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The Crack-Up of Business's United Front Against the Employee Free Choice Act

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On Monday, an unlikely new battle in the heated political war over The Employee Free Choice Act broke out: A fresh round of in-fighting among businesses over this major legislation that aims to give workers a level playing field to organize unions. The bill has been portrayed by Big Business as the apocalypse that would destroy a civilization. Now, however, big and small business leaders alike are taking aim at each other's views of the corporate hard-line opposition to the proposed legislation.

The latest lightning-rod for controversy is a so-called "compromise" proposal floated in the last few days by leading retailers Starbucks, Costco and Whole Foods that they're billing as a "Third Way" approach that acknowledges the need for a "level playing field." But it actually guts two of the most critical elements of the Employee Free Choice bill: majority sign-up and mandated arbitration for employers who sabotage first-contract negotiations. Even so, by breaking ranks with the hard-line, vituperative corporate front groups that have demonized the bill, they've drawn outraged attacks from their Big Business allies, in part because they're essentially conceding that the current system isn't fair to workers. As The Hill and others have reported, the anti-union opposition machine kicked into action:

"These companies should be standing up for the basic rights of their employees instead of kowtowing to the union bosses -- or cutting backroom deals trying to protect their narrow interests," said Mark Mix, president of the National Right to Work Committee. "One thing that is for sure: should this scheme lead to passage of a bill that forces more workers into monopoly unions, these companies' blatant disregard for their own consumers won't soon be forgotten...."

"These huge companies are apparently willing to sell out hundreds of thousands of small ones under the guise of making some phony and misguided compromise with Big Labor," Mix added. "We believe we have this draconian bill defeated outright, so these actions may well lead to the bill's passage."

Unions, pro-labor Democrats and progressives were nearly as harsh in condemning the proposal. That's especially the case when the plan comes from executives like Starbuck's Howard Schultz, a unionbusting "poster boy" for the need for the Employee Free Choice Act. All that mellow music and overpriced lattes at those coffee shops may somehow convey a progressive vibe, but the reality of workers' rights at the company is quite different: Last December, for instance, even the Bush administration's National Labor Relations Board found that the company illegally fired three New York City baristas in its drive to bust any union organizing.

During a press conference call yesterday featuring small business executives who favor the Employee Free Choice Act, Mary Beth Maxwell, executive director of The American Rights at Work organization, echoed the view of many progressives in denouncing the new Starbucks-backed proposal: "This proposal is no solution at all: It's a plan written by CEOs for CEOs and it doesn't fix the fundamental problems that workers face that allow corporations too much power."

But while that strong criticism may be expected, she and other savvy pro-labor advocates still see something quite significant in the willingness of these three companies to at least admit that the current system needs reform and to offer the appearance of compromise.( One reason: a majority of the public supports the pro-worker legislation, as both independent and labor-sponsored polling shows -- a finding that will be reinforced today as the Peter Hart firm unveils a new AFL-CIO-sponsored poll on public attitudes. )

Maxwell remarked, "It's clear that business is divided: While some are making cynical PR threats about Armaggedon [over the legislation], other business leaders see we have a serious need to level the playing field. In a climate of anger at CEO greed and corporate excess, some of them realize they have to at least look like they're talking about solutions."

Their controversial proposal would prevent workers from having the right, now decided just by employers, to choose a union through the majority sign-up approach -- and it bars arbitration as a remedy to prod employers to engage in good faith bargaining after a union wins. In nearly half the cases after a successful union vote, workers never reach a first-contract agreement with employers who use a variety of stalling tactics.

She added, "We welcome folks who are committed to leveling the paying field, finding solutions and fixing this broken system. But this particular proposal is no middle ground."

David Madland, the director of the American Worker Project at the Center for American Progress Action Fund, noted other ways that the signal from these three retailers could help alter the political landscape for reform legislation:

The announcement indicates that at least some of the Employee Free Choice Act's opponents sense that the bill is gaining traction and mere opposition will not be effective. These big name retailers' concession that the process for establishing unions needs reform also highlights how unrealistic the hardcore opposition to labor law reform really is. The announcement could even make some hesitant elected officials more comfortable with voting for true labor law reform.

