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Membership in labor organizations may be at an all-time low, but unions are hardly passe. In fact, they are making a strong comeback. Spurred by the recent downturn in the economy, they are getting attention and respect from white- and gray-collar employees, sectors of the workforce that have been unreceptive to union representation in the past. Labor also is getting smarter, using sophisticated techniques to target companies and industries once considered immune to organizing. The result could mean big problems for big business. These days companies must respond quickly to changes in the marketplace and press for increased efficiency and productivity in their workforces. Unions, however, can impede these efforts through rigid enforcement of bargaining obligations and contractual limits on subcontracting and other changes affecting the workforce. Unions also tend to foster an “us versus them” mentality that hinders cooperative efforts between management and employees. Traditionally unions have focused on representing blue-collar employees in manufacturing and ignored the service sector and white- and gray-collar employees. But now unions see New Economy companies as fertile grounds for organizing. Santa Clara, Calif.’s Yahoo! Inc. and Seattle’s Microsoft Corp. are just two of the most prominent high-technology union targets to date. They also may be just the beginning. In fact, unions are covering all the bases, tapping employees that work both in the Old and New Economies. They’re courting, for example, customer service employees in e-commerce and direct marketing, technicians and clerical workers in heavy industry, dispatchers in the power sector, and physicians and residents in health care. The National Labor Relations Board is adding fuel to the unions’ efforts. In the last few years, the NLRB has demonstrated a willingness to expand the categories of employees who may be included in a bargaining unit — rejecting employers’ contentions that individuals should be treated as managers, supervisors, confidential employees, or instructors, ineligible for inclusion in a bargaining unit. At the same time, the NLRB has imposed greater restrictions on the tactics that employers may use to oppose unionization during organizing campaigns. For example, the NLRB recently imposed restrictions on employers’ use of paycheck stuffers (reminders on how union dues will diminish employees’ take-home pay), raffles (incentives to encourage employees to vote on unionizing), and employee videos (images showing employees in the workplace). The faltering economy also has boosted interest in traditional forms of compensation and in job security issues — the classic rallying points for unions. When the market was soaring, employees showed less interest in hourly wage increases, health benefits, and pension plans. Instead, they were enticed by incentive pay, stock options, and profit sharing plans. Now that some of those stock options are worthless and 401(k) savings are in jeopardy, employees are once again focused on bread and butter issues. Layoffs and a tighter job market also have heightened employee interest in protecting job security — a cornerstone in collective bargaining agreements. At the same time, unions are cultivating the contingent work force: independent contractors and employees supplied by temporary agencies. Under the National Labor Relations Act, independent contractors are not considered “employees” subject to protection, and employees who are “leased” from temporary agencies have not generally been included in an employer’s work force for representational purposes. Recent rulings by the NLRB, however, have made it more difficult to categorize individuals as independent contractors. The NLRB has also made it easier for unions to organize employees nominally employed by temporary agencies. The NLRB has held that employees supplied by a temporary agency may be included in a bargaining unit with company employees, even if the employer and the temporary agency have not given their consent. Although the employer may avoid the harmful effect of these rulings by minimizing its control over the leased employees, doing so may adversely affect the employer’s ability to maximize job performance. Electronic communications are providing unions with unprecedented access to employees. Unions are using sophisticated Web sites to attract particular groups of employees. The standard workplace “no solicitation” rules usually do not apply to these sites. Worse for the employer, the NLRB recently announced that broad bans on non-work related e-mail usage (which include pro-union messages) may violate the NLRA. Although not yet tested in the courts, these decisions surely will be. And if the decisions are upheld, unions will be able to communicate directly with employees at their workstations at virtually any time. Another potent organizing tool is the neutrality agreement. In its simplest form the agreement provides that the employer stay “neutral” when faced with union organizing efforts. These agreements also may stipulate that unions have access to the employer’s plant and the workforce so that organized labor may meet with employees, distribute union literature, and solicit votes. Some neutrality agreements even provide for interest arbitration, which establishes the terms of the initial union contract. At every opportunity unions have been flexing their economic muscle to get neutrality agreements from employers. And they’re meeting with success. Most recently unions won neutrality agreements from West Coast power companies that are eager to build new power plants. Often unions use greenmail, threatening to oppose companies’ request for the environmental permits needed for plant construction. Unions also are putting the squeeze on already organized companies, pressuring them to sign neutrality agreements so that organized labor can make inroads with the companies’ unorganized segments. Another effective unionizing device is the filing of class action suits against uncooperative employers. Typically the union will agree to drop the suit in return for the company’s voluntary recognition of the union or for obtaining a favorable collective bargaining agreement. These suits are frequently based on alleged wage and hour violations or violations of Organizational Safety and Health Act regulations. But they also can be based on any alleged violation that affects a wide range of employees. By threatening to sue, organized labor is betting that employers will capitulate to union demands out of fear of the high cost of litigation. So what can companies do to turn this union tide? First, believe that unionization is not inevitable. Employees spend their hard-earned wages on dues for a reason: They feel they need someone to deal with management on their behalf because management has not been listening to their concerns. So management should start listening — really listening. Companies need to address employees’ concerns promptly. And explain the reasons for corporate actions. They should show that they’ve made a good faith effort, and do all this now, on the companies’ terms. Or some union may soon be forcing the companies to do it on its terms. John M. Skonberg is the cochair of the labor law practice group at San Francisco’s Littler Mendelson. E-mail: [email protected]

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