Kathleen Johnston Jarboe

2004 Society of Professional Journalists MD Excellence in Journalism Awards - 2nd Place Investigative Reporting

The Daily Record (Baltimore, MD)

July 16, 2004 Friday

Copyright 2004 Dolan Media Newswires

Section: NEWS; General news

Length: 1806 words

Byline: Kathleen Johnston Jarboe

An April e-mail that Teamsters Union members claim to have intercepted from USF Red Star management outlined how strongly the company wanted to avoid more union organizing.

"We currently have several non-union offices at USF Red Star and it is imperative that they stay non-union," the communication from the trucking company said.

It was addressed to a distribution list of Red Star terminal and operations managers.

Sandwiched in between company policies on the July 4 holiday and how to properly discipline employees, it then advised on how to avoid unionization.

Just a month later, Red Star managers had occasion to use that advice.

Whether what followed was good business, union-busting or both will be debated as the situation continues to unfold.

But some employers have started to use the event as a tool to thwart labor organizing. And experts say it is an example of how union and employer match ups have become uneven after decades of labor law changes strengthened companies' hands.

Company management followed the recommended procedures when 15 office workers in Philadelphia tried to organize a month later. Union officials said at least 10 had signed cards declaring their wishes to join the labor group.

But the e-mail told managers how to respond. It capitalized words throughout the note for emphasis.

"DO NOT handle, touch, peruse or even look at the cards. To do so may in the eyes of the [National Labor Relations Board] be an admission of recognition thereby making a conducted vote by the NLRB a moot point," the e-mail said.

It was better to wait for a formal election and to contact higher management "IMMEDIATELY," the e-mail said. USF Corp., the Chicago-based parent of Red Star, did not return calls for comment for this story.

But with worries Red Star would harass office workers about joining before the union elections, the Philadelphia local went on strike on Friday, May 21. Teamsters at the other 26 Red Star locations throughout the Northeast joined the picket line.

Then the company answered with a tactic not in their e-mailed play book. It shut down.

The move affected more than 2,000 Red Star workers -- about 1,400 were Teamsters. In Baltimore, nearly 200 employees lost jobs, including about 155 workers represented by Local Union No. 557.

Devastating

Teamster officials have called the move devastating. Questions about paying bills and losing pensions replaced sympathetic picket signs at Red Star.

Then the shutdown rippled past Red Star's northeastern trucking routes.

"From the moment Red Star closed, [USF] used it in our Dugan effort," said Teamsters spokesman Bret Caldwell. The labor group had been holding elections to represent sister trucking company USF Dugan since the start of the year.

Caldwell said the message to Dugan employees in company meetings had been, "Don't let what happened at Red Star happen here at Dugan."

The thinly disguised threat was too strong. The union canceled a representation vote scheduled for May 28 at the Dugan facility in Little Rock, Ark.

"[The closing] absolutely just scared these guys to death. It changed the whole the election -- the whole feeling of the vote," said Todd Roetzel, the secretary-treasurer of the Little Rock local.

Plant closings and threats of closings have a devastating effect on unionization, according to a Cornell University researcher.

While businesses often threaten to close but rarely follow through, "when they do follow through the newspaper articles [about the shutdown] will then be used by employers in campaigns all over the country to make it seem like it is bigger than it is," said Kate Bronfenbrenner, director of labor education research at Cornell.

When companies threaten to close, win rates for signing new groups into a union drops from 51 percent to 33 percent, according to Bronfenbrenner.

"It's part of their arsenal of anti-union tactics," she said.

While labor law prohibits companies from threatening to close in response to labor organization at their facilities, Bronfenbrenner said companies are clever at finding ways to skirt that rule.

"The threats are very pervasive," she said.

Tactics in Little Rock

Roetzel said USF Dugan managers used group meetings and one-on-one sessions to dissuade truckers in Little Rock from joining. He said managers began accompanying drivers on their routes overtly to monitor their adherence to company policies. But he said they also carried a second message.

"All day long these managers will just hammer these employees [about joining]," Roetzel said.

Still the union expected the May vote to be a slam dunk. About 75 percent of the 40 employees in Little Rock had signed cards indicating their desire to join in the beginning of the year.

The Red Star shutdown changed the landscape.

USF Dugan wasn't the only business to take advantage of Red Star's closure. Just three days later, the president of transportation company PJAX Inc. sent a letter to all employees with similar warnings.

"The Red Star closing further illustrates that the union takes a no prisoners kamikaze approach to labor relations with their contracted companies. There is no regard to the individuals " as the union further destroys their membership base. To the many PJAX employees who have been stopped en route by Red Star drivers selling the perceived virtues of belonging to the union, ask them how they like their jobs now," the letter said.

The message took direct aim at employees considering unionization, Teamsters officials said. The labor group had been trying to organize its first group of workers at the Pittsburgh-based trucking company in recent months.

Industry experts say the ability of companies to use such veiled threats has handicapped the growth of unions.

Union membership declined from 35 percent of the work force in 1945 to just 12.9 percent last year. Economic forces caused much of the shift. The number of jobs in the largely un-unionized service sector skyrocketed during that period.

Still a labor professor at Wayne State University said labor laws haven't helped.

It's like going to a wrestling match with one competitor's arm tied behind his back, said labor professor Michael H. Belzer.

The victim

Red Star cast itself as the victim in the dispute. It said the one-day strike caused 20 percent of its customers to divert shipments.

"In today's economy and economic environment, just-in-time inventory is the norm, not the exception," said USF chief executive Dick DiStasio in a conference call the morning after the company said it would close.

"I am very disappointed to announce that Red Star suffered a loss of customers and revenue that put the company in an indefensible position regarding their future viability," he continued.

Yet he stammered over an analyst question about why the company chose to close instead of adding a handful of its employees to union ranks.

"All you had to do to avert the strike was to recognize the union there, correct? Would that have -- wouldn't they have had to call it off after that?" the analyst asked.

"No. I mean -- our process is to go through the NLRB process," DiStasio said.

USF's Red Star division was hemorrhaging long before the walkout. It lost $6.7 million in 2002, and revenue declined last year though it eked out a small profit after selling some property, according to financial statements.

"I believe the closure of Red Star had as much to do with the company's mounting losses over the last three years and their meager profit margins prior to that as it did with the strike action," said Jason Seidl, an analyst with Avondale Partners LLC in Philadelphia.

"I have no doubt the action with the Teamsters did seriously impact the company's revenue base; however, if the same action was taken at USF Holland with the same customer degradation, USF wouldn't have closed USF Holland," Seidl added.

Weeks after Red Star closed, USF said it would fill some of the service gaps by expanding its most profitable trucking division, USF Holland, into eight of the terminals Red Star once used, including Baltimore.

Teamster officials expect the move to return about 500 Northeastern trucking jobs to union rosters in September at about 85 percent of their previous pay.

Belzer said if USF had wanted to hit the union harder, it would have brought in a sister company with a smaller union work force than Holland.

Nearly all of Holland's workers are union members.

Still "they may use this to their advantage to try to stop organizing," Belzer said.

Teamster officials said the company already has.

What next?

From the start, the company used the strike to blame the labor group for its poor financial performance, Teamster officials said.

"USF has been running a vicious anti-union campaign," said Teamsters' Caldwell. "A company doesn't make that kind of a decision based on a one-day work operation. They clearly had plans to shut down operations and used this as an excuse to do this."

Caldwell said the union was considering what legal steps it will take against the sudden closure.

But behind the official Teamsters' statements concerning the Red Star move, another trucking analyst formed a different conclusion.

"It is our sense that the threat of a retaliatory Teamster action is growing less probable as the Teamster management is fearful of potentially losing further jobs like what happened at Red Star," wrote analyst Edward Wolfe in a June 24 Bear, Stearns & Co. report.

For now the Baltimore USF Red Star trucking terminal on Route 1 stands idle just feet from an exit onto Interstate 195. The sprawling tan building is a reminder itself of what happened. Local union officials said morale was very low.

The white-and-orange trailers are lined up to the terminal's docks. But there is no one to load them, and no goods to haul.

Mark Garey was walking the picket line at the Baltimore terminal on May 23 when the company's decision came down. By then the company had nearly completed locking up its facilities.

Garey recalled two Red Star managers approached the picketers. "I hope you're happy that you put us out of business," Garey, the secretary-treasurer for Local 557, remembered them saying.

The announcement dumbfounded union members.

"I was angry. I just couldn't believe they shut the doors like that," Garey said. "They couldn't even grasp it," he said about the five union members there that night.

Union officials said some members are worried about their retirement accounts and about how they will pay bills. Those with less than five years at the company would lose any pension monies earned.

Garey admits the move could hurt future organizing attempts as the Teamsters seek more representation nationwide throughout USF.

"I believe it would dampen the upcoming campaign. But if they could see the union isn't the one that put them out of business "," he said.

The union just gave the company an opening, and Red Star took it, Garey said.

Classification

Language: ENGLISH

Subject: LABOR UNIONS (99%); MANAGERS & SUPERVISORS (90%); STRIKES (90%); UNION ORGANIZING (90%); WHITE COLLAR WORKERS (89%); ELECTIONS (86%); COMPANY ACTIVITIES & MANAGEMENT (78%); LABOR & EMPLOYMENT (78%); LABOR RELATIONS (78%); LAYOFFS (78%); NEGATIVE EMPLOYMENT NEWS (78%); UNION ELECTIONS (78%); LABOR REGULATION & POLICY (76%); LABOR & EMPLOYMENT LAW (75%); LAYOFFS & DISMISSALS (75%); US INDEPENDENCE DAY (73%); LABOR DEPARTMENTS (70%)

Company: YRC REGIONAL TRANSPORTATION INC (85%)

Organization: NATIONAL LABOR RELATIONS BOARD (54%); NATIONAL LABOR RELATIONS BOARD (54%)

Industry: NAICS484110 GENERAL FREIGHT TRUCKING, LOCAL (85%); SIC4212 LOCAL TRUCKING WITHOUT STORAGE (85%); TRUCKING (90%)

Geographic: BALTIMORE, MD, USA (79%); MARYLAND, USA (92%); PENNSYLVANIA, USA (79%)

Load-Date: July 16, 2004
USF Red Star closes down after union strike