The Demerger of UNITE HERE: Worse than a Messy Divorce?

paul-garver-edited by Paul Garver

The break-up of the marriage of convenience between UNITE and HERE is over power within the relationship, over money and over custody (jurisdiction).

The initial 2004 merger between a union facing decline in its garment sector but owning the Amalgamated Bank (UNITE), with a union with growing membership prospects but weak financial resources (HERE) made tactical sense at the time, but always posed a considerable risk of incompatibility.

The merger of such diverse organizations required a delicately balanced pre-nuptial arrangement between co-presidents Bruce Raynor of UNITE and John Wilhelm of HERE. The two organizations remained separate and distinct, while any decision affecting all of UNITE HERE required the agreement of both.

Not surprisingly quarrels began over money. Fewer members were organized at a greater financial cost than initially hoped for. Raynor thought that Wilhelm was frittering away resources on long-term organizing rather than picking low-hanging fruit; Wilhelm criticized Raynor’s willingness to cut deals with employers at the expense of standards. As the tensions grew, both factions began manuevering for power. UNITE-controlled Joint Boards in Detroit and Phoenix fired local leaders loyal to HERE. In December 2008 the pro-HERE majority on the General Executive Board voted for changes opposed by Raynor. UNITE officers sued in U.S. District Court to reverse the GEB decisions; HERE officers filed a complaint before the Public Review Board of UNITE HERE that Raynor was violating the Union’s Ethical Practices Code and the LMRDA.

The public spat was disheartening. Both co-leaders Bruce Raynor from the UNITE side and John Wilhelm from HERE had deserved positive reputations as organizers. Whether either or both of them were to blame for upsetting the delicate and tenuous balance that held together their co-dominion, the growing civil war within UNITE HERE threatened wider union goals such as the passage of the EFCA.

Many in the labor movement hoped that the escalating conflict represented mere pre-divorce posturing to get more favorable financial and organizational settlement terms. Presidents Gerard of the USWA and Gettelfinger of the UAW wrote a letter to Raynor and Wilhelm recommending a negotiated divorce settlement, stating in part: “You represent two proud unions who attempted to come together as one, and now find yourselves in a serious conflict which threatens your own institutions resulting in damage to the entire movement. Your initial efforts were commendable, but your approaches are radically different and even the most disinterested observer can see that the cultures both unions brought to the merger simply do not mesh. This is not an internal dispute resulting from factionalism within a single union, but is a merger of two unions that has clearly not met the mission stated at your founding meeting. No matter how well intentioned, from our perspective, when a merger doesn’t work it is in the best interests of the membership to break it up. The continuing public escalation of your internal battle, when there are reasonable alternatives, threatens members’ interests and reforms that would benefit the entire labor movement.”

Two major complications make a settlement difficult. The first is the battle for control of the Amalgamated Bank. As chairman of Amalgamated’s Board, Raynor proposed changes in the bank’s by-laws and had Wilhelm voted off the Board; UNITE HERE’s GEB agreed to fund a lawsuit to reverse the bylaw changes. With assets of some $4.5 billion, the Amalgamated Bank (originally the creation of UNITE predecessor union ACTWU) funded $13 million of UNITE HERE’s $49 million organizing budget in 2007. However it holds $212 million in toxic home equity loans bought from Countrywide Financial, had a negative return on assets in 2008, has applied for TARP funds, and is perhaps a tainted prize for a power struggle.

The second complication is the entry of SEIU as a suitor (raider?). A long-term ally of Bruce Raynor in the establishment of Change to Win and UNITE’s partner in the “growth agreements” with transnational catering companies Compass and Sodexho, Andy Stern offered a home within SEIU for both factions. HERE politely demured; Raynor accepted. At a Philadelphia convention in March roughly one-third of the former membership of UNITE HERE voted to disaffiliate from UNITE HERE, and to establish a close relationship with the SEIU, whose leaders were the key speakers at the convention. Contrasting statements on the Philadelphia Convention from HERE and from UNITE have already been published on this blog.

