Labor Unions and Their Supporters Are Trying to Turn Back the Clock

From the end of World War II until the Reagan administration, powerful American labor unions regularly demanded wage and fringe-benefit increases that were regularly granted.

Increased labor costs were simply passed on to consumers. However, the spiral eventually spun out of control, and consumers turned to cheaper foreign products such as cars, electronics, and cameras.

Some companies closed their domestic factories and moved to countries that had no unions and low labor costs. Banks, as might be expected, suffered from a loss of business.

Unrealistic Demands

Ultimately, unions proved to be their own worst enemies, pricing themselves out of the marketplace. Their demands had grown increasingly unrealistic, their strikes and slowdowns the last gasps of self-destructiveness.

During the 1980s, union membership decreased, more and more companies opened factories either in other countries or nonunion ones in the United States, and consumers benefited from high-quality, low-priced products. The unionized worker had been made superfluous by selfish and overzealous unions.

Now there is an effort to turn the clock back and repeat the mistakes of the past, to tilt the playing field to the benefit of organized labor as Secretary of Labor Robert Reich has stated he would like to do.

To affect that tilt, President Clinton, Secretary Reich, and the AFL-CIO are all pushing Congress to pass a ban on permanent replacement workers.

Harmful to Recovery

As one who regularly negotiates the settlement of management-labor disputes and contracts on behalf of banks and others. I believe that the legislation would significantly undermine the nation's economic recovery and ability to compete in a global economy.

The new legislation, in fact, will give labor a powerful new weapon to be used against employers in collective bargaining.

Workers will rightly feel that they can strike at will and bring banks to their knees, because they can go on strike and feel that their jobs will not be replaced by permanent new workers.

In addition, banks will find it more difficult to operate during a strike, because temporary workers will be unwilling to cross picket lines for jobs that will end when the strike ends.

Finding it difficult to operate during strikes, banks will have to capitulate to union demands. Knowing that, striking workers will have an even greater incentive to strike again and again for more and more money.

Spur to Strikes

Richard Lesher, president of the U.S. Chamber of Commerce, warned that the adoption of the permanent striker replacement ban "would guarantee this country would experience many more strikes in the future." The bill will "tilt the current level playing field in favor of organized labor."

That we will see a return 
to the blood-in-the-streets
activities that perverted
the labor movement
during the 1920s and 
A BAN on replacing
strikers with permanent
replacement workers 
would undermine the 
nation's recovery and 
ability to compete in a global economy.

Not only will labor strife increase, but the intensity and destructiveness of that strife will wreak havoc on the financial well-being of management and labor alike: indeed, I believe that we will see a new era of labor-related violence, a return to the blood-in-the-streets activities that perverted the labor movement during the 1920s and 1930s.

In addition, the passage of the ban will be a body blow to America's ability to respond competitively to German, Japanese, and other country's companies. And that will have a negative effect on the entire banking industry.

Exodus to the Third World

Rather than benefiting from an economic resurgence of American business, we will be helpless spectators to the exodus of American corporations into Third World countries. Those countries will welcome investments that will drain out of American banks, while they provide an affordable labor pool.

The products those workers will manufacture will be affordable to American consumers, but of no help to their economic well-being.

The alternative, of course, would be for American companies to go along with union demands, pay ever-increasing wages and benefits, pass the costs on to consumers who will refuse to buy those high-priced goods, and then go out of business.

One need only look at the vast number of American companies that were thriving in the 1950s and then went out of business during the 1970s.

A Delicate Balance

Edwin L.Harper, president and chief executive officer of the Association of American Railroads, said that a ban on the use of permanent striker replacements "would upset the carefully crafted and long-standing balance" that exists in collective bargaining.

"Just as the law permits workers to withhold their labor in an effort to secure favorable results," added Mr. Harper, "employers are permitted to keep their business going during such work stoppages by offering permanent positions to workers hired to replace strikers."

