Replacing the Union

As their contract approached expiration in the beginning of 1989, the members of United Autoworkers (UAW) Local 486 in Cleveland, Ohio became suspicious. Their employer, Midland Steel, a maker of truck frames, did not seem to be negotiating in good faith. According to Don McGee, president of the local, there were more than 40 points of contention when the union and the company started bargaining in January; about 28 remained when the contract expired on March 1. Meanwhile, Midland was hiring new workers.

The UAW determined that Midland was trying to force it out on strike. Refusing to fall into the company's trap, the Midland workers continued working. But the company was determined to get rid of them. On May 28, bypassing established disciplinary procedures, it fired more than 250 union members for holding a safety meeting during working hours. On June 2, it fired several dozen more. The remainder of the 330 union workers at the plant went out on strike that day.

Midland never closed down. It had continued to bring new workers into the plant after the March 1 contract expiration, and when the union finally went out on strike in June, the company "had a workforce ready to go," says McGee.

Within two hours of the strike, the company had obtained a temporary restraining order limiting the number of pickets the union could post outside the plant to two, prohibiting picketing strikers from standing still or talking to their replacements and prohibiting groups of union members from gathering within 500 feet of the plant. According to McGee, the company asked the judge who issued the order to shut down the union hall, which falls within the 500-foot radius. The judge declined, but ordered the union hall windows facing the plant welded shut.

McGee says the company had substantial economic incentives to force the strike. Midland pays its new workers $4 an hour less than its unionized employees received and does not provide them with benefits such as health insurance. Equally important, it discarded an older workforce. The new, younger workers do not have built-up vacation time or a vested right to the company pension.

Still, the company's maneuver may ultimately backfire. It lost two of its three major customers, Ford and Navastar (formerly International Harvester), retaining only General Motors. A year and a half after the strike began, the workforce has shrunk to approximately 80.

The company's demise is little consolation to its former employees, who have little chance of regaining their jobs. Their only hope is a favorable ruling from the pro-employer National Labor Relations Board on one of the several unfair labor practices suits launched by the UAW. For now, says McGee, the striking workers, especially the older ones, are "stuck in limbo." They can't find new jobs and they are not eligible for their company pensions until they reach age 65.

Several hundred miles south, workers at the Ravenswood Aluminum Company (RAC) in Ravenswood, West Virginia have had a similar experience. RAC bought the Ravenswood facility from the Kaiser Aluminum and Chemical Company in 1989 and immediately adopted an antagonistic stance towards the workers and their union, Local 5668 of the United Steelworkers of America (USWA). Approaching a November 1, 1990 contract expiration, RAC refused to bargain seriously, making its first full contract proposal only seven days before the contract expired. The USWA rejected RAC's offer and its two subsequent ones, offering to continue to work under the old contract. The company refused the union's offer and told workers coming to 11 and 12 p.m. shifts on October 31 to go home.

Dan Stidham, president of Local 5668, says RAC "intended [to initiate] a lockout from the beginning." It never bargained in good faith, he says, and quickly brought "busloads of scabs into the plant." The company also installed an elaborate security system at the plant. In spring 1990, it cleared shrubbery from the plant's property and installed security cameras. In the fall, it placed a 10-foot barbed-wire fence around the plant and tripled its security forces.

RAC is currently operating the plant with more than 900 replacement workers and salaried personnel. Stidham says strikers have been subjected to harassment from RAC's security forces.

RAC and the USWA have held several rounds of negotiations under federal mediation since the lockout, but their positions appear irreconcilable. RAC has announced that it considers its replacement workers permanent, and that strikers will only be taken back to fill jobs that remain open. Stidham says there is "no way [strikers] will ever go back" and work with replacement workers. Moreover, RAC is demanding an unlimited right to contract out work and the right to restructure the plant to eliminate jobs. The union estimates that each of these demands will cost hundreds of jobs; combined with the company's commitment to the replacement workers, few jobs would remain for the strikers.

