Sectoral Bargaining: Labor’s Pathway to Power?

Top: Amazon Labor Union leader Christian Smalls at May Day 2021 rally. Photo credit: Alex Casconne

Bottom: Union members at the vote count; Starbucks workers in Falls Church, Virginia won 30-2. Photo credit: Richard Bensinger

The coronavirus pandemic, the resulting economic turmoil, and a tight labor market have laid the foundation for the current upsurge in labor organizing and workplace actions. This upsurge includes organizing campaigns around the country at over 250 Starbucks cafes, the nation’s first successful union election at an Amazon warehouse facility, successful organizing drives at  colleges and universities nationwide, and the list goes on. Democrats, to the  great consternation of the right and the business community, managed to inject an “employer neutrality” clause into the Coronavirus Aid, Relief, and Economic Security (CARES) Act. he clause requires corporations with more than five hundred employees to remain neutral during a union drive.[1] It only applies to corporations that participate in this low-interest loan program and therefore may have limited impact. Although employer neutrality has long been a centerpiece of AFL-CIO efforts at labor law reform, it has been a non-starter since it was first proposed during the Carter administration in 1977.

Nevertheless, with sufficient organizing and ferment, the present moment may hold the possibility for paradigm shifting labor relations provisions on the national and state level. Already President Biden has repeatedly used the bully pulpit of his office in support of the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) union Kellogg’s strikers, urging a “yes” vote during the Bessemer Amazon union election and hosting a White House meeting with Amazon and Starbucks workers. In another sign of the administration’s support for organized labor, Biden and Labor Secretary Martin Walsh proposed sweeping changes to regulations on working conditions and organizing rights for hundreds of thousands of federal employees and government contractors. [2] Jennifer Abruzzo, whom Biden appointed as general counsel to the National Labor Relations Board (NLRB), stunned employers by issuing a memo deeming mandatory “captive audience” meetings to be unlawful. Given the widespread use by employers of these meetings to dissuade workers from voting for unionization, this posture holds great potential significance.

To consider how this may play out, history provides some useful examples of the positive interaction between politics and policy and mass labor organizing. The 1934 West Coast dockers/maritime strike took place a year ahead of the passage of the National Labor Relations Act (NLRA), which provided a legal framework to enterprise-level or workplace-based bargaining. But the earlier passage of the National Industrial Recovery Act (NIRA) signed into law by President Franklin D. Roosevelt (FDR) featured provisions giving workers the right to engage in concerted activity and bargain collectively over wages, hours, and conditions.[3] Although later invalidated by the Supreme Court in 1935, this law, with its sweeping industry regulations, was the product of social ferment and political will. Sensing that FDR had their back, passage of the NIRA gave courage and legitimacy to the 12,000 dockworkers who went on strike for eighty-four days on the West Coast.[4]

The assassination of two striking dockworkers led to the historic three-day general strike in San Francisco in July 1934. The strike was resolved by a National Longshoremen’s Board in October, mandating a single “coastwise” contract and a union-controlled hiring hall: two powerful sectoral features of International Longshore and Warehouse Union (ILWU) contracts that remain in effect to this day. The employers’ Pacific Maritime Association (PMA) made up of the giant stevedores and international shipping carriers still negotiates a “sectoral” agreement with the ILWU for all twenty-nine West Coast ports.5 The Juneteenth 2020 shutdown of West Coast ports in support of Black Lives Matter by the ILWU is a lasting demonstration of such sectoral power.

Two key features led to the ILWU’s success in sectoral bargaining:

• Rank-and-file union leaders engaged in intense workplace organizing, while their community allies did deep political and ideological base-building in working-class communities. The lessons
learned from both failures and small successes over many years led to the union’s eventual success in 1934.
• The political moment in which great masses of Americans were disillusioned with the old ways and ready to support new economic and social initiatives. “President Roosevelt Wants You to Join a Union” became much more than a slogan; it was the sentiment of the body politic.

Students of the Congress of Industrial Organizations (CIO) and labor struggles that led to other industry-wide or “sectoral bargaining” in the steel, auto, electrical, trucking, and rubber
industries can weave similar tales of workers organizing, striking, and garnering broad social and political support. The factors cited above which propelled the ILWU to victory are most certainly relevant to these other sectors.

