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Amid Tight Labor Market with Rising Wages, Union Activity Is on the Rise


Editor’s Note: As 2021 winds down, a tight labor market, inflation and various other compensation concerns are confronting organizations amid salary budget planning and financial forecasting for 2022. For these reasons, Workspan Daily’s “Compensation Crossroads” series will provide current salary data, expert insights and actionable plans to better prepare compensation professionals during this tumultuous time.

On Dec. 9, workers at a Starbucks store in Buffalo, New York, voted to form their first U.S. union.

As reported by NPR, “The pro-union Starbucks workers advocated for better staffing, training and pay, including steady wage increases for workers who stay with the company for years only to discover their pay is not much more than that of new hires.”

Earlier, Starbucks had announced starting in January 2022, employees with two or more years could receive up to 5% raise and those with five or more years could receive up to a 10% raise. And by next summer, hourly pay workers would make at least $15 an hour and average nearly $17 an hour.

Days after the win in Buffalo, Starbucks workers in the Boston area expressed an interest in forming their own union, joining the unionization efforts already taking place at other Starbucks stores in New York City and Arizona.  

After being on strike for nearly three months, around 1,400 workers at Kellogg’s cereal plants in four cities (Memphis, Tennessee, Battle Creek, Michigan, Omaha, Nebraska, and Lancaster, Pennsylvania) voted to approve a five-year contract on Dec. 21. Workers are expected to return to work the week of Dec. 27.

The Memphis Commercial Record reported the labor dispute had been focused on details of the company’s proposals for a two-tiered wage and benefit system. “Since 2015, the company has had a system in which new workers receive lower wages and benefits than more established workers,” reporter Daniel Connolly wrote.

Highlights from the new contract include: 

  • No takeaways; No concessions.
  • No permanent two-tier system.
  • A clear path to regular full-time employment.
  • Plant closing moratorium: No plant shut downs through October 2026.
  • A significant increase in the pension multiplier.
  • Maintenance of cost of living raises.

When workers rejected a proposed contract earlier this month, Kellogg Co. had announced it would consider replacing striking workers with permanent replacement employees.

Jon Hyman, chair of the employment and labor practice area at Wickens Herzer Panza in Avon, Ohio, noted that the hiring of permanent replacement workers remains management’s “strongest weapon against labor stoppages.”

“An employer has the right under the National Labor Relations Act to permanently replace striking workers, unless the terminations constitute unfair labor practices (i.e., retaliating against or punishing the striking workers for engaging in protected concerted activity or discrimination against pro-union employees),” Hyman said. “As long as the employer has a bona fide and legitimate economic and non-discriminatory reason for hiring replacements (such as ensuring continuous operations), the hiring is legal.”

Hyman added that hiring replacement workers “will ratchet up the heat of the labor stoppage” and that it can be especially difficult to find enough workers who are willing to cross a picket line in a tight labor market such as the current one.

Dan Altchek, a partner at Saul Ewing Arnstein & Lehr who advises private and public sector employers on labor relations issues, explained it’s important to understand that strikes and walkouts are legally protected activity by employees, regardless of whether they are represented by a union. 

“With that background, strikes and walkouts can have varying effects on a workplace. On a basic level, they result in employees not performing work,” he said. “That can put pressure on an employer that cannot afford a stoppage of its operations. Commentators also speak of strikes and walkouts having a ‘destabilizing’ effect on labor-management relations. These are efforts to coerce an employer into meeting demands by bringing the pressure of a cessation in operations to bear on the employer.”  

Meanwhile, workers at Deere & Co. approved a new contract in November, ending a month-long strike (the first at the company since 1986). The Washington Post reported that after rejecting two previous offers, “10,000 members ratified a new six-year contract offer by a vote of 61 percent to 39 percent.” The offer includes a $8,5000 signing bonus, 20% increase in wages over the lifetime of the contract with 10% this year, among other comp-focused improvements.

And in Bessemer, Alabama, workers at an Amazon warehouse will get a second chance to vote for a union after a National Labor Relations Board official found Amazon “improperly interfered in the first election,” according to a Washington Post article.

Heading into 2022, Altchek does not expect the activity of unionization efforts to slow. Hyman anticipates more organizing drives among more high-profile employers with big-time name recognition, as well as smaller more localized businesses.

“We are on the cusp of the next great union-organizing boom, to heights that we have not seen since the days of Norma Rae in 1970s and could even surpass it,” Hyman said.  

Hyman believes “every employer in America should build union-avoidance training for supervisors and managers into their legal budgets for 2022” because “unions don’t gain a foothold in an industry or market segment and move on; they instead try to expand their reach within that segment.”

Hyman also believes there will be more labor stoppages in 2022, but said employees need to keep in mind that successfully unionizing is just step one. Once unionized, they must bargain a first contract with an employer, which is where employers hold a tremendous amount of leverage.

“An employer’s only obligation is to bargain in good faith, and if they can bargain in good faith to an impasse, the employer is then permitted to unilaterally implement the terms of its final proposal,” Hyman said. “This is how Wal-Mart has effectively remained union-free, for example, in the few instances in which a union has been able to win a representation election inside one of its stores.”

About the Author

Nu Yang is a writer/editor for WorldatWork. 

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