By Adam Lashinsky / Special To The Washington Post
We supposedly live in the age of the virtuous corporation, where issues from inclusion to the environment to “stakeholder” rights hold maximum sway. At the same time, the mindful American corporation is under attack from the right, which argues that its environmental-social-governance focus amounts to little more than disingenuous woke-signaling.
Yet there’s one big exception to this veneer of virtue: Even the most progressive-minded executive teams are opposed to organized labor. It’s a disconnect that portends an increasingly contentious era between management and employees, enhanced by worker shortages not seen during the lifetime of today’s CEOs.
Despite their surging popularity, labor unions remain the bete noire of C-suites everywhere. From Walmart to Starbucks to Apple — all corporations whose CEOs have been celebrated for beneficent-sounding policies — constructive dialogue with organized labor is a non-starter. Most of the biggest corporations that haven’t traditionally had relationships with organized labor are dead set against starting one now.
Indeed, to the extent that corporate America talks about its relationship with its employees, it ignores unions altogether. In 2019, when the Business Roundtable, the collective voice of supersized U.S. companies, loudly updated its Statement on the Purpose of a Corporation, it committed to “investing in our employees” as well as “compensating them fairly and providing important benefits.” It included a promise to “foster diversity and inclusion, dignity and respect.” But it made no mention of unions, collective bargaining or the rights of workers to organize and advocate for themselves.
Walmart neatly embodies this attitude. The company has always been anti-union, dating to the days of its founder, Sam Walton. He, however, had the foresight to offer employees a generous profit-sharing plan. Still, as Walmart grew, the standing of its workers deteriorated. In a forthcoming book, “Still Broke: Walmart’s Remarkable Transformation and the Limits of Socially Conscious Capitalism,” author Rick Wartzman explains that while Walmart belatedly realized the need to boost wages, and then earnestly followed suit, the increases haven’t been sufficient to allow workers to earn a comfortable living.
A healthy relationship with organized labor might well have served as a tripwire for Walmart management. Yet when I asked Walmart why it opposes union membership, the company deflected. “Our founder, Sam Walton, always stressed listening to and serving our associates,” Walmart said in a statement. “We are proud that the vast majority of our management positions are filled by those who started as hourly associates. This has created a culture of respect and partnership with our associates that focuses on what’s important to them.”
That suggests Walmart, which employs about 1.7 million Americans, is choosing to focus more on the career trajectories of its highest-potential workers than the collective desires of the rest.
At Starbucks, long lauded for its pro-employee policies, which include health and education benefits for part-timers, Howard Schultz is battling unions in his third stint as CEO. Starbucks has been accused of multiple labor-law violations, including by the National Labor Relations Board, as it tries to prevent baristas from organizing. Schultz is transparent about his opposition to unions; though claiming otherwise. “I’m not an anti-union person,” he said recently.”I am pro-Starbucks, pro-partner, pro-Starbucks culture. We didn’t get here by having a union.”
Schultz, who once flirted with running for president as a pro-business centrist, has also cited the main argument chief executives use to oppose unions: the negative effects of placing another organization between the company and its workers. “The customer experience will be significantly challenged and less than if a third party is integrated into our business,” he has said.
Apple, whose CEO Tim Cook keeps two pictures of Robert Kennedy on his office wall and likes to wax eloquent about his company’s pro-privacy positions, mounts a similar defense. “I worry about what it would mean to put another organization in the middle of our relationship,” Apple HR chief Deirdre O’Brien told employees this spring, in response to nascent efforts to organize employees at Apple’s retail stores. “An organization that doesn’t have a deep understanding of Apple or our business, and most importantly, one that I do not believe shares our commitment to you.”
It’s not up to companies, of course, to decide who is best positioned to speak for its employees. Then again, it’s notable that even executives with little or no experience with labor unions are so opposed to them. As union membership has declined, business schools have largely given up teaching about them. For example, the word “union” appears nowhere in the course description list for the Wharton School’s MBA program.
Wharton isn’t unique. Even the University of Michigan, which once trained auto executives to negotiate with unions and guided union organizers to negotiate with car companies, has de-emphasized such instruction. “We don’t teach about labor unions in business schools,” said Jerry Davis, a Michigan professor who specializes in organizational behavior. “They’re just not a big enough factor in the private sector.”
Many factors explain the long, slow decline of private-sector unions, not the least of which are endemic corruption and their inability to save jobs in decaying industries. But with today’s tighter labor markets, companies will have to work harder to keep the people they want; and need. That might mean finding partners where they least expect them, making a hear-no-union, see-no-union attitude something they can no longer afford.
Adam Lashinsky is the former executive editor of Fortune magazine and author of “Inside Apple: How America’s Most Admired — and Secretive — Company Really Works.”
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
