, so we have to deal with the union.
Jon Hyman: [00:28:49] Now, Jennifer Abruzzo is the general counsel of the NLRB, is trying to take that talking point away from employers. She’s trying to make it illegal for employers to, among other things, tell employees, that they’ll lose the right to deal directly with an employer if a union comes in. Remains to be seen whether she’s able to prevail on the National Labor Relations Board to make that change in the law, but she’s at least making that argument.
Jon Hyman: [00:29:18] So, there are a number of talking points that prove successful, but employers are fighting an uphill battle here. Employees win, unions win a lot more elections than they lose. Annually, it’s anywhere between 60 and 70% of elections are won by the labor unions, not by employers. And we have historically the most pro-union National Labor Relations Board we’ve ever had.
Jon Hyman: [00:29:53] The NLRB, National Labor Relations Board, is the federal agency that governs union management relations. They are stridently, right now, pro-union. Jennifer Abruzzo, the general counsel, is trying to make a number of changes that would—a number of very aggressive pro-union changes that are going to make that number even higher. It’s going to make the union win percentage even higher. It’s going to make it that much more difficult for employers to oppose union organizing.
Mike Blake: [00:30:26] And one thing that has not come up in this conversation, and I’m a little surprised now that we’re about a half-an-hour into it is the threat of relocation. My misapprehension maybe or my understanding was I always kind of thought that management always had the nuclear option of saying, you know what, if unionization becomes a threat, we are simply going to move to, A, a right to work state, or we’re going to move out of the country to a low wage location. Am I overstating that threat or I’m not remembering, or for some reason, does that threat no longer carry the weight that it once did?
Jon Hyman: [00:31:08] You can’t make threats. So, a threat during union organizing is illegal. And so, you actually can’t—if you’re making a statement with the word will in it, we will do this, we will do that, the odds are pretty good the NLRB’s going to find that to be an unlawful or illegal threat and is going to find unfair labor practice. So, you can’t do that. One of the things that’s interesting, though, it’s interesting that you bring that up, and I think one of the things that’s fueling what’s going on in Starbucks, for example, is that’s not an—and the hospitality industry kind of at large is that you can’t relocate a Starbucks to China or to Mexico, right?
Jon Hyman: [00:31:56] Whether that threat is explicit and unlawful or implicit and somehow pass a scrutiny at the board, that threat carries no weight at a Starbucks at all, because that Starbucks that’s on that street corner, where is it going to move to, to the street corner across the street? It’s going to have the same issues, but it’s certainly not relocating to Mexico or to China, because that’s a long way to go for your morning coffee. So, when we talk about kind of what’s fueling the rise and organizing in industries like hospitality, where we’re seeing a lot of this push right now, that lack of an implied threat of relocation, I think, is fueling a lot of it, because there’s just nowhere else for these stores to go. They are where they are.
Mike Blake: [00:32:45] So, if a business interferes, I want to dive into this, because I think this is really interesting, getting really into brass tacks, and in some cases, brass knuckles, and that is, what are the penalties if the NLRB does find that a company has violated laws regarding impeding an organization effort? How are those fines calculated?
Jon Hyman: [00:33:11] Well, so if an employee is fired, for example, in retaliation, that’s going to be things like back pay and reinstatement for the terminated employee. If it’s something more systemic on the organizational level, like making an illegal threat to employees across the board, you might get a redo election where the board is going to say, we find—because the board requires that elections be held in what’s called laboratory conditions. So, think of a laboratory as sterile, clean, pristine. That has to be the conditions around which that election is held.
Jon Hyman: [00:33:47] And if the board finds those laboratory conditions did not exist because of unfair labor practices that took place during the campaign, the board could order a redo election. In the most egregious cases with egregious serial, repeat, unfair labor practices, the board could skip the election and could actually just order—can enter what’s called a bargaining order, and just say, you know what, we find that it’s impossible to reach laboratory conditions here, because these unfair labor practices were so severe, so pervasive, there’s nothing we can order that’s going to create those laboratory conditions on any redo election, so we’re just going to say union wins, employer, you must bargain with the union.
Mike Blake: [00:34:36] That’s fascinating, and I’m glad we touched upon this, because it strikes me that, taking Starbucks, for example, it would be hard to find Starbucks enough to make it worthwhile. And I kind of go back, when I lived in New York for a few years, I was struck by the fact that if you violated a traffic law, not only would there be a fine, but there would also be a court summons.