Recently in New Labor Forum, former president of the Communications Workers of America Larry Cohen and law professor Veena Dubal engaged in an interesting debate about sectoral bargaining.[6] Cohen argues that labor needs to dramatically reverse the declining percentage of private-sector workers in unions and enable unions to bargain master contracts by industrial sector.[7] The logic is simple enough: sectoral bargaining reduces the vicious antiunion impetus of an employer that is facing an enterprise-based negotiation with its employees in a sea of non-union competition. Cohen takes inspiration from many European countries where sectoral bargaining has been the norm since World War II.

Dubal cautions against quick and easy deals that—in exchange for sectoral representation —create a second class of workers, unprotected by traditional labor laws and wage and hour protections. Cohen acknowledges Dubal’s point, maintaining that any sectoral deal must be worker-led and organized and not a “sweetheart” agreement.

The Juneteenth 2020 shutdown of West Coast ports in support of Black Lives Matter by the ILWU is a lasting demonstration of [dockworker] . . . sectoral power.

Both Cohen and Dubal agree that while sectoral bargaining is an excellent “idea,” it risks an opportunistic approach to labor revitalization. In a VOX article entitled “Europe could have the secret to saving America’s unions,” journalist Dylan Matthews describes the woeful condition of the American labor movement and compares it with a more vibrant trade union situation in Europe. Matthews points to the unwillingness of U.S. private-sector unionized employers to accept generous union contracts with rights and benefits when they are faced with non-union competitors who are not saddled with the same conditions. He then points to the European solution of sectoral bargaining by declaring,

But workers in most European countries, and some other rich countries outside the U.S., have figured out an ingenious way around this. Unions there bargain not at the company level but at the sector level, negotiating for all workers in an entire industry rather than just one company or workplace.[8]

As we shall see, sectoral bargaining is not just an “ingenious” idea but a product of long histories of political and economic—and in some cases—even liberation struggles!

The European numbers are indeed impressive. In 2015, an average of 60 percent of the workers in the countries in the European Union were covered by collective bargaining agreements. The highest percentage is in France at 98 percent although only 7 to 8 percent of French workers belong to unions.[9] The low end is about 10 percent in Greece where nearly all bargaining has devolved to the enterprise level.[10] There are particular features to each country’s collective bargaining system, but a cursory look at the experience in both Germany and Italy shows how it reflects the time, place, and condition of social relations—and the intensity of class conflict.[11]

. . . [S]ectoral bargaining is . . . a product of long histories of political and economic—and in some cases—even liberation struggles!

In 1918 Germany, the specter of the Bolshevik and other socialist revolutions led management to the altar of sectoral labor agreements. The Stinnes–Legien Agreement of November 15, 1918, between Germany’s major industrial associations and moderate unions produced “labor peace” and a quasi-level playing field among competitive industrialists. And by cooperating (or giving the appearance of cooperating) with more accommodating union leaders, German cartels outflanked the left political parties and squelched revolutionary uprisings.[12]

In 1951, West German Chancellor Konrad Adenauer and Hans Bockler, head of the German Trade Union Confederation Deutscher Gewerkschaftsbund (DGB), performed a similar role. Fearing the left political parties emboldened by Stalin’s divisions just east of the Elbe River, the DGB sought to avoid strikes and maximize productivity and—while the export market lasted—pay workers within the sectoral agreement circle(s) decent wages and benefits.[13] The echoes of their brokered deal continue to the present with the largest German labor union IG Metall’s contemporary sectoral agreements.

Moving south, in the Italian case, not only did proponents of sectoral bargaining have to organize workers and their communities, they also had to engage in armed struggle for liberation.
The Italian Communist Party’s leadership of the resistance meant that its affiliated labor federation, the Confederazione Generale Italiana dei Lavoratori (CGIL), was in a good position to achieve sectoral bargaining after the fall of fascism. While the Italian Constitution of 1946 called for the registration of unions as exclusive representatives to bargain for all employees, the provision was not enforced because a bill regulating registration was never adopted. Instead, it is only because of the societal power exerted by the three main Italian Federations (CGIL, CISL, and UIL) that bargaining exists for national agreements for thirteen  separate industrial sectors with the employer’s association, the Confindustria.[14]

During the onset of the Covid crisis in Italy, the three federations threatened a nationwide strike over the impact of the virus on workers and the designation of “essential” workers. Tripartite negotiations were immediately convened for eighteen hours by videoconference between the unions, employers, and the government. They hammered out an agreement. This arrangement was not enshrined in law but was a direct result of the union’s power. This power was recently tested by Fiat/Chrysler’s unsuccessful attempt to institute enterprise bargaining.[15]

The European experience shows that sectoral bargaining and other social democratic reforms reflect the balance of class forces and their strong history of class conflict. The dire straits of U.S. labor, particularly in the private sector where the percentage of represented workers is below 7 percent, necessitate a sense of urgency about reversing this falling “density.”

