Peaceable Kingdom

Rick Peterson is a quiet, soft-spoken man who seems to put plenty of thought into his answers. So ask him what it was like to move from a non-union to a union warehouse, when he became a manager for Leach Company, and his answer is reasoned and considered.

It’s also not what you would expect to hear. “I’m convinced that in a union environment, you have to be a better manager,” says Peterson, director of materials management for the Oshkosh, WI-based Leach, which makes and distributes garbage trucks. “You have to work harder at it, at getting people involved and in staying on top of things. Because if you don’t work hard at it, you’re going to have problems.”

Peterson is not alone in feeling this way. Many distribution and fulfillment center managers remain terrified of unions, and still treat them as if they are the dastardly villain who twitches his mustache before tying the damsel to the railroad tracks. But others, like Peterson, have learned how to coexist with unions — no matter what their personal or political feelings are toward organized labor. These managers realize that no matter how difficult unions can be (and many say they make the job much more difficult than it needs to be), they can’t let the union become an obstacle to getting the job done.

“If I had my druthers, I wouldn’t want the union here,” says Kevin Woolcott, director of operations for a Peapod Inc. grocery distribution center in suburban Washington. “But since they are here, I need to find a way to have a good working relationship with them. I think I have been able to do that.”

A disquieting influence

Talk to industry managers and you’ll learn two things: One, they don’t like unions, and two, they don’t like them because they think unions are a powerful, influential, and disruptive force. Says one Midwestern distribution center manager: “I’m not going to be quoted on this, am I?”

Yet the people in charge don’t necessarily have to feel that way, say many people who work with unions. For one thing, unions aren’t that common in warehouses and distribution and fulfillment centers, although it’s difficult to find exact numbers. An AFL-CIO spokesman declined to be interviewed for this article, and complicating matters further is that the fulfillment business cuts across the industries that the U.S. Bureau of Labor Statistics tracks for union membership. But membership is certainly no higher than one out of five employees (in the category for operators, fabricators, and laborers), and might even be as low as one out of 20, the proportion for wholesale employees. More evidence pointing to the low side: Union membership is concentrated in the Northeast, while membership rates are below 15% in the South, and below 5% in North and South Carolina.

“Unions are just not a subject that comes up when I talk to my colleagues,” says Dave Abeloe, distribution center director for Patagonia Inc. in Reno, NV, and supervisor of 165 non-union employees. “We’ll talk about technology, but unions, even when I talk to people in Reno, where they are in some of the hotels and casinos, are not an issue.”

So why do unions have such a bad reputation? Some of it may be because they deserve it, point out several industry managers. There is the fear of strikes, of featherbedding and gold-bricking, of losing control of the workplace. In addition, they mention arcane and antiquated work rules, like those that prohibit non-union members from carrying a parcel or package from one part of the warehouse to another. They talk about complicated and convoluted grievance procedures, which can drag on for months. They lament that unions add a layer of bureaucracy to the workplace, bringing a third party to the relationship between employer and employee. And many are convinced that unions too often don’t have employees’ best interests at heart.

Woolcott, whose 145 employees are represented by the United Food and Commercial Workers and whose drivers are being courted by the Teamsters, remembers that when one of his former employers declared bankruptcy, he called the union’s business agent to tell him what was happening. The agent, he said, promised to call the shop steward, but never did — leaving the union members in the lurch.

“Unions are in it for the money,” Woolcott says. “They’re in the business of collecting dues, and maintaining the union’s livelihood. They don’t have the same interests you have in caring for the employees on your team.”

The bad old days

Those attitudes, says Sherry Travers, a partner in the employment law group at Thompson-Coe, a Dallas law firm that represents employers, have a long history, and date to the earliest days of union organizing. Then, labor disputes were more common, more violent, and taken much more personally by both sides.

What she says she has seen in her practice, though, is that these perceptions may not be as true as they once were. The United Auto Workers has a seat on the boards of directors of several of its companies, quite an accomplishment for a union that staged bloody, sit-down strikes at Ford in the 1930s. Take away the UPS strike in the mid-1990s, and exclude the labor troubles plaguing the airlines and major league baseball, and how many nasty confrontations have there been in the past decade?

“What has happened over the past several years,” says Travers, “is that unions have become more conciliatory. There seems to be a new realization on the part of unions that they have to cooperate to preserve jobs, especially as the economy becomes more uncertain.”

What’s even more intriguing is that some research suggests that union shops may be more productive than non-union ones. The leading study, done in the mid-1980s and titled “What Do Unions Do?” found that union employees don’t change jobs as often and are more loyal to their employer. These trends tend to translate into lower costs, as well as higher returns for employers on worker training.

There seem to be several reasons for more amicable relations between labor and management:

  • Declining union membership. The number was 20.1% of all workers in 1983; in 2000, it was just 13.1%. Fewer members mean less leverage and less militant leadership.

  • Better, and more progressive, management. That’s because managers are generally better educated and more flexible than their counterparts in the old days. And even if they don’t like organized labor groups, says Travers, they understand the need to work with them in a way that older managers, who wanted to crush them, didn’t.

  • Increased competition from foreign labor. Unions, faced with the prospect of globalization and losing jobs to offshore workers, are becoming more flexible about employment rules, working conditions, and the like.

“Instead of being adversaries, each side is beginning to realize how dependent they are on each other,” says Gerard Nierenberg, author of The Art of Negotiating and president of the Negotiation Institute, which sponsors seminars and workshops to teach labor and management how to work together (and whose clients include General Motors). “What companies are learning is that it’s a self-fulfilling prophecy to expect the worst. What unions are learning is that it’s not in their best interests to destroy an industry.”

