By R. Pepper Crutcher, Jr.

On March 10, 2000, the Federalist Society gathered academics, labor activists, corporate communications consultants, and management lawyers to explore the causes and effects of the "corporate campaigns" recently mounted by labor unions against corporate employers and others who are perceived to have the ability to influence the labor policies of those employers. The subject was divided into two panel discussions. Panel One, "The Core Elements of the Union-Backed Corporate Campaign, Litigation and Regulatory Strategies," was moderated by John Irving of Kirland & Ellis, former member of the National Labor Relations Board (current Chair of the Federalist Society’s Labor and Employment Law Practice Group). Panelists were fellow Board alumnus Clifford "Dick" Oviatt, of McGuire Woods Battle & Booth, Harvard University Economics Professor Richard Freeman, Caterpillar counsel Chris Gangemi, and Teamsters corporate campaign director Bart Naylor. Panel Two, "New Strategies of Organized Labor and the Plaintiffs’ Bar to Influence Target Companies’ Decision-Making," moderated by Chris Johns, featured dueling public relations consultants Robert H. Bork, Jr. and Victor S. Kamber (The Kamber Group), as well as Stetson University Law Professor Charles Ellson, AFL-CIO Associate General Counsel Damon Silvers, and management lawyer Richard L. Wyatt (Aiken, Gump, Washington, D.C.).

The first panel generally agreed that the modern corporate campaign arose from the AFL-CIO’s inability to staunch membership decline by organizing workers through government-conducted, secret ballot elections. The AFL-CIO attributes its frustration to employers’ undue influence over voters. Corporate representatives ascribe labor down-sizing to good corporate management of employer/employee relations and the related irrelevance of the union model of industrial class warfare. Whatever the cause, panelists agreed that the AFL-CIO has little reason to trust its future to traditional organizing tactics which now attract less than one-tenth of the private sector, non-agricultural workforce.

Management panelists make plain their view that corporate campaigns entail personal extortion directed against corporate executives and directors. The panelists disagreed about the effect on targets of tactics such as picketing family funerals and accusing corporate executives of crimes. In the AFL-CIO’s view, expressed by Mr. Naylor, such unpleasantries are necessary means to a worthy end. In Mr. Naylor’s words:

    The corporation has become so dominant in terms of our economy that I would say that the rest of us are all stars or all planets that circle them in orbit, and what I have worked on . . . is to try to unify these various planets and say that we are all the same in relationship to the corporation. These planets are customers, suppliers, shareholders, regulators, people concerned with the environment, and employees.

Management representatives questioned the wisdom of the corporate campaign strategy, which ultimately seeks to hurt the companies’ market share, which injures the corporations’ employees. The wiser tactic, according to management panelists, was that attributed to Jimmy Hoffa, who frequently told management negotiators, "I want you to make as much money as you can, because I want as much of it as I can get for my people."

Management panelists also decried the NLRB’s current view that an employer commits an unfair labor practice when it sues unsuccessfully to recover losses caused by an arguably illegal corporate campaign tactics. This, said the management panelists, encourages unions to defame employers, and to prosecute employers maliciously, knowing that the Board has granted them substantial immunity from countersuit. This criticism, according to Mr. Naylor, constitutes little more than managerial whining that corporate campaigns are lawful, and effective.

Panel Two focused on the corporate governance and marketing tactics employed by unions in corporate campaigns. Professor Charles Ellson submitted that "the root [of union involvement in corporate governance] might have been at some point in time organizationally related, but the effect has been that these folks are capitalists and they are seeking what other capitalists seek, . . . a fair return on their investment." AFL-CIO Associate General Counsel Damon Silvers noted that assets invested on behalf of AFL-CIO members now approach $4 trillion, and agreed with Professor Ellson that most union corporate governance initiatives are driven by a desire to maximize long-run returns. This explains union contests of corporate environmental policies, executive compensation plans, and election of directors, said Mr. Silvers.

The discussion turned then to the tobacco-inspired tactic of using mass tort litigation to drive down target companies’ market value. As Robert Bork, Jr. noted, "as far as I can tell, the law is on the side of the defendants, but that is not important [ . . . ]. Why does it work? Because people love it." Publicity-oriented litigation also serves unions well because corporate hierarchies fail to distinguish this class of suits from their general litigation burden. In Mr. Bork’s view, market-focused litigation cannot be endured if handled in the traditional claims adjustment and risk management fashion. "How should they defend themselves? Well, let me just say first they have to tell their story . . . and they should do it early." "[D]efine yourself before your enemies define you." Failure to do so, Bork noted, is tantamount to guilt in the public mind: "40 percent of the public thinks they are guilty by the mere fact of the suit. When the corporation says "no comment," that number jumps to 60 percent."

Though more congenial than Panel One, Panel Two clearly demonstrated the differing viewpoints of the participants. As Mr. Silvers noted, "the labor movement takes serious exception with the notion that somehow because it is workers’ money or workers’ institutions, we shouldn’t be able to play hard ball like everybody else when our interests are at stake."

By contest, the publicists agreed that lawyers are to blame for ineffective corporate campaign defense in many cases. As Vic Kamber put it:

    "All too often the public relations people who have ideas and who would know how to deal with it . . . are hamstrung by the lawyers, not by the CEOs, not by the corporate executives, not by the people that run the company that would like to defend themselves and feel that they should defend themselves, and not by the PR people that frankly feel here is the way to sell a message, . . . the lawyers feel that they are not only good lawyers, but they are good PR people . . . ."

The panelists also agreed that most corporate campaigns can be ended by employer pledges to remain neutral in union organizing. As in Panel One, there was general agreement that this results from the AFL-CIO’s dissatisfaction with efforts to organize employees through government-conducted secret ballot elections.

One member of the audience noted that neither panel had addressed corporate campaigns’ effect upon those employees who are best served by a secret ballot election - those who genuinely disfavor union representation. The AFL-CIO response, voiced by Mr. Silvers, is that a secret ballot election preceded by an employer’s captive audience presentations is no more respectful of such employees’ wishes than union representation gained through card signing under a neutrality pledge.

AFL-CIO counsel Damon Silvers summarized the case for corporate campaigns by conceding that Jimmy Hoffa did say, "My objective is for you to make money so that my members can make money." But, he added:

    Jimmy Hoffa didn’t start out saying that in life. Jimmy Hoffa started out as the king of the secondary boycott back when the secondary boycott was legal. He started out using guys to blockade warehouse doors to get recognition for his members. He started out in a total bare knuckle fight with management. At the end of that fight, there was a recognition in the trucking industry on both sides of the table that this was just a losing way to go. [ . . . ] [O]rdinary workers in their dealings with their management when they try to exercise their rights under the NLRA experience a bare knuckle punch. I gather that a number of managers feel that in the context of comprehensive campaigns they are given the same kind of punch. The question is, is there a better way to do it.


2003 The Federalist Society