Friday, October 4, 2019

(Incomplete) Reflections on the Sanders and Warren Labor Plans

Bernie Sanders ("The Workplace Democracy Plan") and Elizabeth Warren ("Empowering American Workers and Raising Wages") have now both released labor plans as part of their presidential election campaigns. If enacted, each ambitious plan would bring the deepest and most far-ranging reforms to labor law since…well, ever. Both plans include provisions for union certification based on card checks followed by first contract arbitration when needed, reducing employer interference in union drives, banning permanent strike replacements and right-to-work laws, and extending protections for unionization to public sector workers, independent contractors, graduate students, and others who have been excluded. These are all sorely needed reforms, and it's great to see labor law getting serious attention.

Both plans also call for sector bargaining in which wages and other basic employment standards would be established at an industry level, as is often the case in Europe. But European countries are small, have weaker links between being a union member and having union representation (a link that is at the heart of the U.S. system), and have stronger employer associations, traditions of social dialog, and other supporting institutions. Technically, sector bargaining isn’t prohibited under existing U.S. labor law (and has occurred, as in the steel industry in the 1950s), but it requires everyone to be unionized and employers to agree to it. So to make this a reality, policy change is necessary. It’s very difficult to see how this would be imported to the United States on a large scale. Philosophically, will workers see this as a step towards workplace democracy when unions they haven’t supported are speaking for them? Practically, how will sectors be determined along with representatives of labor and business in each? Legally, how will sector bargaining and agreements be enforced? I’m all for learning from international experience and importing good ideas, but I think this is a stretch in this particular case. In fact, Germany represents a classic case of strong sector bargaining, but it recently established a minimum wage because of the decline of sector bargaining. So while I understand the rationale for raising wages and standards on a broad rather than piecemeal basis, and for taking wages out of competition, I'm skeptical that sector bargaining can be a U.S. reality even if there was the political will. Maybe I'm not alone--while Sanders plan actually calls for “a sectoral collective bargaining system with wage boards”—so in other words, wage boards which are more akin to reforming minimum wages than actual sector bargaining.

Both plans also seem to have an underlying mindset that workers are ripe for unionization, but are prevented from doing so either because they are excluded from protections (e.g., gig workers) or the election process favors employers (e.g., greater access to employers, minimal penalties for firing union supporters). This is undoubtedly true. Research consistently shows that many nonunion workers want a union—maybe as high as 50 percent. But only partly true: this same research also shows that others want more voice in other forms. As such, both plans seem to miss opportunities to promote localized, participatory forms of worker voice. Specific possibilities here include mandatory safety and health committees and works councils. As workers experience voice directly in their own workplace, they can see its benefits, and push for stronger forms of involvement and representation. This might even lead to majority support for a traditional union with full-fledged bargaining rights. In this way, others have labeled this “training wheels voice.” I would add training wheels voice to the Sanders and Warren plans.

Stepping away from the areas connected to labor relations and collective bargaining, the Warren plan goes much further than the Sanders plan. For example, the Warren plan would prohibit non-compete clauses and “no-poach” agreements which limit worker mobility and thereby suppress wages and benefits, and would also ban forced arbitration agreements. The Warren plan also addresses worker scheduling, discrimination, and labor policy enforcement issues, and also provides for worker representative on corporate boards of directors. There are sound bases for all of these proposals. But one area where the Sanders plan goes beyond the Warren plan is in ending at-will employment by prohibiting workers from being fired when there isn’t just cause.

Ten years ago in our book Invisible Hands, Invisible Objectives: Bringing Workplace Law and Public Policy Into Focus, Steve Befort and I advocated for an “American Good Cause Termination Act” in which employees can only be fired if there is “good cause” for such an action. A just cause standard is nearly universal in U.S. union contracts and CEO contracts (and has also been in effect in Montana since 1987). Decades worth of decisions by labor arbitrators applying this standard have created a reasonably coherent framework for determining if an employer has good cause to discharge an employee. This proposed universal good cause standard does not prevent employers from terminating employees because of substandard performance or changes in the direction of the business. To balance employer and employee interests, we propose that a U.S. good cause standard be remedied by a maximum of one year’s back pay, except in cases of unlawful discrimination in which case double or treble damage awards would be allowed. It is difficult to argue that U.S. employers would be at a competitive disadvantage in the global economy because the United States virtually stands alone in failing to a provide general statutory protection against unjust terminations.