Mr. Harper further pointed out that the scales are already tipped disproportionately in labor's favor, since the Supreme Court's 1987 decision(Burlington Northern Railroad Co. v. Brotherhood of Maintenance of Way Employees) to uphold the legality of secondary boycotts against railroads and airlines.

Incentive to Relocate

In effect, this bill is not only a company buster, but it provides a unique incentive to American companies to locate within the borders of countries that are known for being favorable to the interests of business. If American manufactures choose to operate on foreign soil, the banking industry will shrink as a natural consequence.

American companies need all of the help they can get to compete successfully. The ban on permanent worker replacements is an economic kick in the teeth.

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Auditing Your Company's 'Human' Resource

As an auditor, it is your responsibility to analyze the effectiveness of your resources. But most auditors overlook a company's most important, and often most costly resource, its employees. An auditor is particularly qualified to monitor the existing workforce and to develop a system through which an employer can hire those employees who will work most productively within the company's work environment.


Before designing an effective hiring system, you must evaluate the current workforce and work environment. You can complete this evaluation by conducting a series of audit-interviews with selected members of management. The preliminary audit-interview accomplishes two goals: it defines the company's "work philosophy" and allows you to formulate a description or "wanted poster" of the type of employee who will work most productively within that company.

Work Philosophy Defined

The "work philosophy" is a policy statement regarding the company's commitment to maintaining a cooperative employee relations atmosphere and, where appropriate, the advantages of operating without interference from organized or outside representatives. All levels of management, particularly top management, must be fully committed to the principles outlined the "work philosophy" if it is to provide a strong base upon which to build an effective hiring system. For that reason, the philosophy must be an amalgamation of top management's views, as ascertained through the initial audit process, of the type of employee relations environment which is appropriate for that company.


The initial audit process can also be used to develop a profile or "wanted poster" of the ideal employee. The employee profile defines specific behavioral attributes and values. An employee profile should not be an outline of personality characteristics, but rather an assessment of a prospective employee's propensities and past work experience.

You can design a profile for your company or client by evaluating the existing workforce. Supervisors and members of management should be asked to describe those employees who are "successful" company employees and those who are unsatisfactory. You should caution those individuals interviewed to avoid describing employees' personality traits. What is more important is how the successful employee and the unsatisfactory employee view the work they do, the people they report to, the company's policies and procedures and the employees with whom they work. For instance, the initial audit could determine the amount of independence which is suitable for an employee of that company. It could also determine whether the work requires employees who think for themselves and can adapt their work habits to specific situations, or employees who are satisfied performing tedious and repetitive work.

As an alternative to audit-interviews, you can gather this preliminary information by conducting an opinion survey. An opinion survey will allow supervisors to express their unbiased views regarding the existing workforce and has the added benefit of eliciting the supervisors' opinions and attitudes about their work environment in general.

Wanted Posters

Once you have gathered a sampling of "wanted posters" from management and supervisory personnel, you can begin to distill their descriptions into a list of desirable and undesirable characteristics. These profile characteristics form the backbone of an effective hiring system.

The profile should list and define both positive attributes and negative attributes; in other words, those characteristics an interviewer should look for in a prospective employee and those characteristics an interviewer should seek to avoid. By developing a profile of this nature, you can provide your company or client with an objective method of determining whether an applicant will work well within the company's work environment to achieve the company's goals and objectives.


Once positive and negative characteristics are defined, you should help your company or client develop a set of interview questions designed to elicit the various profile attributes. You should phrase interview questions in a way which encourages the applicant to respond with more than a "yes" or "no" answer. Each question should be accompanied by suggested answers and an explanation of the positive or negative attributes which the suggested answer indicates.

Questions and sample answers of this nature provide an interviewer with a consistent, objective system for evaluating prospective employees. The hiring system can be made even more objective if you develop a tally sheet which summarizes and evaluates an applicant's responses to the interview questions. A tally sheet assigns a point value to each attribute indicated by the applicant's answer to each interview question. The total number of points the applicant receives determines whether the applicant should be considered for employment.

