Labor & Employment Law

Thoughts on Private Sector Union Relations

By charlesakrugel

I recently completed my 3rd union negotiation & dispute resolution resolution of the past 6 months.  One case involved a successful union decertification, & the other 2 involved settlements before the NLRB.  For a variety of reasons, I won’t identify my clients or the unions we dealt with.  The reasons for confidentiality include confidentiality agreements in any settlements, I don’t want to upset people & disturb business operations, & it serves no benefit other than my bragging.

What I’ve learned from these negotiations & dispute resolution processes is that in most private sector industries unions aren’t needed.  Sure, in any vocation involving mining, long distance transportation or any other heavy industrial or physically & mentally dangerous activities, unions serve a valuable safety purpose (i.e., monitoring, inspection & enforcement), but short of safety, unions don’t do much for private sector businesses & employees.

Many of the businesses I deal with have no history of union grievances or unfair labor practice charges, & some rarely communicate with their union at all.  Furthermore, due to continuing influences of racism, sexism & religious bias, unions these days often serve as a barrier for minority & female hiring.  Although, out of desperation & reality, unions have improved in their egalitarianism, many of the reasons for which they were founded (e.g., wage inequality, hours & conditions of employment) no longer exist to the extent that unions can remedy or assist with the current state of these concerns.  For example, unions have been largely silent when it comes to the “glass ceiling” that still confronts many women, immigration issues, & they’re too slow reacting to job classification changes & economic conditions.

Essentially, unions today are largely pension fund managers.  They exist to fulfill their pension obligations.  They need new & existing members in order to keep their pensions funded so they can stay current on payouts.  Most of the unions that I’ve dealt with have pensions which are significantly declining in value since economic shakeup 2008.  Some funds that I’ve examined lost billions in less than a year.  A few are doing well considering the circumstances.  Nevertheless, like Social Security & Medicare, these pensions have dismal long term prospects.

Moreover, many of these funds are plagued by corruption regarding fund management choices.  For example, many funds invested in risky securities (with the hope of a kickback or insider information like investment advice).  Some funds have a lack of oversight to the extent that their officers & directors often take expensive trips to resorts & similar destinations for meetings amongst themselves, investment advisors & potential investors (part of the kickback they receive).  Some of this information is discoverable through these funds’ federal filings (not the insider information/kickbacks of course).

Also, many private sector employees will never receive their pensions & many will get only pennies on the dollar due to government takeovers (PBGC-Pension Benefit Guranty Corporation), bankruptcy & other refinancing schemes.  Many future pensioners don’t plan on staying in America, which means that they’ll have to arrange to receive their pensions in other countries.  Some of these future pensioners will probably forget that they’re owed a pension, won’t know how to retrieve it from another country, or realizing that the pension is a ripoff, they’ll take an early withdrawal for a fraction of what they’ll be owed if they waited until they’re fully vested.  In short, many of today’s private sector workers who are covered by these pensions don’t understand their rights & obligations.  Some employees I speak with even believe that somewhere out there is a  retirement account with their name on it.  With pensions, that’s not true.  It’s a fund that has tens to thousands of enrollees & all that money is commingled.

When you add this to the multi-employer pension withdrawal liability that’s mandated by ERISA–Employee Retirement Income Security Act, any reasonable person should see that these many of these funds don’t have the wherewithal to survive.

Full post as published by Charles A. Krugel, Labor & Employment Law, HR Law on March 08, 2011 (boomark / email).