IRI Intelligence Briefing

News and Developments Affecting the Workplace

Volume Number & Date: 
Vol. 2 No. 2 - May 2010

New SEIU Head Signals Possible Priority Shift

"Our local unions and divisions should drive our national priorities, not the other way around, and our national initiatives should be designed to put wind in the sails of our local and industry-based organizing strategies."

Mary Kay Henry, who has taken the helm of the two-mil-lion-member Service Employees International Union (SEIU), seems predisposed to place more emphasis on local control and organizing rather than the political clout and national focus of her predecessor, Andy Stern. How much difference such a shift might make to hospitals and other primary targets of SEIU organizing is hard to gauge.

Even a relatively small change in emphasis, with a corresponding resource reallocation, could have a major impact on organizing. SEIU's annual budget is about $120 million, so taking even five percent out of politics and putting it into organizing could have significant consequences; $6 million buys a lot of purple buttons, t-shirts and leaflets. In a demonstration of the union's increased commitment to organizing, it announced May 8 an immediate $4 million allocation to reinvigorate private sector organizing throughout the country.

Stern, who spent 38 years with SEIU, 14 of them as president, announced his retirement in mid-April, leaving behind a career filled with success and controversy. Henry brings a strong, 32-year union healthcare resume to the job, including the last six years as executive vice president of SEIU healthcare operations. Her accomplishments include:

  • Labor advisor and member of the U.S. Conference of Catholic Bishops' Subcommittee on Catholic Health Care, which issued the controversial 1999 paper, "A Fair and Just Workplace: Principles and Practices for Catholic Health Care"
  • "Top 25 Women in Healthcare" citation from Modern Healthcare
  • Groundbreaking labor agreements between SEIU and Catholic Healthcare West, Beverly Enterprises, Tenet and HCA
  • National labor-management partnership at Kaiser Permanente, the nation's largest HMO
  • Strategic alliance with Allina Hospitals and Clinics

According to her official bio, "Mary Kay is leading a national effort by SEIU to build new kinds of partnerships with hospital employers - partnerships that will improve the quality of patient care, strengthen the hospital's competitive performance, and give workers a voice in decisions that affect care and working conditions."

Noticeably absent from the bio is any mention of political activity, in stark contrast to Stern and his protégé, secretary-treasurer Anna Burger, the person Henry beat for the union's top job.

Stern and Burger helped turn SEIU into arguably the nation's most politically potent union. For instance:

  • Stern was the most frequent White House visitor in 2009.
  • Stern and Burger helped convince President Obama to appoint SEIU attorney Craig Becker to the NLRB while Congress was in recess.
  • Anna Burger and AFL-CIO President Richard Trumka are members of the President's Economic Recovery Advisory Board.
  • Michael Kerr, who oversaw finance and administration at SEIU, is Assistant Secretary for Administration and Management in the Labor Dept.
  • Patrick Gaspard, SEIU Local 1199's former executive vice president of politics and legislation, is director of the White House Office of Political Affairs. n John Sullivan, SEIU associate general counsel, is a member of the Federal Election Commission.

Stern was the driving force behind the formation of three powerful coalitions that lobbied for health care reform, bringing together such strange bedfellows as AARP, the Business Roundtable, Allina Hospitals & Clinics, Catholic Healthcare West, Daughters of Charity, Greater New York Hospital Association, Kaiser Foundation Hospitals, Kaiser Permanent, Los Angeles County Department of Health Services, AT&T, Intel, Kelly Services, Inc., Communications Workers of America, the Center for American Progress, and the Committee for Economic Development.

Will Henry continue down that political path or, as some observers predict, attempt to take SEIU in a more grassroots direction? There are too many variables to tell for sure, at least at this stage. More to the point, the union might not have to do anything and still be a big winner.

Regardless what SEIU does internally, the stage already is set at the National Labor Relations Board (NLRB) for major changes in union organizing. With SEIU's Becker now on the Board, along with two other strong unionists including Chair Wilma Liebman, who is a former labor counsel for the Bricklayers and Allied Craftsmen, and the International Brotherhood of Teamsters, labor has the green light for its agenda.

The NLRB, in theory, has broad discretionary power to issue rules implementing provisions similar to the Employee Free Choice Act. The Liebman/Becker Board (along with Obama appointee Mark Pearce) could circumvent the need for Congressional action on EFCA and issue rules on card-check, shortened election periods, and employer involvement in unit determination.

The new Board also is poised to reverse a number of important pro-business rulings issued earlier in the decade by the Bush Board. Liebman wrote strongly worded dissents to these and many other decisions, and as Board chair, her previous disagreements could become the roadmap for reversing them.

Finances also will play a huge role in determining SEIU's strategic direction. The union spent $85 million during the 2008 campaign season, and is spending considerable sums on this year's mid-term contests. "SEIU is on the field, it's in the White House, it's in the administration," Stern said during the celebration of the Obama administration's first 100 days.

But that power came at a stiff price: "We maxed out the credit card and now we're paying it off," Stern told the Wall Street Journal. The union took out $25 million in loans in 2008 to meet expenses and saw its net assets fall by nearly half. It needs cash, and its primary revenue source is union dues.

As politically potent as SEIU is, its organizing muscle is at least as formidable - that's why it became the country's fastest-growing union under Stern. In 2009, SEIU's overall win rate in RC elections hit 81 percent, among the highest of any union and above the national average of 75 percent.

It has 4,000 dedicated organizers and an annual budget of more than $120 million. Each new member pays roughly $500 annually in dues. With a) some form of EFCA, or b) the changes the NLRB seems poised to make, or c) a reallocation of funds from politics to organizing, it's feasible that SEIU could add 250,000 to 500,000 members a year (Stern and other labor leaders have predicted that card check could boost the country's labor rolls by a million members a year).

An organization as large as SEIU can't turn on a dime; as long as a Democrat is in the White House, it won't need to. Moreover, the union is a democracy, and Henry can't make major shifts unilaterally. Any changes are likely to be incremental, at least at first.

Given the new composition of the NLRB and Henry's track record in healthcare organizing, the odds are strong that the country's hospitals and healthcare systems will be faced with increased organizing pressure for the next several years. The only question is likely to be one of tactics, not strategy; namely, will SEIU attempt to organize systems via corporate campaigns, or individual hospitals via traditional organizing?

The answer to that lies mostly with Congress and the NLRB. If Congress passes some form of EFCA-like legislation, or if the NLRB implements card check or accelerated elections on its own, unions would have a much, much easier job organizing through traditional means. Because unions generally resort to corporate campaigns when traditional organizing efforts fail, corporate campaigns would become much less necessary.

It also is important to remember, however, that Mary Kay Henry has had great success with healthcare "partnerships," a term of art that often means fair election or neutrality agreements; her bio says she is building more of them. That could make the game even more interesting for the nation's hospitals and healthcare systems.

One thing is clear: the state of flux in labor-management relations that began after the 2008 elections isn't going to abate any time soon. Even if a major power shift in Congress comes about this fall, the new, pro-labor NLRB will be around for awhile.

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