Carl Horowitz

The Service Employees International Union (SEIU) could have written the book on how to get corporations to surrender. In fact, it has written the book.

Lawyers for Sodexo USA, a subsidiary of the France-based food services and facilities provider, Sodexo Inc., recently revealed during the discovery phase of the company’s federal racketeering suit against the SEIU that the union had prepared a lengthy manual on how to apply to extreme pressure upon employers to extract maximum concessions. Section Three of “Contract Campaign Manual,” fully 88 pages, can be downloaded from www.workplacechoice.org.

The lawsuit, filed in March, has yet to go to trial. Yet whatever the outcome, the manual unwittingly shines a spotlight on the lengths to which unions in this country will go to achieve victory in a corporate campaign.

Let’s explore that term, “corporate campaign.” Since the Seventies, the corporate campaign has been an increasingly indispensable organizing tool for unions, often working in concert with civil rights, religious, antiwar and other groups to mobilize public opposition against business practices ostensibly harming workers and/or the larger society. Coca-Cola, Food Lion, Nike and Wal-Mart are among the major firms to feel the wrath in recent years.

A corporate campaign thus is more than a way to organize workers at a particular site. More importantly, it should be seen as a multi-pronged attack on a company’s reputation – its brand name, if one will – to achieve broad social goals. Through demonstrations, boycotts, media outreach, lawsuits, shareholder resolutions and other tactics, activists may win far more concessions than through collective bargaining. It’s all a matter of pressure – how to apply it, and against whom.

Running a successful corporate campaign can be likened to a science, whether a union or an outside consultant masterminds the operation. It requires not only coordinated action, but careful and time-consuming groundwork. Researchers assess a target company’s centers of power and vulnerability, and decide whether a campaign will work, given existing resources. In his 2004 book, Biz-War and the Out-of-Power Elite: The Progressive-Left Attack on the Corporation, (Lawrence Erlbaum Associates), George Washington University political scientist Jarol Manheim explains:

The starting point and strategic key to the anti-corporate campaign is what its practitioners refer to as “power structure analysis.” In conducting a power structure analysis, one identifies all the stakeholder relationships on which a targeted company depends in the conduct of its daily business; studies each relationship with an eye toward identifying the strengths and weaknesses and its centrality to corporate well-being; matches these observations up with the needs and capabilities of the antagonist itself, with its resources and with any special events or opportunities that may be available to use in support of the campaign; and arrives at a prioritized list of action items that will constitute the campaign plan.

Implementation of the plan requires attracting allies from a variety of organizations, developing a division of labor, and personalizing allegations against the target company as much as possible, making sure to publicize embarrassing facts. Unions, Manheim argues, often run the show, though they typically farm work out to seemingly benign front groups:

Sometimes the credibility of attacks on the target company is established not by the facts or the evidence but by the source of the allegation. In corporate campaigns undertaken by labor unions, this is often a special problem because the unions themselves are not held in especially high regard. They solved the problem by releasing information through allies or surrogates, which…is how many of the Progressive activists got into the campaign business in the first place.

Recent examples of union-driven campaigns, on due occasion met by employer resistance, abound. Starting in 2006, the United Food and Commercial Workers launched a full-scale attack on Smithfield Foods, prompting the company to file a federal civil racketeering and extortion lawsuit accusing the union of disseminating false information to depress the stock price. The two parties reached an out-of-court settlement in October 2008. UNITE HERE in 2006 initiated a multi-city boycott and media campaign against nonunion hotels across the U.S. and Canada, “Hotel Workers Rising,” that continues to this day. The union during mid-decade also had launched an aggressive campaign against Northern California nonprofit health care network Sutter Health, mailing defamatory postcards to dissuade women from using allegedly deficient OB-GYN services. A jury in 2006 ordered UNITE HERE to pay the company nearly $17.3 million in damages, but a California state appeals court overturned the verdict last year, claiming the union had not acted with actual malice.

The Service Employees became a leader in corporate campaigns during Andrew Stern’s reign (1996-2010) as president. The union, which includes tens of thousands of security guards, launched a campaign to blacken the name of the UK-based security firm, Group 4 Securicor (G4S), which owns Wackenhut Services Inc., the largest security contractor for the U.S. government. SEIU activists issued press releases attacking Wackenhut’s competence in guarding nuclear power plants as retaliation for the company’s refusal to accept an exclusive union representation agreement. G4S Wackenhut fought back in November 2007 with a civil racketeering suit. Union and company reached an out-of-court settlement in December 2008 that allowed employees in nine metropolitan areas to choose SEIU as their exclusive bargaining agent. The Service Employees also launched a campaign blitz, with at best limited success, against a pair of major private equity funds, The Carlyle Group and Kohlberg Kravis Roberts, in hopes of persuading them to abandon plans to acquire stakes in nonunion companies.

That brings us to the SEIU campaign against Sodexo, which like the Wackenhut campaign, has landed the union in federal court. Sodexo, or Sodexho Alliance, as it was known until a few years ago (it also dropped the “h” from its name), is a multinational firm founded in 1966 and headquartered in Issy-les-Moulineaux (suburban Paris) with fiscal year 2010 revenues of about 15 billion Euros (US$20 billion). With some 380,000 employees in 80 countries worldwide, 120,000 of them in North America, the company is a leader in food preparation and auxiliary facilities for a wide range of institutions including corporations, government agencies, schools, hospitals, nursing homes, prisons and military bases.

