Labor Unions and Small Business

The Civil Rights Act of 1964 prohibited employers from discriminating in their hiring practices on the basis of race, religious beliefs, gender, or natural origin—later also by age.

The Occupational Safety and Health Act of 1970 created the Occupational Safety and Health Administration (OSHA). It established guidelines and regulations to make workplaces safer and healthier for employees. "Each employer shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his [or her] employees," read one portion of the Act.

ORGANIZING EFFORTS AND THE SMALL BUSINESS OWNER

Joshua Kurlantzik, writing in Entrepreneur has pointed out that unions are turning organizing activities toward white-collar and service employees in the mid-2000s: these jobs are more difficult to export to foreign countries; at the same time, employees have been frightened by waves of layoffs and outsourcings and now are more prone to seek security. Evidence of such activities is anecdotal, on the whole, and it is difficult to determine whether it constitutes a trend toward (re-)unionization or a rear-guard action by labor as it continues to lose membership. Nonetheless, small businesses of the larger size, anyway, may in fact encounter organizing efforts. At the first sign of such activity in the community, the owner owes it to him- or herself to become familiar with the duties and rights involved. Early defensive action is important.

For example, a business may ban union literature in the work place, restrict internal efforts to convince employees to sign union authorization cards, and expressly forbid outside organizers from any activity on company property. But such rules must be in place before any organizational activity begins. If the rules are published after activities have already been launched, the business is subject to charges of unlawful retaliation.

Under current rules, a union must initially garner sufficient interest from a business's employees (30 percent of the work force is a rule of thumb), before it can petition the National Labor Relations Board for an election by secret ballot to determine whether the work force will join the union in question; if the interest level is 50 percent or higher, union recognition may be granted without an election.

During an organizing campaign, the owner must safeguard him- or herself from engaging in activities normally held to be unfair practices contrary to workers' rights to organize. These include, among others:

• Polling employees about their attitudes toward the proposed union.
• Suggesting that a union victory will spell a loss of employment or benefits.
• Once an election agreement has been reached, withholding employees' names and addresses from union organizers.
• Lobbying against the union in visits to employees' homes.
• Setting uneven rules for solicitation at the company for those for and against unionizations.
• Favoritism toward antiunion employees.
• Discrimination against prounion workers.

Dealing with Election Outcomes

Once the NLRB-supervised election has been held, the small business owner is confronted with one of two outcomes. The business may carry the day but then will face disappointed employees who had hoped for unionization. And it may not be over. The union may apply for a nullification of the results (based on allegations of unfair labor practices, etc.) or simply regroup and make another attempt down the line.

If the union wins the vote, the small business owner has four choices. He or she can—

• Charge the union with unfair labor practices and attempt to have the election results annulled.
• Sell the business and leave the problems to the new owner.
• Go out of business.
• Recognize the union and enter into collective bargaining arrangements in good faith.

The collective bargaining agreement is basically a contract between the business and the union that explicitly states how workplace issues between management and employees will be handled.

LIVING WITH THE UNION

Small businesses do not necessarily suffer from living with a union. As Sarah Klein put it, writing for Crain's Chicago Business, "A union is supposed to be bad for business. Conventional wisdom holds that unions drive up costs and create a more contentious workplace. But labor relations are just another business problem; look hard enough and you'll find entrepreneurs who've figured a way to make it work in their favor." Klein offers four cases of successful "cohabitation." In the first case a restaurant experienced a 12 percent increase in the base pay of wait staff but discovered that its turn-over rate significantly declined. In a second case a printing shop became unionized and saw its costs rise in consequence—but then discovered a new business serving insurance and money-management firms that required the "union label" on all of their printed goods. In the third case, a unionized parking operation found that an increase in hourly pay of $2 dollars also purchased management help from the union in the form of employee training, reduced pilferage, and lobbying help in keeping down parking garage taxes. In the final case, a specialized cleaning company discovered that unionization (it cost between $20 and $50 per hour more) resulted in incentives for workers to get better training which the company translated into higher sales.