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Wednesday, February 24, 2010
Defense Against Union Salting Campaigns
While the recession has landed a solid jab on the nose of construction companies and merit shop workers, it has sent organized labor to the canvas. According to data from the federal Bureau of Labor Statistics, the economic barrage that has pummeled the construction and manufacturing industries has driven private-sector union membership down 10 percent in the last year, accelerating a 50-year downward spiral.
Unions are in trouble, and like a cornered tiger, they are desperate to find an escape. That means aggressive, often unethical, and sometimes illegal organizing tactics will be on the rise. Unions possess an arsenal of obvious yet effective tools to try to boost membership at the expense of project developers, taxpayers and open-shop company owners.
Among the most effective is the salting campaign, a strategy aimed at forcing a non-union company to sign a union contract, often regardless of the firm’s employees’ wishes. Failing to strong-arm the company, the union’s secondary goal is to bury the company under an avalanche of unfounded labor complaints, forcing it to expend time, money and other resources to defend itself rather than competing for and completing construction projects.
As noted, salting is a tried-and-true method of legal harassment, but with care and meticulous recordkeeping, you can avoid becoming entangled in the union’s unscrupulous attempts to bury you under legal and regulatory red tape.
If you find that you’ve hired a union salt or that the union has been successful in convincing a current employee act as a salt, he probably will actively and vocally recruit for union membership, making no secret of his purpose. At the same time, he likely will perform job functions poorly, exhibit bad work habits and/or violate company work or safety rules to the point of termination. The object, of course, is to claim the termination is the result of the unionizing activity and not the subpar job performance.
Protect yourself by ensuring your workplace rules are fair and non-discriminatory against union sympathizers. When disciplining or firing a salt, ensure and document that the punishment is justified, evenly applied regardless of union sentiment, and vetted by upper management and legal counsel. According to the Independent Electrical Contractors, companies cannot institute or enforce rules prohibiting solicitation and distribution if the rules were not established until the organizing began.
If a job applicant advertises his enthusiasm for unions and desire to organize the company’s workers, he may be fishing for grounds to file an unfair labor practice charge with the National Labor Relations Board, according to Frederick M. Switzer III, attorney with the Clayton, MO firm Danna McKitrick . By announcing his intent, the would-be salt hopes to goad the employer “to drop its guard and commit an unfair labor practice, thus giving the union a basis for filing an unfair labor charge. If the employer is not prepared for this, the likely result will be a formal Board complaint, litigation, and an order of reinstatement, back-pay, etc.,” Switzer wrote. “If a union believes that it has a good opportunity to organize a company from within, the salt may remain under cover until after he is employed. Otherwise, the announcement will come at the application or interview stage.” Like asking his marital status, seeking information on his union leanings is a no-no. Assure the applicant that those sentiments will not be considered when you consider the application. Make sure your hiring practices and policies back up your statements.
Have a labor attorney review your company handbook, and ensure supervisors are well-versed in its contents and apply the procedures uniformly.
“The hiring policy should provide that all applicants complete the employment application, and take the necessary tests, before being considered for hire. References should be checked before an applicant is hired,” suggests Michael L. Fortney of the Ohio law firm Fortney and Klingshirn. “If a non-union employee is forgiven for a rule violation, and a union salt is disciplined for the same rule violation, the prospect of prevailing on an [unfair labor practice suit] suffers.”
Fortney notes that “Supervisors are the company's representatives on the front line. [W]hatever you say as a supervisor can bind the company and be held against the company just as though a top company official had made the same statements.”
He reminds management not to threaten employees for unionizing activity or if the union is successful in its organizing efforts. Don’t ask employees their opinion of the unionization effort or its organizers.
Still, if your company becomes the target of a salting campaign, you are not required to sit by and let the union spread false promises or accusations against your company and its management. Fortney notes that you can tell employees the union wants the company to sign the agreement regardless of employee sentiment or support. It is permissible to inform employees that if the effort is successful, they will be required to pay union dues, forfeit their rights to speak for themselves on wages, work hours, and other employment issues.