The banner of “Service Workers United” linking SEIU and UNITE HERE had been in place for years. Now “Workers United”, as an SEIU conference, may become the vehicle for challenging HERE in its core hotel, gaming, food service and catering jurisdictions. Although HERE has announced its intention to leave CTW and to rejoin the AFL-CIO, this may not prove of much assistance, as the UAW and other AFL-CIO unions have formally joined with SEIU to an alliance to organize casinos.

An aggressive long-term “custody” battle over these growing union jurisdictions may prove to be a lasting fruit of this divorce. Another is the bitter taste of negative campaigning. Wilhelm has complained of a campaign of robocalls, mudslinging mailers and intervention of SEIU staff members (orchestrated by political consultant Steve Rosenthal, another long-time Stern ally) to convince HERE members to quit the union.

It may seem ironic that SEIU is likely to absorb tens of thousands of apparel workers from the former UNITE. SEIU once had an Industrial Conference that languished on the vine from lack of resources and attention. Morever it was SEIU ideologue Stephen Lerner who in the past most eloquently argued the need for unions to maintain sectoral concentration and avoid the perils of diffuse “general unionism.” Perhaps SEIU’s acquisition of the UNITE rump (and perhaps of the Amalgamated Bank) is intended to offset the organizational and financial hemorraging from its protracted trench warfare against the NUHW in California’s health workers sector.

5 Responses

  1. Thanks for the post explaining this.
    it looks to me as if SEIU, and UNITE/HERE have traded away most of the possibilities for EFChoice.
    A weakened, divided, and quareling labor movement means Congresspeople will be free to do what their corporate funders want them to do. The primary force keeping Congress people on our side was a respect for power and unity; which now seems gone.
    Apparently the stakes internal to SEIU and CTW were worth it in their eyes.
    Duane Campbell

  2. The organizing dispute you speak of has it’s roots in UNITE’s nasty habit of signing what amount to sweetheart contracts – with “Service Workers United” being only one of the larger and more grotesque examples.

    Service Workers United was, basically, a company union, the product of a backroom deal between UNITE and Sodexo Mariott, Compass Group and Aramark, where certain select cafeteria workers (30,000 out of 200,000) – hand picked by the bosses – were allowed to join SWU.

    The union had no business agents, no organizers, no shop stewards, and only one physical office – in New York City’s McGraw Hill Building – even though their members were scattered across the country.

    If you had a problem at work, you were directed to call an 800 number!

    Also, there were areas, like Chicago, where SWU members made less than HERE cafeteria workers.

    Basically, this is the type of “low wage unionism” that the SEIU is infamous for.

    HERE has it’s problems, but it’s a far better union than UNITE (or UNITE’s sweatshop predecessor, the notorious low wage sweetheart contract signing ILGWU!)

    Raynor and Stern will go along well together – as they both practice undemocratic pro corporate minimum wage “unionism”!

  3. SEIU’s idea of industrial unionism:

    1. Create mega locals that span multiple states with leaders appointed or otherwise loyal to stern and stern alone, destroy any local with leaders who are not.

    2. Childcare is part of the the Healthcare Industry in Illinois and Indiana, but homecare and nursing homes in California are not, they’re part of the totally seperate and distinct Long Term Care industry.

    3. A company union for Sodexho, Compass and Aramark workers, where they often work side by side workers in other SEIU locals in hopsitals, universities and commercial real estate. Three guesses which locals have better contracts and stonger unions, the first two don’t count.

    4. Differing to the craft union CNA in healthcare in order to try to avoid facing the consequences of 1, 2 and 3 in California.

    5. Just keep adding to our “core industries” whenever its convenient. After years of restructuring supposedly to focus on buildning services, healthcare and public sector workers suddenly SEIU is organizing bank tellers, hotels, laundries and gaming. Perhaps this is to cover up the failure to organize since splitting from the AFL.

    Industrial unionism is DEAD in SEIU. Hundreds of staff and hundreds of thousands of members in California have been forced out of SEIU for fighting for it. Long live company unionism.

  4. Thanks Paul, good write-up.

    What’s your source on the woes of the Amalgamated Bank?

  5. […] has not yet been finalized. The battle over money and jurisdiction, which I described in a previous posting on this blog, rages on unabated. Settlement talks mediated by UFCW President Joe Hansen reached an impasse […]

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: