Good morning!
Unionization efforts have grabbed headlines in recent months. Well that and inflation, but we’ll save that for later in today’s newsletter. To the average onlooker, it might appear as though union organizers are making progress. But a union election win is only the beginning of a yearlong race to secure a contract. The ensuing process is one that is long, arduous, and requires delicacy from HR leaders lest they violate labor laws during negotiations.
The unionization movement is far from over. Already, a Starbucks in Seattle, an Amazon warehouse in Staten Island, and a Chipotle restaurant in Lansing, Mich., recently became the first locations at their respective companies to unionize. But as Fortune’s Paolo Confino wrote this morning, some organizers might never actually see a contract because workers and employers get stuck in the contentious bargaining cycle.
Workers have a year to negotiate their contract after winning a union vote. Once that timeline lapses, they’re at risk of employers holding a vote to disband them—more commonly known as decertification. Without an agreement in place, workers are forced to negotiate for each and every issue that affects employment conditions. This poses a real challenge for both employees and employers who might see productivity and morale tank if the negotiating process stretches on too long or becomes quarrelsome. Negotiating a union contract takes an average of 409 days, according to a study conducted by Bloomberg Law, and fewer than half of newly formed unions finalize a contract before the one-year mark.
During that yearlong period—or more—employers must be cautious of how they approach the bargaining process. Confino spoke with Fred Braid, a management lawyer at the law firm Holland & Knight, about what leaders should keep in mind. Though an employer might wish to remain non-union, it would be imprudent for a company to “wreck its business and do foolish things just because the employees have organized,” Braid says.
That includes violating labor laws by discriminating against pro-union employees with reduced hours, worse benefits, or even termination. Should an employer do so, employees can file charges with the National Labor Review Board.
For what it’s worth, the collective bargaining process typically goes over smoothly despite some highly publicized conflicts. But even in good faith negotiations, Braid advises clients to prioritize the “preservation of as much managerial freedom as possible” in union contracts. “If management is weak and makes bad deals, which makes the company non-competitive, shareholders won’t be happy about that,” Braid says.
Read the full story here.
Amber Burton
amber.burton@fortune.com
@amberbburton
Reporter's Notebook
The most compelling data, quotes, and insights from the field.
The consumer price index increased 0.1% from July, according to Labor Department data released Tuesday. And prices climbed 8.3% year-over-year. Stocks tumbled in response—the market’s worst day since June 2020—reflecting the rising fear of a Fed-induced recession. Here’s why employers should care: If the Fed raises interest rates, which it is all the more likely to do, there will almost certainly be a rise in unemployment. As Fortune’s Will Daniels writes, “The central bank will be forced to continue raising rates and shrinking its balance sheet even as the economy slows, which will bring a distinct rise in unemployment.”
Around the Table
- Employees in seven states are set to receive wage increases in the coming year thanks to the latest CPI report. These states specifically look at the August readout to adjust their minimum wages, which go into effect in January. Axios
- While many workers would leave their company for a remote or hybrid arrangement, remote-first workers say they’d be willing to walk away if they feel disconnected at work. CNBC
- Patreon is the latest company in the ever-growing roster of tech firms announcing layoffs. The membership platform’s CEO Jack Conte shared in a letter to staff that 17% of employees will be laid off, affecting the go-to-market, operations, finance, and people teams. TechCrunch
Roll Call
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Imax named Michele Golden as its global chief people officer. Project management platform ClickUp appointed Jim Bartolomea as its new SVP of people. Leadership advisory firm Heidricks & Struggles appointed Jonathan McBride as global managing partner of its global diversity, equity, and inclusion practice.
Have a move? Let me know: amber.burton@fortune.com
Watercooler
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Small city, big dreams. Smaller cities like Tulsa have benefited from the exodus of workers from the coasts. Tulsa launched an incentive program in 2018 that provided workers $10,000 to move to the city. Over 1,000 people moved to Tulsa, and 90% have stayed longer than a year. —Jessica Mathews
Millennial RTO. Less than half, 43%, of millennials say they’re working from home for the majority of the workweek this month, according to a new survey from Bank of America. That's down from 55% in June. —Chloe Berger
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