Friday, March 7, 2014

The UAW Election Failure

The United Autoworkers (UAW) lost their February 12, 2014 representation election to establish a UAW local in the Volkswagen plant in Chattanooga, Tennessee. The vote was reported as 626 yes, 712 no. The election was conducted by the National Labor Relations Board, but there was an unusual amount of confusion about statements made by VWGOA management and actions and statements of opposition from politicians and outsiders with no personal stake in the outcome.

Tennessee Senator Bob Corker was quoted in three separate articles in the Washington Post. (1) In the first, he said, "If Volkswagen turns then its BMW, then it's Mercedes, then it's Nissan, hurting the entire South-East if they get the momentum." In the second, he said, "This is all about money. They feel like if they can get under the hood with a company in the south, then they can make progress in other places." In the third, he said "He'd been "assured" that Volkswagen would make a planned new SUV in Chattanooga rather than Mexico if workers voted no."

Others lined up against the UAW and also Volkswagen. State Senator Bo Watson threatened there would be a "very tough time" winning tax incentives for a plant expansion if the vote succeeds even though the original plant received $577 million in tax subsidies. Grover Norquist who runs the Center for Worker Freedom funded opposition billboards and fliers. The National Right to Work Legal Defense Foundation found eight plant employees to help challenge legal procedure under the National Labor Relations Act. A web site of anti-union materials was set up:

As bad as the outsiders got to be, the UAW had to confront continuing disadvantages from anti-union legacies that remain in spite of U.S. labor law. Furthermore VWGOA did confusing things American companies do not do when confronted with a labor union. Usually when a union tries to organize a local affiliate it requests an election from the NLRB. The company then jumps into action to bully and browbeat their employees to vote no. Because companies get their way so often, unions try to use the alternative "card check" to get a majority to sign cards in support of unionization.

In this case it is reported a majority of the employees signed cards in a union effort to organize the plant over several years. The company could have legally agreed to have the UAW represent its hourly employees, and done so knowing Tennessee is a right to work state that prohibits dues check off or a union shop for those employees who hate unions. Instead they made confusing statements suggesting they wanted to settle the issue of labor relations before they would proceed with a plant expansion. Specifically the quote I found was made by a German official Stephan Wolf "We will only agree to an expansion of the site or any other model contract when it is clear how to proceed with the employees' representatives in the United States."

Some of the Chattanooga workforce apparently interpreted the VW statement as an ultimatum: they had to unionize or expansion would not go forward and so the UAW decided that statement made it a good time to go to Chattanooga and speak again in favor of unionization. The UAW encouraged their thinking as a way to get the workforce to accept the UAW or persuade the workforce they could help them.

The anti-union southern opposition started howling coercion and claimed the UAW wanted to organize VWGOA without a vote. The company then backtracked and released another statement saying labor relations would not influence their decision for plant expansion. The quote I found was made by the head of the Global works council, Bernd Osterloh. He said that expansion of VWGOA’s Chattanooga plant would not hinge on unionization of the plant’s employees. “The decision about a vehicle will always be made along economic and employment policy lines. It has absolutely nothing to do with the whole topic about whether there is a union there or not.”

If a company decides they want to accept union representation with card check and not a vote, they can do it. If the company decides they want a vote, they can ask the NLRB for a vote, but it is the company that asks, not the anti-union politicians and pressure groups. The anti-union groups and politicians found some anti-union employees and helped them file an unfair labor practice claim that the UAW used coercive methods in contradiction to section 8(b) of the National Labor Relations Act, but card check was still up to Volkswagen.

The Election Agreement

When the company decided to have a NLRB election they sat down with the UAW and drafted a 22 page document titled "An Agreement for a Representation Election," hereafter the Election Agreement. In the cover materials on the website, no2uaw, the objectors call the 22 page Election Agreement a sellout. A careful review of the Election Agreement makes this claim hard to brush off. Among other things there are two sections that defines the bargaining unit and a Dual Model. Much of the material in the agreement sounds painfully close to a company union that has a long history from years past.

