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Teamsters Update: Yes on New California Law, A Few New Units, One Decertification Looming

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It has been a mixed few months for the Teamsters, but the scale does appear to be weighing more in the direction of positivity from its perspective.

As the union heads toward an election to replace James Hoffa as its president, and with more attention than ever put on the supply chain that the Teamsters is deeply immersed in, it has had some wins and some losses in the short term.

What would likely be its biggest win remains in limbo: the status of the AB5 independent contractor (IC) legislation in California, with its fate awaiting a decision by the Supreme Court on whether to review appellate court decisions that if allowed to stand would greatly restrict the use of ICs in the state. The Teamsters is an Intervenor-Defendant in the case brought by the California Trucking Association, with the primary defendant being the state's Attorney General's office.

It has been a period in which the Teamsters signed two contracts in July with XPO that for the first time recognized the union at two XPO facilities. While the company boasted that the deals were extremely favorable, the fact remains that XPO had resisted Teamster organizing efforts over the years but in 2021 finally put its signature on two contracts.

In the meantime, the work of the union continues. And besides celebrating a settlement in a driver classification case against XPO (NYSE: XPO), the Teamsters recently claimed victory with the signing of a bill by California Gov. Gavin Newsom that ties enforcement of labor laws to economic incentives designed to spur the purchase of cleaner drayage trucks.

The legislation in California, known as AB794, directs the state to restrict subsidies for clean drayage truck purchases to companies that are in compliance with a bevy of state labor laws, including regulations on the definition of a worker as an IC or an employee.

A purchaser of new drayage and short-haul trucks can participate in the state's incentive program "if it can demonstrate that it does not have any applicable law violation at the time of applying for the incentive," the law says.

In a prepared statement, the Teamsters saw the new law primarily through the prism of its key nonwage issue: driver misclassification. In a statement, the Teamsters quoted Ron Herrera, the union's port division director, as saying that AB 794 "will ensure that taxpayers are no longer forced to subsidize trucking companies that habitually misclassify voters."

The legislation says that vehicles that are not compliant with clean vehicle regulations in California are disproportionately operated by misclassified drivers, citing a study from the University of California. "Many of the misclassified employees do not have the financial resources to comply with clean-vehicle regulations," the legislation says.

On other fronts, here's a look at successes and setbacks at the Teamsters:

Representation/Decertification

Since the rapid back-to-back news, which was stunning at the time, that XPO had signed deals with Teamsters locals in Trenton, New Jersey, and Miami, there have been no further XPO-Teamsters contracts.

But the union is entering a time when tight labor markets and renewed union activism are likely to spur a more active battleground. So far, however, it has not turned into a significant list of new representation for the Teamsters.

Over the last few months, the Teamsters are claiming victory in several representation elections, based on announcements posted on the union's website.

One is for 16 drivers at a West Coast concrete construction company called Conco. The Teamsters' statement on the election said the vote among the drivers, who deliver rebar to construction sites, was unanimous. The rest of Conco already is fully unionized by the Teamsters, according to sources with Teamsters Local 174, which represents Conco workers.

In the last few months, the Teamsters also won an election for a 10-employee unit of drivers at US Foods in Delaware voted to be represented by the union.

There also was a successful representation vote covering 28 staff members at GPS Impact, which the Teamsters described as a public affairs company that does strategic communications and advertising for political candidates and advocacy organizations.

As far as other successful new representation votes, a Teamsters spokesman supplied information about winning an election at a Keurig Dr. Pepper plant in Kentucky — 266 workers, so, not an insignificant unit — and at least two companies in the cannabis business.

What is less clear is where the union has lost elections, which aren't publicized by the union. A Google search of Teamsters lost elections in 2021 turns up nothing; the home page of the dissident Teamsters for a Democratic Union, which thrives on pointing out missteps by the national union, doesn't list any either. (Notably, there is not a post on the TDU page regarding the XPO contracts, which could be considered the most significant victory by the current Teamsters management).

But the Teamsters also have needed to fight off decertification actions. Historically, those often occur at companies where the union is often unable to come to a contract agreement with the employer even after the rank and file votes to be represented by the Teamsters or some other union. Union officials often blame company intransigence on the inability to get those contracts, a delay that leads to frustration and in some cases decertification.

The Teamsters face a decertification election on Thursday at an XPO facility in Los Angeles after a group of workers successfully petitioned the National Labor Relations Board for such a vote. But a similar attempt at an XPO facility in Bakersfield, California, appears to have been withdrawn, according to NLRB documents.

A decertification vote also took the Teamsters out at an Airgas facility in Ventura, California, though that is not logistics-related.

Three decertification votes went against the union earlier this year.

Work Stoppages and New Deals

The giant strike against John Deere, the largest industrial walkout in several years, has raised the prospect that a combination of inflation and greater worker leverage with tight labor markets could start to mean walkouts become more common.

The Teamsters currently are in the middle of its second strike against a company called Keolis, which manages the Regional Transportation Commission of Washoe County, home of Reno, Nevada. A strike that started in August ended after about 10 days. A second strike began in early October and has shut bus service in the county. A spokesman for Keolis said negotiations are to resume Monday.

In the logistics field, the most significant Teamsters near-walkout in the past few months appears to have been averting a strike by drivers in July against the Safeway grocery chain.

The union also signed a new contract at a Sysco food distribution warehouse and related operations in Des Plaines, Illinois, in late August, but not without a strike. The walkout that began Aug. 30 was over in just a few days after a new contract was reached and later approved by the workers. Press reports put the number of workers covered by the contract at approximately 125.

While more than 200 truck drivers were not part of the Sysco contract that was in dispute, a statement from the union said the drivers did honor the picket lines of workers and did not continue to make deliveries.

The Teamsters can also cite new contracts at several facilities that could be shown to prospective new members as a sign the union can get things done. For example, workers at USF Reddway overwhelmingly approved a new five-year-pact in June. USF Reddway is a division of Yellow Corp. (NASDAQ: YELL)

There are also new contracts signed outside the logistics field. On its website, just in the last two to three months, the Teamsters touted new contracts signed at a Foster Farms poultry processing plant, a group of school administrators in Philadelphia, construction workers in Las Vegas (a group that includes some truck drivers) and school bus drivers in Niagara Falls, New York. A four-year deal at Boeing in April narrowly averted a strike.

The XPO-GXO Spinoff and A New Target

In a recent online forum sponsored by Deutsche Bank, several members of the management team of XPO's contract logistics spinoff GXO (NYSE: GXO) talked about automation being a key driver for GXO's long-term success. On that call, Angus Tweedy, the company's senior vice president for strategy, said GXO is a "huge expert in deploying labor-saving technologies like automation."

That isn't sitting well with the Teamsters. It has long fought XPO on numerous battlefields and until the recent contracts in Trenton and Miami had never prevailed in negotiations to get XPO to sign a collective bargaining agreement.

Given that, GXO is clearly becoming a new target. The outside public relations agency of the Teamsters, Berlin Rosen, recently sent a blast email highlighting an article highly critical of GXO and its focus on automation.

The article quoted Matt Draper, a national officer of Unite, which is a U.K. union. "From a worker's point of view, it is deeply concerning when any company seems to openly come out and say they wish to automate," Draper said in the article. He also said that unions should look to reach a deal on technology agreements that "take into account the effects of automation on workforces and their communities and that secure options for retraining workforces rather than just replacing them."

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