Every Business In America Constantly Adapts To Changing Conditions –Except Unions
By: Bill Pilchak – 6/26/14
No one can lead a successful business or business unit in the 21st century without two qualities: knowledge and the ability to respond to change.
As to knowledge: In the new century, with business developments passing like fence posts on the freeway, virtually every person responsible for running a business is in a constant state of learning. The Peter Principal, Demming, Total Quality Management, Six Sigma, Kaizen, e-business, information technology, ISO 9000, deemed export regulations, environmental impact, social media. The list goes on and on. Every year something new looms which may force change. We are, after all, in the information age, which Wikipedia describes as where “the digital industry creates a knowledge-based society surrounded by a high-tech global economy that…influence[s] how the manufacturing… and…service sector operate in an efficient and convenient way.”
Handling information – i.e., leveraging knowledge- is what we now do in America. Manufacturing has declined from 24.3% of GDP in 1970 to 12.8% in 2010. (U.S. Chamber of Commerce Study conducted by University of Michigan) For decades, Microsoft, Cisco, HP, Intel, etc. have grown while manufacturing industries making electronics, clothes, appliances, toys, shoes and many other goods have virtually disappeared from the U.S.
As Wikipedia suggests, the information age now dominates what remains of the manufacturing sector. Machine operators no longer read blue prints, turn on the lathe, cut the metal and measure with a micrometer. Now, a designer prepares a CAD rendering and a technician enters that data into a CNC machine which cuts the tool and electronically measures the finished product. CAD and CNC skills are taught at the community college level.
Reflective of greater demands for knowledge, by year 2000 college degrees became as common as high school diplomas were in the 1940’s (just under 25% of the general population). (Census bureau data) Today, the percentage of college degrees among the workforce has grown to approximately 35%, with another 30% having “some college.” (Georgetown University study) Only 35% in the workforce have only a high school diploma or less. (Id) Drill press operators have been replaced by robots who do not do not demand unrealistic wage increases, fake workers’ comp injuries, bring grievances, file employment litigation or call in sick on Mondays and Fridays. The job that exists instead, Robotics Field Service Technician, generally requires a bachelor’s degree in engineering (electric or mechanical) according to the items found on Careerbuilder.com today.
As to change: I am constantly amazed how companies employ technology and insight to upgrade service or operations to improve their competitiveness or to eke out another fraction of a percentage point in profit. A different distribution model, lowering claims experiences and insurance costs, even stiff-arming plaintiffs in litigation can all be strategies to reduce costs and prices and improve competitiveness. Every segment of the operation is expected to contribute. One client substituted a free customer service requiring an expensive full-time position with a web-based service where all customers obtained the same service by connecting to a website (and was sued for it). In 2014, increasing efficiency and changing one’s business in response to conditions is expected. For successful companies, change is constant.
Except in unions. In 2014, unions still operate on the same business model they employed in the 1950’s – indeed, since the 1930’s. That model made sense when America emerged from WWII unscathed and competed against industrial nations that had been decimated by war. The only issue then was how to split up a virtually untouchable pie.
However, once satellite transmission of data, improved air travel and container shipping resulted in global competition, the unions’ 1950 business model became obsolete. No one leading the labor movement, it seems, realizes that American employers are dancing to a different, global tune. As the State Bar President said recently about the changing environment, when the band starts playing a tango, one doesn’t merely waltz a little faster. Asian manufacturers abroad cultivate a team mentality where employees aim at the competitors. (See, e.g., a fascinating Wall Street Journal item by a 1978 consultant to Nissan: “Nissan had assumed that [U.S.]unions…were much like those in Japan, where the …bargaining unit collaborates with management to strengthen competitive position and prestige” at http://online.wsj.com/news/articles/SB10001424052702304675504579391163334785396) Conversely, U.S. unions still portray the employer as a villain, both at the local union-election level and by fueling the left’s nationwide class warfare political agenda. They gain their foothold among those employees at risk of termination because of poor performance, attendance or respect for supervision. After promising protection for those employees hurting the company’s mission, they next sell the idea that they can increase wages by threatening to shut down the company – i.e., by striking, when anyone with any knowledge knows that even the hint of a strike scares off business customers and drives them to competitors so that inevitably there will be less revenue to fund raises. Even if a strike is averted, paying wages or accepting work rules that do not make business sense to avert a strike drives up costs and impairs the company’s competitive posture. Looking at the issue in a “macro” sense, any company saddled with a union is handicapped. In a thousand ways, via work rules, contract provisions that lock companies into outmoded methods, strikes and cultivating general disdain for the company, a union saps life from a company so that more flexible competitors pass it by. Customers, too. Just as an army of aphids can kill a thriving garden plant, a disloyal workforce sucking out resources can cripple industrial plants. Even GM can go bankrupt, ironically while Japanese brands not only thrive but dominate certain markets, including California, where they have 48.4% of the market share while domestic brands have only 24.8%. (2013 R.L. Polk & Co data prepared for the California New Car Dealer’s Assn.)