The benefits of an American Good Cause Termination Act would be widespread. Social justice (equity) is served by outlawing both bad and irrelevant reasons for dismissing employees. Other employment policies would also be enhanced as workers would have greater protections for exercising their rights, such as by filing a valid workers’ compensation claim or taking a family or medical leave. Also, employee voice would be facilitated because employee free speech, autonomy, and unionization would be protected as terminations in retaliation for pursuing these activities would not possess good cause unless they interfered with job performance. Efficiency could even be promoted by reducing the regulatory burdens of the current system--including multiple forums and an expensive litigious approach--with a streamlined system that is quicker and cheaper. So this is an omission from the Warren plan that could help support the broader objectives of that plan, and I think it merits serious consideration.

Among many other things that Steve and I proposed (some of which overlap with the Sanders and/or Warren plans), I will highlight just one that is missing from both which could be the easiest of all to implement: mandatory disclosure of employment terms and conditions. Workers simultaneously over-estimate the extent to which they can only be fired for a good reason and under-appreciate the availability of other benefits (e.g., family leave) or protections (e.g., NLRA protections of collective voice). The employment relationship would work better if employees better understood their actual terms and conditions of employment. As Richard Edwards noted many years ago, lenders are required to disclose accurate interest rates for loans and manufacturers must reveal the ingredients of food products. Given the importance of employment to individuals, disclosure of employment terms also should be required. This should include wage and benefit information, leave policies, dismissal policies, and descriptions of their rights under the law. At-will employees, for example, should be told that they can be dismissed for any reason. Subject to relevant laws, employers would still be free to unilaterally determine and change these policies, but those changes should be transparent to employees.

This proposal for mandatory disclosure of the terms and conditions of employment has international precedents. China requires written contracts for employees that specify wages and benefits, the length of the working day, vacation policies, disciplinary policies, and methods for changing, renewing, or terminating the contract. Closer to our proposal are European Union requirements that employers must provide written notices to employees detailing key elements, including wage payments, leave policies, and the expected duration of employment for temporary employees. These requirements date back to 1991, and were just renewed in 2019. Who can be opposed to greater accuracy and transparency?

In closing, as someone who advocated for broad-scale policy reform 10 years ago, it’s great to see such comprehensive plans being proposed and debated. Of course the path to actual enactment is a lengthy and uncertain one. But ideas are important for highlighting the deficiencies and imbalances in the current system, and for starting to shape new norms and expectations that can one day lead to substantive reform and ultimately, employment with a human face.

Monday, September 23, 2019

The Fragility of Genuine Workplace Cooperation...Or, Avoid Sliding Down the Cooperation Curve

In last month’s blog posting, I described a project in which Mark BrayJohanna Macneil, and I carefully look at different meanings of cooperation. We think this is important because greater clarity over contrasting perspectives on cooperation can lead to a deeper understanding among individuals with differing views, whether they are academics, policy-makers, company leaders, workers, or worker advocates. This also helps to reveal important challenges in implementing and sustaining workplace cooperation.

For starters, with sharply differing perspectives, cooperation is a contested idea, and cooperation is hard to implement when the parties lack a shared vision and common understandings. More deeply, a dynamic consideration of the tensions across different forms of cooperation helps reveal how there can be a natural tendency to move away from cooperative employment relationships, even when there are strong institutional supports or the parties to the employment relationship devote considerable effort and appropriate resources to maintaining cooperation. My collaborators and I address these dynamics by locating differing perspectives on what we call a “cooperation curve.”
The Cooperation Curve
We place collaborative pluralism and cooperative unitarism at the top of the cooperation curve because, as discussed in the previous post, these are the only views of cooperation in which workers and their employers are truly working together (and thus engaged in genuine cooperation). Achieving these forms of genuine cooperation require overcoming resistance among workers and/or labor unions (on the left-side of the hill) and/or among managers and business leaders (on the right-side of the hill), and also requires work to maintain this genuine cooperation. Without continued investment, we argue that a degradation or running down of cooperation ("entropy") will occur, represented by a movement downwards from the center of the cooperation curve on either side.