In January 2020, the Harvard Labor Worklife Program issued a comprehensive “Clean Slate” proposal calling for the total revamping of U.S. labor law to bolster union and worker power. The proposal provides for  European-style sectoral bargaining, “minority” or pre-majority unionism, and simplified representation procedures. The report also calls for worker representation on corporate boards of directors to provide more purview over management decisions that affect their lives.[16]

Most of the Clean Slate proposals are features of the western European Social Democratic postwar landscape brought to their societies through liberation struggles and intense class conflict. The report is breathtaking in its sweep and comprehensive character: certainly a wish list that no labor progressive could argue with. And the authors make very clear that it is not a road map for how to get there, just an elaboration of what is needed to correct the class imbalance in the United States.

The name of the report, “Clean Slate,” implies sweeping clean the existing labor relations system. But how is a new regime to be won if not birthed out of the old? In our view, it will be the existing organizations of the working class—those old dusty private-sector, enterprise-based unions and their public-sector counterparts—that must inevitably play a major role in any conceivable revamping of labor law. This was true in the 1930s when many of the existing AFL-affiliated unions, United Mine Workers, International Ladies’ Garment Workers’ Union, Amalgamated Clothing Workers of America, and others played a crucial role in bankrolling and institutionalizing the new industrial unions.[17]

In our view, it will be the existing organizations of the working class . . . that must inevitably play a major role in any conceivable revamping of labor law.

A major part of enacting Clean Slate’s proposed reforms would involve the members and leaders of the most powerful organizations that working people have today—their existing trade unions. Signs of life in organizing largescale logistics companies like Amazon, when coupled with the power of unions such as the Teamsters or the United Food and Commercial Workers, could realize true sectoral bargaining in online retailing.

Despite the unfortunate title for their report, the authors acknowledge that such sweeping and ambitious reforms will only take place with the active agency of workers and their unions. The authors also heralded the “Red for Ed” teachers’ movement and the victorious chainwide Marriot hotel workers’ strike as signs of rebirth and inspiration going forward.

Since its publication, the upsurge in strikes has continued with inspiring victories at John Deere and Nabisco by graduate student workers and the fast-spreading NLRB election petitions at hundreds of Starbucks’ cafes and the recent victory of the Amazon Labor Union (ALU) at a Staten Island fulfillment center. These grassroots efforts and successes are the type of activity that can create a major shift in class relations and  engender the possibility of sectoral bargaining.

We began this article by pointing to moments in history when the confluence of political ferment and smart organizing can bring great change—even the possibility of winning sectoral bargaining. The robust electoral politics in 2020 offered the opportunity to showcase the sectoral organizing and bargaining “idea” in the Democratic primaries and the general election. As the candidates sought labor’s support, it pressured them to articulate their vision for labor law reform. The Service Employees International Union (SEIU) successfully did this at its October 2019 “Unions for All” conference in Los Angeles where presidential candidates Bernie Sanders and Elizabeth Warren offered their full support for sectoral bargaining.[18]

Post-pandemic, a welcome discussion is  occurring about how to raise the living standards of workers in whole sectors of the economy, particularly in those deemed “essential” in the Covid-19 crisis. The Harvard “Clean Slate” proposal aligns well with these large ambitions.

In the current political environment, labor unions might be more successful initially at the state and local level to pioneer changes in law and policy that can lead to sectoral bargaining. One proponent of a state-based sectoral approach is University of Michigan law professor Kate Andrias who points out:

Several states, including California and New York, already have tripartite commissions vested with the power to set wages and other standards. These commissions have existed for generations and have intermittently operated to bring labor and management together under state administrative supervision to set standards on an industry-by-industry basis.[19]

Andrias cites then Governor Cuomo’s use of New York’s Wage Board to set higher standards for fast-food workers in 2015 in response to the SEIU’s highly visible “Fight for Fifteen.” Andrias further documents some seventy wage board settlements at the state level that were used by unions to establish many sectoral bargaining arrangements in industries in the United States
between 1938 and 1942. And the aforementioned settlement of the maritime strike on the West Coast in 1934 was also mandated by a federal Wage Board, which also included a sectorwide coastwise contract and union hiring hall.