A Second Benefit

Aside from the benefits of assessing an applicant's suitability for the company's work environment, a hiring system of this nature can help protect an employer from charges of discriminatory refusal to hire. An interview system developed through this process can assure that no unlawful questions are asked. In addition, if challenged, the company can produce a standard set of interview questions and the applicant's tally sheet to rebut any allegation that a decision not to hire a particular individual was based on a discriminatory motive.


The auditor's job does not end when the hiring system is completed. You should also develop a system of general labor relations audits which help the company assess the effectiveness of the hiring system and which allows the company to monitor its employee relations climate. Labor relations audits can fulfill a number of employee relations functions, including

  • Minimizing overall labor relations "risks" by minimizing exposure to liability under state and federal anti-discrimination laws and under theories of wrongful discharge
  • Align employees' expectations with the company's organizational philosophy and economic reality
  • Promote and maintain employee morale, effectiveness, satisfaction and loyalty to the company
  • Monitor personnel procedures and policies
  • Maintain a competitive compensation package


You can develop a series of audit forms to be completed by supervisors or other management personnel on a regular basis to monitor various elements of the company's working environment which effect its labor relations climate. Various types of labor relations audits you can develop to accomplish these goals include:

  • Employee Audit -- monitors each employee's loyalty to and attitude toward the company.
  • Vulnerability Audit -- assesses a particular employee group's receptivity to a union organizing attempt.
  • Daily Human Resource Audit -- completed by the individual responsible for handling human resource matters. This audit reviews on a daily basis absenteeism, discipline and other factors which would indicate the company is vulnerable to a union organizing attempt.
  • Weekly Human Resource Audit -- reviews turnover rates, absenteeism, tardiness, lay-offs, disciplinary action, voluntary terminations, forms of communications used, injury rates and any other factor which could affect the overall human resource climate of the company.
  • Monthly/Quarterly Human Resources Audit -- includes an analysis of wage and benefit comparisons, union organizing activity in the company's geographic area, a review of hiring procedures, orientation procedures, methods of communicating the availability of and tilting job openings, training, discipline, resignations, awards, communication programs, points of employee dissatisfaction, and other factors affecting the company's work environment.

A combination of labor relations audits used in conjunction with a hiring system can help a company to pinpoint trouble areas while developing and maintaining a workforce which will maximize the company's productivity and minimize its vulnerability to outside interference.

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Mental Disability

The question that causes the greatest concern is whether, under the Americans with Disabilities Act, employers risk liability for firing employees who function poorly or engage in disturbing, disruptive, possibly even threatening, behavior in the workplace. Adding to the anxiety is uncertainly over what kinds of cognitive or psychiatric conditions are covered by the disability discrimination law.

Who Is Mentally Disabled?

The ADA itself does not define mental disability. Enforcing regulations issued by the EEOC describe mental impairments as any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and learning disabilities. However, such conditions must be severe enough to substantially impair one or more of an individual's "major life activities" to constitute a disability.

Cognitive impairments having a physiological basis tend to be the most readily identified and quantified mental disabilities. These would include conditions such as neurological damage, autism, dementia, retardation, and learning disabilities.

Mental illness and other emotional disorders, however, have been dealt with inconsistently by the courts. The majority require employees demonstrate that their conditions truly incapacitate functioning. Moreover, the impairment must be long term. The best approach to take, accordingly, is to assume that any worker who might reasonably be viewed as mentally disabled is covered.

Can Employees Fire Mentally Disabled Workers Who Are Disruptive, Violate Work Rules, or Fail to Meet Work Standards?

One thing is absolutely dear under the ADA: A worker who is mentally disabled cannot be fired because of prejudice or stereotype-based assumptions about how he may function or what he might do. For instance, a company may not discharge someone with autism because fellow workers (or even customers) are made uncomfortable by his inappropriate gesticulation or comments. Nor can a worker with an illness like paranoid-schizophrenia be fired because the employer surmises that any such individual poses a threat to company safety.

Nevertheless, an employer will usually be able to mount a solid defense to an ADA claim where an employee has engaged in consequential infractions of important rules (as opposed to simply breaking protocol) or seriously disrupts the workplace.