Starting from the middle or peak of the curve, moving one step to the left or right leads to what we think of as pragmatic opposition to cooperation. The assumptions in these perspectives are not fundamentally different from their neighbors that support cooperation, such that one could envision a shift between adversarial and cooperative pluralism or between cooperative and autocratic pluralism as being determined by a pragmatic calculation of the best way to achieve one’s goals. One of the important insights here is how easy or subtle this shift can be, at least initially. In a situation of consultative unitarism, managers might start to see cooperation as slow and less decisive, leading to subtle increases in unilateral decision-making, and the slide down the cooperation curve has begun. Managers and executives might also be trained to think that it is their responsibility to craft organizational policies, and prejudices might cause them to think that they have unique expertise, which pushes them toward autocratic unitarism.

Similarly, consider a relationship characterized by collaborative pluralism where workers are represented by a union. This, too, can be a fragile situation. Union leaders might think that strong leadership means winning gains for members, not cooperating with management which risks them being labelled as a sell-out. And thus a push for a stronger advocacy of workers’ interests can start a slide away from genuine cooperation. Indeed, narrow perceptions of self-interest can push employees, union leaders, managers, executives and others to prioritize their own needs at the expense of others, which can in turn create a backlash from others who react by prioritizing their own needs. All of this slides the parties away from a mutual gains focus and genuine cooperation.

In these ways, we believe that the cooperation curve reveals that the central tension within cooperation is the duality between mutuality and self-interest. Mutuality is easily undermined unless both sides take some degree of responsibility for addressing the other side’s interests and commit effort and resources to the cooperative venture. Moreover, this effort must be sustained, or cooperation may gradually decline in a process we call entropy. Indeed, this helps explain why key individuals (that is, “champions”) are key for achieving and maintaining cooperation. Our curve additionally makes clear that it can be management or labor that is responsible for failing to achieve genuine cooperation. So worker-centered perspectives should stop uniformly blaming employers for the lack of cooperation, and managerialist perspectives should stop uniformly blaming trade unions and workers. Rather, genuine cooperation can be fragile and therefore requires an explicit understanding of shared visions as well as attention from all involved. Otherwise, it's all too easy to slide down the curve away from genuine cooperation.

Source: Mark Bray, John W. Budd, and Johanna Macneil (forthcoming) "The Many Meanings of Cooperation in the Employment Relationship and Their Implications," British Journal of Industrial Relations here to read the full paper.

Tuesday, August 6, 2019

Cooperation—What Does it Really Mean?

When it comes to the practice of industrial relations, many people’s favorite word seems to be “cooperation.” During a union representation election in Tennessee, a Volkswagen executive bragged that “The Volkswagen Group is proud of its record of cooperation and co-determination between employees, management and the communities in which we live and work…it is a business model that helped to make Volkswagen the second largest car company in the world” and further indicated a desire for an American works council so that Volkswagen “would be able to work cooperatively with our employees.”  In Australia, conservative Prime Minister Scott Morrison recently said “our government believes in cooperative workplaces” and called for “a fresh look at how the system is operating” to remove barriers to cooperation. Last year, a leader of the Australian Workers’ Union argued that “Australia’s national interest is best pursued through cooperation between labour and management.” The International Labour Organization’s SCORE training process to improve productivity and working conditions in small and medium enterprises in the Global South starts with “Module 1: Workplace Cooperation – A Foundation for Business Success.”

But what does “cooperation” really mean? Unfortunately, it is rarely defined, which is a problem given that not everyone has the same thing in mind when using the term. So Mark Bray, Johanna Macneil, and I decided to confront this head on and carefully look at the different meanings of cooperation. We start by defining cooperation as “working together to the same end” while noting that this still leaves a wide range of alternative perspectives on who is working together, how they are doing so, and whose goals are being pursued. So we really need to dig deeper.

