Labor Relations: Leading From Behind

Unions have high hopes for expanding their reach through more-flexible, less-regulated worker centers.

By Robert J. Grossman Dec 1, 2013
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December Cover

As the AFL-CIO prepped for its annual meeting in September 2012, private-sector unions represented just 6.6 percent of workers, down from more than 20 percent three decades ago. Participation in public-sector unions, at 35.9 percent of workers, also was slipping. Overall, the percentage of organized workers had fallen to 11.3 percent, leaving unionization in the U.S. at its lowest level since 1916.

Union workers generally earn more and receive better benefits than their counterparts in similar industries, yet the economic argument was not resonating. The news on the political front also was discouraging, with the Employee Free Choice Act stalled in Congress and some pro-labor National Labor Relations Board (NLRB) initiatives—such as a workplace poster requirement and shorter time frames for certification elections—tied up in litigation.

In the months leading up to the convention, union leaders held listening sessions online and in person, receiving ideas and suggestions from thousands of members. Some suggested more-intense political action, while others called for more attention to traditional organizing. Still others saw great opportunity to broaden labor’s potential member pool by partnering with outside organizations that shared—at least in part—the same economic objectives.

After debate, the convention endorsed by acclamation a resolution calling for the AFL-CIO and affiliated unions "to deepen their relationship with worker centers and other emerging organizations that advocate for workers who are not covered by a collective bargaining agreement, not union members and not represented by a union."

And so, worker centers emerged as the central focus of this year’s strategy for organized labor.

Worker Centers

Worker centers have been around since the 1990s and, unlike unions, have been growing in number and influence. In 1992, there were five centers in the U.S. Today there are 215, according to Janice Fine, a professor of labor studies and employment relations at Rutgers University. Fine is widely recognized as the leading academic expert on worker centers.

Dubbed by employers as UFOs, or "union front organizations," worker centers are typically 501(c)(3) nonprofit organizations offering a variety of services to their members. These services include worker advocacy, lobbying, legal advice and training. The centers serve immigrant populations and other workers in industries that pay low hourly wages and have high turnover such as fast food, home health care, farming and retail.

Each center focuses on a different type of worker. Examples include the Koreatown Immigrant Workers in Los Angeles and the Coalition of Immokalee Workers in Florida, which works with immigrant laborers who harvest tomatoes. Other centers target taxi drivers, day laborers and domestic workers who can’t join unions because they are independent contractors. All share a core agenda in their desire to help their constituents achieve "economic justice" and to improve workplace conditions and safety. Center supporters and partners include coalitions of religious, civil rights and environmental groups, such as the NAACP and the Sierra Fund, as well as union members.

Legal Latitude

With the exception of a few—such as Justice for Janitors, which is part of Service Employees International Union (SEIU)—centers are not subject to the National Labor Relations Act (NLRA) or the Labor-Management Reporting and Disclosure Act (LMRDA).

As a result, unlike unions, they are free to engage in corporate campaigns that include secondary boycotts (attempts to influence the actions of one business by exerting pressure on another business) and picketing that relies on activists who are not directly affected by the employer.

They do not have to gain approval from a majority of workers before confronting employers as unions would under collective bargaining rules. Nevertheless, through corporate campaigns, lawsuit settlements and class-action victories, centers interact with employers and are party to understandings that affect terms and conditions of employment.

And as nonprofit 501(c)(3) corporations, they are required to disclose less about their internal workings and finances than unions that must comply with the LMRDA. All sources of center funding, for example, usually need not be revealed.

Recently, Rep. John Kline, R-Minn., chairman of the House Education and the Workforce Committee, requested that U.S. Secretary of Labor Thomas Perez rule that LMRDA reporting requirements be applied to worker centers because "they are dealing with employers directly on behalf of employees." The secretary rebuffed the request.

Similar requests to the NLRB about placing worker centers under the auspices of the NLRA would likely also receive a cold shoulder.

Among the issues employers want clarified are whether employers that settle lawsuits or yield to demands made with picketing or boycotts are interacting with worker centers in an "ongoing" manner that should be construed as collective bargaining. If it is construed as collective bargaining, worker centers engaging in such activities would be subject to the NLRA and the LMRDA.

Staffing and Funding

Most worker centers have small full-time staffs and external advisory boards. Centers can be found in towns, cities and rural areas.

Membership numbers range from under a hundred into the thousands. ROC-United (Restaurant Opportunities Centers United), for example, began modestly in New York City in 2001. Today, it has 10,000 members with affiliates in Chicago, Detroit, New Orleans, Miami, Washington, D.C., Philadelphia, Los Angeles and the San Francisco Bay Area. The New York Taxi Workers Alliance claims 17,000 members. The National Domestic Workers Alliance has 10,000 members who work as housekeepers and nannies.