As with any labor issue, your best bet when facing a salting campaign – or better yet, before the issue arise – is to consult an experienced attorney.
Unions are in trouble, and like a cornered tiger, they are desperate to find an escape. That means aggressive, often unethical, and sometimes illegal organizing tactics will be on the rise. Unions possess an arsenal of obvious yet effective tools to try to boost membership at the expense of project developers, taxpayers and open-shop company owners.
Among the most effective is the salting campaign, a strategy aimed at forcing a non-union company to sign a union contract, often regardless of the firm’s employees’ wishes. Failing to strong-arm the company, the union’s secondary goal is to bury the company under an avalanche of unfounded labor complaints, forcing it to expend time, money and other resources to defend itself rather than competing for and completing construction projects.
As noted, salting is a tried-and-true method of legal harassment, but with care and meticulous recordkeeping, you can avoid becoming entangled in the union’s unscrupulous attempts to bury you under legal and regulatory red tape.
If you find that you’ve hired a union salt or that the union has been successful in convincing a current employee act as a salt, he probably will actively and vocally recruit for union membership, making no secret of his purpose. At the same time, he likely will perform job functions poorly, exhibit bad work habits and/or violate company work or safety rules to the point of termination. The object, of course, is to claim the termination is the result of the unionizing activity and not the subpar job performance.
Protect yourself by ensuring your workplace rules are fair and non-discriminatory against union sympathizers. When disciplining or firing a salt, ensure and document that the punishment is justified, evenly applied regardless of union sentiment, and vetted by upper management and legal counsel. According to the Independent Electrical Contractors, companies cannot institute or enforce rules prohibiting solicitation and distribution if the rules were not established until the organizing began.
If a job applicant advertises his enthusiasm for unions and desire to organize the company’s workers, he may be fishing for grounds to file an unfair labor practice charge with the National Labor Relations Board, according to Frederick M. Switzer III, attorney with the Clayton, MO firm Danna McKitrick . By announcing his intent, the would-be salt hopes to goad the employer “to drop its guard and commit an unfair labor practice, thus giving the union a basis for filing an unfair labor charge. If the employer is not prepared for this, the likely result will be a formal Board complaint, litigation, and an order of reinstatement, back-pay, etc.,” Switzer wrote. “If a union believes that it has a good opportunity to organize a company from within, the salt may remain under cover until after he is employed. Otherwise, the announcement will come at the application or interview stage.” Like asking his marital status, seeking information on his union leanings is a no-no. Assure the applicant that those sentiments will not be considered when you consider the application. Make sure your hiring practices and policies back up your statements.
Have a labor attorney review your company handbook, and ensure supervisors are well-versed in its contents and apply the procedures uniformly.
“The hiring policy should provide that all applicants complete the employment application, and take the necessary tests, before being considered for hire. References should be checked before an applicant is hired,” suggests Michael L. Fortney of the Ohio law firm Fortney and Klingshirn. “If a non-union employee is forgiven for a rule violation, and a union salt is disciplined for the same rule violation, the prospect of prevailing on an [unfair labor practice suit] suffers.”
Fortney notes that “Supervisors are the company's representatives on the front line. [W]hatever you say as a supervisor can bind the company and be held against the company just as though a top company official had made the same statements.”
He reminds management not to threaten employees for unionizing activity or if the union is successful in its organizing efforts. Don’t ask employees their opinion of the unionization effort or its organizers.
Still, if your company becomes the target of a salting campaign, you are not required to sit by and let the union spread false promises or accusations against your company and its management. Fortney notes that you can tell employees the union wants the company to sign the agreement regardless of employee sentiment or support. It is permissible to inform employees that if the effort is successful, they will be required to pay union dues, forfeit their rights to speak for themselves on wages, work hours, and other employment issues.
As with any labor issue, your best bet when facing a salting campaign – or better yet, before the issue arise – is to consult an experienced attorney.