I daresay one could not find a labor lawyer who has not dealt with a union who dug in and threatened labor unrest rather than permit change that would save existing work, bring in new work or enhance competitiveness generally. Unions often say “we’d rather shut the company down/ lose the work” than change a provision that has been in the contract for thirty years. Management’s excitement over devising a solution to a daunting outside challenge can evaporate upon realization that the union must agree to the change. Bringing the union into the process can be like when a special-needs cousin joins a fast-paced board game. When no one on the union team understands what competitors are doing or the latest business trends that demand change, the union’s veto-power can doom the only solution. That occurs often enough that the management team often rejoices when a degreed auditor or attorney joins the union team and can educate the bargaining unit and legitimize management’s needs.
Occasionally, we encounter colleagues who have served internships at Solidarity House. Two, in different ways, wondered why the UAW didn’t spend some of its estimated $260 Million in annual revenue to hire MBAs to provide them with a game plan for the future. If the “help” management often gets from union auditors and attorneys is any indicator, one has to believe that the nation’s manufacturing competitiveness would improve by infusing an educated viewpoint into the unions, even if the MBAs were paid by the UAW and shared their pro-worker agenda.
So, it is worth noting that Bob King, the son of a Ford Director of Labor Relations, who -with a bachelors and a law degree- has more education than any UAW President in history, is leaving office. Unless King and his father had a legendarily poor relationship, King should have gained some insight on the need to respond to outside business pressures from dinner table conversation. So, it is regrettable that as he hands over the presidency to Dennis Williams, who has no college at all and who led a venomous five year (unsuccessful) strike against Caterpillar, the UAW’s business model remains the same. As King leaves, the UAW’s only meaningful new strategy is an unsuccessful (though unopposed) attempt to also handicap overseas transplants by saddling them with the UAW’s obsolete business model.
So, what kind of ideas and changes might an educated, innovative mind suggest to unions in the information age? How about these off the top of our head:
- How about not fighting for (and achieving) reinstatement of 13 pot-smoking Chrysler workers caught on film, to avoid nationwide news items that give consumers yet another reason to avoid American brands? Doesn’t anyone at Solidarity House realize that telling America that Chryslers are built by workers high on pot hurts their membership by losing far than 13 jobs due to lost market share? Doesn’t anyone at Solidarity House realize that workers in Tennessee, Alabama, and other southern auto manufacturing states might vote against a union that fights to place stoned colleagues into an environment where loaded hilos speed down aisles and safety concerns abound?
- How about aligning the union workforce with strategies to increase market share and thus revenue, in exchange for an agreed method of measuring the economic benefits and an agreed split between workers and the shareholders of the increased profits? The kind of strategies we have in mind would be based on the fundamental principal that each employee, whether management or hourly, should do an honest and vigorous eight hours of work per day. That means the union would work with the company to:
- Stop rampant time theft where employees leave the plant after punching in;
- Eliminate no-work jobs;
- Break down job classifications that result in workers sitting idle for hours on end;
- Where idle time is inevitable, such as maintenance repair positions, fill the time with constructive duties;
- Stop the Monday and Friday call offs.
- How about permitting the company to reward hustle, good attendance and excellent work product by paying bonuses or higher wages to the best employees, instead of stamping out excellence by paying go-getters the same as the worst slacker? Why wouldn’t the union want their members to get more cash? Is there something wrong with promoting a better work ethic?
