A Fox in the Henhouse

When an employer agrees to remain neutral while a union attempts to organize its employees, the situation is more akin to a fox in the henhouse than a level playing field. Add card-check recognition to the mix, and the fox turns into a wolf. The National Right to Work Legal Defense Foundation recently filed an action on behalf of six employees of a company challenging such a double trouble agreement between the Steelworkers Union and a private investment firm which holds controlling interests in the corporate stock of the company, as well as various other enterprises.

The neutrality and card-check agreement was entered into in November 2000, when the company agreed "to adopt a position of neutrality in the event that the Union seeks to represent any non-represented employees of the Company." The agreement sets out some ground rules for organizing and provides that the investment firm will recognize the union as the representative of a particular bargaining unit if a majority of employees in the unit signs union authorization cards. The investment firm agreed to extend the neutrality agreement to any of its enterprises in which it directly or indirectly owns more than 50 percent of the common stock, controls more than 50 percent of the voting power, or has the power to direct management and policies.

The six employees are alleging that the neutrality agreement violates the prohibition in the federal labor law preventing employers from paying, lending, or delivering "any money or other thing of value" to any union and prohibits unions from requesting, demanding, receiving, or accepting any money or other thing of value from an employer. The "thing of value" in this action refers to the revenues from dues and other fees and assessments the union will be able to collect as a result of increased membership rolls under the neutrality and card- check agreement. In a July 29 press release, the NRTWF said the "unprecedented" lawsuit is intended "to overturn an illegal sweetheart arrangement that requires all companies acquired by [the firm] to help impose unionization on their employees." According to the release, the employees already had rejected union representation several times.

Lesson for the Union-free Employer

As the fox in the henhouse analogy suggests, a neutrality and card-check agreement is a dream for the union, exceeded only by an employer inviting a union in to talk to its employees and to sit down at the bargaining table. In some instances, employers unsuccessful in countering an organizing campaign among a segment of the workforce will agree to such an arrangement for the remaining union-free employees. The opportunity this provides a union is extraordinary. For that reason, unions increasingly are seeking such agreements and using outside pressure to do so.

Unionized employers must present a steely resolve at the bargaining table and refuse to agree to these proposals (even when the union offers enticing concessions). Also, given the fervor that can result from a union demand for such concessions, employers should be on the lookout for signs of union efforts to engage the sympathy of community, religious and civic leaders, and enterprises such as banks and investment companies doing business with the employer. Such corporate campaigns can build momentum and achieve critical mass faster than the fox can catch its next meal.