Mike Blake: [00:35:01] And the reason they do that is because there are enough rich people in Manhattan to say, you know what, 200 bucks, if I’m going to a meeting that may make me $1,000,000, I’ll double park and I’ll pay the 200-dollar fine, but you tell that person to show up in court and burn a day in court, that’s the deterrent, right? And I was curious if there is sort of an agent principle problem where you can sort of say, well, I’ll just take the flag, they can only find me once, but it sounds like that they actually have much stronger remedies, where in an egregious case, in effect, the government, by fiat, can just say, bam, you’re a union.
Jon Hyman: [00:35:38] They can, but the union’s just the first step. The second step is actually bargaining that first contract, and it’s the next arrow that an employer can pull out of its quiver if it wants to stay non-union, is that—I mean, you can’t bargain in bad faith, you have to bargain in good faith. But as long as you’re bargaining in good faith, you can bargain to an impasse. And if you bargain to a bona fide impasse, the employer can then take its last proposal and implement that as the terms and conditions of employment. And so, there’s always that kind of implied threat that hangs over the negotiations that we’re going to bargain to an impasse and the employer is going to do what it wants anyway.
Jon Hyman: [00:36:24] And so, there is a lot of—that’s where the employer’s ultimate leverage is in getting what it wants out of this, because the union’s making all these promises to employees, we’re going to get you a 10% raise, we’re going to get better benefits, we’re going to get better hours, better whatever, and the employer can just dig its heels in, and say, no, we can’t do that. And as long as they’re doing that in good faith, and we can talk about what good faith looks like and what it means, but as long as you’re doing it in good faith, there’s not a lot the union can do, because once you reach that impasse, then the employer can essentially do what it wants at that point.
Mike Blake: [00:37:05] So, in your opinion, or maybe a bit in your observation, are unions in the 21st century likely to look, act, behave differently than unions of the 20th century? And if so, how?
Jon Hyman: [00:37:18] Yes, they will, and we’re seeing that now, in that the unions that are driving the campaigns at Starbucks, the campaigns at Amazon, these are not your united steelworkers, united auto workers, your kind of legacy unions. These are unions that have been started by employees by and large. These are employee-started, employee-driven. Now, they’re being backed by large kind of legacy international corporate unions.
Jon Hyman: [00:37:59] And let’s not kid ourselves, I mean, unions are a business no differently than the businesses that are on the other side of the bargaining table with them are businesses. And these employee-driven campaigns are being backed by these legacy unions. They’re getting office space. They’re getting legal support. They’re getting business support. They’re definitely being helped. But these are not the unions that we’re used to seeing because these are largely started by, ran by, managed by the employees of these organizations, not by professional union business people.
Mike Blake: [00:38:49] So, I would suspect that union organizers and advocates for unionization in general will hold up the example of countries in Northern Europe, specifically Germany and the Nordic countries as examples of strong union involvement that has not been destructive to their economies. A, do you agree with that? And then, B, what is it about those unions or those relationships that allows those relationships to exist the way that they do, but still have economies that are still pretty productive, pretty competitive? And can that model realistically be replicated here?
Jon Hyman: [00:39:37] I’ll answer the last part first, which is no, and let me explain why. And it’s because the European unions are very different than the labor unions we have here in the States. In the States, we have, basically, enterprise-level labor unions. Unions organize business to business. Starbucks, obviously, it’s a coffee shop, but the employees that are organizing Starbucks, they’re not organizing Starbucks as a corporation. They’re organizing store by store.
Jon Hyman: [00:40:10] And so, we have hundreds of petitions filed at stores all over the country and there are individual elections that are being held on a store-by-store level. Europe doesn’t have—and depending on the business, a business might be organized by a union, but it might just be a piece of that business. You might have manufacturing employees in a facility that organized, but shipping and receiving, because they do different work, are not included in that bargaining unit and they remain non-union.
Jon Hyman: [00:40:44] So, you can have union workers working arm-in-arm with non-union workers in the exact same facility, just depends on how the units are divvied up. Europe doesn’t have these, by and large, doesn’t have these enterprise-level unions. Europe has sector-level unions. So, if it’s not, I’m going to use Starbucks as the example, because that’s what everyone’s talking about. It’s not Starbucks it’s organizing. It’s coffee shops that are organizing on the sector level.
Jon Hyman: [00:41:12] And so, they’re having one union that’s covering all employees in a particular sector. And so, when we say, why does it succeed in Europe, where it doesn’t succeed here? It succeeds because there’s no advantage or disadvantage to an individual business going union or non-union, because all the businesses in the same sector they’re competing against are also in the union once that sector unionizes. So, it’s just a very different model of how labor is organized in Europe versus how it’s organized here.
Mike Blake: [00:41:52] I’m talking with Jonathan Hyman, and the topic is, should I allow my company to unionize? If a union is successfully organized in a company, how does the company have to change? What changes are coming in store for management in terms of governance, how they operate, and so forth?
