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Unions' New Foe: Consultants
August 15, 2005

FOR EIGHT YEARS, MATT Perovic organized workers for a truck driver's union in Chicago and negotiated the union's first contracts.

Today, he's using that in-the-trenches experience to help companies fend off unions, saying he switched sides because he had witnessed corruption in his own union and thought it was regularly making promises to workers that it couldn't keep. [consultants graphic]

Mr. Perovic, who founded Quantum Consulting Inc. in 1992, is one of an estimated 2,000 labor advisers in the U.S. They include lawyers and independent consultants, as well as former union members, who can be brought in at any time to help resolve labor disputes, negotiate contracts or keep unions from attempting to organize workers in the first place.

During organizing campaigns, they are paid by companies to draft antiunion literature, coach supervisors on what to say and what not to say, and even teach management how to stall a union vote until momentum and fervor cool.

"There's almost no one that doesn't have somebody professional running an antiunion campaign," says Kate Bronfenbrenner, director of labor education research at Cornell University. In 1999, Ms. Bronfenbrenner conducted a study of 407 private-sector employers that found that 75% of those companies hired an outside consultant during a union organizing campaign.

Among those companies that have used consultants in the last two years when unions have tried to organize workers are uniform maker Cintas Corp., Coca Cola Co., and ConAgra Foods Inc., according to filings with the Department of Labor, which requires disclosure of such activities.

Kari Bjorhus, a Coca-Cola spokeswoman, says the company has hired labor-relations consultants to help management deal with many workplace issues, which could include union organizing or job safety. "We respect our employees' rights to join or not join labor unions, and we ensure that those rights are exercised without fear of repercussions," she says.

At Cintas, where unions have yet to successfully organize despite numerous attempts, a spokeswoman declined to discuss the company's use of labor relations consultants.

According to one Labor Department filing, ConAgra paid one consultant $193,803 in February 2004 for "supervisory training, employee relations training, and translation services" related to a union organization effort the previous fall at a facility in Omaha, Neb., where many workers are non-English-speaking immigrants. In that case, workers voted 107-90 in favor of being represented by the United Food and Commercial Workers union, according to the National Labor Relations Board. A ConAgra spokesman declined to comment on the company's use of labor-relations consultants.

Some labor experts say the rise of consultants presents a special challenge to the labor movement's renewed call for organizing.

In recent weeks, several big unions defected from the AFL-CIO, the giant labor federation, saying it didn't do enough to recruit new members. Those breakaway unions and the AFL-CIO have both pledged to devote more manpower and funding to organizing new members. But standing in their way are savvy companies backed by these consultants. Stewart Acuff, national organizing director for the AFL-CIO, calls consultants "a horrible menace," and says they are "a problem for unions who are trying to help workers pursue the goal of collective bargaining."

Consultants see matters another way. "There's more opportunity to sell our services," says Scott Carmichael, vice president of a consulting firm called Labor Relations Institute Inc. Mr. Carmichael says he is currently working with 12 employers, and typically assists about 100 companies a year, winning about nine out of 10 campaigns against unions.

The company even has an online store that sells campaign literature, including packets of recently published newspaper articles on union strikes, violence and financial irregularities within unions; videos; and "Vote No" campaign buttons and fortune cookies containing messages such as "Picket line often next to bread line."

Such work doesn't come cheap. Mr. Carmichael estimates that consultants typically charge about $50,000 for a four- or five-week campaign. John Logan, an associate professor of industrial relations at the London School of Economics, says companies spend between $2,000 to $3,000 per employee on antiunion campaigns.

Mr. Carmichael, like many consultants, typically remain in the background during union-organizing campaigns, working with management and supervisors to discuss strategy. For the actual one-on-one meetings with workers, they recruit former union members or other independent consultants, like Mr. Perovic, who are called "persuaders." They lead mandatory employee group meetings or walk the factory floor to strike up conversations with individual workers.

Worker-advocacy groups, such as American Rights at Work, say some labor-relations consultants privately encourage unlawful tactics, such as threatening to fire workers or close plants if workers join a union.

David Bonior, the group's chairman, cites the Cornell study, which showed that in half of the campaigns studied in 1999, employers threatened to relocate if a union formed, and that in 25% of the campaigns at least one union activist was fired. "Sometimes they use illegal means," Mr. Bonior says. "This is a huge problem and it's one of the untold pieces of why union density has gone down."

Consultants counter that they carefully avoid intimidation and stick to answering workers' general questions about unions and debunking unrealistic promises made by union organizers. If companies lose worker-organizing battles with unions, consultants assist them in drafting the most favorable labor pact.

John Sullivan, former member of the International Union of Electrical Workers and president of Sullivan & Associates Inc., a labor-relations consulting firm, says after he is hired by a company he tells workers there about tactics he learned about when he was a union member. One of these is "salting" in which a union gets one member employed at a nonunion company with the sole purpose of convincing fellow workers to form a union. "We're not union-busters," says Mr. Sullivan, adding that his nine-year-old company has been successful in defeating the formation of unions in 215 out of 218 cases.

Wal-Mart Stores Inc., which has been highly successful in fending off unions, says it doesn't hire labor-relations consultants, but relies on its own 20-member labor team. For the last decade team members have been dispatched to any store that unions are attempting to organize, including two earlier this year in Pennsylvania and Colorado.

Christie Gallagher, a spokeswoman for Wal-Mart, says the team remains on site throughout the election process to answer questions workers may have and dispel "misinformation" that unions may present about the company. "They're there to provide the facts," says Ms. Gallagher.

online.wsj.com Write to Kris Maher at kris.maher@wsj.com

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