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How Sweetheart Deals Hurt Labor

Mike Elk

 by The New York Times

The key to organizing workers in areas like the South, where unions hold little sway, is building trust. From conversations at Volkswagen’s Chattanooga plant, I learned that the U.A.W. lost because workers were suspicious of it. Meddling by antiunion politicians was a factor in U.A.W.’s defeat, but that's not the whole story. Many workers who voted against the U.A.W. said they weren't opposed to unions, but they just didn't trust the U.A.W.



Many Chattanooga workers thought the U.A.W. deal ensuring VW’s neutrality in the election limited their ability to have a meaningful voice in future contracts. While it’s easy to understand why the U.A.W. sought the agreement, given the viciousness with which companies often fight organizing drives, antiunion workers successfully portrayed such a pact as a “backroom deal.”

"If unions are to succeed in the South, they need to build trust among workers, not make them feel that deals are being cut behind their backs."

Several unions have agreed to “sweetheart deals” with employers to win neutrality, and in exchange, “pre-agree” to employer sought contract concessions that cap wages before even organizing a single member. A 2008 Wall Street Journal report uncovered how Unite Here and the Service Employees International Union clandestinely negotiated contracts with Sodexo and Aramark without any traditional labor organizing. Under this arrangement, members were unaware that labor contracts were negotiated prior to joining the union. In Chattanooga, antiunion workers successfully persuaded Volkswagen workers, who had previously signed union cards indicating support for the U.A.W., that such a deal undercutting them was already in the works.



Anti-U.A.W. workers distributed flyers attacking U.A.W.’s pact in which it had agreed to "maintain or enhance the cost advantage and other competitive advantages” Volkswagen already enjoys. They claimed the union had already negotiated a contract that would put them in line with U.A.W. new hire rates at the Big Three — Chrysler, Ford and General Motors — resulting in wage cuts. There was some truth to this claim. U.A.W.-negotiated Big Three contracts pay new hires significantly less than senior workers with starting salaries less than $16 an hour, slightly more than Chattanooga’s starting rate.



Many Chattanooga workers had trouble seeing the upside of joining the U.A.W. Local politicians and outside interest groups, while providing no supporting evidence, claimed that VW would discontinue investing there if U.A.W. won. Scared by such job security threats and unimpressed by U.A.W.’s failure to concretely establish the “upside” of its union, the majority chose the status quo.



By their nature, unions are big, often bureaucratic institutions with sometimes billions of dollars in assets. A lot of workers unfamiliar with unions or already ideologically opposed look at them and say, “I don’t know these people. How do I know they won’t sell me out?” If unions are going to organize the South, they have to build democratic organizations in which workers make decisions about their workplace – not by signing onto to “sweetheart deals.”


© 2020 The New York Times Company

Mike Elk

Mike Elk is the senior labor reporter at Payday Report and member of the Washington-Baltimore NewsGuild. He previously served as senior labor reporter at POLITICO and at In These Times Magazine. 

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