On the shop floor

Many managers who work with unions say they have seen evidence of each of these changes. But equally as important, says Peterson, whose employees are represented by the UAW, is how managers and supervisors deal with their unions on a day-to-day basis. And that’s where being a better manager comes into play.

“What you need is a little perspective,” he says. “You have to understand that your employees want to be treated fairly. Wouldn’t you?”

The key to that approach is improved communication between management and labor. “What too many employers don’t realize is that having a union doesn’t mean you can’t supervise,” says Gary Chaison, who teaches labor relations at Clark University in Worcester, MA. “What it means is that you have to justify your decisions, that they can’t be arbitrary. As long as you negotiate the rules and enforce them, you aren’t going to have as much trouble as you think.”

There are many ways to keep communications open, from Web sites to formal, town hall-style meetings. Several managers, including Peterson, say they find weekly meetings between key management and labor personnel to be very effective. At the meetings, management can offer reasons for any actions taken, labor can offer opinions about the reasons, and each side can air grievances before they reach the formal grievance stage.

“Nine out of 10 disputes I have seen between management and union,” says Travers, whose unionized clients make up 10% to 15% of her practice, “is when management is disrespectful of the union. When there is an attempt at collaboration, there are very few disputes.”

Being open is not just touchy-feely management talk — it works. Peterson says that when he started at Leach, there was a formal grievance every other day. Today, he says, the shop goes months without employees filing any. Travers says that one of her clients, whose employees are represented by the machinists (hardly a bunch of pushovers), was averaging eight to ten grievances a month when they hired her firm. Today, they get one or two every couple of months, thanks to shifting their focus from skirmishing with the union to communicating with it.

One reason openness works is that union leaders, from shop stewards on up, are politicians with a constituency to please, says Chaison. Employers often overlook this reality — usually to their disadvantage. If knowledge is power, any union official who can get an employer to be open is going to impress his or her constituency, and will be grateful to management for the help.

“They have to respond to pressure from within the union and they have opposition within the union,” Chaison says, “and they have to be able to deliver to the membership. That’s why it’s to an employer’s advantage to have a union leadership that’s not intransigent but is stable and realistic. When management helps them, they can come out looking good at their job.”

Some companies have taken this principle so far it surprises even Travers. Several of her clients, faced with the need to make cutbacks and lay off workers, not only opened their books to the union to justify the job cuts, but also paid for experts to explain why the numbers in the books added up to layoffs.

“Five years ago, you never would have seen anything like that,” she says. “But from the employers’ point of view, it was well worth the cost. They saved money on grievances and on attorney’s fees, and they got the union to sign off on the cuts without any trouble. The union was able to go to the membership and say, ‘We’ve seen the books, and they need to make the layoffs.’ Now, there aren’t a lot of companies who are doing this, only a couple that I’ve seen, but I think you’re going to see more and more of it over the next couple of years.”

Rambo in action

Yet employers still make dangerous, morale-shattering mistakes. Some errors stem from peer pressure, the fear that other employers will think less of the company if it doesn’t try to suppress union activities, says David Jacobs, who teaches at the Kogod School of Business at American University in Washington, DC.

Another dangerous influence is what experts call the Rambo manager, the renegade supervisor who runs roughshod over employees regardless of company policy or union contract. The results are often disastrous. Rambo managers provoke the union, which then sees management not as a partner but as an adversary that can’t be counted on to live up to any bargains it may make. Worse, Rambo managers feed labor’s paranoia and natural distrust of management. Its attitude becomes not one of conciliation and working together, says Travers, but of “What else have they lied to us about?”

Grievances pile up, turnover increases, and productivity suffers. Can a strike be far behind? And all because management, for whatever reason, wouldn’t supervise the supervisor. Says Travers: “That’s the surest way to give the union power over the workplace.”

Of course, that’s something no one wants, even managers who don’t see unions as an obstacle. The goal, after all, is to share power so everyone — management, the employees, and the union — benefits.

“One of the things I’ve seen over the years,” says Jacobs, “is that management spends so much time fighting the union they don’t see that they can work with it. When the union comes in, they’ll start with a knockdown, drag-out brawl, and things just get worse. If they just try to keep an open mind at the beginning, they stand a much better chance of success.”

Jeff Siegel’s articles have appeared in Forbes, American Way, and a variety of other consumer and trade magazines. He lives in Dallas.

Balancing Act

THE STRIKE POLARIZED the community, with employees decrying working conditions and lambasting management as bloodsuckers, leeches who cared more about making a buck than about the people who did the work. Management, on the other hand, complained of rising costs and inefficient workplaces, and of the need to increase productivity.

Sound familiar? It did in Massachusetts in 1860, when 20,000 shoemakers went on strike — at the time, the largest walkout in U.S. history.

Unions are not a novelty in the American workplace, and neither is management’s distaste for them. Princeton historian James McPhee points out that American labor started organizing as early as the 1830s, about the same time that the country started to become more urban and more industrialized.

Yet unions, no matter how powerful they became, never became as forceful in the U.S. as they did elsewhere. There is no American equivalent of Britain’s Labour Party, founded by trade unionists as their political voice, and no U.S. union has ever brought down a government, as has happened frequently throughout Europe.

“That’s because the U.S. has a much more prominent culture of union resistance than Europe does,” says David Jacobs, who teaches at the Kogod School of Business at American University in Washington, DC. “I think that has a lot to do with the political system, which allows 50 states and 50 different sets of laws toward unions. When that happens, the attitude toward unions tends to be that of the least common denominator.”

The U.S., says Jacobs, runs the gamut from right-to-work states (including South Carolina, which is so anti-union that it won’t recruit unionized companies to move to the state) to places like Michigan and New York, where laws are much more union-friendly and where organized labor wields considerable political power.
— JS

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