On the other hand, the issue of how to treat employees who simply cannot meet work standards is far trickier. If the employee is utterly unable to perform the essential functions of his job or poses a hazard to other workers or third parties, he will be deemed not qualified. Thus a federal court recently dismissed the case of a hospital technician whose mental condition rendered him unable to properly monitor vital medical equipment.

Yet most cases do not involve extreme or dangerous dereliction of duty. If the employee is simply performing below par because of a known disability, the employer will more than likely have a legal obligation to accommodate him.

How Must the Employer Accommodate the Mentally Disabled?

The ADA mandates accommodation of disabled employees, even unqualified ones, if accommodation would enable them to perform the essential functions of their jobs. The problem is that accommodation for people with mental disabilities 'is usually hard to conceptualize. Unlike accommodations for physical impairments -- which may simply require a mechanical solution like making a work station wheelchair accessible -- accommodations that might compensate for the limitations of cognitively and psychologically impaired persons require a greater degree of imagination and employer flexibility.

Employees having difficulty coping with the stress of certain job assignments might be accommodated through job restructuring, partial at-home work time, reassignment, reorganization of work space, or allowance of periodic work breaks. One interesting form of accommodation was noted in a First Circuit.

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Cooperating Will Bring Better Job Protection

American workers have always sought better wages and job security. Years ago they were just "employees-at-will," subject to the whims of their employers. They toiled in difficult working conditions and feared the day when their employers might fire them.

Workers eventually turned to unions for job security and improved conditions. Bolstered by the National Labor Relations Act, which prevented discriminations against employees because of union activity, unions became the bargaining agents for millions of workers. By the end of the World War II, it looked as if we would become a nation of unionized employees.

But the promises of unionism were never fulfilled. In the name of job security, unions compelled employers 10 accept inflexible, unproductive work rules. Unions spoke angrily and carried a big "strike" stick. They drove employers to pay ever-higher wages and contributed to an adversarial management-labor relationship, but did not assist in improving productivity. Unions gradually became anachronistic institutions, preaching the same 1930s message while the nature of work and the work force changed. Unions came to be perceived as self-serving institutions tainted by criminal indictments and prosecutions.

Unions also became less relevant as an increasing number of state and federal laws were enacted to protect workers. Various laws now regulate minimum wages, overtime, pension plans, workplace safety, Social Security and the like. Many of these regulations contain provisions making it unlawful for employers to terminate employees who report violations.

While these laws made work safer and more secure, state court decisions have built a new bulwark around individual employees over the last 15 years. These courts have further limited the "at-will" concept of employment by allowing terminated employees to file suits against their former employers for "wrongful discharge."

Some employees have succeeded in these lawsuits by alleging that employees violated public policy because they fired them for serving on a jury, taking time off to vote, or "blowing the whistle" on a health violation. Many courts also have recognized implied contractual theories of wrongful discharge. In such cases employers were found to have made and subsequently broken binding, or oral "promises" of employment. Still, wrongful discharge actions, since they are undertaken by individuals, can give only the most limited job security to the masses of working people.

Indeed, neither union bullying, statutes nor state court actions will provide American workers the job security for which we all struggle. Such security will be achieved only after both employers and employees deal successfully with two of the most vital economic issues of our times: international competition and productivity.

We all know that international competition has put American industry on the spot. Our nation is swamped with imports in almost every field of production. Japan of our fiercest competitors, producing top quality products, while paying its employs lower wages than comparable American workers receive. Yet labor relations in Japan are excellent compared with those in America. Japanese workers have a high degree of company loyalty, and Japanese management regards its obligations to them as a top priority.

It is the very need to compete with Japan and other productive, energetic nations that ultimately will force American industry to protect employees and provide better job security. American industry will become a competitive leader in the international marketplace only when it builds cooperative partnerships of labor, supervisors and management. Employers who see the "writing on the wall" will realize that they have to treat their employees fairly and work with them to harness their energies to meet the competition.

