Client Bulletin #527
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In a much-heralded campaign to organize Volkswagen's Chattanooga manufacturing plant, the United Auto Workers union lost an election last week by a vote of 712 to 626. There were 1,550 eligible voters in what was essentially a plant-wide unit. In what may have been one of the first "Quickie Elections" overseen by the National Labor Relations Board, the actual vote was set a mere nine days after the parties entered into a Stipulated Election Agreement. Before the election, VW management had agreed to remain neutral, provide union organizers with on-site access to employees during working hours, and restrict the efforts of anti-union employees. These arrangements were largely unprecedented in the history of the labor movement. Based on the amount of assistance that VW provided to the UAW, most labor experts had expected an easy union victory.
Not surprisingly, however, many saw a potential victory for the UAW as being bad for future business development in Tennessee and throughout the Southeast. Local state politicians, including Republican Sen. Bob Corker and Gov. Bill Haslam, publicly urged VW employees to vote against unionization as a means of preserving jobs and helping the economy. Indeed, Sen. Corker issued a statement immediately before the vote, saying that if workers voted against the union, "Volkswagen will announce in the coming weeks that it will manufacture its new midsize SUV here in Chattanooga." Although VW management denied any quid pro quo between the vote and its future business plans, the UAW has claimed foul. Whether such third-party comments constituted "free discussion" protected by the Constitution, or threats and coercion that improperly interfered with employee free choice, is open to some conjecture. In any regard, such conduct may be the subject of objections from the UAW.
Achieving victory at VW's Chattanooga plant had long been considered the cornerstone of the union's Southern strategy. As president of the UAW, Bob King had bet his legacy on being able to unionize several of the foreign-owned auto plants in the South. The results of the Chattanooga election place such a goal in jeopardy and make it far less likely that the UAW will regain its former membership levels, as well as its strength and prestige within the AFL-CIO. Once commanding a membership of 1.5 million workers, the UAW now has a mere 400,000 dues-paying members.
As an outsider looking in, here are my observations of last week's UAW loss at VW in Chattanooga. The one overriding conclusion is that the only winners in this election were the majority of VW's employees. They overcame an unprecedented combined effort by both management and the UAW to facilitate unionization of the employees. How the two forces failed to achieve this result will be discussed for some time to come, but in all likelihood they acted on false assumptions and with a degree of over-confidence that ultimately proved fatal. Here are some specific factors that probably played a role in the union's defeat:
- From everything that I have read, there has been no indication that employees felt mistreated or disrespected.
- Similarly, I am unaware of any issue of unfairness or discrimination.
- Despite being paid less than other transplants and their counterparts in Detroit, the Chattanooga employees did not perceive themselves as underpaid – at least, not when compared with recent hires in Detroit and their counterparts at other non-union auto plants in the South.
- Dues were a negative, as usual.
- The UAW's perceived role in causing, at least in part, the demise of the auto industry in Detroit was also a negative.
- The demographics of the voting unit did not favor the union.
Based on the above, one has to wonder what the UAW tried to promise employees in return for their votes. Apparently, not enough. However, the lack of factors traditionally found in successful union's organizing efforts may have had the most to do with the union's being unsuccessful in Chattanooga.
Here are some thoughts on the tactics employed in the campaign (and remember that hindsight is 20/20):
- Has the UAW not heard of Specialty Healthcare? Certainly, there had to have been smaller bargaining units at VW in which the union could have won.
- A number of employees may have felt sold out by the neutrality agreement entered into by VW management.
- The anti-union employees were strongly motivated and showed the benefits of having an energized employee committee.
- Local press and high-level politicians were sufficient to communicate the main campaign theme – corporate-wide job security (as distinguished from individual).
- Within the dynamic of this election, a quickie election format did not have a decidedly adverse effect.
- Captive audience speeches by management may be overrated.
- The alleged "third-party threats" may well have had some impact but probably were not decisive. (Should the UAW choose to file objections, the NLRB may disagree with this assessment.)
In the end, the prevailing impression is of a majority of workers being satisfied with their wages and treatment, and not being willing to risk their job security in today's labor market. Viewed in this fashion, one can argue that the UAW's loss in Chattanooga was probably a result of poor timing more than anything else.
So is Big Labor dead in the South? Maybe so, but that prognosis is probably premature. Other unions are taking the leadership role away from the UAW and using more aggressive, confrontational tactics that are aimed at industries where employees more commonly view themselves as disenfranchised and needing outside representation. The Service Employees International Union most immediately comes to mind as being one of these new standard bearers for the future. At least that's one man's opinion . . . .
About Constangy, Brooks & Smith, LLP
Constangy, Brooks & Smith, LLP has counseled employers on labor and employment law matters, exclusively, since 1946. A "Go To" Law Firm in Corporate Counsel and Fortune Magazine, it represents Fortune 500 corporations and small companies across the country. Its attorneys are consistently rated as top lawyers in their practice areas by sources such as Chambers USA, Martindale-Hubbell, and Top One Hundred Labor Attorneys in the United States, and the firm is top-ranked by the U.S. News & World Report/Best Lawyers Best Law Firms survey. More than 140 lawyers partner with clients to provide cost-effective legal services and sound preventive advice to enhance the employer-employee relationship. Offices are located in Alabama, California, Florida, Georgia, Illinois, Massachusetts, Missouri, New Jersey, North Carolina, South Carolina, Tennessee, Texas, Virginia and Wisconsin. For more information, visit www.constangy.com.