An Imperfect Union

How organized labor fits into new business models.

One of modern-day Portland’s most famous labor disputes occurred in 1999, when workers at Powell’s Books voted to organize.

The push divided Portland’s book lovers and pitted then-bookshop owner Michael Powell, an active Democrat and free-speech advocate, against labor sympathizers.

“I don’t think we could have done anything else,” says Powell's CEO Miriam Sontz, reflecting on the labor battle in her office overlooking the shop’s World Cup Coffee cafe.

Sontz has worked in management for all but a few months of her nearly 33 years at the iconic bookseller and sided with her managerial colleagues during the union push in the late '90s.

At the time, Sontz says, Powell’s executives thought they were doing right by offering health and child care benefits. The union — International Longshore and Warehouse Union (ILWU) Local 5 — and management have since developed a working relationship, she says. But the organizing effort still rankles, clearly.

“[A union] slows you down," Sontz says. "It makes you less entrepreneurial.”

Portland and Oregon are chock-full of progressive, worker-friendly companies known for their attention to employees, the community and environment. Seventeen years after the Powell's vote, the contours of the socially minded business community have expanded to include B Corps, a range of social and ethical ventures, Fair Trade-certified enterprises and new socially-conscious business associations.

But even as social responsibility goes mainstream, organized labor remains an outlier among many companies that self-identify as progressive enterprises. To be sure, unions have something of a foothold in government and legacy industries — the grocers QFC and Kroger, manufacturers like Vigor Industrial and Daimler Trucks North America.

Among many young companies and new business models, however, the union presence is tenuous at best.

Government employers have a long history with unions and are familiar with the process, says Bob Bussel, director of the University of Oregon’s Labor Education and Research Center.

But young companies and startups often perceive a move to organize as a slap in the face; the executives have given their all to breathe life into the company and keep workers happy when suddenly an outward expression of dissatisfaction arises and, worse, makes a perceived grab for power.

“Some of the companies that have a progressive ethos react pretty vehemently against unions,” says Bussel.

“It gets back to basic questions about power and authority.” Companies, he says, fear a loss of flexibility should workers unionize.

The result is a transitional moment in the history of labor relations: Union membership nationwide continues to decline, the world of work has become less hierarchical and the line between management and employee continues to blur.

Many new-economy and progressive business models also support the kinds of worker protections and benefits originally championed by organized labor. In spite of these changes, or perhaps because of them, the union economy has yet to find a natural ally among new-economy employers.

***

David Gremmels, the owner of Rogue Creamery, a blue cheese specialist based in the northern Medford suburb of Central Point, believes unions are not always exigent.

The organic creamery and B Corp produces renowned artisanal cheeses, and Gremmels himself possesses a singular ability to speak in complete, metered sentences full of adjectives. His linguistic and cheesemaking skills have helped land his writing in Vice and may have played a role in Rogue’s unionized workforce opting not to negotiate a contract when Gremmels and partner Cary Bryant purchased the business in 2002.

Imperfect Union 03David Gremmels, Rogue Creamery                                                                                                                                  Photo by | Jason Kaplan

Today the company’s 47 employees are no longer union, and Gremmels says they don’t have to be.

"The perspectives and benefits that I offered as an owner outweighed what an outside agency could offer,” he says by telephone.

Rogue Creamery shares its profits — but not equity — with its employees, as well as a comprehensive benefits package that includes bikes and commuting benefits. 

We’re an open book,” says Gremmels, deftly redirecting questions about unions into discussions of empowering employees.

“Team members know our state of well-being — or not — at any moment. If there is something out of the norm we come together as a team.” Successful businesses, he says, “need to offer a sustainable wage and benefits.”

The American workplace has changed dramatically in the decades since unions first fought for better working conditions. But the worker’s union is not an outdated business model, counters Ryan Van Winkle, a union representative with (ILWU) Local 5, which represents Powell’s employees.

Imperfect Union 02Ryan Van Winkle, ILWU Local 5                                                                                                                                       Photo by | Jason Kaplan

Even companies with stellar workplace practices need the checks and balances a union provides, he says.