In another promising sign, legislation was filed to regulate wages and safety conditions in California’s fast-food sector and in New York’s nail salon industry.[20]

In the current political environment, labor unions might be more successful initially at the state and local level to pioneer changes in law and policy that can lead to sectoral bargaining.

Sectoral bargaining is such a worthy goal, and with less than 7 percent density in the private sector, it is tempting for some to imagine expedient routes to resurgence based on labor- management cooperation schemes or regulatory jiu-jitsu. Should we achieve new forms of sectoral bargaining, it will be a reflection of working-class power, not an idea that will replace the difficult external and internal organizing of the labor movement and its committed cadres. There is no escaping the fundamentals of the long, arduous slog of organizing workers.

Yet, thinking big, creative imagination, and situational agility are necessary for a labor renaissance—and thankfully workers at Amazon, Starbucks, and many other companies are showing the way forward.

On April 1, 2022, against nearly impossible odds, the ALU, a new, independent union, won the first union election at the “JFK8,” Amazon’s Staten Island Fulfillment Center.[21] And since its first victory at two stores in Buffalo last December, Starbucks Workers United has now won union elections at over 200 stores—comprising over 4,400 employees—in over 30 states.

Prior to these NLRB-supervised certification elections, there was plenty of skepticism about both campaigns in the labor movement and among the pundits. To most experts, union campaigns at small cafes or at a giant warehouse with only a small organizing committee, no budget, and no experience—up against ferocious anti-union campaigns—were obviously doomed. Except they are winning! (See “High-Octane Organizing at Starbucks” by John Logan in this issue.)

What these winning union votes makes clear is that workers are self-organizing, and when it happens, the typical organizing tactics and strategies may not apply. We need to have an eclectic approach, recognizing that there will be many successes and failures in what will certainly be a long-term effort to build strong unions at Amazon and Starbucks.

These improbable victories support what some union organizers call the “metro strategy.”[22] Workers are winning at locations concentrated in metropolitan areas where there is generally broader support for unions. And victories in just a few cities with a pro-union environment seem to be having a huge ripple effect.

There is no escaping the fundamentals of the long, arduous slog of organizing workers.

Amazon and Starbucks will use every legal maneuver possible to avoid an obligation to bargain. But assuming the campaigns survive the legal obstacles to certification, all eyes will turn toward the process of negotiating first contracts. Hopefully, the new union members will recognize that their negotiations for one warehouse or a small percentage of cafes are taking place in a fishbowl: with all their coworkers and the entire labor movement watching! That environment necessitates breaking out of the traditional legal straitjacket and conducting bargaining as “theater”—heralding the cause of justice for the workers to their community, their customers, and the entire labor movement.

Fortunately for Amazon workers, the warehouse and delivery sector still has substantial working-class power. Dockworkers on both coasts continue to wield power at key strategic nodes of  International commerce and the U.S. railroad freight lines are all wall-to-wall union. And then there is the biggest and most important single-sector agreement: the Teamsters’ contract with United Parcel Service (UPS). The current contract, uniting some 340,000 Teamsters, will expire on August 1, 2023. Newly elected president Sean O’Brien and the International Union executive board are committed to waging a strong campaign to win major contract wage and language improvements. (See “Teamsters Confront Amazon: An Early Assessment” by Ellen Reese and Jake Alimahomed-Wilson in this issue.)

There can be no question that the scale of this agreement will also impact wages and working conditions for nearly one million U.S. Amazon workers as well as hundreds of thousands of workers at FedEx, the U.S. Postal Service, DHL, and many smaller outfits. That sectoral impact provides the Teamsters with a unique opportunity to elevate their bargaining from specifically UPS to the entire warehouse and delivery sector. If the union leadership embraces that approach, it could consider bringing workers from these companies to its negotiations with UPS, making the sectoral impact of its negotiations explicit.

The far bigger, and more important, challenge in 2023 will be for the Teamsters, along with a broader movement of other unions and allies, to devote substantial organizing resources beyond its UPS membership to build sector-wide unity among package and delivery workers. When hundreds of thousands of Teamsters at UPS are mobilized to fight—and possibly strike—for a good contract, the labor movement has a unique opportunity to inspire and motivate Amazon workers to take similar, parallel actions. By engaging workers at Amazon in the 2023 contract campaign, the entire sector will be put on notice that package and delivery workers are ready to fight for—and win—the good jobs our communities need.

