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The Importance of Understanding Labor Issues in Making the Location Decision

Site selectors should assess a potential location’s workforce with an eye to identifying areas of concern that might make it open to unionization efforts.

Workforce Q4 2023
Building new and expanding existing facilities are complex undertakings. Companies face myriad decisions in first selecting a site and then in the long-term challenges of managing ongoing operations. A labor market analysis is a critical step in the site selection process, as the company needs to understand the local demographics for current and future workforce availability. Part of that analysis should involve assessing the actual “labor” laboring in the area — Are they unionized, union-free, or unionizing? The answer holds important information about the company’s future workforce because it illuminates both actual payroll costs and the costs organized labor exacts on employers.

Unionization Today
The U.S. Bureau of Labor Statistics reports the union membership rate in 2022 was 10.1 percent, or 14.3 million workers, which is the lowest on record. Yet those numbers only tell part of the story. The latest Gallup poll from August 2023 reveals that 43 percent of adults want unions to have more influence in the country, and 34 percent believe that unions will become stronger. Importantly, for workforce considerations, 77 percent say that unions help more than hurt union members; a record-high 47 percent say that unions help more than hurt non-union members; and 57 percent say that unions mostly help the companies where employees are unionized.

These opinions are the result of changing demographics, societal issues and, as discussed below, the National Labor Relations Board’s (NLRB) decidedly pro-employee shift to make union organizing easier. More college-educated people view unions favorably and Gen Z is the most pro-union generation of American workers. Unions primarily rely on an “us versus them” mindset to garner support, which is currently being fueled by inflation, a tight labor market, high cost of education/education-related debt, existing and broadening wealth and wage gaps, and a post-pandemic rethinking of values and priorities.

The latest Gallup poll from August 2023 reveals that 43 percent of adults want unions to have more influence in the country. That union support is manifesting itself in workplaces across the country as Microsoft, Trader Joe’s, Starbucks, Apple, Home Depot, Chipotle, Amazon, Alphabet, REI, and others encountered historic organizing efforts. Last year, the NLRB saw a 53 percent increase in union representation petitions — the highest since 2016. In 2021, unions won about 77 percent of certification elections, 76 percent of such elections in 2022, and 80 percent to date in 2023 –— the highest win rates in five years.

Increased union activity and awareness also brought a 19 percent increase in unfair labor practice charges. And, there is the union’s ultimate economic weapon, the strike. Recent, high-profile strikes by the United Auto Workers (145,000 members), Writers Guild of America (11,000 members), and SAG-AFTRA (160,000 film and TV actors), and threatened strikes at UPS (340,000 members) and Kaiser Permanente (75,000 members) have shown unions exerting a growing influence.

As we look toward 2024, President Biden’s re-election campaign is already supported by the American Federation of State, County & Municipal Employees (AFSCME) and other top organizers. NLRB and union activity amplifies when pro-union administrations take office, and the results of presidential elections typically sway public opinion surrounding unions and union activity.

The NLRB’s Current Efforts to Aid Organizing
The NLRB’s union-friendly stance has wrought multiple substantive changes to its procedures. Almost all of these make unionizing a non-union workplace less onerous, including: Last year, the NLRB saw a 53 percent increase in union representation petitions — the highest since 2016.
  • Decreasing the time between filing a petition and actually holding a union election;
  • Putting the onus on employers to seek an election when presented evidence that a union has majority support within a bargaining unit;
  • Limiting the unilateral changes an employer can make after expiration of a collective bargaining agreement; and
  • Expanding the universe of actions that can constitute protected activity under the National Labor Relations Act (NLRA).
With respect to its pro-union election changes, the NRLB said: “The new standard will promote a fair election environment by more effectively disincentivizing employers from committing unfair labor practices.” Businesses should expect emboldened unions and increased awareness among employees for some time. Because the NLRB has jurisdiction over both unionized and non-unionized workforces, companies should review their current practices and keep these changes in mind when assessing their current operations and when evaluating potential business sites.

