What Small Businesses Should Know About Unions
The very idea of a union could cause some small-business owners to shiver in their shoes. Such a reaction stems from the fear that a union's collective power may force higher wages, delay work in the case of a strike, and ultimately damage the bottom line.
Several small business organizations, in turn, are outspoken in their opposition of unions.
The National Federation of Independent Business, for example, opposes the stalled Employee Free Choice Act, or so-called 'Card-Check' Act in Congress, which would make it easier for employees to form unions by allowing them to simply show their employers that a majority of employees favor union representation. As it stands, an employer can insist on a secret ballot election.
To be sure, small businesses have less to fret about than they did in years past. Just 7.2 percent of private sector employees identified themselves as members of unions in 2009, according to the Bureau of Labor Statistics. That compares with 9 percent in 2000, and healthy double-digit numbers 40 and 50 years ago.
However, some industries showed a slight uptick in union membership between 2008 and 2009, namely in nondurable good manufacturing, and management, administrative, and waste services. And small businesses can be a fertile ground for unionization, experts say, because they often provide a more collegial environment in which to get employees together.
Still, as a small-business owner you may never have to deal with a union, but here are some things to know and keep in mind should you ever face the prospect.
What You Should Know About Unions: The History
It's worth remembering that unions weren't formed just to be obstructionist. Many of the protections we all take for granted, and employers now willingly provide in the workplace, stem from the efforts of unions. Before workers banded together and demanded fair treatment and better working conditions, some employers shirked on important safeguards, and worked employees literally to death.
For example, 146 immigrant workers, mainly women, were killed in March 1911 at the Triangle Shirtwaist Factory in New York City because they could not escape from the building, in part because owners had locked the firedoors.
The tragedy brought national attention to workplace safety and set in motion many important reforms, among them the 40-hour work week, restrictions on child labor, and unemployment insurance.
And, in 1935, President Franklin Roosevelt signed the National Labor Relations Act, which gives employees the right to unionize and governs how union workers interact with employers.
'You have to cast your mind back to remember why we needed unions, and what it was like for people back then,' says Philip Dray, author of 'There Is Power In A Union: The Epic Story of Labor In America.'
The fact that unions have lost some clout these days is more a product of poor marketing on their part, rather than evidence that they've outlived their usefulness, insists David R. Levinson, an employment law attorney in Washington, D.C.
'Frankly, it's gotten to the point where a lot of people don't understand what a union does. But they provide a valuable service, in giving employees legally enforceable rights, rather than employment at will,' he says. 'People like to have a say in their jobs, and unions are a very effective way of doing that.'
What You Should Know About Unions: The Law
Even if you're sure unionization is unlikely to occur within your small business, it's critical to know the governing law, so you won't misstep should your employees approach you about it.
The National Labor Relations Act, enforced by the National Labor Relations Board (NLRB), states that an employer can't interfere with the process of unionization once employees have begun it. That would be considered an unfair labor practice.
Other examples of unfair labor practices include threatening employees with firings or reduced benefits if they join or vote for a union, or participate in the process of forming or joining one. Employers also may not threaten to close the company if employees unionize.
Employers should be careful not to question employees about union support, or treat pro-union employees any differently.
If you start to hear scuttlebutt about a union, it's worth talking to your lawyer about what to do, and what not to do.
There are plenty of examples of employers who may have tried to prevent unionization, sometimes to their chagrin.
Consider Regis Corp., an operator of about 10,000 hair salons based in Minneapolis. In late October, the NLRB brought charges against the company, alleging that executives forced employees to sign pledges promising that they would not sign union cards in the future, threatening them with blacklisting if they did so.
The directive allegedly came not only from managers, but from the chief executive, who issued the warning through a DVD. A hearing on the case is pending.
Other parts of the National Labor Relations Act restrict unions, stating that they cannot force employees to take up the cause, and they may not discriminate against certain union members who are critical of the union, or those who refuse to join.
An employer has the right to ascertain that the union that is coming forward for recognition truly represents the employees, with a minimum interest of about 30 percent. Under current law, employers have the right to refuse to acknowledge a presentation of union cards, and to insist upon a secret ballot election, which is intended to ensure that no employee is coerced into joining the union.
What You Should Know About Unions: Contract Negotiations
If a small-business owner decides to recognize the union immediately or if the process of unionization moves along as a result of a secret ballot election, negotiations between management and employees must take place, so that a contract can be agreed upon.
By law, the negotiations must consider the terms and conditions of employment, including wages, benefits, and working conditions.
However, in part because unions are less powerful than they used to be today, union reps are now far more likely to work with management to come to a mutually beneficial arrangement when it comes to the details of working conditions, and what type of employee does what sort of work, for example.
'It's more and more common these days for unions to be flexible and willing to work with companies to create a better workplace,' said Richard Hurd, a professor of industrial and labor relations at Cornell University.
Also, remember that depending on the business you're in, the union you deal with may not be the behemoth you imagine, but a decentralized, small organization. And, there are many flavors of union negotiations and contracts; it doesn't have to always be adversarial, according to Eve Weinbaum, director and associate professor at The Labor Center at the University of Massachusetts Amherst.
'People talk about unions as if it's a monolithic entity, and it's really not true, all the more so if you're talking about small business,' Weinbaum says. 'There's a huge range. A contract can really mean whatever you and the employees want it to mean.'
Once a contract is in place, it usually has a term of about three to five years, but that term is up to negotiation, as well.
When renegotiations come around, they are a 'fairly standard process,' says Cornell's Hurd, 'with both sides reviewing what happened under the existing agreement, and looking for places where they might want to make changes.'
When there is a conflict or grievance, especially at a small business, the issue is usually handled rather informally, with discussions with the person who has the complaint, the union representative, and management.
Especially with small employers, management is 'likely going to have some personal interaction with the representative, to find a way to work things out,' Hurd says.
What You Should Know About Unions: The Trade-offs
If you, as a small-business owner, are approached by a union, large or small, recognizing it might not be the worst thing for your business. There are trade-offs – the cost of doing business may go up, but in addition to keeping employees happy, you may be able to appeal to a whole new target client: the broader union and union supporters.
Some small employers have found it's worth the trade-off in expense to know that employees are content and feel listened-to.
'When unions are formed, what is most likely to happen, is it reduces conflict in the workplace,' Weinbaum says.
Management may also find that the structure helps set in place clearer thinking about jobs and responsibilities.
A small-business owner 'may well become better at management,' Hurd says. 'It forces them to become more systematic. Unions can be a burden, but they can actually also encourage employers to be more careful abut how they organize work.'