Economics

VW workers reject the UAW: Here’s what it means … and what’s next

Image Credit: JuliusKielaitis / Shutterstock.com

Image Credit: JuliusKielaitis / Shutterstock.com

Employees at Volkswagen’s Chattanooga, Tenn., manufacturing plant rejected union representation last Friday in an election conducted by the National Labor Relations Board. Fifty-three percent of the 1,338 employees who voted rejected representation by the UAW. The vote concludes what may be just the first phase of an organizing campaign that began in 2011.

UAW officials suggested on Friday evening that the union is considering a legal challenge to the election. UAW President Bob King said he was “outraged” by statements made by Tennessee Republican politicians in the days before the election. US Senator Bob Corker was quoted earlier last week as saying that he had been “assured” by Volkswagen officials that if employees voted against the UAW, the company would soon announce its decision to select Chattanooga, rather than another VW facility in Mexico, as the site for a new production line for its new mid-size SUV. Other Tennessee Republicans also spoke out against the UAW in the days before the vote. King implied that such comments amounted to unlawful threats under federal labor law.

The UAW’s indication that it may challenge the election raises novel issues under federal labor law. VW management promptly repudiated Corker’s statement and had earlier signed an agreement with the UAW to remain neutral during the election campaign. Federal labor law provides that unlawful threats and promises made by third parties during an election campaign can be attributed to either an employer or a union under traditional principles of agency law. In addition to convincing the NLRB that the statement should be considered an unlawful threat (not a sure thing), the UAW would have to prove that Sen. Corker was acting on behalf of the company. This seems implausible, given VW’s publicly-stated positions. Moreover, Corker’s statements may well be immune from legal challenge under the US Constitution’s “Speech or Debate” clause, which shields lawmakers from litigation or even having to defend themselves, so long as they were engaged in “legislative activity.”

The UAW’s defeat is a significant setback for its efforts to reverse its falling membership numbers by organizing employees working at auto plants owned by foreign manufacturers. The organizing campaign has been closely watched, in part because of VW’s decision to enter into an unprecedented pre-election “neutrality agreement” with the UAW. Among other terms, the agreement required VW to permit UAW officials to enter the company’s facility and campaign openly in favor of the union, a benefit that was not extended to a group of employees that opposed unionization.

VW’s decision to enter into a neutrality agreement with the UAW has been criticized by many in the business community as well as by employee rights advocates who point to labor law provisions that protect the right of employees to oppose unionization. The company’s stated rationale is that a UAW victory would facilitate VW’s ability to establish a “works council,” a form of corporate governance common in Germany and other European countries. VW argued, with explicit support from the UAW, that U.S. labor law prevents the establishment of a works council unless the employees are represented by a traditional labor union.

A provision of the Labor Management Relations Act makes it an unfair labor practice for an employer “to dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it.” Some argue that the typical interactions between an employer and a works council would violate this prohibition, because a traditional works council would be viewed as a labor organization under U.S. law. Other experts dispute this characterization. A labor law reform measure known as the TEAM Act was passed by Congress in 1997. Vetoed by President Clinton because of strong union opposition, it would have clarified this matter by expanding the ability of non-union employers to engage in various sorts of quality improvement and employee involvement initiatives without triggering the statute’s prohibitions.

Federal labor law requires the union to file an objection to the election within seven days. Objections are investigated initially by regional officials at the NLRB, and can lead to a hearing on whether the conduct at issue is serious enough to justify annulling the results of the election and requiring a revote.

Thomas Gies is an AEI adjunct scholar and a founding member of Crowell & Moring’s Labor & Employment Law Group.

Follow AEIdeas on Twitter at @AEIdeas.

46 thoughts on “VW workers reject the UAW: Here’s what it means … and what’s next

  1. What would be interesting to know is why workers decided not to vote for unionization. I think the public in general understands why workers would have voted for it.

    • Here’s a guess. A natural leader among the “workers” helped them understand the history of the UAW, and how that recent history has involved running one plant after another into the ground. They may have also done the extra credit unit of study to learn how their dues are funneled to union friendly politicians who pass laws that make it harder for their employers to stay in business. Perhaps they then did the rational economic calculation for themselves individually, as “workers.”

      • LAS, The hypothesis about having their “dues are funneled to union friendly politicians…” is incorrect. Under federal law, all union members have to deliberately choose to have their dues used for campaign funding. That is an interesting hypothesis about a union “running one plant after another into the ground.” Do you have any citations to supper that?

          • “GM bailout” is not a cite. Please provide a citation. Thank you. Then I will reciprocate.

            That’s not how this works. You pretended to quote a law. You’ve been invited to cite the law you prete4nd to quote. Your evasion is a loud and clear answer concerning your pretense.

            Eric Hines

          • @cgregory: At a plant level of detail, “GM bailout” is actually a collection of many “cites”. Now you need to find every federal statute that might apply to your claim in order to “reciprocate.” GLWT, union flack.

          • @cgregory: 2nd sentence of the Columbia Law Review abstract you “cite” for @ehines states “After the decision, campaign finance law leaves both [corporations and unions] equally unconstrained and free to use their general treasuries to finance political expenditures.” Un. Constrained. This is the exact opposite of the position you stated. Still waiting for something that holds water.

