Crisis Management in the Midst of Labor Strife: Preparing for the Worst
Crandall, William, Menefee, Michael L., SAM Advanced Management Journal
It was a classic case requiring crisis management. A group of union gold miners walked off the job. Another group of miners from the same union crossed the picket line. Then, on the morning of September 18, 1992, a mysterious explosion killed nine miners. Accident or homicide? Striking member of the Canadian Association of Smelter and Allied Workers claimed it was an accident caused by mine managers who had violated safety regulations (Howse, 1993). Police, on the other hand, investigated the case as a mass murder.
Fortunately, most companies with labor unions will never deal with a crisis of this magnitude. However, crises do occur, and the way they are handled can be a key element in a firm's survival and financial health. Crisis management is the term generally used to describe the process of handling these troublesome events.
In labor relations, a crisis usually revolves around some type of contract dispute. A strike, for instance, has the potential to stir up labor unrest and simultaneously cripple operations. To deal effectively with such a crisis, organizations are encouraged to develop a crisis management plan. This article examines crisis management in relation to organizations that must deal with labor unions and offers suggestions for dealing with labor-related crises.
Crisis Events in Labor Relations
"A crisis is a major, unpredictable event that has potentially negative results. The event and its aftermath may significantly damage an organization and its employees, products, services, financial condition, and reputation," (Barton, 1993: 2). Labor relations has the potential to embody all of the above facets of a crisis. Crisis events that are specific to unionized organizations include picketing, strikes, violence, and negative public perceptions of management.
While picketing can be fairly peaceful, it can also be troublesome, especially if it disrupts business activities. The Pittsburgh Press witnessed this in 1992 when strikers blocked replacement delivery drivers from entering the compound entrance (Gibbons, 1992).
The Jefferson Hotel in Washington, D.C. was the site of a different type of picketing, i.e., the "bullhorn serenade," (Mencimer, 1992). Rather than go on strike, members of Hotel and Restaurant Employees Local 25 walked the picket line and sounded bullhorns to take their message directly to guests. Jefferson management tried unsuccessfully to get a restraining order on the bullhorn use, although the judge did set guidelines, designating only one bullhorn between 7:00 a.m. and 8:30 a.m. and two horns after that until 9:00 p.m. (Mencimer, 1992). Thus, the picketing did include some degree of guest discomfort. Since some of the rooms command a hefty thousand dollars a night, any discomfort could be seen as a crisis event for management.
The 1994 Teamster strike at UPS illustrated another form of business disruption that can approach crisis proportions. Although the strike lasted only 11 hours, major UPS clients such as Lands End and AT&T were severely affected by the lack of deliveries. In addition, a UPS spokesperson estimated the company would lose in excess of $5 million because of the strike (Frank, 1994).
The Ravenswood Aluminum Corporation was the scene of a particularly nasty labor dispute from late 1990 to 1992. Preparations for the impending conflict began early as management installed new fences around company property, erected video surveillance cameras, hired a new security guard service, and brought in refrigerated boxcars of food (Corn, 1992).
The situation became a crisis when a security guard was shot and seriously wounded while on duty. The town of Ravenswood became seriously split between loyalty to the strikers or the strikebreakers. The feud even spilled over to churches. In one example, a strikebreaker entered a church and approached the alter only to witness union workers and their families suddenly exiting the sanctuary (Corn, 1992). …