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Return of the Lockout: Uber and Lyft Try to Strong-Arm California

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In August a California court ordered Uber and Lyft to reclassify more than 100,000 drivers as regular employees. The two companies, which depend on a business model that defines drivers as independent contractors, got the decision lifted for at least a few months.

But in the meantime their threat to shut down operations in California—and thereby fire thousands of drivers while ending service to millions of customers—raises the question: What do we call this extraordinary corporate stratagem? A public relations gambit? A pressure tactic? Blackmail? A capital strike?

It’s all of the above, but the best historical analogy is the “lockout,” a disreputable, two-century-old employer weapon designed to force workers to knuckle under.

A WEAPON AGAINST SKILLED WORKERS

The Homestead strike of 1892 began as a stoppage by skilled workers who resisted demands by Andrew Carnegie and Henry Frick to slash wages and union power. Frick erected a fence around the entire mill, locked out all employees, and called in a barge full of Pinkerton private police to protect the scabs he hoped to recruit. When workers routed the Pinkertons in a bloody battle, it took the importation of National Guard troops from Philadelphia to put power back in capitalist hands.

Late 19th century lockouts were not uncommon because the status quo had tilted in favor of elite workers: skilled labor controlled the shop floor in many mills and mines and on construction sites, even as deflation was increasing the value of their nominal wages. Bosses responded with lockouts to force concessions and wage cuts.

Lockouts were far less frequent in the mid-20th century decades of union power and successful collective bargaining. That’s when workers went on strike themselves and almost always came out ahead.

But beginning in the 1980s, when just holding on to the contract provisions won in earlier bargaining rounds was often counted a union success, lockouts returned as an employer weapon. Managers locked out union workers in major battles at Caterpillar, the Detroit newspapers, and A.E. Staley in the 1990s. In more recent years, they used the same tactic at Honeywell and National Grid, a Massachusetts gas distribution utility.

Remarkably, the most high-profile lockouts have arisen in professional sports. Here players established strong unions that captured some of the enormous revenue generated by game broadcast rights. And free agency contracts enabled some stars to win enormous salaries. Owners struck back, precipitating lockouts that wrecked the training season: in 2011, the NFL locked out players for 136 days and the NBA did the same for 161 days. The following year, NHL owners locked out players for 119 days.

GIG WORKERS’ FUTURE AT STAKE

But what does all this have to do with Uber and Lyft? Their drivers are not unionized, after all. True, but they have won, in California courts and legislature, a considerable employment-rights victory that, if and when enforced, will transform the meaning of work in the gig economy, greatly enhancing income and security for many.

Last year California Governor Gavin Newsom signed a law that requires Uber, Lyft, DoorDash, and many other companies to reclassify as regular employees workers currently illegally treated as independent contractors. This means that in the future they will be paid a more predictable wage, earn sick leave and Social Security credits, and find themselves covered by worker compensation and unemployment benefit laws.

And they will be legally entitled to unionize, in which case workers and managers can negotiate a contact that gives drivers as much “flexibility” as Uber and Lyft now claim they want.

So, like the skilled workers of late 19th century America, gig economy drivers and DoorDash “shoppers” now find the status quo theoretically on their side. At least in California, they are on the verge of enjoying work rights that gig employers want to gut. To do so Uber, Lyft and DoorDash have amassed a $181 million war chest to pass Proposition 22 on the November California ballot. That proposition would once again legalize contract work for millions of workers who by any reasonable definition are regular employees.

Uber and Lyft are strong-arming Californians. They hope their threat will convince drivers to abandon their rights and persuade California riders to endorse the theft.

BLUSTER

In 1941 Henry Ford threatened to shut down his company if workers voted for the United Auto Workers. They did and yet Ford continues to this day. Management bluster is often just bluster, which is probably the case with Uber and Lyft.

But in the last month, they have proposed another way to keep employees from their rights: create a set of franchises to employ their drivers, if Proposition 22 passes. Franchising is an old trick, as any employee at McDonald’s, Days Inn, FedEx, or Jiffy Lube can attest. Workers are legally employees in a franchise, but the real employer, the one with the money and power, remains legally aloof. Workers get squeezed and unionization brings few benefits.

So the lockout, once thought a relic of Gilded Age America, has returned with a vengeance, ingenuity, and determination that would have made Henry Frick envious. We need an equally radical rededication to the concept of jobs with rights, and the rewards, monetary and moral, that are their just compensation.

This blog originally appeared at Labor Notes on September 23, 2020. Reprinted with permission.

About the Author: Nelson Lichtenstein is Research Professor in History at the University of California, Santa Barbara.


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Corporations Deploy Anti-Worker Weapon

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Leo GerardInstead of picnicking, Steelworkers in six states spent this Labor Day picketing the gates of a dozen Allegheny Technologies Inc. (ATI) specialty mills.

These 2,200 Steelworkers are not on strike. They never even took a strike vote to threaten a walkout.

ATI locked them out of their jobs.

