Labor's New Face, New Tactics

A new union federation, already not much smaller than the AFL-CIO, is behind a stepped-up organizing drive. Corporate America will have to pay attention

By Aaron Bernstein

The unions that broke with the AFL-CIO in July met in St. Louis on Sept. 27 to formally found a rival labor federation. The seven unions involved in the Change to Win Federation, as the group now is called, represent 5.4 million workers, vs. nearly 9 million in what's left of the AFL-CIO.

The new federation, led by the Service Employees International Union (SEIU), the country's largest and fastest-growing union, is intended to help the unions involved focus their energies on new membership growth.


  They split in frustration at what they saw as lackluster leadership by AFL-CIO President John Sweeney, who has been unable to stem labor's long-term decline during his 10 years in office.

"We are going to collectively turn ourselves into an organizing machine by helping each other grow," vows Bruce Raynor, President of UNITE HERE, which represents needletrade and hotel workers.

It's not clear how seriously the unions involved will take the new federation. SEIU President Andy Stern, Raynor, and the other leaders made it clear that they had no intention of replicating the AFL-CIO's structure. Instead of the AFL-CIO's annual budget of close to $100 million, the new group adopted dues giving it just $16 million a year.


  In addition, the person whom federation leaders had hoped would replace Sweeney at the AFL-CIO, UNITE HERE co-president John Wilhelm, has decided not to lead the new federation. That task has been left to SEIU Secretary-Treasurer Anna Burger.

Change to Win leaders say their goal is to collaborate and mount much larger and more aggressive recruitment drives. If they succeed, their efforts could pose significant challenges to some large companies. Like other unions, the SEIU and UNITE HERE have largely abandoned federally supervised unionization elections as a method of seeking new members. Instead, they prod companies to agree to recognize unions when a majority of employees sign union authorization cards, a process knows as "card check."

Labor's goal with this approach is to get employers to remain neutral and allow employees to decide whether to join a union or not without input from management. Union leaders have long complained that employers use coercive tactics -- both legal and illegal -- to block unionization efforts. Indeed, they blame labor's decline on the union-avoidance strategies routinely used by large companies these days.

A key Change to Win strategy is to pressure companies to sign neutrality agreements. As a result, some employers could find themselves facing more united attacks from labor.


  "Employers would be crazy not to rethink their labor strategies to be ready for the neutrality campaigns likely to come from this new labor federation," warns Philip B. Rosen, who heads the labor practice of Jackson Lewis LLP, one of the country's largest union-avoidance law firms.

Companies that are already partially unionized are the most likely to be targeted by the new federation, which in addition to the SEIU and UNITE HERE consists of the Teamsters, the United Food & Commercial Workers, the Carpenters, the Laborers, and the United Farm Workers. (The last two unions haven't quit the AFL-CIO, although Laborers' leaders have said that their union probably will over the next month or two.)

The unions' recent track record gives an idea of what they're likely to do in the new federation. For example, the SEIU and UNITE HERE recently won neutrality agreements from Sodexho (SDX ), Aramark (RMK ), and Compass (CMP ), three multinationals that together employ more than 1 million workers around the globe, mostly in service jobs ranging from cleaning uniforms to corporate benefits administration.


  The unions spent more than a year pressuring the three companies to go along, and ultimately came to a hard-fought compromise. While no one will talk publicly, insiders say the companies agreed to remain neutral in recruitment drives involving about a fifth of their U.S. workforces. They will expand the agreement to more workers only if the unions can win similar neutrality deals from rival companies.

Federation leaders intend to use similar multi-union efforts at other large companies. Of course, labor's shrinking membership means that there are fewer partially unionized companies available as targets. Still, if the strategy succeeds, labor's future may look brighter than it has in years.

Bernstein covers labor from the Washington bureau of BusinessWeek

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