American managers must re-examine their methods. Management must communicate effectively with employees, encourage suggestions and participation, adequately train supervisor in international relations and introduce problem-solving mechanisms in which employees have confidence. Under such circumstances, employees would find that their employers are eager to solve problems in the workplace.

The American-managed Nissan plant in Smyrna, Tenn., is an example of a company that has built a working partnership of labor and management. The company trains its workers to do a number of jobs, involves them in decisions and gives them responsibility for the quality of the product at every level. The Nissan employees have shown no interest in unionizing and labor relations are harmonious.

The cooperative approach may have been born out of necessity, but it will be cooperation, rather than wrongful discharge actions, government regulations or union muscle, that will be the source of employee protections in the future.

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Management's Role in Non-Union Companies

The number of unionized workers in the private sector continues to diminish, with estimates of no more than a fraction of the non-governmental workforce currently unionized. To maintain a productive workforce, pulp and paper company management needs to supplant the role that unions have played. Unfortunately, there are few companies with managers trained to supplant unions. That lack of training can be a significant detriment to a company's overall well being.

In the past, the foremost role for unions was dealing with employee grievances/ complaints. Unions listened to employee grievances and then negotiated resolutions with management. In a non-unionized company, management must listen to concerns and grievances and resolve them in ways that do not cause discord.

Alternative dispute resolution

It is essential that human resource executives be expert in administering alternative dispute resolution (ADR) programs. ADR programs are generally welcomed by both management and employees because they are cost effective and swiftly arrive at fair resolutions. One obstacle is management's fear of giving up its traditional power. But by involving employees, management will not be perceived as arbitrary or capricious.

The three most common ADR programs are:

Arbitration. An adjudication process during which a third party hears both sides of a dispute and renders a decision after weighing the evidence. Both sides may agree prior to arbitration that the decision will be binding or that an appeal to another body is allowed to reach a mutually acceptable decision.

Mediation. A process where a third party facilitates open and ongoing communication designed to lead to a settlement.

Peer review. A representative adjudication process that relies on a selected panel of managers and employees. A majority of the panel is required to render a binding decision.

If costs are incurred for the mediator and/or arbitrator, management and employee can agree to share the costs, or management can absorb the full costs.

Focus groups, teams, and coaching

Management at non-union plants also undertakes one of the traditional roles of unions: listening to employees. One of the best means is through focus groups, which afford management significant opportunities to obtain representative information about its workforce and their attitudes. Focus groups also permit management to communicate real issues through ongoing employee involvement.

Focus groups explore issues in a flexible manner that is part of an overall strategic plan. Such groups are an effective means for collecting valuable data. That data, when analyzed, will be essential for management making decisions that will meet the needs of employees, thus maintaining morale and productivity. The results should be published as part of management's commitment to open communication.

Focus groups lead to team building-the instruments that implement strategic plans. Historically, unions have created a sense of a team. Management can also create that spirit of solidarity. Teams can serve such purposes as the enhancement of communication and the resolution of conflicts, but they are most effective in increasing productivity and enhancing employee morale.

To create effective teams, management must clearly determine what problems it hopes to address by the formation of a team. It is also important that all levels of management support the team. Finally, it is important that teams have a selection of the right kind of people to get a job done.

An essential spur for a team's success is having an effective coach. The coach encourages employees to do better and to accomplish more, works to rehabilitate negative employee attitudes, and is not a punitive task master

Employee Advocate Representative (EAR)

Just as unions used to have shop stewards, non-unionized companies can have an employee advocate representative (EAR). The FAR position is usually a trial assignment aimed at improving morale by involving employees in a broad spectrum of management activities and decisions.

When employees want to make their concerns available to management, the EAR listens and imparts those concerns. The EAR position may or may not be salaried and exists for a limited period of time. Once a term expires, another employee is either chosen or volunteers for the EAR position.

The responsibilities of the EAR include providing input about employee issues and suggesting solutions at department meetings. The EAR may assist in promoting company communication and may play a pivotal role in assisting management with training and quality control programs, while also serving on committees dealing with employee awards and activities.

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