Now the company’s Gaithersburg, Md.-based subsidiary, Sodexo USA, is far from averse to unionism. Its work force is 15 percent unionized, more than twice the overall U.S. figure for the private sector. At least 300 separate collective bargaining agreements are in force. The company last April was named by Working Mother magazine as one of the nation’s best employers for hourly compensation. “We lead our industry in expanding the range of benefits available to front line employees, and offer training to help employees excel in their current jobs, position them for career advancement, and contribute to their personal and professional growth,” says Sodexo USA CEO George Chavel.

Apparently, the SEIU isn’t impressed. Of Sodexo USA’s 120,000 employees, about 98,000 are paid by the hour. About 18,000 of the latter belong to a union; the other 80,000 don’t. The SEIU for years has eyed the non-unionized portion as an organizing bonanza. Toward that end, its leaders for well over a year allegedly have engaged in a campaign of extortion, blackmail, trespassing and illegal lobbying designed to steer business away. Sodexo USA responded on March 17 by filing a civil lawsuit in Alexandria, Virginia federal court, charging the union with racketeering and extortion. SEIU officials, the suit asserted, threatened Sodexo executives in face-to-face meetings to undermine company operations.

The union made good on its vows. The lawsuit states that SEIU and allied activists on at least one occasion engaged in the following acts:


-threw plastic roaches onto food at a high-profile event catered by Sodexo;

-scared hospital patients by insinuating that Sodexo food contained bugs, rat droppings, mold and flies;

-sneaked into elementary schools to avoid security;

-violated lobbying laws to steer business away from the company; and

-threatened Sodexo USA employees with public exposure of alleged wrongdoing.

The action seeks an injunction against the Service Employees International Union, its executives, and certain locals from engaging in further disruptive activity, plus unspecified monetary damages. The company insists it was willing to negotiate, but that the SEIU campaign had made this impossible. “We work constructively with unions every day but the SEIU had crossed the line by breaking the law,” Robert Stern, general counsel for Sodexo USA, in announcing the suit. “We will not tolerate the SEIU’s tactics any longer.”

The union has responded by calling the lawsuit a diversionary tactic from the real issues. SEIU officials accuse Sodexo and its legal counsel, Hunton & Williams, of launching a “dirty tricks” campaign against American workers by retaining three cyber-security vendors to discredit the SEIU and other unions with fraudulent documents. The lawsuit, says the union, is “bogus litigation meant to deprive workers of the right to bargain collectively with their employers and undermine the middle class in the United States.

How did the union pick Sodexo as a target? And why did it choose certain tactics of intimidation, despite being noxious and possibly illegal? More than a few clues may be found in the aforementioned internal SEIU monograph, titled “Contract Campaign Manual.” The monograph serves as a veritable bible for waging guerrilla warfare against recalcitrant employers. The Washington, D.C.-based free-market think tank, the Competitive Enterprise Institute, obtained a copy from the Public Access to Court Electronic Records (PACER) system.

The manual argues that pressure – from as many sources as possible and aimed at as many targets as possible – is of the utmost importance. “Outside pressure,” the authors explain, “can involve jeopardizing relationships between the employer and lenders, investors, stockholders, customers, clients, patients, tenants, politicians, or others on whom the employer depends for funds.” Legal and regulatory pressure can be especially beneficial, as it can “threaten the employer with costly action by government agencies or the courts.” Community organizations also serve a key function, as they can “damage an employer’s public image and ties with community leaders and organizations.” Such pressure is not an option. “Assume that pressure tactics will be necessary and start planning for them in advance,” counsels the manual.

Much of the monograph is in the spirit of the Left’s dictum: “The personal is the political.” Toward that end, it recommends going after company officials and board members in personal ways, hopefully with the intent of embarrassing or harassing them. Legality doesn’t seem to be an object here. Here is how the SEIU puts it:

It may be a violation of blackmail and extortion laws to threaten management officials with release of ‘dirt’ about them if they don’t settle a contract. But there is no law against union members who are angry at their employer deciding to uncover and publicize factual information about individual managers.

Bank of America Deputy General Counsel Greg Baer two months ago got a taste of the SEIU treatment. Union and allied demonstrators – more than a dozen busloads – rode to Baer’s suburban Washington, D.C. home. After they arrived, they assembled in front of his house, several shouting through a bullhorn or waving signs. It felt more like a riot about to happen than a demonstration. The effort proved a waste, as only Baer’s teenaged son was home.

The union emphasizes using the media to find other organizations in the community with grievances. “Such organizations,” states the monograph, “can include environmental groups, student organizations, consumer groups, women, minorities, poor people, senior citizens, and doctors.” Isolating the employer from its everyday associations, by way of bad publicity, is crucial. In the section “Using the Media,” the SEIU advises: “Give customers, clients, investors, and other in the community reasons to cut off economic ties with the employer. Media attention can convince the community of the justice of your cause, or can make businesses or individuals feel that they don’t want to be involved with the employer while it is getting such bad publicity.” The monograph calls upon activists to enlist politicians, regulators and other unions to join the struggle.

What we have here, in short, is a manual not just for union organizing, but for enterprise destruction. And the monograph is a logical result of organized labor in the U.S. retooling itself as a political as much as an economic force. The crude and possibly illegal tactics employed by SEIU leaders, members and outside allies against Sodexo may or may not have been inspired by the union’s “Contract Campaign Manual.” But it’s certainly worth finding out in court.


Carl Horowitz

Carl F. Horowitz is director of the Organized Labor Accountability Project of the National Legal and Policy Center, a Townhall.com Gold Partner organization dedicated to promoting ethics in American public life.
 
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