Post-Covid Organizing Efforts: What Are Hospitality Industry Employers to Do?
By Gregory A. Hearing
This article was co-authored by Matthew A. Bowles, Esq., Associate, GrayRobinson, P.A.
The COVID-19 Pandemic presented hospitality industry employers with novel legal issues which forced them to navigate existing labor and employment laws in ways in which hospitality employers likely never envisioned.Â
Now that the Pandemic is on its way out and many of these novel issues dwindle away, employers all over the country are facing a resurgence of a familiar but almost-forgotten issue – union organizing.Â
With the National Labor Relations Board ("NLRB") reporting that union petitions in 2022 are up 58% from the previous year, it is not surprising for employers to learn that unions are making a concerted effort to unionize workplaces and increase union membership.
Many employers are already noticing labor organizers' push to strengthen unions across the country. While most employers have at least heard of massive unionizing efforts in the news, such as efforts to organize Amazon's and Starbucks' workforces, some employers may have noticed union organizers showing up at their own workplace. Regardless of where union organizing efforts are popping up, most such efforts share a common theme: they are capitalizing on the difficulties caused by the Pandemic as a springboard to convince employees that they need to organize. For instance, one hospitality union is promoting certain goals on its website such as lobbying for laws which require hospitality employers to call back laid-off workers before hiring new employees and resisting some hotel employers' moves to reduce daily housekeeping.
In order to better understand this organizing trend, where it is headed, and how employers can act to oppose organization, employers must first understand the National Labor Relations Act ("NLRA"). President Franklin D. Roosevelt signed the NLRA into law in 1935. This was a time when working conditions for many workers were truly dire and the government was forced to act to not only protect workers but also regain control of employees who had resorted to violent strikes and confrontations to express their displeasure with their working conditions.
There are two main sections of the NLRA which protect employees' right to organize. Section 7 protects employees' right to engage in concerted activity regarding the terms and conditions of employment and specifically provides the following:
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities...
Section 8 prohibits employers from interfering with employees' Section 7 rights and prohibits employers from discriminating against employees who exercise such rights. The NLRB is the federal agency responsible for enforcing the NLRA. Employers, employees or unions who believe that a violation of the NLRA has occurred may file an unfair labor practice charge ("ULP") with the NLRB.
While unions may have once protected workers' safety and wages prior to laws such as the Fair Labor Standards Act (1938) and the Occupational Safety and Health Act (1970), modern laws now protect employees from many of the harms which the NLRA and labor organizers sought to protect against. Now, unions may actually inflict more harm than good as union economics can cause harm to the overall economy. While some employees may experience slightly increased wages, unions can cause many employees to lose their jobs. In fact, unions can cause job losses across the economy. Indeed, increased union membership can cause higher unemployment rates due to a decrease in available jobs, the exporting of jobs to other countries due to increased labor costs, price increases for consumers, and unequal competition between unionized and non-unionized employers.
Regardless of the negative impacts which unions may impose on the economy, administrations typically align with unions or employers based on the party holding office. For instance, Republican administrations tend to favor pro-employer policies, while Democratic administrations tend to favor unions. Recently, the Biden Administration established its commitment toward unions by President Biden's appointment of Marty Walsh as Labor Secretary at the Department of Labor.Â
Prior to his appointment, Secretary Walsh served as the President of the Laborer's Union Local 223 in Boston, Massachusetts. As for the NLRB, which is comprised of five board members, President Biden recently appointed NLRB Board Member David M. Prouty, giving the NLRB a three-to-two Democratic appointee majority. President Biden also appointed Jennifer A. Abruzzo as General Counsel for the NLRB. Prior to her appointment, General Counsel Abruzzo served as Special Counsel for Strategic Initiatives for the Communications Workers of America, one of the country's largest unions.
With its new appointees, the DOL and NLRB have not wasted any time in swinging the pendulum from the Trump Administration's employer-friendly policies and decisions back to those of the Obama Administration's DOL and NLRB. For starters, on August 29, 2022, the Board reversed a Trump era decision by holding that employers' attempts to restrict the display of union insignia are presumptively unlawful even when the employers' policies are facially neutral. Specifically, in Tesla, Inc., 370 NLRB (2022), the Board explained that facially neutral uniform policies are presumptively unlawful unless the employer can establish that special circumstances exist which warrant restricting employees' Section 7 rights, a very difficult showing to meet.