"If the company can drive the [unionized] workers out of there, cut personnel and have people run from one job to another, cut benefits drastically ... [and pay] the replacement workers $5 or $6 an hour," it will clearly save a lot of money, says Stidham, though there are questions about whether RAC can produce a sufficiently high-quality product to retain its customers. The replacement workers will certainly suffer at RAC's hands. Stidham says the replacement workers' wages have already been cut two or three times from their starting rate. They also face significant safety threats; four union workers died in the plant in the year after RAC took it over. Only two had died in the previous 18 years. The new and untrained replacement workers stand to have an even higher casualty rate. But the biggest losers, of course, are the locked out workers.

"If justice is ever done, it should be done in this case," says Stidham. But the USWA now must rely on the National Labor Relations Board to rule that RAC locked the unionized workers out and engaged in unfair labor practices. The evidence in the union's favor is strong, but the Board's hostility to workers is very likely stronger.

The situations at Midland Steel and RAC are not exceptional. They exemplify the state of U.S. labor-management relations in the Reagan-Bush era.

Replacing the right to strike

The use of permanent replacement workers--commonly known as "scabs"--has skyrocketed in the United States since 1980. In most of the defining strikes of the last decade--the air traffic controllers, Phelps Dodge, Magic Chef, TWA, International Paper, Eastern, Greyhound, the Daily News--management brought in permanent replacement workers when workers went out on strike. A January 1991 General Accounting Office (GAO) study determined that employers hired permanent replacement workers in 17 percent of strikes in 1985 and 1989.

Corporations and business associations, attempting to forestall legislation banning the use of permanent replacement workers, argue that their use has remained consistent over the last 50 years. Peter Eide, manager of labor law at the Chamber of Commerce, argues that the "threat to use permanent replacements was common prior to 1980" and that the general perception that their use has increased is a "labor-created, media-created" fiction.

The GAO study, however, found that "about 45 percent of the employers and about 77 percent of the union representatives involved in strikes ... in 1985 and 1989 believe permanent strike replacements were hired in proportionately fewer strikes in the late 1970s than in the late 1980s."

Most commentators trace the rise in permanent replacement workers to the 1981 PATCO strike, when then-President Ronald Reagan fired striking air traffic controllers and brought in permanent replacements. Labor commentators argue Reagan's action sent a message to U.S. employers that the ground rules of labor- management conflict had changed, and that more aggressive and ruthless behavior was acceptable.

The consequence of the shift in employer attitudes and strategies has been profound. "By basically pressuring groups to go out on strike by remaining totally rigid [in negotiations]," charges Cindy Yeast, spokesperson for the Association of Flight Attendants, companies can "get rid of an older, more senior workforce" and replace it with a younger, non-unionized and less expensive one. Yeast's assertion is echoed by labor leaders across the country, including union representatives of the workers at Midland Steel, Ravenswood, Eastern and the Daily News.

More significant than the number of cases in which corporations actually hire permanent replacements is the extent to which they threaten to do so. The GAO study estimated that companies involved in strikes announced they would hire permanent replacements in about 31 percent of 1985 strikes and 35 percent of 1989 strikes. Labor leaders say the numbers are even higher. Warren Davis, regional director of the Northeast Ohio region of the UAW, says locals in his region are "threatened with scabs" in about 60 percent of their contract negotiations. Lynn Williams, president of the USWA, told a March 12 hearing of the Senate Subcommittee on Labor that "in a recent informal survey of Steelworker-represented locations where strikes have occurred in the last decade, three-fourths of the respondents reported the use of permanent replacements."

The effect of these threats is to undercut labor's bargaining power by drastically curtailing its ability to make use of its most potent weapon, the strike. Yeast says that when negotiations "start to get down to the wire" and the flight attendants tell airlines they maybe forced to go out on strike, the employers' respond: "'Fine. Go out. We'll replace you."' This sort of employer intransigence, she says, "cripples our ability to come to a deal."

Even when the threat is not overt, workers' knowledge that employers are willing to use permanent replacements severely cuts into their negotiating strength. Williams told the Senate Subcommittee: "Increasingly, we have had to advise our members that they dare not strike because of the risk of permanent replacement. And, what is crucial is this: the employers knew as well as we that we were left without any meaningful strike weapon, and therefore felt no compulsion to negotiate seriously toward a mutually acceptable agreement. In this way, the use of permanent replacements by only a few employers has been sufficient to alter the balance of collective bargaining with many others."

