Posted: March 30th, 2022
Case Study: SGA Industries
The impetus for the Amalgamated Clothing and textiles Workers union (ACTWU) to organize an effort to create worker protection at SGA industries was provoked via a variety of reasons. SGA industries had always been a workplace where they invested a lot of money to protect and elevate workers. SGA made a concerted organizational and financial effort to ensure that their employees and their families had a very high quality of life. However, with foreign competition becoming so aggravated in the mid-1980s, the entire hosiery industry was under siege, and the company didn’t have the luxury to invest so heavily in the happiness of their employees. As the case study clearly explained, “Growing foreign competition and imports had a negative impact on domestic hosiery manufacturers. Many manufacturers attempted to reverse the impact by intensive capital investments in new technology, by the reorganization and downsizing of plants, and by instituting programs to improve employee productivity and efficiency” (Harris, 1997).
As the case study explains their international sales were reduced by over 50%, going from $26 million to $10 million. This put the company in a mode where they had to look after their own survival first, and think about the needs of employees and their happiness and security, second. Such a massive profit loss as the type reported in this case study can be crushing to so many companies. From the company’s perspective, the fact that they had to “cut corners” meant that it was better than simply folding and closing down shop completely, laying everyone off. As the case study clearly states, “…the company was forced to lay off 1,500 employees, reduce pay scales, and rescind many of the perks that the workers had enjoyed under the Anderson family. Many of these changes drew worker protests and created a good deal of tension between workers and management” (Harris, 1997). Hence, from the management perspective, it looks like the leadership of the company is doing everything that it can in order to stay afloat, stay competitive and remain profitable—so that the company can exist at all. To the employees, it looks like their workplace satisfaction is being shredded and completely dissolved by the company. Employees have certain rights and expectations about how they should be treated, the benefits they should receive and what they will and will not tolerate. Management of SGA started to slash those expectations while creating a workplace that meant employee efforts weren’t being adequately valued and rewarded. When 1500 employees are suddenly laid off, it threatens the job security of everyone there in a decisive and lasting manner. Hence, it is only natural that the workers of this company decided to organize in order to protect their jobs, their livelihood and their families, so that they have baseline levels of job security. Furthermore, the fact that the wages within SGA were lower than wages within the manufacturing sector as a whole is something that workers would want to address through the collective power of a union.
SGA’s demonstrated a clear and concerted strategy during their management of the representation campaign. President White was the leader of the anti-union campaign and they had aligned themselves with help from an Atlanta law firm that specialized in anti-union campaigns. One major pillar of this strategy was the company sought partnerships and help from other influential entities within the community, as a means of promoting active discouragement of the union organizing and of people joining the union. As the case study clearly states, “The SGA strategy to defeat the union organizing effort included extensive meetings with community, business, and religious leaders in an attempt to influence workers’ views about the union. Viewing anti-union films was required for workers on company time. Letters sent to workers’ homes by President White and Philips emphasized the need for team spirit, not only to keep the union out, but to overcome the threat created by hosiery imports” (Harris, 1997). Granted, unions aren’t perfect entities, and the company leaders attempted to showcase the inherent imperfections of joining a union, and how unions can create inherent divisive tension between leadership and the staff (MSG, 2018).
For example, many experts have cited that unions can act as a monopoly, as an entity, which creates inflation, and as a presence that creates even more layoffs (MSG, 2018). This is a difficult argument to make, one which depends on intense persuasive tactics, particularly when the company has slashed the benefits of their employees, and laid off 1500 workers. Even though some of those points might have some validity to them, it can easily come across as if the company leaders are encouraging workers to not look after their own best interests. The one thing that the company leaders did that was intelligent was that the made consistent visits to the plant to shake hands and to talk with workers about their concerns. This at least gives leadership the appearance of genuinely caring about the worker’s mindset, needs and concerns. This is so important because, “While pay and benefits are often hot topics in union organizing tactics, employees are most influenced to join a union when the company is perceived to be unfair, unresponsive or offering substandard working conditions to employees” (Shrm.org, 2012). By reaching out and offering a listening ear, leadership shows that they really do care about then needs and concerns of their employees and that they are perhaps willing to make changes. If leadership does this responsively enough, it can demonstrate to workers that perhaps there is no need for a union.