          • LaS– Re: your reading of the Columbia Review article.

            If you’d read pp. 819-20, you would have realized that the operative term in “equally unconstrained” was the former, not the latter. To have written “equally constrained” would have in no way changed the character of the cited text. It appears you never got farther than the second sentence of the overview.

          • #1: If I’ve asked you to provide evidence, and the evidence you provide is a third party opinion 20 pages long, it is incumbent upon you to identify which 2 pages you think are relevant if you wish to make a convincing argument. It is not my responsibility to sift through it to support your argument. #2: The equal “constraint” pp. 819-820 identify is an employee right to opt-out. If the employee does not exercise this right, the union is: completely. un. constrained. #3: Since you are the expert – please educate the forum on the federal regulations that govern the opt-out disclosure requirements imposed on unions. Try to be more direct this time. Looking for a legal code, not a third party opinion.

          • LaS, it does not speak well of people who don’t like to do their homework. To save you the effort, however: In June of 2006, in Knox vs. SEIU the US Supreme Court ruled that unions may not willy-nilly use agency fees (funds from non-members who are required to pay to support the union’s member services, such as legal representation in workplace disputes) for political purposes against the wishes of those non-members. Translation: Unions, either you have an “opt-in,” or you will pay for it.

            A year later, SEIU in California found itself obligated to pay over $5 million to those non-members for disbursements disallowed by Knox vs. SEIU: http://www.sacbee.com/2013/09/12/5728371/seiu-local-1000-paying-back-5.html.

            The union I belonged to has finessed this, as many others probably are, by setting up a PAC and asking members to contribute. All of them are, as a result of Knox v. SEIU, being very careful to make sure members “opt in.” Questions? Bueller? Bueller? Anybody?

            Now, if you go back and read the CRoJ article pages I specified, I think you will find it actually is not too dense to understand.

            Meanwhile, I’m still waiting for your citation that the UAW drove General Motors into the ground.

            Not that you have to bother providing it, since you’re not going to find a credible source. GM’s financial condition was not due primarily to its automotive branch, but to its financial services branch, particularly, Ally, which brought ruin to the whole enterprise through its subprime scamming. Among economists, GM is known as the finance company that also sells cars. And I don’t think I’ll bother citing sources for you.

          • @cgregory: I bow to your superior scholarship. I have learned, according to your thorough research, the unions are effectively following an “opt-in” process for funneling dues to politicians by recording the names of political contributors through PAC organizations. I wonder if you could enlighten the unwashed by supplying more “credible” “cites” for the percentage of dues paying members who opt-in to the PACs. Then maybe a “credible” “cite” for total dues collected and a “credible” “cite” for PAC contributions to politicians. Wouldn’t you agree the ratios should align?

          • LMAO! My, my, you are selective about showing off your impressive powers of citation. Here’s the bottom line, union troll: The corrupt and economically destructive UAW is done because the record is clear. They are a virus that drives their hosts into the ground, their leaderships cares for nothing but feathering their own nests and funneling dues to the Democrat politicians on their payroll, and everybody knows it. They will never win a major vote among working citizens again. Private sector union membership in general is in rapid decline in the private sector for all the same reasons. I will return the favor of your last insult and let you engage in the self-awareness and self-reflection exercise you so desperately require. I do now do think we are done here.

          • I will remember you for your inability to corroborate your claims as well as your uncalled-for rudeness at the very beginning of our exchanges.

        • Under federal law, all union members have to deliberately choose to have their dues used for campaign funding.

          So each and every union goon voted for each and every dollar that the union mafia sent to D-bag political campaigns? Unlikely. Matter of fact, it’s not simply unlikely, that’s a bald-faced lie.

          • skh.pcola, You’ll want to look up UAW v. Beck, in which the Supreme Court stated over 30 years ago that any union dues used against the payer’s will for political purposes would have to be refunded.. Cite, cite, cite!

            pcola? Is that Pensacola? I was stationed there.

        • Actually there is some truth to this. Supreme court said that Union members can not be forced to have their dues removed for political cause. However, the union member has to opt out, and opting out can be quite difficult for several reason. One the current interpretation is you need to opt out annually. Second, the unions do tricky accounting to make it look like they use more money than they really do for collective bargaining. Third, you will get a lot of pressure from your union, and shop steward if you don’t pay the extra dosh. And finally you will end up with less than plum assignments if you know what I mean.

          It is interesting that some 40% of teachers in CA are Republican, and their union supports democrats exclusively, yet very few opt out of the system.

    • Having worked as both an hourly employee and then as a supervisor at GM I wonder if you could you clarify why the public in general understands why workers would have voted for it? In day to day interactions most employees saw the union as a way to protect those workers who should have been fired. In the long run the union negotiated benefits that could not be sustained.

      • My original question here was what might be the reasons the workers voted against it, not why they might have voted for it. So far, the reasons given are: 1) some influential worker(s) convinced the rest that the UAW has run other companies into the ground; 2) unions can funnel employees’ money into political campaigns willy-nilly; 3) unions can punish workers with deleterious work assignments; 4) unions use tricky accounting for purposes of evading campaign finance regulation; 5) unions can take companies to court.