Amount of Union Organizing Activity Varies by Geographic Region

However, while the filing of union representation petitions has increased nationwide, the number of petitions filed varies greatly by location. For example, to date in 2023, there have been 33 representation petitions filed in NLRB Region 15 (New Orleans, LA); whereas NLRB Region 19 (Seattle, WA) has seen 215 representation petitions filed. Other regions with the most representation petitions filed in 2023 include Region 5 (Baltimore, MD) with 177, Region 1 (Boston, MA) with 130, and Region 13 (Chicago, IL) with 126. In contrast, regions with the fewest representation petitions filed include Region 6 (Pittsburgh, PA) with 42 and Region 8 (Cleveland, OH) with 45. The prevalence of union-organizing activity, and the filing of representation petitions, within the relevant geographic area should be a key consideration in any site selection decision.

While the filing of union representation petitions has increased nationwide, the number of petitions filed varies greatly by location. Unionization Is Always a Choice

The NLRA gives employees the right to join a union or engage in other concerted protected activity — and the right not to do so. Because this is exclusively the employee’s choice, a business needs to understand how to reduce employees’ interest in unionizing. This starts with understanding why employees typically seek to form or join a union: to protect themselves from unfair treatment, for a sense of belonging, and to protect their dignity. Taking action in these areas may help a business to remain union-free. The fundamentals of doing so are the same — assess your workforce, communicate with your employees, and document policies, procedures, and decisions.

Supervisors are key to avoiding most workforce issues, as many legal issues relating to employees result from the things supervisors either failed to do or did incorrectly. Employees will file lawsuits, discrimination charges, unfair labor practice charges, or seek union representation when they feel (rightly or wrongly) they are being treated unfairly, arbitrarily, or unjustly. Front-line supervisors deal most often with employees and are typically the focus of employee complaints. At the same time, supervisors — especially those with positive working relationships with the workforce — can help identify and assess employees’ issues and concerns that make the employer attractive to union organizers.

Supervisors can ascertain shifts in employee behavior or increases in certain types of complaints that could warn of potential union activity. Some early warning signs of union organizing include unusual gatherings of employees; employee disrespect; non-employees or former employees showing up on the premises or at after-work gatherings; an increased volume and/or militant tone in inquiries about policies, pay, benefits, and discipline; employee conversations suddenly stopping when supervisors appear; employees who are no longer friends with co-workers or are suddenly friends with those with whom they previously didn’t associate; employee complaints being raised by one person on behalf of a group; anti-company graffiti and pro-union regalia.

Like all relationships, frank and open communication is critical to fostering effective (and union-free) employer-employee relations. This means a business cannot wait to start effectively communicating with employees until after problems have been created, especially because an employer’s ability to communicate directly with its employees and address employee concerns is limited once they are represented by a union. Make sure that employees are aware of the open-door policy and the willingness to follow the policy. Supervisors are key to avoiding most workforce issues, as many legal issues relating to employees result from the things supervisors either failed to do or did incorrectly.

Finally, employees must be treated fairly and consistently. When issues arise, a business should document its interactions, decisions, and rationale for changes in policies, promotions, discipline, etc., and, when possible, share that with its employees. Such transparency, along with fair and prompt treatment, helps cultivate trust. Employees are usually more likely to voice concerns about workplace issues to the employer (as opposed to seeking out union representation) when they believe those concerns are being heard and responded to.

In Sum
Some dissatisfaction or conflict in the workforce is unavoidable. The most effective way to deal with the presence of union representation is to reduce the incentive for employees to feel that they need a union in their workplace. Employers should take time to assess their current workforce and the potential labor force where they may open new operations, identify potential areas (workplace policies, pay, benefits, employee complaints) that make them vulnerable to organizing efforts, and seek legal counsel for guidance.

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