So although a company’s policies may be good today, “a management change or new generation of owners can create unforeseen problems overnight if there’s no union to smooth the transition. The fact is managers come and go, but a company is immortal. A union is the immortal version of the worker.”

Van Winkle adds that employers should offer employees a living wage, good health benefits and ensure employees have time to spend with families. Companies should also have a mechanism for communicating with employees and accepting their input. “In the end, a union is a good way to do it."

But for many firms, emerging business models are equally effective.

Consider the B Corp, an emblem of new management-led worker and social responsibility initiatives. B Corps are for-profit enterprises that have been certified by a national nonprofit, B Lab, to meet standards of social and environmental accountability and transparency. (Oregon has one of the highest numbers of B Corps in the country.)

Employee benefits, wages and equity opportunities play a role in B Corp certification. B Lab is generally agnostic on organized labor, although the process does include questions that "ensure companies do not prohibit the right to collective bargaining and freedom of association for employees," said B Labs director of standards Dan Osusky in an e-mailed statement.

Certified companies must score 80 or higher out of 200 on the assessment. In Oregon the median score for all companies that have been reviewed under the B Corp criteria is 55; the median on the workers portion is 18. Rogue Creamery claims a high B Corp score of 138 —  24 for workers.

The Joinery, a furniture maker and retailer, barely made it to certification with an overall score of 81 but landed a workers' score of 25. Bridgetown Natural Foods, which makes snack bars in Southeast Portland’s Lents neighborhood, has a B Corp score of 104 but only pulled a 19 for workers. B-Line, an alternative logistics company that uses pedal power and is also based in Southeast, has a B Corp score of 95 with a worker score of 18. New Seasons Market clocked in with a score of 109; 25 for workers.

With the exception of Rogue Creamery, none of these companies agreed to be interviewed for this article.

None employ union workers, and some have clashed with organized labor.

New Seasons Market, lauded for its competitive pay and slate of generous worker benefits, has come under fire from the United Food and Commercial Workers union’s UFCW21 in Seattle, where the grocer is planning to open a second store this year.  UFCW has tried unsuccessfully to organize the grocer in Portland. 

Across the Columbia, fast-food alternative Burgerville, based in Vancouver, Wash., promises workers affordable healthcare, opportunities for advancement and pay that “is competitive within the industry.” The 42-restaurant enterprise is also accused of firing employee Jordan Vaandering for attempting to organize his co-workers into the Burgerville Workers Union, an offshoot of the Industrial Workers of the World. 

The restaurant chain says Vaandering was fired Jan. 18 for accepting a bagel from a manager at no charge earlier this year, but Vaandering claims he was let go because he’s been working to recruit workers since 2015. In lieu of an interview, the firm emailed this statement, attributed to Jack Graves, its chief cultural officer:

“Burgerville recognizes employees’ right to organize and respects each employee’s right to decide for herself or himself about whether to have or not have a union.”

Vaandering himself initially agreed to an interview but later stopped responding to attempts to schedule the discussion.

***

The apparent disconnect between young or progressive business models and unions suggests that employers  that identify as such are not a panacea for the nation's struggling organized labor movement.

But at least one Portland employer with B Corp certification, Neil Kelly, the Northeast Portland construction company, has always had a union and likely always will.

“My dad helped build the Grand Coulee Dam and was a shop steward,” says owner Tom Kelly in his Alberta Street office. After his father helped build the dam, Kelly started his namesake construction company, and the firm’s carpenters have been union ever since.

Imperfect Union 04Tom Kelly, Owner Neil Kelly                                                                                                                                                Photo by | Jason Kaplan

Kelly says the union helps him simplify human resources issues for his biggest labor component. The remodeler also drew the highest score in the B Corp worker category for all certified companies contacted for this story  — a 30, with a total score of 92.

But Kelly says he likes the B Corp process because it looks at his entire workforce, not just the unionized carpenters.

Most office jobs aren’t union and, although they generally enjoy higher salaries, have fewer benefits. Kelly says the union benefits are just part of being a progressive employer. He’s now trying to make his staff more diverse:

“Right now the focus we’re taking is diversity. At the very least we’d like to mirror the population.”