ATI threw them out of the mills on Aug. 15 even though the Steelworkers clearly told the corporation that they were willing to work – that they wanted to work – while negotiating a new labor agreement.

A lockout like this is a weapon increasingly deployed by corporations to injure workers, families and communities. And corporations are doing it even as workers engage in significantly fewer strikes. The growing use of lockouts to force workers to accept corporate demands demonstrates that the already powerful – corporations – have secured even more might in their relationship with workers. Corporations’ lopsided hold on power in the United States has suppressed labor unions and contributed significantly to wage stagnation and income inequality.


USW District Director David McCall holds Marlee Grinage, daughter of Steelworker Jaimee Grinage, aloft at Steelworker rally.

A century ago, the power imbalance between corporations and workers looked like Jabba the Hutt commanding one end of a seesaw and Yoda clinging to the other. By the 1930s, workers fumed about this inequity and labor unrest was rampant. In 1935, Congress passed the National Labor Relations Act (NLRA) encouraging collective bargaining and giving a little weight to the workers’ end of that seesaw.

For several decades, workers organized and secured gains in pay and benefits. By the 1960s, a third of the U.S. workforce was unionized. Because organized workers had the power to win labor agreements calling for better wages, income inequality declined significantly from its peak in 1929. Thirty years after the NLRA passed, CEOs earned about 20 times the pay of average workers.

Since the day the NLRA took effect, though, corporations lobbied to recover the small measure of power Congress gave workers. Congress, courts and too many state legislatures complied with corporate demands, handing them more muscle in their dealings with workers.

As a result, now only 11 percent of U.S. workers are represented by labor unions, about the same portion as before the NLRA passed. The number of strikes in a given year is down to a sixth of what it was just two decades ago. Income inequality is back to 1929 levels. CEOs now pull down nearly 300 times what workers get.

ATI is an example. It locked out workers to force them to accept massive benefit cuts. Just one year ago, however, it handed its top management team raises of up to 70 percent, so that the top five executives pulled down more than $19 million.

Between 1978 and 2013, corporations increased compensation for their CEOs by 937 percent, while raising worker pay a paltry 10.2 percent.

The situation worsened for workers recently. A study by the National Employment Law Project released last week found that considering inflation, median worker wages actually fell by 4 percent between 2009 and 2014.

This occurred even while worker productivity increased. Another report released last week, this one by the Economic Policy Institute, shows that the benefits of better productivity have nearly all gone to corporations, shareholders and top executives. Workers produced more and got less.  Instead of investing in workers, research and development, corporations are increasingly spending virtually all profits on stock buybacks, a practice that increases CEO compensation.

Corporations are using lockouts to try to take even more from workers. That’s what the Minnesota company American Crystal Sugar did. It was earning record profits, yet demanded concessions from workers. When the 1,300 members of the Bakery, Confectionery, Tobacco Workers and Grain Millers Union said they wanted a fair share of the wealth that their labor had created, the company locked them out on Aug. 1, 2011.

American Crystal Sugar contracted Strom Engineering to find replacement workers. That’s the same company ATI hired in an attempt replace its hardworking, highly-skilled Steelworkers. American Crystal Sugar paid the inexperienced replacement workers more than it did its veteran workers – just as ATI is doing.

They’re willing to do that because their goal is eventually to kill the union, just as robber baron Andrew Carnegie and his henchman Henry Clay Frick did in 1892 when they locked workers out of the Homestead Steel Works.

That lockout cost the lives of six steelworkers and at least four Frick-hired Pinkerton guards. But Frick and Carnegie didn’t care about that. In the end, with the help of troops sent by the state, they got what they wanted – the ability to impose wage cuts and hazardous working conditions with no threat of pushback from organized workers.

In Minnesota, after 22 months locked out, a slim majority of Bakery, Confectionery, Tobacco Workers and Grain Millers Union members voted to accept the concessions American Crystal Sugar demanded. That seemed to give the company what it wanted – the ability  to more easily stuff into the fists of executives all the sweet profits produced by the hands of labor. But the Bakery, Confectionery, Tobacco Workers and Grain Millers Union is fighting back to protect its members.

Labor is not down for the count. Far from it. Check out the thousands of Steelworkers who rallied in Pittsburgh, Chicago and Burns Harbor last week, demanding fair contracts from ATI, U.S. Steel and ArcelorMittal. Check out the success of the Fight for Fifteen movement, strongly supported by the Service Employees International Union and other labor groups. Check out the polls showing surging support for labor unions.

Larry Curry, 61, drove from Maple Heights, Ohio, to Pittsburgh to join the Steelworkers’ rally last week. The retiree from ArcelorMittal said he was making a stand. He explained, “The corporations are getting greedier and greedier. They want to give us peanuts. If we continue like this, with them cutting everything, we can’t take care of our families.”

