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Article by Corporate Counselor: Managing Security Risks During Labor Disputes

September 17th, 2015

Steve10

Managing Security Risks During Labor Disputes

By: Peter Martin

September 2015

Every company with union workers faces the risk of a labor dispute. Identifying any business risks and then managing them is a priority for executive decision makers who must ensure that the company delivers its promises to stockholders, customers, and employees. The process is well defined in business terms:

• Risk identification, including assessing and tracking existing risks and identifying new ones;

• Risk assessment, including charting probability and consequences;

• Risk prioritization, including decisions to accept, avoid, control, transfer or monitor the risk; and

• Risk mitigation, including planning and implementing strategies for handling medium- to high- risk events.

When this risk involves labor disputes, the stakes are high. The potential for disruption of operations, lost customers, and damage to the corporate brand cannot be overlooked. Without a well-defined strategy on how the company will function during a labor dispute, the event can result in business disruptions that threaten to shut down daily operations, potentially forever.

Preparing an Operating Plan

A company with a union contract that is about to expire will plan for negotiations, but executives who do not expect or plan for problems (or blindly accept risk) weaken their bargaining position. When a company employs unionized workers, its risk-mitigation analysis should take into account the concept of foreseeability: knowing whether the negotiations will involve concessionary agreements on potentially contentious topics, whether language issues or economic factors. But even if the probability of highly antagonistic bargaining is low, the decision not to be prepared is itself a recipe for disaster. If something goes awry and there is no strategy, the business impact can be overwhelming.

A proactive strategy for dealing with potential labor disputes is needed to mitigate the risk to the organization from a business perspective as well as a legal standpoint. From the latter perspective, the company may be allowed to lock out employees, for example. But that action could be a significant risk from a business standpoint; the company may be unable to hire replacement workers to maintain operations, or skittish clients or customers may decide to do business elsewhere.

The operating plan, then, must be based on a business decision that identifies what level of risk the company is willing to accept. The decision can be facilitated by a risk matrix that weighs scenarios on a scale of high risk/high probability, and low risk/ low probability as well as cost versus time. Once this matrix is fleshed out, the decision-makers can decide what level of risk they are willing to assume from both a business and legal standpoint. That decision will then determine the measures the company either will or will not put in place.

Considerations Before A Labor Dispute

Community Perceptions

Recently, a healthcare facility on the West Coast endured a three-day strike, which resulted in the need to hire more than 70 security personnel and a public relations firm to manage the situation. The effect on patients and healthcare workers required the facility to adjust its services. While the employees returned to work and continued to negotiate, the healthcare facility had to mitigate negative perceptions from the community.

Continuation of Service

The strategy for managing a labor dispute should include operating plans for continuing to service customers needing products or services, as well as a security plan for protecting assets and those individuals continuing operations during the event. By sharing that strategy with stakeholders, it helps them understand that the company is preparing a professional response to a difficult challenge.

Part and parcel of such a plan is identifying ways to move raw materials onto the premises or finished goods from the facility through its supply chain to customers. Experience shows that customers lost during a labor strike are very difficult to win back. Whether the executive team plans to continue operations at 50%, 80% or 100%, they need to make the right choice on how they are going to fulfill customer needs.

Picket Lines

Also during a labor dispute, suppliers or other third parties may have issues crossing a picket line. Communicating in advance is the best way to plan for this potential. “Early communication with your suppliers’ legal representative to lay out the landscape, address issues and formulate a plan can help minimize potential disruption to your supply chain,” says Ruthie Goodboe, Shareholder (Pittsburgh/Detroit Metro), Ogletree, Deakins, Nash, Smoak & Steward, P.C. “The National Labor Relations Act (the Act) provides certain protections against secondary boycotts designed to keep neutral employees from being dragged into a labor dispute. It is important for all parties to understand both the protections and limitations under the Act in these situations.”

Actions to Keep The Business Open

Define key positions that would need to be filled by another resource to meet the production schedule. Plans should include identifying which members of the management team will be on the premises during the strike. It is also important to protect company property or trade secrets that could be at risk from striking workers, sympathetic managers, or opportunists during a labor dispute. However, “in light of recent decisions from the National Labor Relations Board (NLRB) on policies and practices relating to issues such as confidentiality, access to property, and the definition of protected concerted activities, employers would be wise to review these trends when developing their labor dispute strategies,” says Goodboe.

Recognize that during a labor dispute, some members of management may sympathize with or support employees in their actions. Based on that knowledge, the executive team may decide to limit access to certain areas of the property or to sensitive information, strategies and documents. Building a team of managers who are strong company supporters long before a labor dispute will help mitigate the potential for internal losses. That team should meet in advance to set clear job responsibilities and establish lines of authority and communication.