The proposal from Costco, Starbucks, and Whole Foods fails to address key problems with the current union election system and should not be enacted into law....

Still, the effort by Costco, Starbucks, and Whole Foods is a good sign for labor law reform.

Extreme antiunion companies and their front groups have for too long led a hardline opposition to the Employee Free Choice Act that has been treated with respect in the press. A few companies have championed the bill, but too many companies--especially large ones--have remained on the sidelines, giving cover for the extreme opponents. Public statements by major retailers like Costco, Starbucks, and Whole Foods help show just how radical the opponents of the Employee Free Choice Act are.


In contrast to the millions of dollars spent on anti-union propaganda and falsehoods focusing on how the proposed law would somehow take away workers' rights and destroy businesses, some small business owners see the value that union workers bring to their workplace and the economy. For instance, Ruth Schepp runs a small leather-making firm in West Fargo, N.D., employing six people; she sees their membership in the Machinists (IAM) union as a way to work together to build a stronger, growing firm. She told the conference call yesterday, "I want my employees to be part of my corporation as it grows. As they start to make a better living, they're part of that growth. As they earn hopefully better than middle-class wages, with pension plans, good jobs that support our families here in our community, in our state and our country. We need to keep our money here in America."

As the AFL-CIO blog reported about these small-business owners, they see unions as contributing well-trained, productive workers with a long-term commitment to their businesses and the customers they serve:

David Horndasch, the owner of Wisconsin Vision, echoes that sentiment, saying that having a union--Food and Commercial Workers (UFCW)--makes his employees more career-minded and invested in providing excellent service. Horndasch says having a union doesn't undermine his competitiveness; it gives him a competitive edge.


"With our employees, we've had an opportunity to develop policies and procedures that benefit the company. It's been an entirely positive experience.

"Horndasch says that without a strong middle class, small businesses like his won't be able to function--and giving people a good union job makes sure they can be part of a strong middle class."

Equally important, the press conference call highlighted a new report for the Economic Policy Institute that definitively shows, showcasing decades of economic and labor board data, that the unionizing of firms has no impact on either job loss or closings. The myth that unionization will kill jobs and drive companies out of business is the biggest fear being stoked by the business lobby: it was still being peddled yesterday in a Republican-run "hearing" by the Senate Republican Conference that trotted out business owners and experts who proclaimed that the "terrifying" Employee Free Choice legislation would be a "disaster" for businesses.

On the other hand, the research explored yesterday during the pro-union conference call was a review of the real-world experience of numerous firms and their economic outcomes, as shown in assessments of federal labor board data since the 1960s. It was reviewed in the new paper by one of the world's leading labor economists, John DiNardo of the University of Michigan. "We don't find any effect on employment," DiNardo says, comparing similar companies that had close votes either for or against a union -- so the only major difference was whether they were unionized. In contrast to fear-mongering about unions causing businesses to shut down or lay off workers, DiNardo sums up:

This research provides evidence that this causal effect of union recognition is zero....In short, the biggest fear voiced by employer groups regarding unionization--that it will inevitably drive them out of business--has no evidentiary basis.

The report offered additional business-friendly benefits of the legislation:

In addition, DiNardo says that workers who are members of unions have strong incentives to cooperate and ensure that their bargaining results in a company that's sustainable in the long term.

"The obvious fact that unions have no stake in driving employers out of business is reinforced by this evidence. It seems clear that American employers as a group need not fear firm insolvency as a result of granting workers rights to collective bargaining."

The value of decently-paid, well-trained and dedicated employers to their companies' futures and the broader economy was the basic message of yesterday's call by small business owners to pass the Employee Free Choice Act. Take the view of one Pittsburgh businessman (via AFL-CIO Now):

In Pennsylvania, Jim O'Malley, who owns and runs the Print and Copy Center of Pittsburgh, says he appreciates the training and apprenticeship programs through his employees' union, which help ensure he has great employees who can contribute to the company's overall functioning. Says O'Malley:


"My employees offer good, productive ideas, and we all work together. We have common goals we work towards.

I look at my employees as a partner. They understand that if the company is successful, they share in that."

That's a far cry from Armageddon, and one of the reasons that the hard-line anti-union business front is starting to fall apart.

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