Companies' legal license

The right of employers to use permanent replacement workers in instances where their workforce strikes for economic reasons was established by the Supreme Court's 1938 decision in Labor Board v. Mackay Radio Co. Companies are not allowed to hire permanent replacement workers in lockouts or strikes over unfair labor practices.

The "Mackay doctrine" coexists uneasily with the National Labor Relations Act of the 1935, which guarantees workers the right to strike without fear of being fired. Section 7 of the Act says, "Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection." Section 8 states that "it shall be an unfair labor practice for an employer to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [section 7]."

Unions and labor law experts argue that the right of employers to use permanent replacement workers overturns the right of workers to strike without fear of being fired. Paul Weiler, a professor at Harvard Law School, told the Senate subcommittee that "for the last several decades, labor law classes around this country have annually broken out in laughter at the thought that lawyers and judges would draw such a spurious distinction between discharging workers and permanently replacing an employee in his job."

But the Supreme Court has upheld the Mackay doctrine, writing in a 1985 decision concerning TWA's use of permanent replacement workers that workers' right to strike amounted to a "gamble" with their jobs.

The unions' response

Confronted with the Supreme Court's affirmation of employers' right to use permanent replacements and corporations' increasing willingness to exercise that right, the labor movement has turned to Congress for a legislative remedy. Senator Howard Metzenbaum, DOH, and Representative William Clay, D-MO, introduced legislation in 1990 which would have banned the use of permanent strike replacements and have reintroduced their bills in 1991. The legislation would permit companies to hire temporary replacements during strikes.

Metzenbaum has been particularly forceful in pushing the legislation. In his statement opening a March 12, 1991 hearing before the Senate Subcommittee on Labor, he said, "We are here today because the scourge of permanent replacements threatens our very system of collective bargaining. The right to strike has been reduced to the right to quit." Metzenbaum called employers like Frank Lorenzo of Eastern Airlines, the Greyhound Bus Company and the New York Daily News "scofflaws [who] have become role models for far too many American businesses." Noting that the March 12 hearing was the fifth on the topic of permanent replacements in less than 10 months, he said "It is now time for Congress to act."

Passage of the bill is "a top priority of every labor union," according to Ernie Dubester, legislative counsel of the AFL-CIO. Congressional failure to enact the striker replacement legislation, says George O'Bea, vice president of the United Paperworkers International Union, "will kill collective bargaining." In addition to lobbying, the labor movement hopes to express its concern with the bill at an August 31 Solidarity Day rally in Washington, D.C., where it hopes to mobilize tens of thousands of workers, primarily to demonstrate support for the striker replacement legislation.

Labor faces significant obstacles in achieving passage of the bill, however. Secretary of Labor Lynn Martin, testifying before the House Labor-Management Subcommittee on March 6, said that the Bush administration opposes the Metzenbaum-Clay legislation. "If the bill were presented to the president," she said, "his senior advisers would recommend a veto."

Given the active lobbying of business groups to prevent Congress from even passing the bill, labor will have a hard time mustering the two-thirds majority it would need in both the House and Senate to override a veto.

Led by the Chamber of Commerce, business has formed an "Alliance to Keep America Working" to oppose the striker replacement legislation. It includes the National Association of Manufacturers, the Associated General Contractors of America, Associated Builders and Contractors, the National Federation of Independent Business, General Dynamics, International Paper, 3M, USX and dozens of other companies.

Business lobbyists describe the effects of passage of the bill in apocalyptic terms. "Were the bill to become law," says the Chamber of Commerce's Eide, "it would completely upset the economic balance in collective bargaining situations, giving unions all power.... Employers would have to agree to what unions wanted or shut down."