Anyone who has been involved in business for 30 years knows that America is declining on many fronts. It’s hard not to believe that Asia is winning the global competition in the auto industry because their unions “collaborate with management to strengthen competitive position and prestige.” When will American unions abandon their class warfare ideologies and begin to think outside of their outdated box?
By: Dan Cohen – 6/24/14
Over the weekend, I read an article, “Neutrality agreements aid UAW in organizing.” According to Brent Snavely, who wrote the article,
“[N]eutrality remains the exception in an environment that is hostile to most unions. Now that the right-to-work movement has penetrated Indiana and Michigan, even companies in that portion of the industrial Midwest will be emboldened to resist. The climate is not growing any more hospitable in the South, either.”
I beg your pardon Brent, but what environment are you referring to that is “hostile to most unions”?
How about a dose of reality, Brent? The National Labor Relations Act gives employees the right to self-organization, to form, join or assist a union, to engage in collective bargaining or to refrain from any or all such activities. 29 U.S.C. §157 (otherwise known as §7 rights). This means it is their own decision whether to vote a union in as their bargaining representative. This same law gives employers the absolute right to bring employees the other side of the story after the union tells them just how great they are and how much they can do for the employees. The NLRA allows the union to lie to the employees and make unrealistic promises to them. But this same law requires employers to tell the truth and does not permit employers to make promises to the employees. This cannot possibly be the environment Brent believes to be “hostile” to the Union.
What Brent must be referring to is that when employers do tell employee the other side of the story, the union generally loses the election. This is why unions push so hard for neutrality agreements, which generally prevent employers from becoming involved in the union election. They don‘t want employers to tell their employees the truth about what it means to be represented by the Union. For example, they don’t want employees to know that the International Brotherhood of Teamsters has a provision in its Constitution that takes away the right of the employees to vote on a contract that they, the employees, want to ratify. Quite frankly, referring to this environment as “hostile” is intellectually dishonest and actually ignores reality.
Employers should not sign neutrality agreements. With rare exceptions like Volkswagen in Tennessee, signing a neutrality agreement will result in a union victory and a duty to recognize and bargain with the union, which translates into less profit for the business. Employers should care enough about their employees not to sign a neutrality agreement so they can tell them the truth about unions and how being represented by a union will affect them. Employers owe it to their employees to be upfront with them.
By: Rhonda Armstrong – 6/19/14
Hot off the press: President Obama seeks to issue yet another Executive Order regarding workplace protections for federal contractors – this time extending non-discrimination protections on the basis of sexual orientation and gender identity. See: http://www.huffingtonpost.com/2014/06/16/obama-enda_n_5499377.html. To date, neither Federal nor Michigan statutes extend protections to these categories, despite much prompting from lesbian, gay, bisexual, and transgender rights (LGBT) groups.
President Obama has already been criticized in the past for issuing Executive Orders on matters that Congress refuses to make law, including requiring federal contractors to pay higher minimum wages and prohibit retaliation for disclosing or inquiring about pay. This is another example. To date, while Democrats have pushed for passage of the federal Employment Non-Discrimination Act (which would extend non-discrimination protections to LGBT groups), it has only passed Senate approval (in November 2013) and has since been stalled in the House.
The anticipated order will, however, now require all federal contractors and subcontractors to extend such protections to employees. As noted in our March 25, 2014, Blawg post, many businesses operate without realizing they are federal subcontractors. This is the second Executive Order issued in 2014 that prompts employees to determine their employer’s status.
If your organization is not a federal contractor or subcontractor, however, the planned executive order will not apply to you. All the same, Michigan employers must beware that sometimes actions that seemingly appear as sexual orientation discrimination may still be actionable as “sex” discrimination even absent specific protections in Michigan. For example, treating employees differently because they are not sufficiently feminine or masculine has been recognized to be illegal for years.
Also, employers must beware that 21 states, the District of Columbia, and some Michigan cities have enacted local ordinances that extend protections on this basis including Detroit, Ann Arbor, Ferndale, Lansing, Huntington Woods, etc. Also, some contracts (e.g., with local governments) may require businesses to not discriminate on this basis.
