Is Labor Day Misnamed?

In the past two and a half decades, organized labor has continued its declining membership as a percentage of the American workforce. Today, organized labor represents only about 10% of private sector employees and there is no indication that the recent national strikes at Caterpillar, UPS, GM or the Baby Bells will improve the lot of unions in the current economy. But organized labor remains a significant economic and political force in this country. From my perspective of twenty-five years experience representing management in labor issues, it seems a good time to pause and look back for lessons to guide management in the future.

In 1973, when I graduated from law school, the law of labor and employment was a comparatively simple arena. The Fair Labor Standards Act required minimum wages and overtime and the Labor Management Relations Act protected employees' rights to form unions. OSHA was a three year old legal infant. The Civil Rights Act of 1964 was still a sleeping giant. State law was "at will" and "right to work."

The economy was fueled by the heavily unionized "smoke stack" industries of auto, steel, rubber and coal. Employee issues were often handled by payroll or "personnel" clerks. Formal training in the field was concentrated in "industrial relations," i.e., dealing with unions, rather than "human resources management." In the twenty-five years following 1973, much of that picture has changed.

But, despite the critics of the NLRB and its political progenitors, that federal agency and the law regulating unions remain largely unchanged. In 1974, union organization was made possible in the health care industry. Differing political forces have shaped the mood and decisions of the NLRB from time to time, but the law and the agency would remain relatively constant as unions continued their decline.

Unions continue to win about one half of the NLRB elections they request - just as they did 25 years ago. And these NLRB elections are held just as promptly, or more so, than they were 25 years ago. Recovery of back pay by the NLRB has grown from $4.5 million in 1971 to almost $80 million by 1994, an increase of 1700% in less than 25 years. The NLRB has become the stable vortex of a whirlpool in changing employment law and economic forces.

The most visible changes came with increased legislation granting individual employee rights. Unions are not needed to enforce OSHA, COBRA, ERISA, the Immigration Reform and Control Act, WARN, the ADEA, the ADA, the Employee Polygraph Protection Act, and most recently, the FMLA. Even that old sleeping giant, the Civil Rights Act of 1964, was roused by its 1991 amendments.

State "at will" standards evolved to "wrongful discharge" and old common law tort remedies replaced earlier master-servant doctrines as the panoply of individual employee rights and remedies grew. And with this panoply of rights there also arose a growing sophistication in the field of human resource management, and among plaintiffs' lawyers, special interest groups and the courts and agencies of government.

The old fashioned economic warfare of the labor unions, through group strength, was supplemented (and supplanted) by the litigation of individual employees seeking to avail themselves of these new remedies. In this much more personal forum, employees could seek personal financial reward without the risk and threat of a strike and without the certain losses endured in that "group" exercise. In personal litigation there was no lost time from work, no forfeited benefits, no union dues and, under the careful care of their lawyers, employees gained a personal connection that no labor union can offer.

As the law of individual rights grew, former personnel managers became trained in behavioral motivation, training, career development, counseling, appropriate discipline, fair policies, good communication and, most importantly, participatory management. Risk management and human resources development merged to afford better workplaces and an environment which made unions less and less appealing to employees. Old labor lawyers turned their experience in campaigning against unions to assist human resource managers cope with all the necessary changes. We became human resource counselors as well as union battle horses.

And the economy changed in the same period. Global competition and new technology diminished the dominance of the old smokestack industries. The impact of a strike in any particular industry was dissipated by the availability of alternate sources, services and products.

And as new technology and new businesses grew, the modern field of human resource management and the protection of individual employee rights converged to render labor unions increasingly ineffective and inappropriate to redress employee concerns.

Ironically, the decline of the labor movement has been brought about, in part, by forces supported by labor unions in suicidal fashion. Labor unions have supported the very legislation of increased individual rights that has proved to be their undoing.

The recent resort to strikes in the communication, transportation and automobile industries demonstrate the dilemma faced by labor unions. Rather than enhance individual employee rights, labor unions now fight to hold on to the jobs they have.

The Reuters news service recently reported the following:

"GM and the United Auto Workers were simply playing out a drama that is being enacted all across the country, often at non union companies. 'People are simply fighting to hold on to what they have,' said Andrew Stern, President of the Service Employees International Union. 'These fights are not about massive wage increases or massive benefit increases. A good job with good benefits is a precious commodity in America today." (Reuters News, August 4, 1998)

But labor unions are not needed to get or keep a good job with good benefits in our economy. Unions petition the NLRB for election whenever employees show enough interest.in union representation. Reality is demonstrated by the steep drop off in union petitions for NLRB elections.

In 1971, unions filed almost 13,000 petitions for election. In 1994, fewer than 6,000 such petitions were filed. Union failures to meet the challenges of a modern economy and modern human resource management are demonstrated in this increasing failure to convince employees that union dues are needed to get or keep a good job with good benefits. The recent GM/UAW strike is another example of the damage done by a dinosaur thrashing in the edge of the tar pit of the new millennium.

But labor unions will persevere. Their resources and reserves, while not unlimited, are far from insignificant. The UAW reportedly had $1 billion in its treasury during the GM strike, including a strike fund of $600 million. But what did the UAW win if it cost GM vital market share? Ask the Teamsters what UPS lost.

Jobs are not created by unions. According to news reports, the recent CWA strikes are the result of downsizing and the resulting overtime demands. But will striking employees ever make up the wages they lose in this fashion? What if more jobs are created as a result? Whose wages will pay for those jobs? Strikes are senseless in any realistic economic model and will destroy rather than enhance individual employee rights.

Twenty-five years later, we labor lawyers have truly become employment lawyers in the broader sense. We have always been advocates of employee rights and employer responsibilities. The hobgoblin of organized labor is only one reason to be motivated, vigilant and careful. Our job will continue as long as management seeks assistance in that most devilish of tasks, i.e., understanding and managing our most vital asset, our human resources.

It is our people who made the American economy great. It is our labor unions which soil their own nest. Until unions realize and stop their own self-destructive behavior, we must continue to recognize that no business can truly prosper with an internal adversary embedded by law and contract in the very bosom of our economy.

The protection of individual employee rights and the exercise of all appropriate employer responsibilities is the centerpiece of union-free life. But increasingly, this same emphasis is required by state and federal law. And, besides, it is the right thing to do. . . .

Maybe the first Monday in September should be renamed Employees Day . . . ?

Bayard E. Harris
Mr. Harris is Of Counsel for the Firm.
E-mail: bharris@woodsrogers.com

Copyright © 1999 Woods, Rogers & Hazlegrove, P.L.C.
All rights reserved.