The business community argues that the fact that the bill would allow employers to use temporary replacements during a strike is irrelevant, a claim hotly disputed by labor. "It is virtually impossible to hire temporary replacements for anything above the most unskilled job," Eide says. But labor representatives dismiss this claim as groundless. At the March 6 House hearing, Owen Bieber, president of the UAW, cited evidence that roughly 25 percent of the total civilian workforce is made up of temporary workers and stated that "with one in four workers already employed on a less than permanent basis, the claim that employers will not be able to hire temporaries is specious." Weiler told the Senate Subcommittee on Labor that "the available evidence is all to the contrary" of the business claim. He pointed out that many U.S. businesses choose to use temporary rather than permanent replacements during strikes, and have no difficulty attracting them. He also noted that Canada has banned the use of permanent strike replacements for the last two years, without causing any difficulty for employers who want to operate during a strike with temporary replacements.

The limits of legislative reform

In responding to business arguments about the potential effect of passage of the striker replacement bill, labor leaders have argued that even though the bill is critical to re-establishing the right to strike, it will not give unions the power to dictate contract terms to corporations. For example, in his testimony to the House Subcommittee, Lane Kirkland, president of the AFL-CIO, stated that the bill "does not come close to creating an imbalance in favor of working people. The reason for this is simple: all of the evidence demonstrates that employers have always had effective options in response to a strike other than the hiring of permanent replacements."

Unfortunately for U.S. workers, Kirkland was not arguing just for the sake of expediency. Employers have alternative ways to respond to strikes; they can use temporary replacements or wait out workers who themselves suffer tremendous economic hardship from work stoppages. Moreover, as employers became more aggressive in the last decade, their bargaining power was heightened by a number of factors. With ever-greater frequency, they employ union-busting consultants and "security firms" to intimidate workers [see "Confessions of a Union Buster" sidebar - omitted here]. When they have legal conflicts with workers, they know they can rely on a pro-employer National Labor Relations Board to adjudicate their case [see "Two Percent Justice for Workers" sidebar]. And they can threaten--and carry out the threat-to close factories in the United States and open up new ones in low-wage countries abroad.

Responding to all of these problems will require labor to dramatically increase its political power, primarily by reversing the trend of declining membership in unions and by organizing new workers. But there are steps unions can take in the short term to respond to the new bargaining climate. Strikes can only be used in limited situations where employees have significant leverage over their employer; unions must experiment with other protest tools. Davis of the UAW says he encourages workers in his region to "resort to in-plant strategies to try to keep from striking or to use them first to weaken companies before a strike." These include tactics like work-to-rule, where workers do exactly what their job description requires, but no more.

Passage of striker replacement legislation is of extreme importance to labor, but labor should also search for creative alternatives to it. Unions and their allies in Congress will have a hard time assembling the two-thirds majority they will need to override a Bush veto of the striker replacement bill, and carrying out successful strikes will be difficult even with passage of the bill. At a time when labor's strength is declining, there is a grave danger in relying only on legislative avenues to remedy inequities in the relationship between workers and corporations.