I am often asked whether a Michigan employer should extend its non-discrimination, harassment, and retaliation policy to sexual orientation. In my opinion, at this juncture, it is a better practice to refrain from extending your written policies to categories beyond what the law or your client contracts require. Unfortunately, a judge or jury may hold you to a higher standard based upon your own policy. However, in practice, it is wise for employers to train their supervisors to avoid discrimination and harassment on the basis of sexual preference and promptly address known or suspected incidents, notwithstanding. This sends a message that you will not tolerate archaic or biased opinions in the modern-day workplace.
By: Bill Pilchak – 6/17/14
Work ethic is one of the main traits by which I measure others. It’s the primary reason why I have devoted my talents to the defense of employment law cases. Our attorneys could easily go over to “the dark side” and advance the body of law we have learned over the past decades on behalf of terminated employees. The best plaintiff-side attorneys sometimes earn six-figure attorney fee awards for far less work.
But, it would be difficult to commit oneself to the cause of a slacker, and too often employment law cases are filed by individuals who simply didn’t have the work ethic needed for the position they filled. I would have a visceral reaction to working hard for someone who didn’t work hard.
Most of the successful people we represent, owners, supervisors, heads of HR departments, draw a significant part of their identity from their career. But in modern society, many have lost that sense of pride derived from their work. For virtually hundreds of years, whatever work one did literally defined one’s identity in the community. One’s surname was the person’s occupation and that work-related identity has been proclaimed from one generation to the next.
We might be better off as a society and global competitor if our individual reputations in the community depended on our work ethic.
Consider the following list. As it was being compiled, it became apparent that many non-English surnames describe occupations as well. Some are noted here. Feel free to send us your own contributions to the list.
Archer- Defended the realm
Baker- Prepared the bread
Baxter- A female baker
Barber- Cut hair
Bailey- An official or a steward
Barker- Tanned leather
Bauer (farmer, in German)
Bishop- Spread God’s word.
Bowman- Like Archer, defended the realm
Brewer- Made beer.
Butcher- Cut meat
Butler- Served the lords and ladies
Carpenter-Built the shelters
Cartwright- Built carriages
Chancellor- Secretary to a Nobleman
Chandler- Made candles
Clark- Derived from clerk
Cohen- Doctor in Jewish community
Coleman- Gathered coal
Cooper- Made Barrels
Dean- Headed the school
Draper- Hung fabric
Eisenhauer, Eisenhower- Ironworker (German)
Farmer- Grew Food
Faukner- Hunted with falcons
Fisher- Netted seafood
Fleischer – Butcher in German
Forester- Produced the wood
Fowler- Trapped birds
Fuller- Treats wool
Gardener- Tended the soil and plants
Goldsmith- Fashioned jewelry
Harper- Played music
Hayward- Managed vegetation that fenced in livestock
Hayman- Grew and gathered straw
Hellier- Constructed tiled or thatched roofs
Hooper- Made items for the Cooper’s trade
Horner- Made items out of animal antlers
Kellogg- Pork butcher
Kemp- One who engages in combat to defend the throne
Knight- Defended the realm
Kolar- Cartwright in Slovenian
Kovacs- Blacksmith in Hungarian
Kowal(ski)- Blacksmith in Polish (“ski” = land owner)
Kravitz- Tailor in Jewish community
Kumar- Potter in Indian
Marshall- Tended horses
Mercer- Dry goods merchant
Miller- Ground the grain
Muller- Miller in German
Painter- Spread pigment
Palmer- Wove palms into products, (as proof of pilgrimages to the Holy Land)
Piper- Played the bagpipes
Plumber- Installed pipe
Potter- Made clay containers
Porter- Gatekeeper, later carrier of items
Priest- Another clergy
Roper- Maker and seller of rope.
Sawyer- Cut the wood
Schneider- Tailor in German
Shoemaker- The cobbler
Smith- Hammered Iron
Shepard- Raised the flock
Stewart- Administrative official of an estate
Tanner- Made leather
Tailor, Taylor- Sewed clothes
Tucker- treats wool
Turner- Operated the lathe
Tyler- Laid tile
Usher- Doorkeeper for the king
Waggoner- Drove the team pulling the cart
Walker- Treats wool
Weaver- Made cloth
Weber- Weaver in German
Woodman- cut down trees
By: Rhonda Armstrong – 6/12/14
As a follow up to the Mother’s Day post, I thought it would be a good time to review employer obligations when new mothers come back to work. The biggest challenges for employers relate to breastfeeding, requests for part-time/modified schedules, and absenteeism. I have outlined below what employers should consider in these common scenarios.
