UAW’s Loss at VW—What To Expect

by Ballard Spahr LLP
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The United Auto Workers suffered a devastating defeat at the polls at Volkswagen AG’s Chattanooga, Tennessee, plant on Valentine's Day, losing a National Labor Relations Board-conducted election by a vote of 712 to 626. The defeat comes despite unusual management neutrality, which included unprecedented access to the VW plant and workforce, joint labor-management communications, and silence from line supervision.

Is this loss the death knell for the UAW and organized labor? Hardly. Here are three developments to look for in the election’s aftermath.

  • UAW President Bob King famously said, “If we don’t organize these transnationals, I don’t think there’s a long-term future for the UAW. I really don’t.” The union has suffered a major, large-scale defeat. But that will not stop labor from continuing to organize. Expect unions to turn away from high-profile campaigns, like the one at VW, which attracted a surprising level of "outside interference" to the UAW effort.

    Bolstered by decisions from the Obama NLRB that made it easier for unions to organize small groups of employees, or micro units, and the Board’s recent announcement of new rules and regulations to streamline its election process (so-called "ambush elections"), unions will lower their sights and take aim at smaller employers and groups of workers.
  • UAW pressure on foreign auto makers in the Southeast will not abate. The union has spent millions to create an organizing infrastructure. Although it is obligated to not organize at VW for one year, expect the UAW to turn its attention to vendors and suppliers of the major auto makers, where it recently has had some success, organizing Mercedes Benz suppliers like ZF Industries, Faurecia Interior Systems, and Inteva. These smaller victories support UAW President King’s statement that “the perception is wrong that you cannot organize in the South.”
  • Expect legal challenges to the unprecedented outside influences brought to bear at the VW election. The Koch brothers and Grover Norquist funded publicity campaigns against the UAW. Federal and state legislators were especially aggressive. U.S. Senator Bob Corker (R-TN) assured VW workers that if the UAW was rejected, the reward would be the addition of a new midsize SUV product line in Chattanooga. State Senator Bo Watson (R-Chattanooga) announced that there would be opposition in the statehouse to any tax incentives for VW expansion if workers chose to be represented by the UAW.

    Under current NLRB rules, it is unlikely that VW can be held responsible for these statements, which clearly would be unfair labor practices if made by an employer. However, given the Obama NLRB’s clear agenda to make it easier for workers to organize, expect enhanced legal scrutiny of these outside influences, with possible changes in the law applicable to their conduct.

Although the UAW, and all organized labor, has suffered a bitter defeat in the most favorable of circumstances, expect unions to redouble their organizing efforts in smaller, lower profile, less public venues.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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