Corporations Step Up Drive Against Bill to Ease Unionization

Source: Wall Street Journal

By: Kris Maher

President Barack Obama's public backing this past week of a bill that would make union organizing easier is driving companies to step up opposition.

Mr. Obama embraced the Employee Free Choice Act, a top legislative priority for unions, in a video address to the AFL-CIO winter meeting on Tuesday in Miami. It was one of his most vocal statements in support of the bill, which would let workers opt for unionization simply by signing cards, rather than through secret-ballot elections. An election gives an employer the opportunity to campaign against a union.

Many companies have said the bill, likely to be introduced in coming weeks by congressional Democrats, would add to their costs while hurting their ability to boost productivity and keep their work forces flexible enough to respond to changing markets. The U.S. Chamber of Commerce has said it will spend at least $10 million this year fighting it.

The bill would "effectively eliminate freedom of choice and the right to a secret-ballot election," said Daphne Moore, a spokeswoman for Wal-Mart Stores Inc. "We believe every associate or employee should have the right to make a private and informed decision regarding union representation."

It would be a "job killer," said Harry Kazazian, chief executive of Exxel Outdoors, a Haleyville, Ala., maker of sleeping bags and tents. He said he shut a unionized plant in Mexico in 2000 despite low labor costs, because union rules hampered productivity, and moved the work to a nonunion plant in Alabama. Mr. Kazazian, who also has a nonunion plant in China, said the bill "would be like putting the brakes" on his plans and profit.

Another opponent, Joni Paladino, president of MIF Inc., a trucking company in Brockway, Pa., said her 10 drivers earn between $11 and $16 an hour, without health-care or retirement benefits. The "most irritating" part of the bill, she said, is a provision that would have government arbitrators set contract terms if a newly formed union and a company can't agree within 120 days. "Somebody else is going to tell me how profitable or unprofitable I'm going to be," she said. "It ticks me off."

The bill creates a special dilemma for executives who supported Mr. Obama's candidacy, particularly in the technology industry. Gary Shapiro, president of the Consumer Electronics Association in Arlington, Va., said more than 60% of the group's members supported Mr. Obama in an October poll. But its 2,000 member companies are "universally" against the bill, he said, and some have said they would move factories overseas if it were to pass.

"It would have a devastating impact on technology companies," said Loyd Ivey, chief executive of Mitek USA, a Rockford, Ill., maker of speakers and amplifiers.

Tech giants including Microsoft Corp., Apple Inc. and Google Inc., said they haven't taken a position on the bill and declined to comment further. Mr. Shapiro said many companies fear becoming a target of unions if they speak out against the measure. Unions are expected to focus on the tech sector, where they see strong potential to increase membership.

Labor officials counter the criticism by saying unions can contribute to productivity, safety and training. "The lie is that it's bad for business to have collective bargaining," said Larry Cohen, president of the Communications Workers of America, who is leading the AFL-CIO's efforts on the measure. At the AFL-CIO meeting this past week, unions pledged to spend $2.50 a member, or roughly $25 million, to support the bill this year.

Stewart Acuff, national organizing director for the AFL-CIO, acknowledged that most companies are opposed to the bill, but said the labor federation continues to sign on corporate supporters. A small number of employers that already have unionized work forces are backing the measure or agreeing not to oppose it -- largely at the request of unions.

Ed Smith, CEO of Hartman-Walsh Paining Co., a St. Louis industrial-coatings company, backs the bill, as does the Finishing Contractors Association, which has 1,500 unionized painting, drywall and other contractors. About 150 of Mr. Smith's employees belong to the International Union of Painters and Allied Trades. If the bill helps the union organize more companies, it would help the contractors association "by leveling the playing field," he said.