Do Unions Help (or Hinder) Social Enterprise?

Written by Rolfe Larson | Edited by Rory Hart
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    A lady pointing to the analysis of a business

    As the social enterprise movement grows, enters new markets, and works with new employees, it’s discovering new partners … and new adversaries. One of those adversaries, according to some practitioners, can be unions. Unions of course exist to balance the excesses of power of management, and seek to protect the jobs and increase the wages of their members. Sometimes that can put them into conflict with a social enterprise, whose purpose in launching a new venture might be to provide training and jobs to the unskilled or who are recovering from drug abuse, incarceration or homelessness.

    For example, there have been situations where unions have initiated legal challenges to a successful, growing social enterprise, which has demonstrated impact in training and employing those individuals. And these individuals would not have been hired into a unionized workforce because of those employment barriers. Nevertheless, because of concerns of loss of jobs of their members due to this new competitor, unions have filed complaints with the National Labor Relations Board, costing the social enterprise huge legal fees and reducing its ability to create jobs for those at the bottom of the economic ladder.

    So are unions a problem for the social enterprise movement?

    The ~7500 subscriber global social enterprise listserv I manage, the npEnterprise Forum, recently discussed this topic. Some of the comments provide insight into this question. One person noted that, after a recent merger, their staff who provide training to transitional jobs participants work under a collective bargaining agreement. The manager reported that going from pre-union to union affiliation “hasn’t been too noticeable.”

    But other commenters told a different story. One person wrote that: “After working in private sector employee relations for many years and now several years in business development for a social enterprise, I have seen a few cases where a union could be appropriate and helpful when management performs poorly. In the not for profit SE — with a mission — there should never be a need to pay for third party intervention. If there is such a need, then the mission is wrong or not being achieved and the SE should be dissolved.”

    Strong words, but that comment was echoed by another practitioner with decades of experience operating a social enterprise.

    “The union, by default and heritage, serves as a 3rd party whose purpose is to protect workers from the abuses and self-interest of management. It must first convince the worker that this tension exists, however, because it’s going to charge the worker monthly for the privilege of having his/her interests protected. The union’s business model is entirely dependent upon making the the threat of abuse and mistreatment very real. It’s the only way to get your foot in the door and thereafter to sustain cash flow. I’m not naïve about potential abuses even within a social enterprise, but when the ultimate success of your business depends on the careful balancing of profits and people, market and mission, there are inherent checks and balances that make 3rd party engagement both unnecessary and potentially problematic.”

    What do you think?

    Rolfe Larson