2 Percent Justice for Workers From 1982 to 1990, the National Labor Relations Board (NLRB) ruled that unfair labor practices took place in only 2 percent of the cases brought before it involving the largest 50 U.S. corporations, according to documents obtained by Multinational Monitor. The NLRB is the agency charged with investigating and prosecuting unfair labor practices arising from union disputes and elections. The vast majority of unfair labor practice charges involve claims of illegal firings due to union activity. Multinational Monitor obtained the records in response to a Freedom of Information Act request. They contain all charges of unfair labor practices against the top 50 Fortune 500 companies from 1982 to September 1990. More than 4,000 charges of unfair labor practices were filed against these 50 companies in the 8- year period. The NLRB found that an unfair labor practice occurred in only 80 cases. In these "formal settlements," the accused company usually admits to a violation of the law and agrees to provide some sort of compensation to the petitioning worker, such as back pay. Most charges filed with the Board are never even investigated. Of the approximately 4,000 cases released to the Monitor, 1,497, or 37 percent, were dismissed without investigation by regional directors. An additional 1,027, or 25 percent, were withdrawn. Petitioners usually withdraw cases because they have been advised by the Board that no complaint will be issued. A complaint is issued when a regional director decides there is sufficient evidence to investigate a case. If the regional director refuses to issue a complaint, parties can appeal to the NLRB's general counsel, though almost all appeals have been denied in the last decade. The counsel's decision is final. In addition to the 80 cases where the NLRB ruled in favor of workers, 874 of the cases examined by Multinational Monitor reached some sort of settlement. The petitioner and the charged company arrived at an independent settlement in 718 of the cases (75 percent of the settled cases). "Informal settlements," which are approved by the regional director but do not involve an admission of guilt by the company charged, accounted for 156 of the cases. The NLRB took further action on an additional 519 cases which are still pending either because of appeals or heavy case loads. Some cases have been pending for as long as three years. Labor commentators say that drawn-out unfair-firing cases deter workers from organizing as much as the actual firings of union supporters. Greg LeRoy, research director of the Midwest Center for Labor Studies, says, "it is cost-effective [for companies] to fire people today and maybe have to pay them tomorrow." Unfairly fired workers are not entitled to pay or benefits until the Board decides in their favor. Union representatives say the Board no longer fulfils its intended function: to guarantee and enforce the rights of workers to organize and maintain unions. The NLRB was established by the Wagner Act (National Labor Relations Act) of 1935, which guarantees workers the right to form unions and bargain collectively and bans unfair labor practices such as the formation of "company unions" and discrimination in hiring and firing due to union affiliation. The Wagner Act established the National Labor Relations Board as an agency with jurisdiction over labor disputes and violations of the Act. The Board is also charged with running elections for union certification. The documents obtained by Multinational Monitor lend support to unions' claims that they can no longer depend on the NLRB to enforce the laws protecting union supporters. Candace Johnson, a spokesperson for the AFL-CIO, says the NLRB's refusal to enforce labor laws has made the firing of union supporters "a fact of life," even though such action is strictly illegal. LeRoy characterizes the NLRB as "increasingly irrelevant because [it] has become so corrupted." Johnson attributes the NLRB's inaction to Board members appointed by the Reagan and Bush administrations. (The NLRB is run by five presidentially appointed Board members and a general counsel. The general counsel appoints directors for the Board's 39 regional offices, which handle the majority of the cases.) "Starting with Donald Dodson [the first Reagan appointee], we have had a pro-employer Board," Johnson asserts. NLRB spokespeople refused to comment on this charge. The cooptation of the NLRB has significantly affected unions' ability to organize and wage effective actions, according to union officials. Union organizers believe employers' ability to defy U.S. labor law with impunity has contributed to the tremendous decrease in union representation. They say they can no longer rely on interested workers openly attempting to convince their co-workers that they need a union because of the likelihood that these workers will be fired. - Jim Sugarman

