Management rights to avoid union program

Bny Mellon-Union Avoidance Program

BNY Mellon Human Resource

Management rights to avoid union program

Severance of benefits and wages

Monetary losses

Non-availability of unemployment insurance

Limited monetary benefits paid by unions

Economic implications for the company

Referendum on Unionization

Restructuring wage structure

During a union organizing drive in any organization, it is the right of company’s management to convince their employees of the potential benefits that not being part of a union may have for both the company as well as the employees. This is the crucial period when the union organizers, in this case International Brotherhood of Teamsters, will try to convince each employee of the potential benefits of joining a union. The usual tactics employed by union organizers are shortlist the opinion leaders and active members of employees and convince them. These opinion leaders in turn are tasked with convincing their coworkers to register in the union. In order to effectively mitigate the threat of unionization, management has considerable rights that it may use to avoid the union program. However, these rights have to be exercised within the prescribed legal bounds of National Labor Relations Act (NLRA).

NLRA is the main framework that outlines laws pertaining to the collective bargaining by management as well as the employees of an organization. NLRA was invoked in 1935 by the Congress to protect the rights of both stakeholders of an organization, the management as well as the employees. NLRA is also known as he Wagner Act since it was named after the introducing member of Congress, Robert F. Wagner. The main issue that will be addressed in this paper is regarding BNY Mellon’s efforts to avoid a union program and still remain within the legal bounds imposed by different laws regulating employee-employer relationship. The convincing of not joining the union should be non-coercive and should result in law suits being filed by employees. Following is an account as to what are the main options available to BNY Mellon management for avoiding a union program that is currently pursued by International Brotherhood of Teamsters.

Management rights to avoid union program

The management’s rights to avoid the union organization program are tightly regulated and the managers should not explicitly discourage the employees to organize in a union. Legally stating, the employer or management is barred from prohibiting the employees from engaging in a ‘concerted’ activity aimed at organizing themselves, the management has to put forward company’s side of the arguments very convincingly and not having the threat of discrimination. In case of BNY Mellon, the management should act fast and swift in order to conduct an information dissemination informal meeting within each of the company’s department.

The union selling associations, such as one involved in this case, the International Brotherhood of Teamsters always used under-the-cover representatives of their associations to get employees of a company on-board for unionization. These union organizing associations get their representatives recruited in the target company and then delegate these recruits the task of propaganda and effective convincing to be made for getting 30% of the employees to sign the ‘authorization’ cards issued by the union that is trying to organize employees. To effectively mitigate the threat of unionization, the management should inform all the employees across each department of the potential drawbacks of getting organized under union programs.

Since, the unions that organize the employees do not share the potential drawbacks; it is for BNN Mellon’s management to reveal the potential disadvantages of unionization. Although, the unions pitch their sales to individual employees by stating that higher salaries, benefits, and job security will be the outcome of joining a union along with union’s ability to call strikes in case of non-enforcement of their demands, these unions rarely share the complete details of negative impacts that can be casted upon the career or pay of an employee. Following issues should be particularly highlighted and communicated to opinion leaders in each department and through formal meetings. However, these meetings should only present the information and leave the decision to individual employees rather than obliging them to not joining a union.

If management takes a commanding and directional approach, this may amount to breach of NLRA. Following are some of the drawbacks of unionization that should be made known to the employees potentially becoming members of International Brotherhood of Teamsters union secretly. Most of the union representatives sell the idea of unionization by convincing the employees of power of strike and job security as a result of being member of a union. On the other hand, a strike has many drawbacks on the compensation of striking employees (Bronfenbrenner, 1998). Such as:

Severance of benefits and wages

Since the most effective tool of enforcing the management to agree with union’s point-of-view and demands during a deadlock in negotiations on wages or benefits are strike, it is sold as a benefit that employees earn after signing membership of a union. BNN Mellon’s management should immediately communicate to the employees that in case that unionizing employees give a strike call, the members of union cannot draw wages and the benefits being offered as part of compensation package. The company is not legally obliged under NLRA to compensate the employee’s for the period they have been on strike. Neither does the firm continue providing benefits and perks associated with each employee’s job. This particular aspect of being a union member should be foretold to the potential candidates for union membership.

In some countries such as Germany, and in Europe as a whole region (Locke, Kochan & Piore, 1995), the compensation provision in labor law for striking period are not that stringent. In case of U.K and he U.S., employees do not receive any compensation for the period work has been suspended due to strike by the union. This is a potentially strong and convincing argument that management of BNN Mellon can use to demotivate the employees for joining International Brotherhood of Teamsters.

Another important aspect that BNN Mellon, during the effort to demotivate their employees from joining International Brotherhood of Teamsters, should keep in consideration is that colored or any other ethnicity may not be part of the demotivation drive of the company management. The issue of ethnic background and remaining non-unionized as well as in low paying jobs in sensitive and the union organizing association, International Brotherhood of Teamsters may use this to their advantage. There was a similar instance whereby sandwich factory employees in U.K tried to keep employee paid low as well as non-unionized. A trade union then effectively got these employees too unionized based on their ethnic issue (Holgate, 2005).

