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U.S. Department of Labor Futurework
  Trends and Challenges for Work in the 21st Century
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What Do Nonunions Do?
What Should We Do About Them?

by
Daphne Gottlieb Taras, University of Calgary and Bruce E. Kaufman, Georgia State University
Task Force Working Paper #WP14
Prepared for the May 25-26, 1999, conference
“Symposium on Changing Employment Relations and New Institutions of Representation”

September 1, 1999

The Pet Bear Metaphor: “NERPs Are Not Easy to Manage”

By and large, employers are ambivalent about formal nonunion representation: the costs and risks are great, the benefits are small or uncertain, and the management style issues are problematic. To successfully implement any cluster of progressive human resource practices requires commitment and resources, and nonunion plans are particularly challenging even to firms with well developed HRM functions. David Boone, a senior Canadian manager, gives a list of prerequisites to overseeing sophisticated employee representation that a more autocratic manager must justifiably find daunting. The costs borne by the company include continuous vigilance, hypersensitivity to discontent, managing open communications across multiple hierarchical levels, and having to balance the need to raise worker expectations with the desire to retain unilateral decision-making authority. Without the shelter offered by explicit management-rights clauses found in union-management collective agreements, management is in a vulnerable position, having to justify its decisions to an often skeptical workforce. As Boone put it, there is “no veil behind which management can hide.” Taras has nicknamed NERPS “pet bears” because they require their “trainer” to keep sweets in his pockets and never turn his back for an instant (Taras and Copping 1996).

Given the complexities of managing nonunion vehicles for collective expression, it is not surprising that there may be a natural threshold level for this practice. Both Lipset and Meltz, and Gollan note that despite different legal treatments, Canadian and American and British companies have similar levels of formal nonunion representation.

Though widespread, we believe that NER remains a “niche” phenomenon in that it is not a form of employee-management relations likely to spread beyond a number of companies which are committed to collective representation (short of unions). NER has dynamics that make it difficult: continuous negotiations, the management of raised expectations, the tendency to continuously sweeten the pot to keep employees at the nonunion table, the need to careful monitor union settlements in the relevant industry to match or exceed any union gains, and the imperative to select managers who have greater interpersonal sensitivity to steward nonunion representation. As a result, as Nelson concluded, “Like most effective and durable company unions, the Rockefeller Plan had a greater impact on management than on labor.” It is no easy substitute for unions, and employers who believe they can use NER for this purpose are seriously deluding themselves.

Further, NERPs may provide the organizational base for union organizing. Once workers have acquired legitimacy and a skill set, there is no impediment to prevent them from exercising their discretion to the detriment of management. Jacoby’s chapter describes independent local unions as “far from obsequious.” Though often less adversarial than national unions, they could be quite assertive, and stubborn. While some ILUs were quite anti-union – that is, determined to remain independent of the larger unions – they often developed personalities of their own. The commitment to collective representation held. Some even sought out other ILUs to form independent multi-employer federations. Gollan writes that in Australia, “evidence suggests that traditional adversarial industrial relations re-emerged when worker expectations were not met.”

NERPs are unionizable: they are tempting organizing targets for national unions. Workers are familiar with collective representation, they have formed leadership structures, they have articulated an agenda for advancing their interests (Taras and Copping 1998). In the 1950s, wrote Jacoby, ten percent of ILUs experienced an organizing raid each year. Reg Basken, former President of the Canadian Energy and Chemical Workers Union, developed effective strategies of wooing and winning NERPs into the union fold, which he describes in some detail. Unions must work with, not around, NERP employee leaders. Unions must court NERPs through gradual affiliations. He argues that the structures of NERPs actually facilitate union organizing, but that a union must have a long-term view on organizing. Eventually, the weaknesses of NERPs will become apparent to workers, but, he laments, this could take 25 years.

NERPs are a costly strategy: labor costs are equal to, and in some instances higher than, they would have been with a large national union (Jacoby, Taras). NERPS do have power to extract rents from management. The more subject to union raids, organizing, and any form of union presence at all, the greater the power of the NERPs to obtain “entitlements” for their nonunion status. Granted, when strike costs are factored in, the equation might equalize. However, there is no great economic advantage that our volume authors can see to running formal nonunion representation.

Given the difficulties in managing NERPs, it is not surprising that we have not discovered a groundswell of demand ready to overwhelm the American workplace in the event of a loosening of restrictions against nonunion representation. Verma found that Canadian employers do not take advantage of their legal freedom to maneuver to create nonunion systems that are substitutes for unions. Employers are anxious to innovate in matters affecting productivity and quality, the systems Estreicher terms “on-line”, but tend to avoid seeking employee input into matters involving the terms and conditions of employment. Further, although Canadian firms are legally unrestricted in their ability to develop employee relations systems that are both participative and representative, they rarely do. These systems are the exception rather than the rule.

In summary, we do not anticipate an opening of floodgates towards nonunion representation. From a management perspective, nonunion plans are cumbersome, costly and time-consuming. Employee involvement programs offering direct participation can achieve the same results for management, and are more flexible. Very few employers are genuinely interested in fostering collective worker identity. Finally, like inviting a pet bear into the house, there is an omnipresent fear that the creature cannot be controlled, although it can be pacified temporarily by feeding it a rich diet.

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