Authors’ Note
The authors are grateful to Norbert Dall and Marco Biasi who contributed to our respective understanding of the German and Italian experience with sectoral bargaining, and Trent McDonald for comments on an earlier draft of this article.

1. Daily Labor Report, “Virus Loans to Come With Union Neutrality Pledge for Companies,” Bloomberg Law, March 26, 2020, available at https://news.bloomberglaw.com/daily-laborreport/
2. Eli Rosenberg, “White House Offers Blueprint for Union Growth as Labor Movement Struggles to Gain Ground,” The Washington Post, February 2, 2022, available at https://www.
3. https://www.ourdocuments.gov/print_friendly.php?flash=true&page=&doc=66&title=National+Industrial+Recovery+Act+%281933%29.
4. Rod Palmquist, “Labor’s Great War on the Seattle Waterfront Part 2—The Start of the Great 1934 Longshore Strike,” Waterfront Workers History Project, Harry Bridges Center for Labor Studies, University of Washington, available at https://depts.washington.edu/ dock/34strikehistory_part2.shtml.
5. International Longshore and Warehouse Union, “The ILWU Story,” available at https://www.ilwu.org/history/the-ilwu-story/.
6. “On the Contrary,” New Labor Forum, Winter 2022, available at https://newlaborforum.cuny.edu/2022/01/26/on-the-contrary-a-debate-onsectoral-bargaining/.
7. 1955 = 35 percent to today = 6.7 percent.
8. Emphasis added. Dylan Matthews, “Europe could have the secret to saving America’s unions,” VOX, April 17, 2017, available at https://www.vox.com/policy-and-politics/2017/4/17/15290674/
union-labor-movement-europe-bargaining-fight-15-ghent. For another optimistic perspective, see David Madland, “The Re-emergence of Sectoral Bargaining in the US, Britain, Australia and Canada,” OnLabor, April 22, 2021, available at https://onlabor.org/the-re-emergence-of-sectoralbargaining-in-the-us-britain-australia-and-canada/.
9. European labor relations are generally characterized by declining membership but continue “Coverage,” meaning broad representation of workers irrespective of their membership.
10. Lionel Fulton, “Worker representation in Europe,” 2015, Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at www.worker-participation.eu/National-Industrial-Relations.
11. “Map of European Industrial Relations,” available at https://www.worker-participation.eu/National-Industrial-Relations/Map-of-European-Industrial-Relations.
12. https://www.marxists.org/history/usa/pubs/tuel/03-%20Revolutionary%20Crisis%20of%201918-1921.pdf.
13. Evan McGaughey, “The Codetermination Bargains: The History of German Corporate and Labour Law,” available at http://eprints.lse.ac.uk/61593/1/The%20codetermination%20bargains%20the%20history%20of%20german%20corporate%20and%20labour%20law.pdf.
14. https://www.bls.gov/opub/mlr/1987/03/rpt-1full.pdf.
15. “Fiat: Marchionne’s Gamble,” The Financial Times, available at https://www.ft.com/content/a9e53516-cbf5-11df-bd28-00144feab49a.
16. “A ‘Clean Slate’ for the future of labor law,” available at https://today.law.harvard.edu/clean-slate-future-labor-law/.
17. Irving Bernstein, A History of the American Worker: Turbulent Years (Boston, MA: Houghton Mifflin, 1969).
18. “Unions for All” conference.
19. Kate Andrias, “A Seat at the Table: Sectoral Bargaining for the Common Good,” Dissent Magazine, Spring 2019, available at https://www.dissentmagazine.org/article/a-seat-atthe-
20. Brian Callaci, “Antitrust And Labor Movements Return to Their Roots,” Democracy: A Journal of Ideas, April 18, 2022, available at https://democracyjournal.org/arguments/antitrust-andlabor-movements-return-to-their-roots/.
21. Amazon Labor Union, available at https://www.amazonlaborunion.org/.
22. https://stansburyforum.com/2021/10/01/thinkbigger-new-possibilities-for-building-workerspower-at-amazon.

Author Biographies 

Peter Olney is retired Organizing Director of the International Longshore and Warehouse Union. He has been a labor organizer for fifty years in Massachusetts and California.

Rand Wilson has worked as a union organizer and labor communicator for more than forty years.