Entrepreneurs in the Silicon Valley should pay close attention to the experiences of Dave Bego, the Indiana businessman who started a company from scratch. By 2006, after years of unrelenting toil and sacrifice by Bego and his family, Executive Management Services, Inc. (EMS) had expanded into 38 states and had 5,000 employees. Bego now had something so valuable it became an attractive target for unionization.
Bego’s story, which he has written about in two books and has turned into a one-man information crusade, is not unique. But his decision to fight back is very unusual, and his account of how his company was targeted has gone largely unreported. The details of his fight reveal a frightening lack of legal protection for company owners and their workers from union intimidation, as well as a dated, shamelessly abused set of exemptions shielding over-zealous union organizers from legal sanctions. A UnionWatch article from December 2012, “The Special Privileges And Exemptions of Public Sector Unions,” references several compilations of how unions escape many of the laws that govern the rest of us, but hearing about what actually happened to Dave Bego makes it far less academic.
It is conventional to assume that if somebody is critical of a union’s tactics, they must be anti-union. But even Dave Bego, who fought the SEIU for years, believes that unions have a legitimate role to play in a capitalist democracy. Because Bego, in an ad placed in the Indianapolis Star, offered to hold a secret ballot election among the employees to decide whether or not they wished union representation. As stated publicly in this ad: “EMS is very willing to let its employees vote in a secret ballot election conducted by the federal government to decide whether they want to be members of your union or not… we have encouraged you to seek an election since your first contact with EMS” (view EMS ad).
The problem unions have with a secret ballot election, apparently, is that the union might lose. When union representatives met with Dave Bego, and during all of their subsequent campaign of pressure and intimidation, what they wanted him to do was sign a “neutrality agreement” (view actual neutrality agreement presented to Bego). Here are highlights of what a neutrality agreement does:
- The employer shall not “take any action or make any statement that will directly or indirectly state any opposition by Employer to the election by its Employees of a collective bargaining agent.”
- The employer will sign a letter provided by the union, and distribute this letter to all employees, that is “assuring Employees of Employer’s neutrality in the matter of their union organizing.”
- “Employer shall provide within five (5) business days a list of the names and addresses of all Employees within classifications subject to this Agreement.”
- “…union will then present Employer with signed authorization cards or a petition memorializing individual Employees’ desire to be represented by Union for purposes of collective bargaining.”
- Once the union has submitted union authorization cards from 50% of the employees, if management cannot come to terms with the union during the collective bargaining process, they must submit to binding arbitration.
What a neutrality agreement does is enforce the process known as “card check,” whereby instead of voting in a secret election whether or not employees want union representation, the union organizers gather individual signatures on consent forms. Armed with the home addresses of every single employee, the union has three years to target individuals, one by one, until 50% of them sign the card. This process, currently only legal if and when an employer signs a neutrality agreement, would become law of the land if the union-supported, misleadingly named “Employee Free Choice Act” ever becomes federal law.
Because the unions wanted Bego to sign a neutrality agreement, he refused on principle, because doing so would have denied his employees the right to a secret ballot election. That’s when the troubles started.
As summarized in Bego’s book, “The Devil at Our Doorstep,” the SEIU embarked upon a campaign of persuasion that relied on laws designed to give unions an advantage over employers. Here are some examples of rules that impose double standards on the conduct of unions vs. employers during union organizing campaigns:
- The “Persuader Rule,” which requires employers to publicly disclose all relationships with outside firms who may assist them to resist unionization. Not only are unions exempt from this rule, but because most employers have never encountered a union campaign before, they have no choice but to solicit outside advice on the legal issues as well as on how to effectively communicate with their employees. This rule gives the unions an opportunity to then attack anyone consulting with the employer.
- The “Posting Rule” requires employers to post union provided printed material in their workplace, saying, for example, that all employees have the right to unionize – with contact information. But the employer does not have the right to post anything reminding employees that they are not compelled to vote for unionization.
- Rules prohibiting “Interrogation,” or “Promising,” meaning an employer cannot meet with employees during a union campaign and ask them (i.e., “interrogate” them) what is wrong, or what can be done to improve work conditions. Similarly, during a union campaign an employer cannot remedy work conditions; that is “promising.”
- Unions are exempt in many states from laws that make stalking an individual a crime, as well as laws that make many forms of extortion a crime.
In order to hold a secret election, the union has to get 30% of a company’s employees to sign a petition asking for a vote. To do this, their operatives approached EMS employees – over and over – on their way to work, in the parking lots, and sometimes even followed them home. They enlisted the support of local clergy, who organized blockades of buildings where Bego’s employees worked. Because EMS provides contract janitorial services, the unions organized demonstrations outside these buildings, intimidating the building owners in an attempt to get them to change vendors. They sent letters to the press and to EMS clients alleging “unfair labor practices” which in most if not all cases were without merit. Indeed, in November 2007, EMS filed a set of counter-charges (view EMS Unfair Labor Practice Charges Against SEIU), and in the subsequent NLRB hearing the ruling was in favor of EMS. Even the NLRB felt the union had gone too far.
These “corporate campaigns” occur every day across America. Most employers cannot withstand the pressure from the unions. At one point, the union campaign against EMS included enlisting children on Halloween night to go trick-or-treating in Bego’s neighborhood, and after being given candy, they gave each resident a union flyer.
While Bego has managed to successfully fight the SEIU, at least so far, most people can’t stand up to the intimidation that appears to be standard procedure for unions who operate a corporate campaign. Not only the company owners, but their family, their employees, their suppliers, and their customers face harassment. Sometimes this harassment escalates into vandalism and violence, with laws in place that create for unions a higher threshold before such acts become criminal. But the unions are lobbying for even more laws to assist them in their corporate campaigns. For example:
- Unions have now won the right to form “micro-unions,” where they can carve out small groups of employees and hold a union election. If a union can’t get 30% of an entire retail store to sign cards calling for an election, they can now get 30% of the employees in one department of that store to sign the card, and an election will be held for that particular department.
- Unions are pushing to lower the time period between when cards are submitted requesting an election from 48 days to 18 days; the so-called “Quick Elections” rule. This creates a significant advantage for the unions, because it takes time to communicate to employees that they are not compelled to vote for unionization. Many employees who have signed cards calling for an election believe that they are required to vote for unionization because they signed the card requesting the election.
- Legalizing the “Card check” method of unionization, via the perennially introduced “Employee Free Choice Act,” would enforce the terms of a neutrality agreement on employers without their consent. Unions could then approach employees individually until they collected signatures from 50% of the workforce, eliminating the secret election ballot.
Eliminating unfair union advantages, currently built into federal law, would not necessarily eliminate unions. In a recent speech at an event sponsored by the Heritage Foundation (view speech – begins at 5:40), Bego emphasized that some workplaces probably would benefit from unionization. But unions must play by the same rules as the companies they negotiate with, employees should have a right to a secret ballot in elections concerning unions, and nobody should be forced to join a union.
Silicon Valley entrepreneurs come from a variety of ideological leanings, but it is accurate to state that most of them support Democratic political candidates. Perhaps this, combined with their extraordinary personal wealth, blinds them to the agenda of unions, despite the fact that public sector unions already control California’s state and most of its local governments and their unsustainable financial demands are contributing to the insolvency of those institutions.
If the Silicon Valley business elite want to maintain control of the companies they founded, and preserve the vitality of the new industries they helped create, they should take a careful look at the proper role of unions in 21st century America. Because the rules governing unions and union organizing are at a tipping point. If union-friendly legislation continues to emanate from Washington D.C., and Sacramento, the Silicon Valley may find itself on the front lines of a battle for which they are entirely unprepared.