Carl LeDonne, 48, a Teamster, joined the Steelworker rally because he felt he had to defend unions against the current corporate assault on labor. “We can’t give away what my dad’s generation fought and died for,” he said as he marched on Grant Street. “They are coming after all of us. Today it is the Steelworkers under attack, tomorrow it is my union. They want to destroy all unions and force people to work for $2 an hour, 80 hours a week, like a Third World country.”

Eric Martin, 45, of Fombell, a member of the International Union of Operating Engineers, marched in the rally because he believes the ATI lockout specifically, and lockouts in general, are attacks on workers. “Corporations are trying to break anyone who they think is standing in their way. I am standing with my brothers in this struggle,” he said.

As the rally began at the United  Steelworkers (USW) International Headquarters on the Boulevard of the Allies in Pittsburgh, David McCall, who is Director of USW District 1, held aloft 7-year-old Marlee Grinage, daughter of Steelworker Jaimee Grinage. “This is what this fight is all about,” McCall said. “It is about a decent future for our children!”

On this Labor Day, with the public at its back, organized labor demands an end to lockouts and to this new age of robber barons who impose them.

 

This blog originally appeared at OurFuture.org on September 8th, 2015. Reprinted with permission.

Leo W. Gerard, International President of the United Steelworkers (USW), took office in 2001 after the retirement of former president George Becker.


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Memphis MLK Day Actions to Support Locked-Out Kellogg’s Workers

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Image: Mike HallMore than 220 workers who have been locked out of their jobs at a Kellogg’s Memphis, Tenn., plant since October will be honored and supported as part of Monday’s Martin Luther King Jr. Day actions in Memphis.

Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) President David Durkee will march in the morning parade with a large group of locked-out BCTGM Kellogg workers from Memphis. Durkee also will be a featured speaker at an afternoon ceremony sponsored by the Southern Christian Leadership Conference to commemorate King’s leadership, vision and beliefs.

Find the day’s schedule and more information here and if you’re going to be in Memphis, click here to RSVP to this event on Facebook.

The BCTGM Local 252G members who make Frosted Flakes®, Froot Loops® and other breakfast favorites were locked out as part of the drive by the $14 billion company to replace steady, middle-class, full-time jobs with casual part-time employees who would make significantly lower wages and substandard benefits.

The workers have received support from unions around the nation and the world.

This article was originally printed on AFL-CIO on January 17, 2014.  Reprinted with permission.

About the Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journaland managing editor of the Seafarers Log.  He came to the AFL- CIO in 1989 and has written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety.


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AFL-CIO: NFL Lockout Would Hurt Communities

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Image: James ParksThe Minnesota Vikings and the New Orleans Saints kicked off the NFL season in a show of solidarity Thursday night and the AFL-CIO has taken the field in the players’ behalf. In a letter released today, the AFL-CIO’s top leaders warned NFL team owners that locking-out players next season could create significant job losses off the field and cause a “spiraling impact on communities.”

In individual letters to each NFL team owner, AFL-CIO President Richard Trumka, AFL-CIO Secretary-Treasurer Liz Schuler and AFL-CIO Executive Vice President Arlene Holt Baker said football generates hundreds of thousands of jobs in stadiums and in the cities. They said a conservative estimate is that a lockout would cost thousands of jobs and cause more than $140 million in lost revenue in each NFL city.

We strongly urge you to think about the stadium workers, hotel and restaurant workers, and thousands of other working people who support [your team] as dedicated employees and fans.

The owners terminated the collective bargaining agreement with the NFL Players Association (NFLPA) a year early, claiming they were losing money. But like other employers, they refused to let the players’ union see the books that showed their financial condition.

In negotiations that have lasted more than a year, the owners continue to threaten a lockout and make demands for more work for less pay. Besides that, there is no guaranteed health care for players who are injured and players must play for three seasons before they are eligible for only five years of post-career health care.

This is significant because an NFL player’s career lasts, on average, between three and four years because of the physical toll on their bodies. A study commissioned by the NFL found that Alzheimer’s disease or similar memory-related diseases appear to have been diagnosed in the league’s former players far more often than in the national population—including a rate of 19 times the normal rate for men ages 30 through 49. The researchers found that 6.1 percent of former NFL players age 50 and above reported that they had received a dementia-related diagnosis, five times higher than the national average.

In the letters, the AFL-CIO officers said they will work with the NFLPA to let local elected officials in team cities and members of Congress know just how much a lockout would cost their cities. And, the officers said, where appropriate, they would call for hearings on the monies that teams got from taxpayers and the effect of the team’s non-profit status on tax revenues.

This article was originally posted on AFL-CIO NOW Blog.

About the Author: James Parks had his first encounter with unions at Gannett’s newspaper in Cincinnati when his colleagues in the newsroom tried to organize a unit of The Newspaper Guild. He is a journalist by trade, and worked for newspapers in five different states before joining the AFL-CIO staff in 1990. His proudest career moment, though, was when he served, along with other union members and staff, as an official observer for South Africa’s first multiracial elections. Author photo by Joe Kekeris


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