The Decline And Fall Of A Union
Joanne and Les Frederick blame themselves for the unionization of their company, a Somerville, Mass., custom photo lab with sales approaching $1 million a year. As Northeast Color Research Inc. expanded from a 2-person shop in 1960 to a 25-person organization in the '70s, the Fredericks failed to define pay policies or work rules. And their production supervisor, with no experience or training in supervision, never learned how to communicate with employees.
In 1980 the company's dozen production workers finally rebelled: They petitioned for a National Labor Relations Board-sponsored election and voted 9-3 to be represented by the United Food and Commercial Workers Union. The Fredericks negotiated their first union contract.
That first union contract was also the Fredericks' last, however. Northeast Color became part of a modest but nonetheless significant national trend: union decertification. Less than a year after the contract was signed, production employees ousted the union.
Employees in 656 bargaining units throughout the United States voted to end their union representation in 1980 the last year for which complete statistics are available. That is the largest number on record, representing a fourfold increase since 1965. And the statistics don't even include cases like Northeast's, where the union decided to give up the fight without forcing a formal election.
Joanne Frederick, who has served as Northeast Photo's chief executive officer since the start of the union crisis, hated the idea of sharing management responsibility with a union. She felt that no union was likely to reflect the company philosophy that serving professional photographers with good craftsmanship is more important than making money. She knew that Northeast had neglected that philosophy, but she says she would rather have closed shop than give up the ideal.
The law required Joanne Frederick to deal with the union once employees had voted to make it their bargaining agent. And despite her anti-union bias, she had to admit that the professional leadership of the Food and Commercial Workers was useful to her. "The union helped us to establish and enforce discipline and teach these young employees what it meant to have a job," Joanne declares.
The union's usefulness stemmed in part from lack of work experience. Custom photo finishing attracts young people fresh out of school who hope to acquire craft skills necessary for a career in photography. Many revolted at attempts to enforce rules. But Frank Papineau, vice-president of the union local that had organized Northeast, tried to point out the Fredericks' right to prohibit employees from leaving the building during coffee breaks, for example.
Despite Papineau's help, the Fredericks remained anxious to rid themselves of the union. "You feel your employees have voted you out of management," Joanne Frederick says. She hired Julius Steiner, a lawyer with a national reputaion for toughness in labor relations. Steiner cautioned that it is illegal for employers to encourage employees directly to oust their union. But he also told Joanne several ways she could encourage decertification indirectly. Based on his advice, she:
* improved aspects of the workplace, such as cleanliness and lounge facilities, not covered in the union contract.
* improved supervision by taking over much of the guidance of employees herself, encouraging the retirement of the authoritarian production supervisor and replacing him with someone who had proved his abilities in other companies.
* suspended employees, including two of the three most militant unionists, who regularly broke the union-approved work rules. (The pair soon quit.)
* accepted union requests for contract provisions she knew the employees wouldn't like. (For example, the union asked for strict descriptions of the work each employee would be expected to do, while the upwardly mobile workers at Northeast wanted opportunities to do as many different jobs as possible.)
* refused to accept union demands for a closed shop, so employees would always be aware that they could quit the union* prepared to replace the unionists if they struck.
* carefully sought new employees, as old employees quit, who shared her philosophy of craftsmanship.
Dissatisfaction with the union grew. The shop steward badgered new employees constantly until they signed up as union members. Talented employees resented promotion based on seniority. Rancorous disputes broke out among employees. Turnover, always high in the photo-finishing business, became more rapid than usual because the workers disliked the turmoil in the shop. "Money became secondary to some petty, picayune battles," says Papineau. Sometimes the tactics in the battles became more than petty: One day, employees arrived at work to find someone had glued the doors of Northeast shut with epoxy.
During the shop steward's vacation in April 1981, 10 months after the union contract was signed, the production employees asked to meet with Joanne Frederick to discuss the company's problems. Specifically they wanted to know why the company couldn't replace a worn-out film mounter that had a tendency to scratch photographers' film. Frederick, who by that time had spent $26,000 on union-related problems, announced that she couldn't afford the new equipment and blamed the union. In response to questions, she noted that employees could call the NLRB for information regarding a decertification election. She left the office, and within hours received a call telling her that employees had decided to hire their own attorney -- and were petitioning for decertification.
After several efforts to dissuade the employees, the union's staff asked them to take a straw vote on whether they wanted the union to continue representing them. Eight workers voted against continued unionization, three voted for it. When the petition came up for an NLRB hearing, the union asked to be allowed to withdraw from representing the employees.
Papineau says the union saw no purpose in forcing a vote when its relationship with Northeast's workers was obviously not working. He suggests that Northeast was able to eliminate the union because of the company's high rate of turnover, because of the union leaders' emotionalism, and because of the smallness of the company, which allowed Frederick to get to know her employees well.
Northeast certainly typifies the size of companies where unions commonly lose decertification elections. NLRB statistics show that 60% of elections in which unions are ousted take place in bargaining units with fewer than 20 employees.
But Northeast's workers also ousted the union because Frederick effectively used most of the standard tactics available to anti-union managers. She demonstrated that the company would do more to provide fairness for employees than the union would; she made the disadvantages of unionism obvious; she cracked down carefully on misbehavior by militants; and she hired new employees who were unlikely to sympathize with hostility toward management.
Moreover, Steiner argues, the Northeast experience typifies what happens when unions attempt to organize outside their traditional industries. The unions find footholds only in companies that have grossly neglected people, they fail to understand the special characteristics of the new industry, and then they fail to consolidate any gains.
Even when a union is clearly providing no benefits to employees, however, Steiner warns that no boss should assume that employees can be induced to decertify it. And employers must be cautious in fighting unions. New York attorney Peter M. Panken, of Parker Chapin Flattau & Klimpl, notes that many petitions have been thrown out because the NLRB concluded that bosses had directly encouraged employees to file them.
Frederick now acknowledges that unions may not be bad for companies with different philosophies. She says that one New York-based competitor told the Fredericks that "a union is like a motherin-law who comes to live with you. You may not like everything she does, but she sure makes a great baby-sitter." The competitor argued that his union relationship enabled him to handle all the vexing questions of pay and benefits in a few weeks of contract negotiations.
Most entrepreneurs probably don't want to share decision-making power with a union, however. And for them the Fredericks' experience may contain an important warning. Steiner's law partner, Stephen Cabot, a well-known foe of unions, argues that many employers are behaving during today's recession in ways that will lead to union-organizing campaigns when the economy improves. "They're abusing the living hell out of their employees," he declares. Some are seeking to cut wages when they don't have to; others who must cut wages are failing to communicate why.
Cabot notes that most unions cannot organize effectively now, when employees feel there are few job opportunities available if a confrontation with management leaves them unemployed. But unless employees feel they are treated fairly during the recession, Cabot says, many will seek to organize when the economy is strong again. Many companies, he adds, could soon find themselves facing crises like the one at Northeast Color.