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Hospitality Lawyer: Why you must act NOW to win the hearts, minds & loyalty of your workforce

6 November 2008

Hospitality Lawyer: The EFCA: Why you must act NOW to win the hearts, minds & loyalty of your workforce.


Thirty years of declining union membership in the American workforce is about to end. Two powerful forces are converging to form the perfect environment for the unionization of America: a global financial crisis affecting virtually every worker in America and pending Federal legislation known as the Employee Free Choice Act or EFCA.

Why you need a “hearts, minds and loyalty campaign” NOW.

If you are an employer, NOW is the time to launch a campaign to win the hearts, minds and loyalty of your workforce, before the new laws kicks in and before the existing rules on “unfair labor practices” affect your ability to communicate directly with your workers — which happens as soon as a unionization effort commences.

By most estimates, there are only a few months to act. And this is one of the most important issues facing the hotel industry, according to Tom Corcoran, Chairman and CEO of FelCor and Chairman of the AH&LA (As discussed here on www.HotelLawBlog.com in The AH&LA and Tom Corcoran talk with Hospitality Lawyer about the 3 most pressing issues facing the industry today“)

I am so lucky to have an incredible team of hotel lawyers covering all the essential bases for hotel owners, developers and lenders. Marta Fernandez has been one of our stars for many years. In fact, she has a top GOOGLE listing going back to Hotel-Online’s profile in 1997. (GOOGLE “hotel lawyer” or see “JMBM Hotel Lawyer Profile: Marta M. Fernandez“) In fact, you will notice that item #3 in that 1997 profile highlights an issue that is the subject of today’s article — an issue that has become critical for all hotel owners and operators.

Think of this article as the background on WHY you need to act NOW. In the next article, we will talk about HOW you plan, launch and execute a successful campaign to stay union-free.

Why you must act NOW to win
the hearts, minds & loyalty
of your workforce

By Marta Fernandez, Hotel Lawyer

. . . once a union organizing campaign is underway, labor laws significantly limit the types of actions they may take with their workforce. . . Act now!

Obama and the unions say, “Yes we can!” . . . What that means for hotels.

It is no coincidence that president elect Barack Obama’s “Yes we can!” election-night acceptance speech used the picket line phrase chanted by striking members of the largest hospitality industry union, UNITE-HERE. Obama has vowed to pass the law he originally co-sponsored, saying, “We will pass the Employee Free Choice Act. It’s not a matter of ‘if’ — it’s a matter of when.”

We believe him, particularly with a Democratically controlled Congress.

It is the new president’s promise, and employers across the United States — particularly in the hospitality industry – should act immediately to prepare themselves for a new era of unionization efforts.
Unions thrive when workers fear economic hardship

Historically, workers turn to unions for security in an economic crisis. Unions thrive on employee fears in a difficult economy. With job losses, wage and benefit reductions, and declining retirement plans, it is easy for unions to successfully pitch their services to a workforce ready to believe anyone who will promise better times. The economy alone is enough to give unions a significant edge in union organizing efforts. But coupled with the pending passage of the Employee Free Choice Act, the labor movement is likely to see unprecedented success in the increase of its membership.

Who wants to see a couple of strangers from the union at your front door at 3 AM asking you or your wife why you haven’t signed “the card” like “all the others”?

Unionization by “Card Check”

The Employee Free Choice Act eviscerates the current law which provides for secret ballot elections in which employees democratically choose union representation through an election which is supervised and conducted by the National Labor Relations Board (“NLRB”). When the new legislation passes, unions will be able to penetrate the workforce by obtaining a simple majority of employee signatures on authorization cards — known as a “card-check” process — which substitutes a signature for a secret ballot vote.

Once a majority of “authorization” cards are signed and presented to the employer, the union is entitled to legal recognition as the employees’ exclusive bargaining representative. While organized labor, which has spent millions lobbying for the passage of the law, touts the law as a fairer system designed to avoid delays created by legal barriers during a union campaign, the new law in fact removes the employee’s “free choice” by permitting a system inherently ripe for coerced signatures.

An environment ripe for coercion

Without secrecy or NLRB supervision, unions are able to pressure employees on the basis that they “will know” who supported them or not, once they are the representative. Co-workers will know who has signed and who has not, thereby allowing for significant peer-pressure. Since unions can press employees for their signatures before and after work, during their breaks and even at their homes, signatures will be given just to “get the union off my back”.

When the union organizers are on your doorstep, or when the new law is adopted, it is TOO LATE!

Who wants to see a couple of strangers from the union at your front door at 3 AM asking you or your wife why you haven’t signed “the card” like “all the others”?

Those of us who have represented employers that have agreed to the card -check used in the neutrality agreement context can tell you that unionization is virtually a foregone conclusion whenever a card check process is used instead of the secret ballot process.

