The American Prospect, November 8, 2010, Monday

The American Prospect

November 8, 2010, Monday

The American Prospect

Globalization, Union-Style

The challenge is to raise U.S. workers' rights to the level that European workers enjoy -- not to lower their rights to our level.

Louis Uchitelle

Seated on a folding chair in a cramped union office in New York, Wilhelm Ado, a visiting German labor leader, explained through an interpreter that he had come to help American workers do what they can no longer do easily on their own -- organize themselves into effective unions.

That means establishing unions with collective-bargaining rights and contracts that, once negotiated, are binding on managers. American law gives workers the right to choose to be represented by unions, but today that happens less and less as managers, ignoring the law, block the process. With employers firing or harassing employees who try to organize unions, only one in seven organizing drives eventually produces a contract. So the American labor movement has turned abroad for the organizing leverage it is losing at home.

Wilhelm, a compact, 60-year-old, is a foot soldier in that campaign. In late July, he visited the United States to help the Communication Workers of America (CWA) organize workers at T-Mobile USA, whose U.S. wireless network is owned by Deutsche Telekom, the German communications giant.

In this age of globalization, large foreign multinationals are acquiring subsidiaries in the United States. Going native, they are embracing anti-union tactics they avoid at home, where unions often have legal recognition, respect, and political influence. The CWA is trying to exploit this contradictory behavior by embarrassing Deutsche Telekom into being as tolerant of unions in the United States as it is in Germany, or at least staying neutral during CWA organizing drives.

As part of this strategy, in 2008 the CWA reached out to ver.di, its German counterpart. Wilhelm led the fourth visit of ver.di officials to the United States in support of the CWA's organizing efforts. A former telephone installer, he rose to be a director of ver.di and, as such, holds a seat on Deutsche Telekom's board of supervisors. That puts him in regular contact with Rene Obermann, the company's chief executive. Indeed, ver.di officials occupy several of the board's seats, as provided by Germany's co-determination law.

Beyond engaging Obermann, Wilhelm and his union colleagues lobby shareholders and convene press conferences, hoping that descriptions of a worker's lot at T-Mobile across the Atlantic will stir up public anger in Germany. In case that is not enough, ver.di, with 2.3 million members, can appeal for support to the German government, which owns 32 percent of Deutsche Telekom.

"We want to take back to Germany the personal accounts of workers here when they try to organize," Wilhelm says. "We are meeting with call-center workers and technicians, and they will tell us about their own personal conditions, and I will go back to Germany, and the next time I see Obermann, I can tell him, 'This is what the workers told me personally.' Because the company always says the workers are happy in the United States."

The CWA has been trying for years to organize T-Mobile's 26,000 technicians and call-center employees. It even endorsed Deutsche Telekom's 2001 acquisition of the company, then known as VoiceStream, in the belief that Deutsche Telekom's acceptance of unions, required by German law and custom, would carry over to the United States and that the CWA's organizing drives could then proceed without interference from company managers. The organizing drives have proceeded, but unsuccessfully. Larry Myers, senior vice president in the company's human-resources department, says that T-Mobile "provides an employee-friendly workplace where our people enjoy excellent working conditions, competitive pay and benefits, and direct, open, and frequent communication with managers." The CWA, in sharp contrast, accuses T-Mobile of anti-union tactics. "It seems like they are not very open to the idea of neutrality, to put it mildly," says Hae-Lin Choi, a CWA official who speaks German, acts as an interpreter, and helps direct the T-Mobile campaign.

Neutrality is clearly not in evidence at the T-Mobile call center in Springfield, Missouri, where 300 people, mostly women, earn $9 to $10 an hour for a 40-hour work week, with infrequent raises. When CWA organizers first distributed leaflets there two years ago, repeating the process for a day or two every month or so since then, the managers disputed the CWA's right to leaflet from the sidewalk near the one-story call-center building, claiming the sidewalk as company property.