Another union strike incident that went out of control also took place at the Century City district of Los Angeles where janitor employees registered with Services international Union Employees (SIUE) were staging demonstration for increment in pays. Although, the incident resulted in rising of pays, but at a considerable price was paid by the striking employees as most of them got injured. The demonstrators were injured during the strike due to police action (Waldinger, et al., 1996).

Monetary losses

The monetary losses that result from strike by the employees are not paid by the employer. The time period during which an employee is on strike does not cost the employer else then the production losses. Therefore, an employee has to risk wages and benefits during the period that strike is underway. This may cause serious financial implications for some of the employees engaged in strikes from a union platform.

Non-availability of unemployment insurance

Many of the employees thinking to join the International Brotherhood of Teamsters may not be aware that in case that strike is called, the unemployment insurance is for the period of strike is not available to the employees on strike. This may cause serious financial implications for the employees registering for the union membership. It is often that unions use the strike as a bargaining tactic and offer executes their threat by calling strikes. The insurance companies sever the funds that otherwise may be available to the employee.

Limited monetary benefits paid by unions

Although, unions promise their members of the benefits in case that the company severs an employee’s monetary benefits should there be a strike call. The actual situation in otherwise to the claim of union representatives and only those members, actively pursuing union activities, get the monetary benefits. The most common activity performed by the active union members is ‘picketing’. The above mentioned are some of the potentially negative impacts of joining a labor union that BNN Mellon management should communicate to their employees. This will make clear the ambiguities and employees will be able to negotiate hard with the International Brotherhood of Teamsters. The cultural and compensation related issues are most cited for avoiding union programs by U.K firms as well that remain union-free (Dundon, 2002).

Economic implications for the company

Not only is the economic impact of strikes and unionization on the employee but it is also exerted on the company’s productivity and finances. The economic implications of unionizations and issue related to it have been extensively studied. Bartik (1985) reported that a firm’s decision to expand its business operations is significantly impacted by the location and the state laws in context of unionization. The states that sympathies unions are those that business choose lease likely to be the potential destinations for expansion.

Clark (1982) conducted an empirical research on the economic impact of unionization on firm’s profitability, growth, and productivity. The research found that despite not having found a strong positive relationship between unionization and firm’s growth and productivity, it did find a strong and negative relationship between profitability and unionization in a firm. This indicates that the unionization has considerable economic impact on the performance of the firm. The firms usually utilize profits for Research and Development (R&D) and other activities including that their share price growth is also attached to the quarterly earnings being reported in media and to the Securities and Exchange Commission (SEC). Thus, BNY Mellon management should communicate to the employees that pay raise and other perks can only be made available to the employees should the company remain profitable and continue earning higher profits each quarter. The profitability ensures that new investments from public and private sources keep flowing in and the company does not have to cut down on R&D and other crucial expenses.

The management should also communicate that collective bargaining aspect of unionization negatively impacts the distribution of profits and the example of General Motors can be cited. GM was one of the most successful and forward looking organization in the world before succumbing to the swelled union costs and benefits and wage raises ensured through union enforcement. Rather than pursuing union activities and membership for unknown and vague promises by the union representatives, BNY Mellon should, after communicating negative impacts of unionizing, convey that economic gains and job security issues can be negotiated without union presence as well since the company has an ‘open door’ policy for all employees.

Referendum on Unionization

The proposal to hold referendum regarding joining or not joining the union has both advantages as well as potential disadvantages. If the management is able to convince the opinion leaders within their employees regarding the potential negative impacts of unionizing, the referendum can provide an effective tool to eliminate the threat of unionizing, at least in the short run till the company gets time to manage more lucrative benefits program. On the other hand, if before the referendum the management fails to convince the opinion leade3rs and active members in the workforce, regarding the negative impacts of unionizing, the referendum can put the company into a difficult situation.

The affirmation by majority of the employees that they desire to unionize will leave the company with no other option but to acknowledge International Brotherhood of Teamsters as the representative union of BNY Mellon’s employees. Therefore, entering into a referendum immediately without preparing the foreground for making the referendum successful for BNY Mellon will be ill-advised step. The management should adopt a non-rigid and open approach to avoiding the unionization in their organization. By threatening the employees with layoffs and other negative impacts may result in further strengthening of International Brotherhood’s efforts to unionize the employees of BNY Mellon.

In order to make the referendum against unionization successful, the company shall first introduce a range of steps to mitigate negative sense of being under-compensated prevailing in the employees, if any.

