We have our Twinkies back! And our Ding Dongs, Ho Hos and Wonder Bread. As The Daily Caller reported on April 24, key assets of bankrupt Hostess Brands have been sold to private equity firms and plans are underway to open new plants. Presumably, the new owners will operate non-union.
If they don’t blow it.
To refresh your memory, last fall Hostess Brands, the maker of iconic products such as the aforementioned Twinkies, suspended all operations and began liquidating assets in response to a nationwide strike by the bakery workers’ union. The union was striking over requested concessions the company needed to stay in business. Over the following weeks and months, Hostess let go most of its 18,500 workers as it shut down operations and started trying to sell its valuable brands. The asset sale yielded fruit, and the new Hostess has announced it will open three plants in the near future and start hiring workers.
All but the most hopeful of union advocates assumed that the new Hostess would open its doors non-union. To do otherwise would be like marrying Kim Kardashian for a second time. Why would you think things would be different the second time around?
Under U.S. labor law, an acquirer of corporate assets has no obligation to keep existing labor contracts, and unless a majority of the predecessor’s previously unionized employees are hired back, the acquirer doesn’t need to recognize or bargain with the union at all.
But before you rush to the Piggly Wiggly to stock up on Wonder Bread, there are a few ominous signs from the new management. According to reports, they are getting cold feet about avoiding the union entanglements that helped speed the original company’s demise. After initially stating they had no intention of recognizing the previous unions (they had contracts with the Teamsters as well), this week the new owners beat a hasty retreat and issued a mealy mouthed statement promising to open their doors to one and all, regardless of their union status. The Atlanta Journal-Constitution called it a “strident effort to clear the air.”
This, of course, is the law. You cannot — and should not — refuse to hire a qualified employee because of his or her union affiliation. But the law also allows an employer to state its opinion clearly and unequivocally on its desire to be union-free, as one of the new owners did. The backtracking — obviously ginned up by PR types and nervous lawyers — was unseemly, confusing and causes me to question the employee relations competence of the new owners.
Before I am accused of union bashing, I haven’t lost perspective for one minute on what happened last fall. While it was difficult to report on this story without snarky references to the products — icons of a pre-obesity crisis era where no one knew what organic food was and good parenting meant “putting meat on the bones” of your children — it was a real tragedy. As I wrote at the time, thousands of workers were flung into the streets, their job prospects grim. Investors in the old company lost tons.
It wasn’t entirely the fault of greedy union officials. Labor management blow-ups don’t occur without plenty of fault on both sides. They are like products of bad marriages — both parties plant the seeds of distrust and acrimony far in advance of the divorce.
Does Hostess want to stay non-union? Fighting the battle in front of the press and, eventually, the NLRB is not the way to go about it. The simplest way for Hostess or any company to stay non-union is to establish good relations with its new employees from the outset. Be fair, listen and communicate. Put good supervisors in place. Provide a vision for the company that employees can believe in. Give people a chance to build careers, not just punch clocks.
And get those assembly lines rolling. I’m hungry.
Dan Bowling is Senior Lecturing Fellow at Duke Law School, a lawyer, and the CEO of a workplace consulting firm. Previously, he was head of global human resources for Coca-Cola Enterprises.