That dispute was settled in favor of the union, according to Judy Graves, a regional CWA organizer, but there was another, more daunting obstacle -- high turnover. The operators responded readily enough to union organizers. Many, Graves says, contacted the union through the telephone number or e-mail address printed on the leaflets or gave their phone number to those who approached them with leaflets. Discussions followed, off-site and during off-hours, and more than a few operators signed up for a representation election, Graves adds. But then many were gone, resigning voluntarily in most cases, often exhausted by the pace of having to handle one call after another, in several-minute bites. Indeed, turnover at many call centers across the country is more than 50 percent a year.

"A union would stabilize turnover," says Graves, whose own spirits were lifted during a visit to Germany last May, where she met ver.di officials and handed out leaflets at the annual Deutsche Telekom shareholders meeting. "Turnover tends to decrease as people gain a voice on the job and just-cause grievance standards."

As globalization spreads, allowing corporations to play off workers in different nations, it also promotes global unionism. In the process, a cross -- border labor movement is beginning to add muscle to American unions. The United Steelworkers, the United Auto Workers, the Teamsters, the United Food and Commercial Workers, and the Service Employees International Union are all engaged in the novel tactic. SEIU is perhaps the most successful to date. Working in part through UNI Global Union, a relatively new Geneva-based federation of 900 unions in numerous countries, it is managing to organize thousands of American security guards whose employers were acquired by foreign multinationals.

A prime target is the Pinkerton company, which, fittingly enough, began as a supplier of strikebreakers in the 19th century. Today, Pinkerton's owner is Securitas AB, a giant security company headquartered in Stockholm, Sweden, a solidly pro-union nation. Securitas acquired Pinkerton in 1999, and in 2004, it signed an agreement with three unions -- SEIU, the Swedish Transport Workers Union, and UNI -- in which the company formally agreed not to interfere with SEIU's organizing efforts in the United States. Even with this commitment to neutrality, though, the going has been slow. Six years have passed, and Securitas employees in fewer than a dozen cities have been organized.

That is partly because the company's American managers have resisted, despite the formal agreement. "They push back, they argue that unionization will destroy profitability, they threaten to quit if SEIU signs up their employees, and that makes Swedish executives in Stockholm nervous," says Tom Woodruff, SEIU's executive vice president. "They don't want to have to send Swedes to run the American operation."

That's one dynamic; there's another. "Many foreign multinational corporations cooperate with unions in their own countries but consider that they have a license in this country to prevent workers from unionizing," says Richard Bensinger, a former director of organizing for the AFL-CIO. They often argue that they are not in violation of American labor law, embodied in the National Labor Relations Act, and when they are found to be in violation, the penalties are mild compared with those in many other countries. "There is an arrogance in their attitude," Bensinger says.

And an irony. Wal-Mart, staunchly anti-union in America, has reached collective-bargaining agreements in several Chinese cities, signing contracts with state-sanctioned unions. IBM, resistant at home, accepts labor norms abroad. "When IBM opened a plant in Sweden in the 1980s, it did not want to be union," says Richard Freeman, a Harvard University labor economist. "Swedish employers said, 'This is the way we do it in our country.'"

The right to organize a union and bargain for a contract is enshrined in federal law, but the procedure is complicated. In most cases, a majority of the workers to be represented must sign cards requesting a representation election. The workers must then, by majority vote, authorize a union to represent them in bargaining a contract. The Obama administration has proposed simplifying this process but has not yet pressed reform in Congress. The procedure is still drawn out, giving managers time and opportunity to throw up obstacles: discharging employees who participate in organizing campaigns; harassing others by demoting them or reassigning them to overnight or early morning shifts; cutting benefits; keeping organizers away from plant sites; calling all workers at a particular site to a meeting at which unions are criticized just when union organizers are about to hold a meeting to convey the opposite message. Such actions rarely encounter public scorn, as they might in European and Asian countries where unions are woven into the social fabric. "There is a cultural acceptance of anti-union behavior in the United States," says Christy Hoffman, an SEIU official who recently joined the staff of UNI Global Union in Geneva.

In sum, we are no longer the pro-union nation we were in the immediate post-World War II decades, when roughly 40 percent of the workforce was unionized and union contracts influenced wages and working conditions for millions of non-union workers as well. Cesar Chavez, the United Farm Workers leader, mounted his nationwide grape boycott in the late 1960s on the strength of public sympathy for organized labor.

