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Apple store unions could jeopardize its 'caring' reputation

Apple (AAPL) is being accused of attempting to stifle employee efforts to unionize at its retail stores, and it could spell trouble for the company’s carefully curated public image.

According to The Washington Post, employees at at least two Apple Stores are filing paperwork to seek recognition by the National Labor Relations Board. But Apple is reportedly fighting back, with managers trying to paint the unionization effort as a negative for employees in the long run.

The move, however, could backfire for Apple and torch the goodwill it has built up over the years as a tech giant that cares about people. That image is part of the reason the company is so beloved by its billions of users.

“One of the questions about a union busting effort, which is apparently already starting, is whether it can tarnish Apple's brand,” says Rutgers University School of Management and Labor Relations associate professor Rebecca Kolins Givan. “Apple has a lot of rhetoric about caring about people, caring about employees, caring about things like racial justice, and [if] they're union busting, then their brand may be tarnished.”

Apple isn’t the only business facing renewed unionization efforts. Employees at companies ranging from Starbucks (SBUX) and Amazon (AMZN) to Nestle (NSRGY) and Alphabet (GOOG, GOOGL) are working to organize as a widespread labor shortage in the U.S. gives them more leverage.

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Apple’s very success may also give its own workers more leverage to fight for better pay. Its market capitalization is $2.7 trillion. What’s more, the iPhone maker continues to set new quarterly revenue records. In Q1, for example, the company raked in $71.6 billion in iPhone revenue alone.

For their part, Apple store employees want better wages as inflation hampers their spending power. They make between $18 and $21 per hour, according to Glassdoor. This compares to CEO Tim Cook who is set to make $99 million for the company’s performance in 2021.

“[Apple Store workers] see how much executives and people on the corporate side of the company are making, and they're working very hard,” Givan said. “In retail, the jobs have been riskier throughout the pandemic, because they're public facing. They're not able to work from home. And it's not a surprise that these workers want to organize collectively and improve things.”

Growing efforts in Big Tech

Worker organization is relatively new to the tech industry. Just last year a contingent of more than 200 employees at Google parent Alphabet unionized under the Alphabet Workers Union. That number has since grown to more than 800 employees.

Workers at a handful of Amazon warehouses, meanwhile, are seeking to organize, but have faced obstacles including opposition from Amazon. After failing to garner enough votes in their first election, the workers are holding a second vote with the results expected in March.

Apple CEO Tim Cook greets customers at the new Apple Store on Broadway in downtown Los Angeles, California, U.S., June 24, 2021. REUTERS/Lucy Nicholson
Apple CEO Tim Cook greets customers at the new Apple Store on Broadway in downtown Los Angeles, California, U.S., June 24, 2021. REUTERS/Lucy Nicholson

The Apple union drive may more closely resemble a current effort by Starbucks employees. Workers at the retail giant have organized or are seeking to organize at as many as 60 locations in an effort to secure better wages.

“It's got some things in common with Starbucks, which is that the company likes to portray itself as a very progressive, dynamic company that's socially responsible,” explained Paul Clark, professor of labor and employment relations at Penn State University’s School of Labor and Employment Relations. “I think people are looking at what's going on, and saying things could be better and maybe now's the time for us to try to do something about it.”

Apple, according to The Post, has already started to quash the unionization effort, by pushing well-worn union busting tactics like managers telling employees that a union will take away certain benefits and could force the company to lower wages.

But that kind of reaction could backfire against Apple, and drive employees to join unions instead.

“I'm continually amazed when companies or organizations that you'd think…might not take the position that organizing a union in their workplaces is the end of the world, take the position that they have to jump in and stop this before it gets out of hand. Before Armageddon happens,” Clark said. “And employers just don't seem to learn.”

That kind of approach, he said, has likely resulted in more Starbucks workers seeking to unionize, and could push Apple employees to do the same.

Apple already offers benefits including health and dental insurance and wages that are above your average retailer. But according to Stanford Law School professor William B. Gould, unionizing would give employees the ability to enshrine those benefits.

“The benefits [of joining a union] are that…they’re not dependent upon the benevolence of the employer,” explained Gould, who chaired the National Labor Relations Board from 1994 until 1998. “They have a say in their pay and working conditions. They have the ability to protect themselves from arbitrary treatment by the employer, and particularly, unilateral decisions over dismissals or rearrangement of work and the like.”

For Apple, and other tech giants, this may only be the beginning of a period of continued unionization efforts, as more young workers begin to demand better pay and working conditions.

“They're starting to discover that in our system, the way you do that is by organizing,” Clark said. “And they've proven that they can do it against a very powerful company. So I’m somewhat optimistic.”

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Got a tip? Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.