Restructuring wage structure

In order to seriously mitigate the potential threat of unionization, the management should first make an informed assessment of the economic cost of unionization. Based on assumptions of potential economic costs of unionization, the management should convince the board of directors for a wage restructuring that allows the management to increase wages by 8% to 15% depending upon the designation and performance of the employees. The increased wages should be communicated as the ‘living cost adjustments’ as this will allow the employees to feel that their company bonds with employee sensitivity regarding living costs. Profit sharing plans and bonuses are two of the most widely used steps that management can take to avoid the unionization of their employees. Cahill (2000) identified that Employee Share Ownership Plans (ESOPs) that got initiated in the 1950s are also effective in boosting productivity of the firms and avoiding a union program. In Scandinavian countries, the sample of 93 employee-owned firms displayed higher productivity as compared to non-employee owned. Therefore to increase the employee engagement and eliminate the ‘us’ versus ‘them’ feeling in BNY Mellon’s workforce, the management can introduce Employee Share Ownership Plans (ESOPs). This will significantly increase the stake of each employee in BNY Mellon’s financial success and growth and thus the motivation to be part of union will decrease. Cahill (2000) also reported other studies that found positive relationship between gain-sharing and share ownership plans that increasing employee and firm productivity. Several of the German metal firms also benefited from such benefit restructuring programs.

Medical covers are the most important issue that management can use in their favor. Since most of the employees are already medically covered through insurance, the company can restructure the medical insurance to cover additional ailments generally recommended by the insurers to include in medical covers. Medicaid is the publicly funded program for medical insurance, and the management can communicate that would the employees remain non-unionized, one or more of the blood relations of employees can be covered through the medical insurance making it into a family insurance policy. Nonetheless, this offer depends on the cost of such step.

Several other programs such as work life balance programs are also used to foster a feeling of attachment in the employees. Osterman (1995) reported that such programs that increase the vacation time of employees can boost their productivity. This can be used by BNY Mellon as well and the employee vacation plans can be redesigned. All these restructuring plans can only be made after the management reviews and assess the potential economic impact of unionizing. After assessing the economic impact the management can provide some benefits and restructure job design and wage structure of its employees. The plethora of literature suggests that rather than adopting a coercive and discriminatory approach to avoiding the labor union, the management is always successful only by introducing liberal freeform in context of wage and job design restructuring. Since National Labor Relations Act (NLRA) restricts organizations from preventing unionizing, the management has limited options to demotivate the employees from registering with International Brotherhood of Teamsters. Therefore a structured and careful approach has to be adopted.


BNY Mellon is faced with challenging situations whereby International Brotherhood of Teamsters is trying to court majority of the employees of the company to sign the union membership. These literature reviews suggests that in case 30% of the employees of BNY Mellon sign the ‘authorization’ cards, International Brotherhood of Teamsters will be eligible for sending the election petition for their union to be recognized by NLRB. Therefore, it is advised the management should swiftly hold meetings with opinion leaders and inform them of the negative monetary impacts of unionizing, both for the firm as well as the employees.

On the other hand, the company management should also restructure the wage and compensations offered to their employees. Benefits plans should also be reviewed and programs such as gain sharing as well as share ownership should be offered to the employees. This will not only improve the productivity but also ward off the threat of unionization. Both the management and the employees can openly discuss the issue and prevent unionization before International Brotherhood of Teamsters is able to secretly get authorization’ cards signed from 30% of the employees of BNY Mellon. National Labor Relations Act (NLRA) restricts BNY Mellon from coercing the prevention of labor union formation, therefore the management rather taking coercive preventive actions such as layoffs and reducing pays of certain employees should try to device conciliatory strategies. The need for unionizing shall be eliminated and reduced rather than actually eliminating the union. This will help achieve the objective of avoiding union program while not inviting any legal consequence for the company. The coercive actions, if any, may result in involvement in litigation initiated by employees or the International Brotherhood of Teamsters. The firm management has less time to mitigate the threat and advised steps should be initiated shortly.


Bartik, T.J. (1985). Business location decisions in the United States: Estimates of the effects of unionization, taxes, and other characteristics of states. Journal of Business & Economic Statistics, 3(1), 14-22.

Bronfenbrenner, K. (1998). Organizing to win: New research on union strategies. Cornell University Press.

Cahill, N. (2000). Profit Sharing, Employee Share Ownership and Gain-sharing: What can they achieve? National Economic and Social Council (NESC). Research Series Paper No. 4, 1-31.

Clark, K.B. (1982). Unionization and Firm Performance: The Impact on Profits, Growth and Productivity. American Economic Review, 74(5), 893-919.

Dundon, T. (2002). Employer opposition and union avoidance in the UK. Industrial Relations Journal, 33(3), 234-245.

Holgate, J. (2005). Organizing migrant workers a case study of working conditions and unionization in a London sandwich factory. Work, Employment & Society, 19(3), 463-480.

Locke, R., Kochan, T., & Piore, M. (1995). Re-conceptualizing comparative industrial relations: lessons from international research. Int’l Lab. Rev., 134, 139.

Osterman, P. (1995). Work/family programs and the employment relationship. Administrative Science Quarterly, 40(4), 681-700.

Waldinger, R.D., Erickson, C., Milkman, R., Mitchell, D., Valenzuela, A., Wong, K., & Zeitlan, M. (1996). Helots no more: A case study of the Justice for Janitors campaign in Los Angeles. The Lewis Center for Regional Policy Studies. Working Paper 15, 1-26.

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