While Tesla, Inc., represents one of the first Biden Board reversals, it is only the beginning. On October 3, 2022, the NLRB issued its decision in Valley Hospital Medical Center, Inc., 371 NLRB No. 160 (2022) which reversed another Trump Board decision. Specifically, the Board held that employers may not unilaterally cease collecting union dues from employees' paychecks when a collective bargaining agreement expires. Rather, employers must continue collecting union dues until a new collective bargaining agreement is reached or the parties reach impasse in negotiating a successor agreement. As the Biden Board considers additional cases, hospitality industry employers should expect to see the Board continue to revert back to Obama era precedent.
As the Board swings the NLRB precedent pendulum as expected, the Biden Administration is actively working with Congress to enact the Protecting the Right to Organize Act ("PRO Act"), and employers should be concerned. If enacted, the PRO Act would represent the most significant changes to federal labor law since President Roosevelt signed the NLRA in 1935. Further, these changes would greatly impact employers by effectively eliminating certain employer rights during an organizing campaign.
For instance, the PRO Act would prohibit employer meetings designed to allow employers to convey their opinions regarding unionization to employees and allow ambush elections which do not afford an employer time to respond to an organizing campaign. But the PRO Act would harm employees as well by allowing non-secret elections which would open the door to increased peer pressure as an organizing weapon and foster retaliation against employees who vote against organization. In nullifying state right-to-work laws, the PRO Act would also require all employees in a unionized workforce to join the union and pay dues, not just the employees who voted in the union.
While the foregoing represent only a fraction of the PRO Act's negative impacts on employers and employees, the biggest potential threat to hospitality industry employers is the PRO Act's creation of a private right of action to enforce the NLRA. Currently, employees, employers, or unions must file a ULP with the NLRB which prompts an investigation. Under the PRO Act, employees would be able to file a lawsuit against their employer directly in federal court. This could open a Pandora's box of lawsuits against employers, lawsuits in which employees could potentially be awarded back pay without consideration for interim earnings, as well as liquidated damages, front pay, consequential damages, punitive damages, and attorneys' fees and costs.
The U.S. House of Representatives passed the PRO Act in 2021, but it was dead on arrival in the U.S. Senate where it faced fierce opposition. In order for the PRO Act to be considered, the Senate would likely need to change the filibuster rules in order to get the PRO Act on the Senate floor for a vote, a move which some Democratic Senators have openly opposed while the Senate maintains a partisan stalemate broken only by the Vice President. Even then, Democratic Senators Mark Kelly, Kyrsten Sinema and Mark Warner remain holdouts. Accordingly, those who oppose the PRO Act will be closely watching the 2022 mid-term elections.
For now, there are certain steps which hospitality industry employers should take to maintain a non-unionized workforce. First and foremost, employers should always be cognizant of any organizing activity as a good defense is having an even better offence and, the sooner an employer becomes aware of organizing efforts, the greater the opportunity to successfully maintain a non-unionized workforce.
While there are obvious signs of union organizing, such as union representatives showing up at the workplace and passing out materials, employees openly wearing union insignia, or open conversations between employees regarding organizing, some organizing indicators are more discreet. Such indicators include, but are not limited to, sudden organization and camaraderie among employees, an us (employees) versus them (management) attitude, and employees suddenly vocalizing issues as a group or unexpectedly becoming quiet around management.Â
Typically, managers and supervisors are in the best position to recognize potential organizing efforts as they have the pulse of the workforce from daily interactions with their subordinates. Employers wishing to avoid a unionized workforce should commit to training their managers and supervisors in recognizing organization efforts.
Once an employer discovers that its workforce is engaged in an organizing campaign, the employer must act fast while ensuring that it does not commit a ULP. In order to understand the steps that employers may take to oppose an organizing campaign, employers must first understand what actions are prohibited. For the employer "Don'ts," employers should learn the TIPS acronym. TIPS stands for Threaten; Interrogate; Promise; and Surveil all of which would likely draw ULPs. While these four "Don'ts" may seem like common sense, an employer may easily engage in one of these prohibited activities if it is not cautious and deliberate in its communications with employees.Â
For instance, "Threaten" includes any threat to alter, or not alter, the terms and condition of employment should employees support unionization. Conversely, employers must not "Promise" to change any of the terms and conditions of employment if employees oppose unionization. As for "Interrogate," employers are prohibited from asking employees about an organizing campaign, including employees' opinions regarding same. Finally, an employer may not "Spy" on employees' organizing activities. This includes following employees and/or union representatives to organizing meetings, staking out such meetings or engaging in similar affirmative action to learn more about the organizing campaign.