Labels: Commercial, Construction Industry, Industrial
Wednesday, February 10, 2010
Expanding Into Unfamiliar Territory
When you go on vacation with your family, where do you choose to eat dinner? Do you like to sample all of the popular local restaurants in the area, or do you opt for the familiar chain restaurants, where you know you can get something that you’re going to like? Change is scary to many, and we all know that a Happy Meal will taste the same whether we’re in Boston, Seattle, Miami or San Francisco.
As a business owner, you also may find change difficult to deal with. But with the industry floundering in the midst of the worst recession in a lifetime, construction companies increasingly are facing a daunting choice: try to ride out the storm by cutting staff, marketing budgets and profits to the bone or cast a wider net to land projects outside their comfort zones.
“[F]aced with the choice of retrenchment or expansion, it seems that a fair proportion of construction companies are choosing the latter. Almost four out of ten respondents say they’ve continued to develop regionally or globally, while only 12 percent have actually contracted their activity,” according to KPMG’s Navigating the storm Charting a path to recovery? Global Construction Survey 2009.
Horizontal integration – expanding to heretofore unexplored locales or taking on public works jobs when their experience and proficiency lies in negotiated private work – opens builders to risks that are only exacerbated by the current economic woes. Construction defect claims as contractors step outside their areas of expertise or are tempted to cut corners to make up for paper-thin profit margins, unforeseen difficulties stemming from working with unfamiliar owners and developers, new site conditions as companies move into new states or foreign countries, and unanticipated labor troubles all lie in the weeds ready to ambush unwary contractors seeking greener pastures, Jack Gibson, president of International Risk Management Institute told Business Insurance.com. Thankfully, contractors can take advantage of familiar resources to help them navigate the stormy seas when leaving the relatively safe harbor of their home territory.
Risk Management
Before you consider extending yourself beyond your comfort zone, take steps to mitigate as much risk as possible. You can do this by keeping as many variables as possible as constant as possible. Think about expanding into similar locales or market niches. For a contractor based in Ohio, a move into Pennsylvania probably won’t be as trying in terms of logistics and site analysis as seeking work in Florida or British Columbia. If you’ve built a dozen high schools in Texas, bidding on a school in Kansas may not be as much of a stretch as taking on an Indian casino in Arizona.
Insurer Rolf A. Neuschaefer writes that it may help to look at your potential integration in the same way a bonding agent might assess the risks:
• Assess your portfolio’s value and makeup.
• Explore financing options. “If the sewer contractor, for example, has to wait for the sale of bonds before he can receive a contract award, he may have a low bid outstanding for some time which ties-up his bonding line,” Newschaefer notes.
• Note the location risks, including the legal and political environment, local customs (especially in foreign countries), travel, office rental, the state of the infrastructure, etc.
Vendor relationships
Contractors can mitigate their risks by doing their homework when it comes to the people they do business with. Suppliers and subcontractors often are identified with their partners and therefore are as much the “face” of your company as your project manager and superintendent. Seek out vendors and partners whose business practices, acumen and customer service attitude are as impeccable as your own. You must trust your vendors to fulfill areas, be they labor supply, jobsite security, permitting, etc., that are not among your own core competencies, Rick Kuharik, director of risk services at Westfield Insurance, explained to Smart Business online. Frequent, open communication, visits to the vendor’s place of business and full documentation of expectations, remuneration, and all parties’ obligations will help create a strong, lasting partnership, Kuharik said.
Professional associations can be a contractor’s best friend when developing vendor relationships. The Associated Builders and Contractors and the Independent Electrical Contractors boast chapters nationwide. The members of both exhibit exemplary professionalism and chapter staff can provide recommendations based on your particular project. These associations are fonts of knowledge and insights into their local political and regulatory arenas. Rely on them to help you avoid pitfalls.
Labor Issues
Do you have qualified supervisory staff to oversee the job? Are they willing to relocate for the project’s duration? Are you willing to compensate them for that inconvenience? Is the local labor, subcontractor and material supply sufficient in number and competency to make the job run smoothly? The last thing you want when taking on a far-flung project is to lose money, and most of these disasters stem from inadequate estimates for the labor time required to complete the work or misjudging the productivity of the available work force, Kuharik said.
