Labor Unions

By: Ian Park

Edited By: Kiran Sheth and Anna Westfall

On December 9, 2021, a Starbucks store in Buffalo, New York made news for becoming the first Starbucks to vote to unionize. Facing heavy pushback from Starbucks for decades, the location’s vote was a decisive first step toward greater union representation across the company and the low-unionized food service industry as a whole. 

However, Starbucks wasn’t too happy with the movement toward unionization. In a report to the Securities and Exchange Commission, Starbucks claimed that “if a significant portion of our employees were to become unionized, our labor costs could increase and our business could be negatively affected by other requirements and expectations that could increase our costs, change our employee culture, decrease our flexibility and disrupt our business” [1]. This antagonistic assessment of unions reflects a view that many for-profit organizations have held for centuries — that unionization is a threat to their business models and only causes trouble. 

The nation’s long and often troubled history with labor unions can be traced back to 1794, when Philadelphia shoemakers formed a union called the Federal Society of Journeymen Cordwainers. The earliest forms of unions were similarly trade workers who banded together for protection and improved working conditions. A time of labor unrest and tension between employers and employees during the late 19th century and early 20th centuries led to major strikes against railroad, steel and coal industries with varying degrees of success. The American Federation of Labor was then established and would later become the country’s largest and most influential union. For decades, unions and labor movements have operated without legal protection and were looked down upon by both the government and companies as disruptive threats to economic productivity. 

It was ultimately the Great Depression that began to turn the tides of government and public sentiment in favor of the unions. Growing worker discontent and high unemployment rates led to a rise in union activity as workers once again turned to unions for jobs and representation. In 1935, Congress passed the monumental National Labor Relations Act (NLRA), a law that encouraged collective bargaining by “protecting workers’ full freedom of association.” [2] The NLRA officially recognized the legal rights of workers to collectively bargain, reflecting a change in government and public sentiment in the favor of unions. The law was instrumental in serving as a sort of “workers’ bill of rights,” laying the groundwork for further legislation.

But why have Starbucks and so many other multi-billion dollar corporations been able to suppress their workers’ rights for so long? To answer that question, we have to understand that the law hasn’t always favored unionized labor. In 1947, Congress passed the Tart-Hartley Act which prohibited certain union practices and increased government oversight on union activities [3]. However, the Act also established workers’ rights to deny union membership, allowing them to avoid coercion and pressure by unions.

Since the Tart-Hartley Act, other legislation passed has continued to erode workers’ and unions’ rights, giving companies more control. Failed bills such as the Employee Free Choice Act by the Obama administration and landmark court cases ruling clearly in favor of companies have further contributed to a recent decline in union membership among businesses to just 6.3% of private sector workers in 2020 [4]. These numbers are even lower for retail and food services, which have 4.6% and 1.2% union memberships respectively. 

As a result of these laws, companies are employing intimidation tactics similar to the union-busting coercion and infiltration of the 19th century. Leaked documents from Amazon’s Global Security Operations in 2020 revealed that Amazon had hired the detective agency Pinkerton to monitor warehouse workers and any union activity [5]. Earlier this year, Amazon was similarly accused of interfering in union votes by sequestering and harassing Amazon workers involved in unionization efforts [6]. Companies have also been using forced arbitrage clauses, legal documents that require employees to waive their rights to lawsuits. The Supreme Court upheld companies’ rights to continue using arbitrage clauses, ruling in Epic Systems v. Lewis (2018) that employers could legally use forced arbitration clauses during employment [7]. This practice has been growing at an alarming rate; a report by the Center for Popular Democracy and the Economic Policy Institute predicts that more than 80% of the private sector’s non-unionized workers will be employed under forced arbitration clauses by 2024 [7]. Without unions and fair laws protecting workers, those in low-paying jobs are left vulnerable to continued exploitation and wage theft. 

Perhaps the biggest flaw in collective bargaining laws is the fact that companies are not obligated by law to reach deals with labor unions. As the National Labor Relations Board puts it, “It is an unfair labor practice for either party to refuse to bargain collectively with the other, but parties are not compelled to reach agreement or make concessions” [2]. As a result, negotiations can end fruitless and unions can find themselves strong-armed out of the demands they make. 