It is very important for managers and supervisors to maintain situational awareness in the workplace because they are only allowed to learn about an organizing campaign based on observations made during their normal employee interactions in the workplace. Once they attempt to affirmatively seek out information from employees through either questions or intentional observation of organizing activity occurring outside of the workplace, managers and supervisors may cross the line. For instance, a supervisor who discovers that employees will be attending a union organizing event at a local bowling alley should not drive to the bowling alley to observe which employees attend the event. Rather, the supervisor should steer clear of the event and refrain from asking employees about the event.
Once an employer understands what actions to avoid, it may focus on what management can do to address an organizing campaign. Primarily, an employer should share information with employees as information is an employer's most effective tool. Management can do this as a group during a captive audience meeting, although the NLRB General Counsel currently wishes to prohibit this practice, or via a voluntary assembly of employees. As for the information shared with employees, an employer may explain to employees that unionization does not mean that the employer is required to meet the union's demands during contract negotiations as the NLRA only requires the employer and union to engage in good faith negotiations regarding the terms and conditions of employment.Â
Employees are not guaranteed an increase in wages or additional benefits simply because they become unionized. To the contrary, the union could negotiate for changes to the workplace environment, working hours, and/or the disciplinary process instead of wage and/or benefit increases. It is also possible that the union would negotiate for a decrease in financial benefits in exchange for other contract terms. There is only one certainty when a union and employer enter into contract negotiations – uncertainty.
Many employees are drawn to the allure of unionization without fully understanding how they will be affected once the union is their sole representative bargaining the terms and conditions of their employment. Accordingly, it is important for employers to educate their employees on what unionization means for represented employees. For instance, employees lose their individual voice with the employer. Once represented by a union, members of the bargaining unit are no longer permitted to deal directly with management. Rather, they must address any and all issues regarding the terms and conditions of their employment with the union as their sole advocate. Indeed, many employees are shocked when they learn that they may no longer advocate directly with management for their individual and unique needs.Â
As such, a zealous employee is not permitted to individually seek a raise with management and is stuck with the wage schedule and seniority terms identified in the collective bargaining agreement. Similarly, an employee wishing to take time off may be subjected to a merciless seniority-based PTO system which may not consider the employee's specific needs such as expenses incurred in planning a vacation. Indeed, employees with lower seniority may find working in a unionized workforce difficult and frustrating.
Loss of individual voice is not the only detriment unionization may cause employees. Employees may be surprised to learn that union membership costs money and that money typically comes directly out of an employee's paycheck. Many employees are also surprised to learn that, if the union calls a strike, employees may be forced to participate in the strike, even if they wish to continue working. Employees on strike may not be eligible for unemployment compensation and the employer may permanently replace employees striking for economic concessions. With inflation at its highest in decades and a potential recession looming, employees may think twice about incurring additional financial responsibilities or hardships.
Management may also share their union experiences with employees and any other information regarding the election process and the implications of a unionized workforce so long as the information is true and does not include prohibited threats or promises. While the foregoing information can be shared with a group of employees and is typically the most effective way to disseminate such information, management may have individual conversations with employees under certain circumstances. While management cannot question employees about organizing efforts, management may answer an employee's questions regarding a union campaign and/or the implications of a unionized workforce. One way to facilitate such conversations is having an open-door policy which allows employees to freely approach management with questions or concerns.
While the foregoing may assist an employer with maintaining a non-unionized workforce after an organizing campaign has commenced, hospitality industry employers without ongoing organizing efforts among their non-unionized workforce should take steps now to prevent such efforts in the future. The most effective step an employer may take is ensuring that it maintains open communications with its employees and understands their needs. Effective communications must run both ways.Â
If an employer is unable to meet certain needs such as a wage increase, the employer should communicate the reason to employees so that they understand the employer's rationale and constraints. Likewise, an employer which raises employees' wages should communicate the reason it is able to implement the raises so that employees can connect their success to the success of the employer's business. Regardless of the issue, employees want transparency in the employer's responses.
Employers may also wish to conduct anonymous surveys in order to determine what issues employees value most. For instance, employees may be satisfied with their wages and benefits, but they may have serious concerns with their work environment, concerns of which the employer is entirely unaware. Understanding a workforce's actual needs allows an employer to show that they care about their employees and sends a signal to the employees that they do not need a third-party advocate to bring their needs to the employer's attention.
In sum, hospitality industry employers should prepare themselves for an anticipated wave of post-COVID-19 organizing efforts. Employers facing organizing efforts may take advantage of the current state of federal labor law to inform their employees of the implications of unionization which employees oftentimes do not consider or about which employees are unaware.Â
Employers not facing organizing efforts may prevent the development of organizing efforts by ensuring two-way communications and transparency with their employees.                           Â
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