Confessions of a Union Buster Marty Levitt worked for a variety of union-busting consulting firms from 1969 to 1987. In 1987, he shut down his consulting firm, The Human Resources Institute, in what he calls "shame and disgust." He now advises labor unions on union-busting campaigns. His book, A Dirty Business: Confessions of a Union Buster, will be published by Crown later this year. Multinational Monitor. What are some of the companies that you worked for? Marty Levitt: When the National Bank of Washing-ton was first organized, I think that was in the be-ginning of the 1970s, itsenta chain reaction throughout the country and a real chill and fear in the banking industry that they were not immune from union organizing. So I cut my teeth in the field with the banking industry, including the Riggs Bank and what was then American Security Trust in Washington, D.C. and Chase Manhattan in New York, and then moved to the insurance industry and all the way through manufacturing. You could name Fortune's top 50 and I or my predecessor firms had a finger on them at one point or the other. You name it, you name the industry � white-collar, blue-collar, public sector, private sector � it really doesn't matter; there is no area that we haven't touched. MM: What are the techniques you used? Levitt: The essence of successful union busting rests with the first-line supervisors. Supervisors, especially at the first line, have no protection under law, because [they are] management. Those supervisors are literally taken hostage� I took them hostage and made it very clear to them that they were going to do my bidding or their very job was in peril. And thus I could get them to carry my campaign, my message, however distorted, however untruthful. MM: What did you have the supervisors do? Levitt: I would send them out with a lot of distorted information about what a union really was, calling the union an outsider, a big business, a self-serving organization, something that was only interested in taking dues and fines, fees and assessments and all those little buzzwords. I would also force them to prey on friendships, if need be, to call in old personal loans. Part of the union buster's process is to develop background profiles on all of the employees in the either proposed or existing bargaining unit. Those profiles don't stop at a person's personnel file, their disciplinary track record, their work record, their work history. We would go into credit files, we'd go into criminal records, we'd go into anything and everything. Let's say, for example, that there was a strong union advocate who had a great deal of credibility, but somewhere in his background, many years before, he had been involved in a petty theft, a very minor criminal infraction. That person might, at the end of his shift, go to his car or his pickup truck. As he opened the door, there peering out from under his floor mat would be some expensive company tools or company property. And, by sheer coincidence, two supervisory people would be on the spot when he opened his car door. And even though he knew he was set up, he would be called into the personnel office. He would be told, "Our company policy when we catch someone red-handed stealing company property is to not only discharge them, but to bring in the authorities. But knowing that you have a prior record, we don't want to ruin your life, so if you will tender your resignation right now, we will accept it and we won't bother with the authorities." The same might happen if somebody had a substance abuse problem. They might go to their locker at the end of the day, and as they open the door,illicit drugs would fall off the top shelf of their locker. Again by sheer coincidence, these supervisors would be standing near by. I'll bring it into more [concrete] terms. [Take] the Greyhound dispute, the random shootings. I would say 90 percent of the shots fired were not fired by striking drivers; they were fired by the security firm that was hired as kind of an adjunct union buster. MM: What is the role of violence in union-busting campaigns? Levitt: The only violence today or in the last 20 years is that which is orchestrated by the union buster to make it appear to be the act of the union. Let's say that I was running a counter-organizing campaign. In the stretch run before the eventual election, a day might come when a dozen very anti-union employees' cars were vandalized. Maybe they were scratched with keys or their tires were slashed. A letter would come out from the company conveying outrage, saying, "This is the work of the union; these were very pro-company people: Is this the kind of organization that the people want representing them?" In fact, this was all orchestrated by the union buster. ... The whole process was to [give] labor ... a negative image. MM: Are laws any deterrent to those kind of activities? Levitt: Labor laws are toothless and the penali ties for violating them are nothing more than a slap on the wrist.... There are many practictioners out there. When I got into the field, there were a few hundred of us. Today there are in excess of 10,000 and it is a billion-dollar industry, breaking or violating [the law]. MM: Is there an explicit role for things like quality circles and employee-management cooperative pro-grams in union-busting campaigns? Levitt: I would say that the majority of them [are part of union-busting efforts]. They are the invention of my former field, those participation tools.... It is kind of a mirror trick, a kind of illusion to get employees to feel they are involved, when in fact they are not. In fact, I tell the labor groups that I am working with today that there are some employers who genuinely want the whole employee-involvement process to work, but they are the minority. The majority use these things as a union-busting instrument. MM: What has been the impetus behind the recent, rapid growth of the union-busting industry? Levitt: Mr. Reagan made union busting fashionable. Prior to the PATCO situation, decertification, which has now become almost a bigger business than the other forms of union-busting, was kind of a hush-hush word. But when Reagan destroyed PATCO, he made the word trendy. There are many consultants today that publicly promote decertification, that do seminars for management on how to decertify, even though in essence that is purely unlawful, for management to inspire it. I would say Mr. Reagan was without a doubt the catalyst, but there were a couple of [important] events before him. The Chrysler bail-out was the first step which opened the floodgates to my former field, because the words "concession bargaining" and "giveback" became as trendy and public as "decertification." MM: What can unions do in the face of these kinds of union-busting campaigns? Levitt: What I have been telling labor all over the country for the last three years is that there is one thing that my former field cannot deal with: the light of day, exposure. The union buster operates best when he is concealed. [Unions should] get him out in the open: who he is, what he is, where he is, everything there is to know about him, kind of what he is doing to the employees when he develops profiles. Exposure is the most potent weapon. Alongside of that is the solidarity of the workforce, because target number one of my former field is to divide that workforce, whether it is union or non-union..