The deterioration in a single generation is considerable, particularly in the last decade. Only 12 percent of the nation's workers (and just 7 percent of private-sector workers) are represented by unions today, with a further decline likely as union organizing dries up. The National Labor Relations Board (NLRB) reports a "precipitous drop" since the late 1990s in the chief means of union expansion: workplace elections to certify bargaining units. Only 1,304 elections took place last year, down 60 percent in little more than a decade, with only 44,000 workers gaining representation in the elections won by unions. That number, too, has declined precipitously.

What stands out in this data is the role of the foreign company operating in America. One-third of the dwindling number of companies organized successfully in recent years were foreign-owned, according to a study by Kate Bronfenbrenner, director of labor education research at Cornell University's School of Industrial and Labor Relations. One of her colleagues, Richard Hurd, estimates that one-half of all workers organized into bargaining units in the United States in recent years benefited from neutrality agreements. Most of them involved foreign companies with operations in the United States, but in some cases, an American company acquiesced to neutrality in exchange for a union's support in dealing with the federal government, or with state governments, on a regulatory matter or other issue important to the company's managers.

"All this started in the 1990s, accelerated a decade ago, and has accounted for a majority of new bargaining units in the last five years," Hurd says. As a result, successful organizing today increasingly means that corporate managers have agreed in advance to remain neutral, often prodded by overseas owners and unions.

"The law simply does not make it possible at the moment for workers to organize if management wants to resist," says Thomas A. Kochan, a management and labor expert at the Massachusetts Institute of Technology's Sloan School of Management and co-author of the study that found that only one in seven organizing campaigns produces a collective-bargaining agreement when management actively opposes the effort. Illustrating the point, Bob King, the new president of the United Auto Workers, points to foreign-owned auto plants in the U.S. The UAW has asked BMW, Volkswagen, Mercedes Benz, Honda, Nissan, and Hyundai, all of whose workers are organized abroad, to recognize unions at their American plants, or at least not resist organizing campaigns. So far, they have refused, King says, adding that the NLRB election process is "broken" and should be abandoned. "In the early days, workers did not rely on the law," he says. "They did sit-down strikes and direct action."

He singled out Toyota in particular for criticism. "It has had plants here for 25 years," King says. "It is unionized in England, in Australia, almost everywhere else in the world, and here it isn't, because we as a society don't stand up for a worker's First Amendment rights: freedom of speech and association."

If autoworkers and T-Mobile employees have not yet benefited from the new cross-border pressures, thousands of American school-bus drivers have. Rather than bus children themselves, 30 percent of the nation's school districts contract out this service to private operators, according to the Teamsters. Starting in 1999, a British multinational, FirstGroup PLC, headquartered in Aberdeen, began to acquire school-bus companies in this country, vaulting into first place in the industry in 2007 with the acquisition of a company called Laidlaw, then the largest private operator of yellow school buses. (The drivers are FirstGroup employees; the buses they drive are almost always school-district property, and while 70 percent of the school districts still employ their own drivers, the outsourcing of this task to lower-wage drivers is growing.)

As FirstGroup expanded its American operations (it also owns Greyhound and Ryder Trucking), it came under pressure from unions in Britain and the United States, often coordinating their efforts, to cease interfering with attempts to organize FirstGroup's American workers. In 2007, First Group finally agreed, asserting in a letter to shareholders that its American employees, like those in Britain, "should be free to choose whether or not to be represented by a trade union through a secret ballot conducted by the National Labor Relations Board."

To enforce this stated resolve, FirstGroup appointed a monitor, William B. Gould IV, a professor emeritus at Stanford University Law School and former chair of the NLRB during the Clinton administration. Under this new arrangement, the International Brotherhood of Teamsters expanded its representation of drivers employed by FirstGroup from 14,000 in 2007 to more than 25,000 less than two years later.