In the early years of the last century business denounced union organizers as outside agitators, always claiming their employees were happy and contented until the agitators arrived to cause trouble. After World War I it became popular in business to defeat the outsiders by setting up company unions. One of the earliest company union plans was the John D. Rockefeller Jr Employee Representation Plan. Business regarded themselves as progressive because a company union plan allowed company employees to elect representatives to speak, or even complain, to management without being summarily fired, but management did not give up any decision making authority over their employees. They maintained the options of an open shop.

In the early part of the great depression Congress passed the National Industrial Recovery Act that included Section 7: employees shall have the right to organize and bargain collectively through representatives of their own choosing. Companies claimed their company unions fulfilled the requirements of the new law, but the Unions disagreed and when the National Labor Relations Act, aka the Wagner Act, was passed in 1935, it included wording to define a labor organization and ban the company union.

That was Section 2(5): The term "labor organization" means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.

Then Section 8(a)(2): It shall be an unfair labor practice for an employer to dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it.

In the first paragraph of the Agreement, both the Volkswagen Group of America (VWGOA) and the UAW acknowledge they are proposing something not proposed before. They call it a Question Concerning Representation(QCR), which they agree to address in the Election Agreement with an expedited representation election and by establishing “certain shared principles that the UAW and VWGOA agree shall form the basis for their conduct, activities and relationship between the date of this Election Agreement and such NLRB-conducted representation election, and their future relationship and understandings. . .”

The next section of the Agreement has stipulations in whereas clauses to be incorporated as principles to the Agreement. Here the UAW agreed to establish an employee works council with VWGOA principles and participation. The discussion reads like the UAW is giving up union functions to the VWGOA works council where it reads “the UAW acknowledges, supports and shares VWGOA's commitment to the development of an innovative model of Labor relations . . . in which a lawfully recognized or certified bargaining representative would delegate functions and responsibilities ordinarily belonging to a union . . .”

Then there is “the UAW would delegate to the Works Council many of the functions and responsibilities ordinarily performed by unions as bargaining representative in the United States that it shall support the Dual Model as the basis for a relationship with VWGOA and that it is committed to the delegation to the Works Council of certain duties, responsibilities and functions that are traditionally the subject of collective bargaining . . .”

The Dual Model mentioned above appears as an appendix at the end of the Election Agreement. It uses similar language to delegate authority and responsibilities to the works council, which would be used later to negotiate a collective bargaining agreement.

Explaining the Vote

Explaining the vote requires some conjecture primarily because the use and abuse of United States labor law assures some uncertainty. If VWGOA wanted to form works councils that establishes a grievance procedure or other union functions listed in Section 2(5), they could be subject to unfair labor practice charges of dominating or interfering with the administration or formation of a union under section 8(a)(2).

The UAW or other international union might file an unfair labor practice to end the works councils. The employees themselves could decide to organize their own Independent Labor Union(ILU) at the VW Chattanooga plant and they could file an unfair labor practice complaint with the National Labor Relations Board that the works council was in effect a company union. However, a National Labor Relations Board ruling against VWGOA would only bring a cease and desist order under unfair labor practice rules.

The VWGOA decision to sit down with the UAW and make an Election Agreement to organize a local at the Chattanooga plant suggest they wanted to use the works council badly enough to attempt to avoid potential unfair labor practice claims, but did not want work councils badly enough to give up the authority to set up and operate their works councils the way they do in Germany. To use the vernacular, they wanted to have their cake and eat it too.

Based on the written terms of the Election Agreement, the VWGOA agreed to conditions for a free election that avoided adversial attacks on the UAW and unions. Wording included “The parties and their representatives will communicate with employees in a non adversarial, positive manner and will not defame or make any untruthful statements regarding one another or their respective employees and representatives . . . VWGOA shall not take a position opposed to such representation. . . .”