        Although all but the last are unsupported with citations, they are at least answers to why the vote might have gone against the UAW. Clearly I feel more comfortable with reasons supported by logic and fact, but I’m not asking anybody to change his mind.

        Now, as for why I feel the public in general (and I mean the US public, not the Tennessee public) understands why workers would have voted for it, my experience as both an at-will worker and a union member says these are the reasons the public would understand workers would vote for it. Mind that in both types of work I have experienced the effects of these:

        1. Forty-hour work week, with every weekend off.
        2. Appropriate compensation for working on national and state holidays when the other workers have off.
        3. Health care coverage.
        4. Paid earned sick leave. (Important for us single parents wen it allows us to care for a sick child rather than lose our job and have to go on welfare).
        5. Protection against the supervisor from Hell and the revenge evaluation/ shop floor harassment.
        6. Protection against the co-worker from Hell.
        7. Paid vacation.
        8. Pay raises commensurate with productivity.

        And I don’t think there is a worker in America who wouldn’t want to have these. Of course, there are workers in America who would not want OTHER workers to have these, but that’s beyond the scope of this thread.

  2. …convincing the NLRB that the statement should be considered an unlawful threat (not a sure thing)….

    I think this is an optimistic characterization of an NLRB that haled a major manufacturer into court for the dastardly labor violation of wanting to build a manufacturing plant in a right-to-work state.

    Eric Hines

  3. I have not researched whether it has been applied in the labor context, but I wonder whether the Noerr-Pennington doctrine might immunize VW, even if they were explicitly lobbying the politicians to act on their behalf.

    • Noerr-Pennington deals in anti-trust matters (business competition, fair or unfair). I don’t see how it would apply to VW in this case. It might conceivably apply if VW were trying to favor, say, SEICU over UAW. Still, what does VW have to be immunized against? Is it against the law for a company to respect a union’s wishes to organize in Tennessee?

      David Halberstam in The Reckoning did tell of how Nissan organized a company union, at the workers’ expense.

      • It arose out of the antitrust arena, but has been extended to tort law. I honestly have not looked at whether it has ever been applied in the labor context. Apparently no one else on here has, either.

        The immunity would be against challenging the validity of the election based upon the actions of elected officials.

      • It arose out of the antitrust arena, but has been extended to tort law. I honestly have not looked at whether it has ever been applied in the labor context. Apparently no one else on here has either.

        The immunity would be against challenging the validity of the election based upon the actions of elected officials.

  4. Volkswagon will just bring in their German union:

    VW works council says will pursue labor representation at U.S. plant (Reuters) – Volkswagen’s works council said it would press on with efforts to set up labor representation at its Chattanooga, Tennessee plant, undeterred by a workers’ vote against any such step involving the United Auto Workers union (UAW). Employees at the plant, in a region traditionally hostile to organized labor, on Friday opted to reject representation by the union, whose membership has plummeted 75 percent since 1979 and now stands at just under 400,000. “The outcome of the vote, however, does not change our goal of setting up a works council in Chattanooga,” Gunnar Kilian, secretary general of VW’s works council, said in a statement on Sunday, adding that workers continued to back the idea of labor representation at the plant. VW’s rise to become one of the top three global carmakers is intertwined with the influence of labor, whose representatives make up half of the group’s 20-member supervisory board. Under the group’s “co-determination” policy, workers have a say over matters affecting work rules and the workplace environment while the consensual structure allows management to draw on labor support in decisions on new products and plants.

    see how Corker is a fool. WV cant build another plant in the US without approval of the VW works council..

    • You know, workers don’t HAVE to have an adversarial relationship with management. It says a lot for a workers’ council that VW is now one of the top three automakers in the world, according to your post.

      When workers know that their suggestions for improving the work and communications flows get serious consideration, not only do they make better employees, but when they lose out on their issue, they respect management for having adhered to the process.

  5. All~~

    I ask for citations simply because there are so many that you and I might be talking about two entirely different sources.

    Rush Limbaugh says that Sandra Fluke wants the government to pay for her having sex. The New York Times reports that Sandra Fluke testified that for many women birth control pills are a medical necessity.

    If I say “Sandra Fluke is a slut,” and you have only read reports citing the NYT source, I come across looking like a nutcase. If you have read nothing at all about Sandra Fluke, then I come across as a true prophet. When you know that you and I have read different source materials, then we can have a conversation.

    So, please use specific citations, or we’ll wind up someplace we oughtn’t be.

    • @cgregory. Sandra Fluke failed to notice the drug store down the street at which she could have purchased her own birth control for nine dollars a month. Then publicly asked the rest of us to subsidizae her nine dollar a month habit. Specific enough?

  6. Eric Hines, you’re not done with the “union troll” yet. That citation you provided is about Boeing, not GM.

    You would be unhappy if I told you something and you found out it was just a lie to make me change my mind. It would not speak very highly of my character. I appreciate it when people marshal their facts, because then I not only know that I can trust them, but I also respect their ability to think things through before they open their mouth.

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