If you find that you are struggling to build or maintain your revenues in your market, now is the time to get out of your comfort zone and explore the possibilities in other markets. And don’t forget to visit the local restaurants!
As a business owner, you also may find change difficult to deal with. But with the industry floundering in the midst of the worst recession in a lifetime, construction companies increasingly are facing a daunting choice: try to ride out the storm by cutting staff, marketing budgets and profits to the bone or cast a wider net to land projects outside their comfort zones.
“[F]aced with the choice of retrenchment or expansion, it seems that a fair proportion of construction companies are choosing the latter. Almost four out of ten respondents say they’ve continued to develop regionally or globally, while only 12 percent have actually contracted their activity,” according to KPMG’s Navigating the storm Charting a path to recovery? Global Construction Survey 2009.
Horizontal integration – expanding to heretofore unexplored locales or taking on public works jobs when their experience and proficiency lies in negotiated private work – opens builders to risks that are only exacerbated by the current economic woes. Construction defect claims as contractors step outside their areas of expertise or are tempted to cut corners to make up for paper-thin profit margins, unforeseen difficulties stemming from working with unfamiliar owners and developers, new site conditions as companies move into new states or foreign countries, and unanticipated labor troubles all lie in the weeds ready to ambush unwary contractors seeking greener pastures, Jack Gibson, president of International Risk Management Institute told Business Insurance.com. Thankfully, contractors can take advantage of familiar resources to help them navigate the stormy seas when leaving the relatively safe harbor of their home territory.
Risk Management
Before you consider extending yourself beyond your comfort zone, take steps to mitigate as much risk as possible. You can do this by keeping as many variables as possible as constant as possible. Think about expanding into similar locales or market niches. For a contractor based in Ohio, a move into Pennsylvania probably won’t be as trying in terms of logistics and site analysis as seeking work in Florida or British Columbia. If you’ve built a dozen high schools in Texas, bidding on a school in Kansas may not be as much of a stretch as taking on an Indian casino in Arizona.
Insurer Rolf A. Neuschaefer writes that it may help to look at your potential integration in the same way a bonding agent might assess the risks:
• Assess your portfolio’s value and makeup.
• Explore financing options. “If the sewer contractor, for example, has to wait for the sale of bonds before he can receive a contract award, he may have a low bid outstanding for some time which ties-up his bonding line,” Newschaefer notes.
• Note the location risks, including the legal and political environment, local customs (especially in foreign countries), travel, office rental, the state of the infrastructure, etc.
Vendor relationships
Contractors can mitigate their risks by doing their homework when it comes to the people they do business with. Suppliers and subcontractors often are identified with their partners and therefore are as much the “face” of your company as your project manager and superintendent. Seek out vendors and partners whose business practices, acumen and customer service attitude are as impeccable as your own. You must trust your vendors to fulfill areas, be they labor supply, jobsite security, permitting, etc., that are not among your own core competencies, Rick Kuharik, director of risk services at Westfield Insurance, explained to Smart Business online. Frequent, open communication, visits to the vendor’s place of business and full documentation of expectations, remuneration, and all parties’ obligations will help create a strong, lasting partnership, Kuharik said.
Professional associations can be a contractor’s best friend when developing vendor relationships. The Associated Builders and Contractors and the Independent Electrical Contractors boast chapters nationwide. The members of both exhibit exemplary professionalism and chapter staff can provide recommendations based on your particular project. These associations are fonts of knowledge and insights into their local political and regulatory arenas. Rely on them to help you avoid pitfalls.
Labor Issues
Do you have qualified supervisory staff to oversee the job? Are they willing to relocate for the project’s duration? Are you willing to compensate them for that inconvenience? Is the local labor, subcontractor and material supply sufficient in number and competency to make the job run smoothly? The last thing you want when taking on a far-flung project is to lose money, and most of these disasters stem from inadequate estimates for the labor time required to complete the work or misjudging the productivity of the available work force, Kuharik said.
If you find that you are struggling to build or maintain your revenues in your market, now is the time to get out of your comfort zone and explore the possibilities in other markets. And don’t forget to visit the local restaurants!