The company leaders also made it clear that the company had no choice except to remain competitive (or profitable) or else the company would cease to exist, they seemed to imply. The leaders further asserted that they would not be bullied into this decision by anyone. This demonstrates a mix of diplomacy harnessed by the leadership of SGA. On the one hand they are aggressively seeking out community allies, they are asserting their clear boundaries, yet trying to let workers feel heard and as if they matter.
While it’s wise for management to rely on a variety of tactics, it would be even wiser if they resorted to more creative thinking, as this one union was able to achieve with a group of teachers. ““The union was pushing for a higher cap [for faculty] on health insurance coverage…’ adding that negotiators insisted on roughly a 20 percent increase. ‘We created a pooling system for the school’s 65 teachers. Everyone still had the same cap but whatever money they didn’t use went into a pool, allowing others paying higher out-of-pocket costs to reduce those costs within that employee group” (Patton, 2013). This is an example of a tactic that leadership at SGA could have engaged in: rather than simply push against unions, they should have offered more creative solutions to protect worker interests.
The case study suggests that there were several potential unfair labor practice charges that SGA management could have implemented, that would have dissuaded the overall employees interest in organizing. For example, even though the case study stresses that wages at SGA had steadily increased throughout the years, they were still lower in manufacturing overall. Many workers would argue that by definition that constitutes an unfair labor practice Had management corrected this early on and raised them to be slightly higher than the entire manufacturing industry, this might have prevented much of the desire to organize to begin with. Another massively unfair labor practice that the case study refers to is the fact that while women made up 40% of the workforce and minorities made up 35% of the workforce, they were still vastly underrepresented in terms of management, with women and minorities consisting of less than 2% of management and leadership staff (Harris, 1997). This is so egregious that it looks like bias and prejudice at work and a system that only desires to protect the white men in it.
Furthermore, one could argue that the very fact that leadership of SGA was actively seeking to dissuade employees from organizing into a formal union, is a categorical manifestation of an unfair labor practice. According to the Society for Human Resource Management, “An employer cannot interfere with, restrain, or coerce employees in the exercise of their rights. Most violations of this section include supervisors who (a) make threatening statements, (b) question employees who assert their labor rights, or (c) make false statements to workers seeking unionization” (2012). One could argue that the fact that SGA leaders met with influential community leaders represented a form of coercion on their end, along with the fact that they sent anti-union propaganda to the homes of their employees and made employees watch anti-union content during company time. In fact, employees could argue that the very fact that they were forced to watch anti-union propaganda was an attempt at management trying to brainwash them. Furthermore, when one worker in the case study argued that “supervisors can be too arbitrary,” it was unclear what that meant. Are they arbitrary when it comes to fairness and following protocol or in some other unjust way? This statement offered an ominously vague look at life within the company.
Harris, M. (1997). Human resource management: A practical approach. Fort Worth, Tex [u.a.: Dryden Press, Harcourt Brace College Publ.
MSG. (2018). The Case Against Labor Unions. Retrieved from https://www.managementstudyguide.com/case-against-labor-unions.htm
Patton, C. (2013, September 23). Tug of war: How HR can prepare to negotiate with unions. Retrieved from https://www.universitybusiness.com/article/tug-war-how-hr-can-prepare-negotiate-unions
SHRM.org. (2012, May 1). Unfair Management Practices: What is an unfair labor practice by management? Retrieved from https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/managementunfairlaborpractice.aspx
SHRM.org. (2012, June 12). How can we prevent a union from organizing in our company? Retrieved from https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/preventunionorganization.aspx
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