Ultimately, we think it’s necessary to identify six key alternative perspectives on workplace cooperation. Why so many? Because people have different views about how the employment relationship works rooted in alternative views about the extent to which employers and workers have conflicting interests. First, from a neoliberal market perspective comes a generic view of cooperation:
#1) A market-based perspective in which cooperation is employers and employees complying with freely-entered contractual obligations in self-interested ways. 
Note that this is not a very deep conceptualization of cooperation in that it doesn’t require much except a lack of deep-seated conflict manifested in a refusal to agree to abide by the terms of a job. In this way, it’s similar to a self-interested pluralist view of cooperation (the main difference being the pluralist respect for the legitimacy of the other side):
#2) An adversarial pluralism perspective in which cooperation is employers, employees, and their representatives pursuing their separate goals and compromising with each other in ways that respect the legitimacy of each party’s interests.
Next is perhaps what many conservative commentators envision as workplace cooperation—or what worker advocates think conservative commentators have in mind:
#3) An autocratic unitarism perspective in which cooperation is employees following managerial directives for serving organisational goals, that in turn also are assumed to benefit employees.
This is a one-sided view of cooperation, which essentially requires workers to do as they are told. So it’s not really a case of working together, and hence not a vision of true cooperation. It might not even be truly unitarist if organizational goals are not pursued in ways that also benefit workers. Indeed, this leads to the critical or radical critique that sees cooperation as disguised domination:
#4) A critical (radical) perspective in which cooperation is acquiescence by employees to employer-established goals and practices.
In these ways, we have four perspectives on cooperation that don’t actually embrace cooperation as working together. The critical perspective sees cooperation as a mechanism to control workers; neoliberalism sees cooperation as largely irrelevant because it assumes the voluntary negotiation of cooperation before workers enter the employment relationship; adversarial pluralism sees cooperation on common interests as very limited, overwhelmed by conflicting interests that need to be bargained in a largely arms-length style; and autocratic unitarism largely assumes the right of employers to direct employees and expect employee compliance.

But cooperation can actually exist in a meaningful way. In fact, we think it’s important to understand two views that can both be seen as representing a legitimate degree of working together:
#5) A consultative unitarism perspective in which cooperation is employers and employees working together on organizational goals, in ways that are established by management through consultation. 
#6) A collaborative pluralism perspective in which cooperation is employers, employees, and their representatives working together on mutual goals and compromising on conflicting goals in ways that respect the legitimacy of each party’s interests.
These views are distinguished by the extent to which management and workers share a single common interest in the attainment of organizational goals (=unitarism), or there are some conflicts of interest (=pluralism). This crucial distinction points to different variants of cooperation with different roles for labor unions and different levels of workers’ rights in decision-making. But what they have in common highlights what’s needed for genuine cooperation: the parties avoid opportunistic wins, organizational and employees interests are pursued, collaboration is not limited to short-term issues, and there are high levels of trust and information sharing. In these ways, cooperation is much more than workers simply following managerial directions without complaint.

At the same time, in contrast to many writers who reject the value of cooperation in the absence of trade unions, our framework reveals legitimate space for genuine cooperation within a unitarist frame of reference which downplays employer-employee conflicts of interest. The key, we think, is to recognize that this is not unconditionally—in other words, only particular forms of unitarist HRM truly rise to the level of cooperation (otherwise, it's more like #3) autocratic unitarism).

In closing, cooperation is advocated by politicians and policy makers of all complexions, but they bring very different meanings and assumptions about how increased cooperation will be achieved and what its consequences will be. Better recognizing the values that underlie the respective positions on cooperation will encourage more rational debate and allow policy making based on evidence rather than obscure rhetoric and opinion. In practice, greater clarity over contrasting perspectives on cooperation can lead to greater understanding among workplace actors with differing views, and can set the stage for aligning visions by reconciling frames of reference that can be roadblocks to developing and sustaining genuine cooperation. This will not be achieved by hollow rhetoric or a limited understanding of alternative perspectives.

Source: Mark Bray, John W. Budd, and Johanna Macneil (forthcoming) "The Many Meanings of Cooperation in the Employment Relationship and Their Implications," British Journal of Industrial Relations. Click here to read the full paper.