Under the EFCA an arbitration panel can set the terms of employment

But there is an even more onerous component to EFCA. In its current form, the proposed legislation contains a section entitled “Facilitating Initial Collective Bargaining Agreement.” Under this section, a collective bargaining agreement must be reached within 90 days after a demand is made by the union to commence negotiations following a successful card-count. If an agreement is not reached, the parties must submit the negotiation process to mediation and thereafter, if there is still no agreement, to a federal arbitration panel. That arbitration panel settles the negotiations by determining the terms of a binding two year agreement, setting wages, benefits, hours, work-rules and all the other terms of employment.

Unlike current law, which permits the parties to reach an impasse in bargaining, which triggers various options for both parties (upon declaration of an impasse, the employer may implement its last, best and final offer and the union in turn may live with those terms or call a strike depending on its bargaining power), the new law would wipe out those options by requiring this third party to decide wages, benefits and working conditions and effectively decide the fate of your business.

Employers must prepare NOW!

When the union organizers are on your doorstep, or when the new law is adopted, it is TOO LATE!

Today, we can guide you in preparing an aggressive campaign to win the hearts, minds and loyalty of your workforce.

Today, we can guide you in preparing an aggressive campaign to win the hearts, minds and loyalty of your workforce. If your workers respect you and understand the problems of union membership as well as the economics of your business and your industry, they are much less likely to be tempted in the locker rooms or hallways when approached by union organizers. NOW is the time to educate your workforce and your executives, and to revamp your employment arrangements to optimize your workforce.

Now, your communications are only limited by truth and economic reality. When an organization effort commences, your communication with your employees are stifled by the NLRB process, unfair labor practice claims that may apply, and by the union-in-your-face problems.

Soon, it will be very difficult to talk with your own employees.

It appears that the new law will be greatly more restrictive that the present rules, which is enough to suggest you start your preparation immediately. Clearly, the new legislation would significantly reduce the legal challenges available to the employer, and increases monetary penalties for engaging in unfair labor practices. How far the arbitration panel will exercise its right to write the collective bargaining agreement for the parties is also unclear. What is clear is that employers must prepare NOW for the storm that approaches.

Hospitality industry employers who have been fortunate enough to have no unionization experience, need to educate their executives and top management on the relevant legal do’s and don’ts, the warning signs, and what preventative measures they can take. Employers with a mix of union and non-union properties need to evaluate which properties may be at risk and understand how the unionized properties will target the non-union properties.

Hospitality industry employers . . . need to educate their executives . . .on the relevant legal do’s and don’ts, the warning signs, and what preventative measures they can take

So what should you do? The campaign . . .

In the next article, we will talk about how you launch your campaign to win the hearts, minds and loyalty of your workforce BEFORE THE UNION IS AT YOUR DOOR. There are many legal measures that can be taken now, such as identifying and addressing key union issues for vulnerabilities in the areas of wages, benefits and work rules. Employers may want to educate the union-targeted workforce on what the card check process means, putting systems and policies in place to limit unionization efforts on the property and introducing employee friendly programs and employer public relations forums.

Union prevention audits can identify areas of vulnerabilities and the steps that can be taken now to reduce the unionizing risks. Having a plan in place rather than reacting to an organizing campaign once it has started can save valuable time in the race to win the hearts and minds of employees while a union is rapidly sprinting for signatures.

Finally, employers must remember that once a union organizing campaign is underway, labor laws significantly limit the types of actions they may take with their workforce. Thus, the cost of doing nothing is too great. Act now!

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marta%20Fernandez%20-%20Hotel%20Lawyer%20.jpgMarta Fernandez is a senior member of the Global Hospitality Group® and a partner in the Firm’s Labor & Employment Group. A management labor lawyer with more than 20 years’ experience, Marta specializes in representing hospitality industry clients in all aspects of labor and employment, including labor-management relations such as union prevention, collective bargaining for single as well as multi-employer bargaining units, neutrality agreements and defense of unfair labor practice charges before the NLRB; implementation of preventative management strategies, such as executive training, arbitration enforcement and policies and procedures; defense of administrative and litigation claims, such as employee claims of sexual harassment and discrimination. For more information please contact Marta Fernandez at 310.201.3534 or MFernandez@JMBM.com.

This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. We’ve done more than $50 billion of hotel transactions and more than 100 hotel mixed-used deals in the last 5 years alone. Who’s your hotel lawyer?

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Our Perspective. We represent developers, owners and lenders. We have helped our clients as business and legal advisors on more than $50 billion of hotel transactions, involving more than 1,000 properties all over the world. For more information, please contact Jim Butler at jbutler@jmbm.com or 310.201.3526.

Jim Butler is one of the top hospitality attorneys in the world. GOOGLE “hotel lawyer” or “hotel mixed-use” or “condo hotel lawyer” and you will see why.

Jim devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group® — a team of 50 seasoned professionals with more than $50 billion of hotel transactional experience, involving more than 1,000 properties located around the globe. In the last 5 years alone, Jim and his team have assisted clients with more than 100 hotel mixed-use projects — frequently integrated with energizing lifestyle elements.

Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them.

Contact him at jbutler@jmbm.com or 310.201.3526. For his views on current industry issues, visit www.HotelLawBlog.com.