Despite the many systemic barriers to labor reform, the decision by the Starbucks branch in Buffalo is the first step of many toward legitimizing workers’ concerns. While the future of unionized labor is uncertain, Congress needs to reconsider pending legislation such as the Protecting the Right to Organize Act and California’s Private Attorney General Act, both of which would allow employees to join unions at greater ease while holding companies accountable for seeking to undermine local and state laws [8]. With consumer demand spiking amid labor and supply chain shortages, it is more important than ever to ensure that workers are fairly compensated and treated well.

NOTES:

1.  United States Securities and Exchange Commission, “ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934,” United States SEC. https://www.sec.gov/ix?doc=%2FArchives%2Fedgar%2Fdata%2F829224%2F000082922421000086%2Fsbux-20211003.htm. 

2. National Labor Relations Board, “National Labor Relations Act,” National Labor Relations Board, https://www.nlrb.gov/guidance/key-reference-materials/national-labor-relations-act.

3. National Labor Relations Board, “1947 Taft-Hartley Substantive Provisions,” National Labor Relations Board, https://www.nlrb.gov/about-nlrb/who-we-are/our-history/1947-taft-hartley-substantive-provisions.

4. Bureau of Labor Statistics, “Union Members 2020 - Bureau of Labor Statistics,” BLS, https://www.bls.gov/news.release/pdf/union2.pdf.

5. Gurley, Lauren, “Secret Amazon Reports Expose Company Spying on Labor, Environmental Groups,” Vice, https://www.vice.com/en/article/5dp3yn/amazon-leaked-reports-expose-spying-warehouse-workers-labor-union-environmental-groups-social-movements.

6. Palmer, Annie, “Amazon Illegally Interfered in Alabama Warehouse Election, Union Alleges in Complaint to Federal Officials,” CNBC, https://www.cnbc.com/2021/04/19/amazon-prevented-free-and-fair-election-in-alabama-union-alleges.html.

7. “Epic Systems Corp. v. Lewis,” Legal Information Institute, https://www.law.cornell.edu/supremecourt/text/16-285.

8. Hamaji, Kate, Rachel Deutsch, Elizabeth Nicolas, Celine McNiholas, Heidi Shierholz, and Margaret Poydock, “Unchecked Corporate Power: Forced Arbitration, the Enforcement Crisis, and How Workers Are Fighting Back,” Economic Policy Institute, https://www.epi.org/publication/unchecked-corporate-power/.
   

BIBLIOGRAPHY:

United States Securities and Exchange Commission. “ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.” Inline XBRL Viewer. United States SEC. https://www.sec.gov/ix?doc=%2FArchives%2Fedgar%2Fdata%2F829224%2F000082922421000086%2Fsbux-20211003.htm. 

National Labor Relations Board. “National Labor Relations Act.” National Labor Relations Act | National Labor Relations Board. https://www.nlrb.gov/guidance/key-reference-materials/national-labor-relations-act. 

National Labor Relations Board. “1947 Taft-Hartley Substantive Provisions.” 1947 Taft-Hartley Substantive Provisions | National Labor Relations Board. https://www.nlrb.gov/about-nlrb/who-we-are/our-history/1947-taft-hartley-substantive-provisions. 

Bureau of Labor Statistics. “Union Members 2020 - Bureau of Labor Statistics.” Union Members - 2020, January 22, 2021. https://www.bls.gov/news.release/pdf/union2.pdf. 

Gurley, Lauren. “Secret Amazon Reports Expose Company Spying on Labor, Environmental Groups.” Secret Amazon Reports Expose Company Spying on Labor, Environmental Groups, November 23, 2020. https://www.vice.com/en/article/5dp3yn/amazon-leaked-reports-expose-spying-warehouse-workers-labor-union-environmental-groups-social-movements. 

Palmer, Annie. “Amazon Illegally Interfered in Alabama Warehouse Election, Union Alleges in Complaint to Federal Officials.” CNBC. CNBC, April 19, 2021. https://www.cnbc.com/2021/04/19/amazon-prevented-free-and-fair-election-in-alabama-union-alleges.html. 

“Epic Systems Corp. v. Lewis.” Legal Information Institute. Legal Information Institute. Accessed December 13, 2021. https://www.law.cornell.edu/supremecourt/text/16-285. 

Hamaji, Kate, Rachel Deutsch, Elizabeth Nicolas, Celine McNiholas, Heidi Shierholz, and Margaret Poydock. “Unchecked Corporate Power: Forced Arbitration, the Enforcement Crisis, and How Workers Are Fighting Back.” Economic Policy Institute, May 20, 2019. https://www.epi.org/publication/unchecked-corporate-power/.