Between 1935 to 1947 it was an unfair labor practice for employers to speak to or contact employees. That changed with the Taft-Hartley Amendments of 1947. New wording now referred to as the management free speech amendments provide many options for employers to speak against a union. Section 8(c) allows that expressing of any views, arguments, or opinions, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this Act, if such expression contains no threat of reprisal or force or promise of benefit.

The whole of the Election Agreement suggests the UAW negotiated the opportunity to have an election without management interference in exchange for delegating customary union perogatives to management. In the years since 1947 there has been no change in what constitutes a labor organization or a company union that would allow the UAW and VWGOA to agree for the UAW to delegate union functions to management. In effect, VWGOA agreed to give up what is not an unfair labor practice to get the UAW to agree to do what is an unfair labor practice. The Election Agreement puts both parties in a labor law netherworld.

VWGOA apparently honored its commitment but before the election there were outside threats from Tennessee politicians to eliminate tax advantages for VWGOA and fromTennessee Senator Corker that VWGOA would move work to Mexico if the union won the election. Even though these claims were not supported by VW, they probably influenced votes in the election.

I confess a hard time believing the employees at VWGOA do not know their own best interests. Based on the Election Agreement it appears quite rational for an employee to weigh the expense of union dues and other implied threats against potential gains from the UAW Election Agreement, and then vote no.

How much southern politicians and union haters everywhere influenced the election cannot be known, but union elections have too many abuses to believe the votes reflect the true sentiments of employees at VWGOA in Chattanooga, or anywhere else. Companies routinely demand their employees attend anti union meetings on company time and listen to threats of layoffs, wage cuts, outsourcing and plant closings. They go beyond what is allowed in the section 8(c) knowing unfair labor practice filings have few sanctions even when they lose, which they quite often do. Companies can fire employees for union organizing knowing they will lose unfair practice decisions, but sanctions will be mitigated back wages after years of delay so they go ahead anyway.

New Ideas

Remember that in spite of all the anti union talk heaped on the UAW and employees, 626 voted yes, and they were southerners no less. It does suggest a significant number in Chattanooga and around the country might welcome some help to organize a collective defense against the current onslaught against labor.

The result suggests organized labor needs a new Modus Operandi. It might be time to question spending rank and file dues on politicians and political campaigns. Woodrow Wilson, Bill Clinton and Barak Obama were Democrats elected as the friends of labor, but their friendliness has never relieved labor’s fundamental political and legal disadvantages, then or now.

The National Labor Relations Act is not friendly to labor because it is not intended to help labor so much as it is designed, amended and interpreted to prevent strikes, boycotts and disruptions. The disadvantages of organizing under it have become so severe it is close to impossible to organize a plant over the determined opposition of business and now the active opposition of anti union politicians.

Without help from the law or politics labor has to look for some economic leverage, which is also difficult in surplus labor markets in an economy managed to have surplus labor and excess capacity. Unions might want to lower dues and promote soldiarity and job actions across many labor markets. Autoworkers have more in common with nurses, engineers and fast food cooks than they apparently realize and so do you if you work for wages.

After the latest attack on labor an excerpt of the declaration of principles from the short lived Socialist Trade and Labor Alliance of 1902 sounds relevant.

"The methods and spirits of labor organization are absolutely impotent to resist the absolute aggressions of concentrated capital . . . ; that the economic power of the capitalist class . . . rests upon institutions, essentially political, which . . . cannot be radically changed . . . except through the direct action of the people themselves, economically and politically united as a class."

And so on.

[1] "In Tennessee, the UAW finds an unusual ally", WP February 11, 2014, "Union Vote at VW plant is seen as bellwether," WP, February 14, 2014, "Volkswagen workers reject UAW in Tenn.; Union looks for Plan B to enter South," WP, February 15, 2014.