Jon Hyman: [00:42:16] You lose communication with employees. You can’t communicate directly with employees anymore. You have to go through the union. At least for the employees that are in the bargaining unit, you can’t give individual raises. All this needs to be bargained with the employer. Promotions, transfers, it’s all governed by the contract. The contract becomes the Bible for the employer-employee relationship.
Jon Hyman: [00:42:43] And you’ve got to follow what the contract says in terms of when raises are given, how raises are given, when and how employees can be disciplined, who gets promoted, who gets transferred, when, how, why, et cetera. You can’t make changes on anything that’s a mandatory subject of bargaining. It has to be bargained with the union. So, mandatory subject, anything that is essentially core to terms and conditions of employment, that has to be bargained with the employer or bargained with the employees through the union, an employer just can’t make a change to its employee handbook like it does in a non-union facility.
Jon Hyman: [00:43:28] And then, you better get used to sitting in grievance meetings with the union reps and possibly sitting in conference rooms with the arbitrators talking about discipline and termination decisions, because that’s what happens. When you discipline or fire someone, those decisions get challenged by the union, and as a manager, you oftentimes lose your ability to effectively control performance, discipline employees, because an arbitrator who live under their own rules of industrial justice might come in, and say, we find this decision was unfair, arbitrary, unreasonable, and we’re going to put this employee back to work. And so, it is a whole different way for employers as to how they choose to or how they’re able to manage their employees on a day-to-day basis.
Mike Blake: [00:44:31] Can you think of or imagine a scenario in which it would be to a company’s benefit to allow or even get on board with encouraging a unionization effort?
Jon Hyman: [00:44:44] I mean, we’re seeing it now with Starbucks. There are shareholders, large, large shareholders of Starbucks who are petitioning the board, saying, you’re hurting our share value by taking the aggressive anti-union stance that you are. You’re hurting the value of our investments, and so we’re urging you, maybe not necessarily to be pro-union, but at least adopt a union-neutral viewpoint, where you won’t welcome the union with open arms, but you’ll be stopped being aggressively anti-union and just let the vote happen or let employees have their choice without you actively trying to discourage employees from joining the union.
Jon Hyman: [00:45:31] And so, in a large, publicly traded company like Starbucks, where you have—I mean, these are shareholders with tens of millions of dollars of investment that’s on the line here, and they’re saying you are severely decreasing the value of our investment. I mentioned Fair State Brewing earlier, Minneapolis brewery, one of the first craft breweries in the country to organize, they said, their ownership said, we view this as essentially a social justice issue. And so, if the employees want to unionize, we’re going to welcome the union with open arms.
Jon Hyman: [00:46:12] We view that as part of our obligation to help further a fair and equitable society, right? So, they viewed it as a social justice issue. So, philosophically, there may be employers who think that way. Economically, there may be employers who potentially see being anti-union as significantly and materially diminishing the value of the company as maybe taking a less hostile position towards union. So, there are certainly situations where a company may decide either to welcome the union or at least be neutral with their position towards the union, but that’s largely going to be the minority view.
Mike Blake: [00:47:01] Jon, this has been a good conversation. I didn’t get through, I think, half the questions I’d hoped to ask, it’s just too big a topic, so there are likely questions that either our listeners would have wished that we’d spent more time on or just didn’t ask at all. If somebody wants to follow up with you and ask about addressing a unionization effort in their business, can they contact you? And if so, what’s the best way to do so?
Jon Hyman: [00:47:26] Absolutely. They can contact me. The best way is they can find me at my firm’s website, wickenslaw.com. They can contact me. They’ll find all my contact information there. I don’t hide online either, so if you just Google Jon Hyman, employment lawyer, you’ll find me, my blog, my LinkedIn, my Twitter, where I write about this stuff all the time. And then, in addition to my employment law practice, I also chair my firm’s craft beer practice. And so, you can also find me at ohiobeerlawyers.com, where you’ll find information about that practice, and that takes you to my contact information as well.
Mike Blake: [00:48:04] So, that’s going to wrap it up for today’s program. I’d like to thank Jonathan Hyman so much for sharing his expertise with us. We’ll be exploring a new topic each week, so please tune in, so that when you’re faced with your next business decision, you have clear vision when making it.
Mike Blake: [00:48:17] If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. It helps people find us that we can help them. If you would like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself, and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. Also, check out my LinkedIn group called Unblakeable’s Group That Doesn’t Suck. Once again, this is Mike Blake, our sponsor is Brady Ware & Company, and this has been the Decision Vision podcast.
