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Labor Unions and Financial Institutions

4/12/2010

Do financial institutions need to worry about union organizing?  Maybe.  In the recent financial meltdown, labor unions have stridently attacked the big banks and Wall Street.  The Service Employees International Union even has a website focused on the issue:  http://www.seiu.org/bigbanks/ 

In a recent New York Times story, authors Steven Greenhouse and Louise Story pointed out that union criticism of Wall Street has increased since the federal government has provided billions of dollars in bank bailouts. http://www.nytimes.com/2010/03/25/business/25labor.html. The article points out that labor leaders led the call for the resignation of Bank of America’s Chief Executive and that unions criticized Goldman Sachs’ bonus pool.  The authors observe that the AFL-CIO organized 200 protests nationwide to shame bankers, and called for new taxes on bonuses and on speculative short-term financial transactions.  Unions like the Service Employees International Union and the AFL-CIO are also pressuring financial institutions which have an equity position not to oppose union membership drives in businesses which the unions seek to organize.

Why should smaller banks be concerned?  Union membership in the private sector has been declining for years.  The United States has been shedding its manufacturing base, and unions are seeking new members from other areas of the economy.  The relatively stable jobs of workers in financial institutions may appear to be good targets for union organizers.  Additionally, there is no question the Obama administration is more employee and union friendly than the Bush administration.  It is likely that Congress may send President Obama some version of the Employee Free Choice Act, which will make it easier for unions to organize.  Even if this does not happen, President Obama has appointed two individuals with strong union backgrounds to the National Labor Relations Board.  At this time, the balance of power on the NLRB is definitely in favor of those having pro-union sympathies. 

Is it far-fetched to think that the Teamsters, for example, might seek to organize employees of financial institutions?  Not necessarily.  In the quest for new members, unions are breaking out of their historic areas of interest; for example, the Steelworkers union represents many healthcare workers. 

Much union organizing is instituted secretly.  This means that when organizing activity finally comes to the attention of management, the union is already several steps ahead.  Managers are wise to evaluate the vulnerability of their financial institution, and should take pro-active steps to institute defenses against organizing.

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