Parameters must also be set on how visitors will be handled, how individuals who are withholding their services or are picketing will be treated, and how employees who are working in the facility will be accommodated. An awareness program for this group of employees will help them understand what to expect, especially if they have not been involved in a labor dispute before. This training not only helps the employees, but it also underscores senior management’s commitment to their well-being by helping them to stay out of harm’s way or advising them to avoid a situation that could escalate as a result of their actions.

Security

It is imperative that onsite security officers be trained to understand the rights of all parties involved. “There are limits on what security officers can do in terms of monitoring activities on the strike line,” says Goodboe. “The use of videotaping, while useful in collecting what could be necessary evidence of misconduct, implicates claims of unlawful surveillance.” Security officers do not need to become experts on the National Labor Relations Act or local statutes, but they should be briefed on what can and cannot be done by a security officer to limit the organization’s overall exposure.

Once again, reminds Goodboe, “the company must take into account the NLRB’s recent rulings that expand protection for conduct not obviously viewed as protected. This is especially important in determining what, if any, disciplinary action should be taken for misconduct on the strike line.” Procedures should be put in place so everyone knows how information on potential misconduct will be collected, preserved, and communicated since often decisions as to the company’s response may be deferred until after the labor dispute.

Legal Options

In anticipation of potential strike issues, part of a well-crafted response to any labor dispute is reviewing the legal options available. For example, as part of the response plan, an employer’s legal team may want to prepare fill-in-the-blank pleadings in case it is necessary to seek injunctive relief quickly, says Goodboe. Court ready evidence that can be used to support such action is extremely critical. The security staff must work closely with the legal team to keep information flowing. Of prime importance are reports written when an activity occurs, and documentation of illegal picketing. When physical evidence is collected, both security and legal personnel must make sure that the chain of custody is protected so it is admissible in court.

Actions During a Labor Dispute

Once a strike occurs, the security part of the proactive strategy will shift into action. Transportation services should be available for managers working in the facility as well as those who are hired temporarily and must cross the picket line. Extra protection for executives at work and at home should be offered, especially if the negotiations become contentious.

Management has definite responsibilities and tasks to perform during the strike. Any investigation should not be deceptive or covert, but should take advantage of security equipment already on site. Many may have the urge to monitor social media for useful information during a strike, but the law limits how that monitoring can occur and what can be done with information discovered. Care must be taken not to violate the rights of striking workers. Otherwise an employer may find itself defending unfair labor practice charges long after the dispute is over.

After the Dispute

A petrochemical company in the Southwest experienced a strike that lasted seven months. The company spent resources on security and logistical support services, and its production capabilities were also affected. While the final agreement was not much different than the original offer, the company experienced reduced production, reduced revenue, and strained relations with the hourly workforce that required repair.

Once contract negotiations are settled, management can take certain steps to start putting the issues behind them and to help ensure that they don’t recur. The executive team must also work to restore the relationship and trust between the employees and the company. Experts on this matter feel that any lingering bitterness between the parties should be resolved quickly and advise that focusing on business usually gets everyone back to normal.

If questions of employee misconduct during the labor dispute arise, the executive staff should review their original bargaining plan and goals before making any decision on whether or to what extent such behavior will be addressed. The company will want to review all options and evidence depending on the type and severity of the misconduct. In the case of minor infractions, management may feel no action is warranted or it may want to look for ways to reconcile the behavior in conjunction with the union. For more egregious acts, an employer may feel disciplinary action is required. Either course of action must be weighed against the current legal environment as well as the post-bargaining climate.

Employers should consider two questions: What are the expectations for the business are going forward, and what is the most beneficial path the company can to take to get there? Whichever course of action is chosen, coordinating the process with the human resources, security, and legal departments will better position the company to either move forward under the new contract or appropriately defend the necessity of disciplinary action.

Of course, training is the key to infusing appropriate management techniques and conflict resolution strategies into any corporate culture regardless of the existence of a labor dispute. Without a doubt, risk mitigation strategies are extremely important when working to avoid labor conflict. Executive management must acknowledge that risks will occur and that plans for mitigation are needed up front.

Additionally, in post-incident evaluations, the management team must realize that a labor dispute is not necessarily a defeat. It can simply be a business interruption that must be anticipated and dealt with appropriately. By identifying risk cues and triggers, the executive team can forestall labor incidents that can lead to work stoppages and can analyze mitigation options. Looking at an event through realistic hindsight, management can turn a seemingly negative event into an opportunity to improve performance, expand capacity, and become more flexible.

When viewed through this prism, the risk of a labor dispute will be valuable learning experience.

Peter Martin is the CEO of AFIMAC Global. He is an international security practitioner, having worked extensively in both the North American and overseas markets. Beyond his experience in the international security industry, he is a subjectmatter expert in crisis management, use of force, threat/risk assessment and personal and physical security measures. He can be reached at pmartin@afimacglobal.com

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