Some centers require no membership dues. Others collect dues on an ability-to-pay basis. ROC-United, for example, asks for $5 a month. On average, foundations provide 90 percent to 95 percent of centers’ funding, Fine says. Indeed, ROC-United receives 95 percent from such sources, says Saru Jayaraman, ROC-United’s co-founder and co-director. Additional resources may come from government or union grants.

Employers are concerned that, without greater transparency, it is difficult to follow funding sources. For example, SEIU last year gave $2.5 million to worker center New York Communities for Change, a transaction brought to light by a Wall Street Journal article.

Collaboration Blueprint

Organized labor’s game plan, says Jim Gray, an HR consultant in Charleston, S.C., calls for union activists to create or join worker centers and then cultivate them as a means to ultimately convert more workers into dues-paying union members. He says the tactics include five sequenced phases:

  • Find a common cause.
  • Join or form a worker center.
  • Engage in public protests and raise media interest.
  • Focus on issues that concern employees.
  • Explore opportunities for a union through a traditional campaign or by approaching willing employers directly.

The first four phases are operational and visible, as evidenced in the Communications Workers of America’s "Building a Movement for Economic Justice & Democracy" document on its website. But the jury is out as to the likelihood of achieving the final phase—the one that would swell union rolls.

There have been successes, however: 200 carwash employees from worker centers in Los Angeles and New York were organized by the Retail, Wholesale and Department Store Union and the United Steelworkers, and Justice for Janitors has been successful in unionizing janitors. But considering that the worker center collaboration strategy dates back as far as a resolution the AFL-CIO enacted in 2006, organized labor’s overall record of closing the deal is not very good. For example, in 2013, seven years after the AFL-CIO resolution, only about 1 percent of 10 million fast-food workers belong to unions, Jayaraman says.

Dire Warnings

Still, with the collaboration strategy out in the open, and worker centers showing up as key players in protests and campaigns that have earned heavy media coverage, employers are on alert over the double-barreled threat the centers pose.

Centers are making major gains in wage and hour and workplace safety issues through lobbying efforts that result in legislative reforms that many employers contend are unreasonable and make it difficult for them to turn a profit. And centers and their supporters are pummeling employers with wage and hour and discrimination lawsuits, corporate campaigns, picketing, and threats of boycotts. They’re seeking better pay and reimbursements for overtime they say is owed, among other things.

Targeted employers—especially smaller ones—caught in the cross hairs see these actions as harassment led by paid provocateurs who do not represent a majority of a business’s workers. The tactics are "frivolous, unfair and unfounded," says Eric Oppenheim, SPHR, chief operating officer of Republic Foods in Rockville, Md., a Burger King franchisee.

"They look for the one worker in 20 who is disgruntled. When they find an isolated incident that’s not the norm, they expose it and make it a national issue. For example, they’ll find a worker who says his employer forces him to make up the difference when his register is short. They’ll turn it into a national public relations campaign, magnify it, then use it to pressure major brands to pay higher wages.

"They’ll keep coming after you until they wear you down. Finally, you decide you don’t want the hassle of litigating, back down, and enter an agreement."

Oppenheim worries that the small-business owner’s side of the story is being buried. He provides good jobs and health benefits for his approximately 600 workers but says he cannot agree to ROC-United’s push for a $15 hourly wage. "We’re a small family business scraping by on low margins," he explains. "Our company’s operating profit is roughly 2.5 percent to 3 percent. If the hourly rate goes to $15, I shut down."

Burger King has 7,200 restaurants in the U.S. Fewer than 100 are owned by the company; the rest belong to small franchisees, with most running seven to 10 restaurants.

In contrast, Shannon Liss-Riordan, founder and co-owner of The Just Crust, a pizzeria in Cambridge, Mass., is considered by ROC-United to be one of 100 "High Road Employers." (Also earning the label: celebrity chef Mario Batali, owner of 22 restaurants.) These employers have pledged to work with ROC-United to promote sustainable business practices for employees and consumers while still boosting the bottom line.

Liss-Riordan, an employment attorney who represents workers, bought the pizzeria at auction after the pizza chain Upper Crust filed for bankruptcy. The Just Crust opened in June 2013 and has 15 employees. She is optimistic about the prospects of paying higher wages and offering a solid benefits package. "The sky is not falling," she says. "We haven’t been open that long, but based on how we’re doing, I think we will be fine. I’m trying to do things right and show that when people feel valued, they will be happier, stay around longer, and the business will prosper."

The lowest-paid worker at The Just Crust earns $11 an hour, $2 more than the going rate. Large pizzas run $18 to $20, compared with $10 to $12 at Pizza Hut.