Screen Shot 2017 04 03 at 11.20.22 AM

Other Legacy companies with union workers are also rethinking the relationship between employees and management — outside the traditional organized labor paradigm.

Vigor Industrial, the Swan Island shipbuilder, employs about 1,800 union, non-union, corporate and production workers. The company recently launched "Evolution in Leadership," a class that was originally only for salaried management but is now offered to employees at all levels, says Sue Haley, Vigor's vice president for human resources.

“We have a mix of execs, managers and craft employees in each class,” she said in an email. “This is a marvelous forum to not only build leaders, but to build transparency, lasting connections and teams across the company.”

Haley says Vigor’s relationship with unions does not define the company’s workplace strategy.

“We are all expected to live by the same code and values and find that the more we engage folks in conversation around what that means, the more our differences go away," she says.

"We have union and non-union workers working side by side. We are partnering with the unions to make the changes needed to remain competitive and attract new work and new workers. We are embracing innovation and the employees are leading.”

Back at Powell’s, Sontz says the bookseller remains committed to progressive workplace policies by choice, not because of — or in spite of — the union. Powell's now offers green commuting benefits; Sontz also finds the growing work-at-home options intriguing, if impractical for a brick-and-mortar retailer.

She reflects on the lavish benefits on offer in Silicon Valley by companies with margins unharmed by Amazon, Powell’s new economy competitor that for years has successfully fended off organized labor.

Sontz cites as examples Twitter’s vacation policy — employees and managers sit down to decide what’s equitable rather than setting days in contracts — and Google’s WiFi-enabled coaches that shuttle employees between San Francisco and the Google Mountain View headquarters.

Powell’s can’t compete on that scale, Sontz says, but is committed to raising the bar for employees.

***

Almost two decades ago, the Powell’s labor dispute symbolized a gap between the bookseller’s left-leaning reputation and perceived anti-worker practices. Today a new generation of progressive companies is upping the ante on employee amenities and perks, a trend fueled byScreen Shot 2017 04 03 at 11.20.37 AM millennial demographics, technology and the mainstreaming of social ventures.

For many supporters of organized labor, however, these employer-driven fair labor practices are still no substitute for worker-driven organizations. 

“Workers do better if they have an independent voice,” Bussel says. “If the employer has all the cards and all the power, that often can give rise to all kinds of problems. Whether or not a company calls itself progressive or not progressive, workers should have a fair opportunity.” 

The issue is not black and white. Even Sontz, who may be ambivalent about Powell's ILWU presence, acknowledges the value of organized labor. “Do I think other places in America could use some union support? Yeah, I do,” she says. For his part, Van Winkle says he can imagine a time when a company doesn’t need a union to ensure worker protections and benefits.

In the meantime, new management-led progressive business models continue to proliferate.

Last year, a group of local businesses formed a new association, Business for a Better Portland, aimed at foregrounding issues of equity and sustainability. Asked to comment on the affinity between unions and progressive business models, spokesperson Ashley Henry initially declined comment.

“We are such a new organization that we don't have any experience working with unions,” she said via email.

Later, when pressed, founder Mara Zepeda offered a neutral statement about the relationship between unions and the new organization:

"We are building on work of others who instigated change, whether labor unions, community activists or business. Given our shared interests in community, equity and sustainability, we see opportunities to collaborate and cooperate with established organizations and new initiatives alike."

A version of this article appears in the April 2017 issue of Oregon Business. 

1 comment

  • A Powells Employee
    A Powells Employee Tuesday, 11 April 2017 06:14 Comment Link

    Sontz's comment about being entrepreneurial is laughable. Is it entrepreneurial to outsource the building of your website to a foreign company and, after years of overrun and additional cost, launch a defective product prematurely? Is hiring cheap foreign workers progressive now?

    The biggest obstacle to success for Powells is Sontz: a CEO who lacks any real vision, leads inefectively, and rather than collaborate with the union to grow the business, assumes an inflexible adversarial relationship.

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