Gould credits FirstGroup's chief executive, Sir Moir Lockhead, for the change of heart. "I was approached by Sir Moir, who felt that his reputation was being sullied unfairly, and also that of his company," Gould says. Sir Moir asked Gould to act as monitor and to investigate any complaint filed by either a union or an individual employee. "I explained to him that [the] Taft-Hartley [Act] allows employers to aggressively campaign against unions," Gould says, "and he pledged not to do anything that would directly or indirectly disparage unions."

Gould says that in his role as monitor, he has processed 130 complaints of unfair labor practices, nearly all of them charging that the company violated its self-imposed neutrality. For each complaint, he has sent an investigator to follow up and has filed a report. "I think a major factor in the adoption of this program -- indeed, the dominant factor -- is the commitment of Sir Moir Lockhead," Gould says. (Lockhead is scheduled to retire on March 31.)

In the trenches, local Teamsters leaders are also upbeat, although perhaps not as upbeat as Gould. Teamsters Local 671, for example, represents more than 500 of the nearly 800 school-bus drivers in the Hartford area of central Connecticut. The final 150 drivers to join the Teamsters came in a spurt after FirstGroup dismantled its roadblocks and embraced neutrality in 2007, according to Tony Lepore, the local's business agent. With neutrality, the margins of victory have been greater in each representation election, Lepore says, and the contracts negotiated with FirstGroup have been more generous, with the union winning additional paid holidays, attendance and longevity bonuses, paid bereavement leave, and a top wage of $19.10 an hour for a 25- to 35-hour week.

"We might have eventually achieved the same results without neutrality," Lepore says, "but it would have taken us twice as long to do it."

As if to document that point, the Teamsters are struggling to organize the school-bus drivers of another British company, the National Express Group PLC, which operates in the United States as Durham School Services and has an 11 percent share of the private market, second only to FirstGroup's 42 percent. Highly organized in Britain, National Express shuns unions here, although in a submission last year to the British Parliament's Joint Committee on Human Rights, the company said it "has adopted policies to ensure full compliance with labor laws throughout all of our operations, both in the United Kingdom and the United States and Canada."

The Teamsters represent 4,000 of the Durham drivers and are seeking to organize many more. "We are in a pitched battle," says Iain Gold, director of the Teamsters' Strategic Research and Campaign Department. "We are trying to document their behavior. We are trying to engage their shareholders. We had folks at their annual meeting this summer letting British shareholders know how their company is operating in the United States."

So it goes across the spectrum. ThyssenKrupp Steel, the German giant, is expanding a recently opened steel plant near Mobile, Alabama, and the United Steelworkers is seeking to organize not only the 700 existing workers but those to be added -- doing so not through confrontation but through an alliance with IG Metall, the German metalworkers union. The goal is to pressure ThyssenKrupp into a neutrality agreement. "In the cases where we try to organize without global solidarity, it is much more difficult," says Patrick Young, an official in the United Steelworkers' strategic campaign department.

H&M, a big Swedish-based chain of clothing stores, is unionized at home and in other countries. The retailer, however, has resisted unionization in the United States, specifically the organizing efforts of the United Food and Commercial Workers (UFCW), despite a neutrality agreement that H&M signed with UNI Global Union. The UFCW was a partner to that pact, and largely as a result, it has organized 1,200 H&M workers in New York City, according to Patrick J. O'Neill, the union's executive vice president and director of organizing. "We haven't achieved our final goal, but we have engaged the company on a number of levels," he says.

Foreign-owned banks in America are yet another target. So are food-store chains, manufacturers, and DHL Express, a German-owned package-delivery company. The list continues to grow as foreign multinationals establish or acquire American subsidiaries and the nation's unions respond, not through in-your-face organizing campaigns but through pressure to transfer to the United States a foreign owner's commitment to labor back home.

Hae-Lin Choi, the CWA official, is guardedly hopeful that will happen in the case of T-Mobile USA. She notes that Deutsche Telekom is bringing in a new CEO for T-Mobile -- Philipp Humm, the first German to head the American subsidiary -- and that maybe he'll be more neutral. Perhaps the pressure from ver.di's members in Germany is beginning to have its effect. "It is unclear," she says. "Humm could go either way."


Louis Uchitelle writes on economics topics for The New York Timesand other publications. He is the author of The Disposable American: Layoffs and Their Consequences.