Wolves in Sheep’s Clothing?

Employer advocates warn that worker centers are actually fronts for unions trying to slip in the back door and gain access to potential recruits who might not be receptive to classic organizing techniques. "These groups have become tools of traditional labor unions moving away from their historical mission and closer to the goal of securing membership for organized labor," says Michael Lotito, SPHR, co-chair of the Workplace Policy Institute of law firm Littler in San Francisco. "They’re really stalking horses for unions who are waiting in the wings and don’t want to surface because they’re concerned about their brand. Then suddenly they launch a campaign and you realize the center is dominated by SEIU."

Not so, says Harvard Law School professor Benjamin Sachs. Historically, worker centers tend to be fiercely independent. Many were started as alternatives by people who were skeptical about unions. Sure, they openly welcome cooperation and support from unions. But they also welcome support from foundations and groups such as the NAACP. That does not mean they are "fronts" for any of them.

Uneasy Alliance

There are underlying differences between unions and worker centers, Fine suggests, that cause their partnerships to experience tension because of a "mismatch" in their varied structures and ideologies.

"Unions are premised on gaining support from a majority of workers and achieving exclusive bargaining rights across their industries," she wrote in 2007 in the British Journal of Industrial Relations. "By doing this they evolved into complex organizations with highly established internal structures and methods of operation.

"In contrast, worker centers are social movement organizations bent on raising labor standards community-wide. They are non-bureaucratic, grass-roots organizations with small budgets, loose membership structures, improvisational cultures and strategies that are primarily funded by foundation grants."

Worker centers often are alienated by organized labor’s mandatory participation in strikes and picketing and forced membership, Fine says. In contrast, membership and participation in worker centers are voluntary. Some union officials are annoyed by some centers’ anti-capitalist rhetoric and are perplexed by their tendency to focus on the long term, as opposed to shorter-term political, policy and industry organizing goals.

New Paradigm

One reason for worker centers’ increasing influence and visibility is successful networking, Fine says. "The most important development in the past five years is that they have started to federate. There’s been a rise of national federations, improving the possibility of concerted action."

Technology also contributes to the centers’ outreach. With Facebook, Twitter, texting, e-mail and other means, they can communicate quickly to vast numbers of people at low cost, Fine says.

"We’re beating employers on the merits of our cases, and that’s got them very nervous," Jayaraman says. "They can’t discredit our substantive arguments. When the public hears the facts, they support us. We’re raising wages, winning paid sick days for our workers, improving working conditions."

What their successes demonstrate, perhaps, is that the worker centers—with their grass-roots, bottom-up organizing; broad support from social groups, educators, foundations and government; and ability to use tactics such as pickets, boycotts and corporate campaigns that unions are prohibited from deploying—have the chance to be even more effective than traditional unions. "It’s about a different model that extends beyond the workplace by engaging employers, workers, consumers and the public," Jayaraman says.

But there are potential hurdles ahead. So far, worker centers, unions, and social action and religious groups share a common goal to elevate low-income workers above the poverty threshold. So long as they stick to this core economic issue, the coalition is in a sweet spot where all groups can agree. But when they drift into other hot-button issues, solidarity becomes more difficult. For example, environmentalists in some worker centers oppose construction of the Keystone XL Pipeline from Canada to Texas. Construction unions, however, favor the pipeline and other building projects worker centers might find objectionable.

Also still looming is labor’s vexing money problem and whether worker centers, no matter how successful in fulfilling their missions, offer a realistic solution. "Unions are more interested in using worker centers to deliver the resources they need to survive," Lotito says. "The AFL-CIO must receive some compensation—either from people who join unions or from dues-paying worker center members."

HR in the Middle

Some in HR may find themselves in accord with worker centers and what they seek to accomplish, at least in the abstract. Many are concerned about the growing economic divide in the country.

HR professionals "don’t want to defend or work for low-road employers who take advantage of the weakest workers," says Fine, who teaches HR graduate students at Rutgers. "They see these firms as competing unfairly against employers that observe employment and labor laws. They see worker centers as allies because they’re helping to police the labor market. Exploiting workers is wrong, and if worker centers are working to abolish these practices and improve the quality of life, they believe that’s a good thing."

Others, like Lotito, who has been representing management for decades, do not view today’s worker centers so benignly. "HR has to be aware of worker centers and the negative impacts they can have on their companies," he says. "Your organization needs to do a self-assessment that asks how a [worker center] might attack. What is your Achilles’ heel? What preventative steps should you take?"

Robert J. Grossman, a contributing editor of HR Magazine, is a lawyer and a professor of management studies at Marist College in Poughkeepsie, N.Y.

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