Before March 2010, employers had no duty to permit the use of breast pumps at work or to provide related break-time. However, that changed in 2010 when the Fair Labor Standards Act (FLSA) was amended to require employers to provide non-exempt employees (generally the hourly-paid workforce) with reasonable break time (up to 1 year after the child’s birth) and to provide private space (not a bathroom) that is free from intrusion. While some states have laws that protect employees company-wide, Michigan has not yet joined these ranks.
So, should Michigan employers be concerned about their salaried employees, given the exclusion under the FLSA? In EEOC v. Houston Funding II, Ltd., 717 F3d 425 (5th Cir. 2013), the Fifth Circuit recently ruled that firing an employee because she was lactating or wanted to use a breast pump at work was unlawful discrimination under both Title VII (prohibiting sex discrimination) and the Pregnancy Discrimination Act (PDA)(prohibiting discrimination on the basis of pregnancy, childbirth or related conditions). While the Fifth Circuit found disparate treatment, the Court noted the PDA does not create a duty to accommodate. For this proposition, the Fifth Circuit relied upon Wallace v Pyro Mining Co, 789 F Supp 867 (WD KN 1990), aff’d, 951 F2d 351 (6th Cir. 1991), which found an employer need not provide breastfeeding leave.
Based on the above authority, an employer should not discipline an employee simply because she brings a breast pump to work. It becomes a closer question for employers when an exempt employee (a supervisor for example) asks for special accommodations (e.g., extra break time, modification of certain spaces, etc.). While the law may not require an employer to provide such accommodations, employers must still be careful. If an employer has granted similar requests to others (e.g., permitting smokers to take intermittent breaks, or providing designated areas for smoking), this is the kind of disparate treatment evidence that will attract the attention of the EEOC or even plaintiff’s counsel and create difficulty for an employer under Title VII, the Michigan Civil Rights Act and the PDA.
Requests for Modified or Part-Time Schedules:
Here is an often played-out scenario: Upon return from leave, the new mother asks if she can work a modified or reduced schedule. What should you do? If the request is due to a medical condition of the child or the mother, the employer may have obligations under the Family Medical Leave Act (FMLA) or the Americans with Disabilities Act (ADA). Employers’ obligations will depend on the particular facts. If the employee exhausted her FMLA leave entitlement, she would have no right to an accommodation to care for her child. The ADA simply does not create a duty to accommodate an employee who seeks to care for a sick family member. If the employee still has some FMLA leave time remaining or if the modified or part-time schedule is needed for her own medical condition, then reduced time FMLA rights and the ADA both come into play.
If neither the FMLA nor ADA applies, employers are generally free to deny such requests to the extent their denial is not discriminatory. For example, while the employee claimed marital status discrimination, the Michigan Court of Appeals held an employer had no obligation to honor a married woman’s request to be home at night with her family and children. Noecker v. Dep’t of Corrections, 203 Mich App 43 (1993). Like the lactation accommodation cases, a disparate treatment analysis would take center stage.
Dealing with Absenteeism for Child-Related Reasons:
While some states have specific rights relative to education functions or child medical emergencies, Michigan does not. To the extent an employee’s absenteeism or request for time off does not implicate the FMLA or ADA, as in the situation where FMLA rights have been exhausted and the time off is sought to care for the child, an employer can generally enforce its attendance policies. Thus, employers may discipline employees who violate attendance policies so long as they apply their policies in a non-discriminatory manner. Once again, employers must be aware of disparate treatment. In other words, don’t excuse male employees gone during hunting season, yet deny similar time off requests by new mothers.
The law may not require an employer to let an employee attend a kindergarten graduation or work part-time if the employee’s infant has a heart condition, but denying such requests most often will send the wrong message to your workforce particularly if the employee’s request is legitimate and the employee does not have a history of abusing the attendance policy. On the other hand, some employees’ requests are onerous or indefinite, and employers may have to say “no.” Just make sure, when you do, you have crossed the “T’s” and dotted the “I’s” because parents with sick kids garner a great deal of sympathy, rightfully so, and juries will punish you.