December 27, 2023Client Alert

Banks and Financial Institutions Beware:  Unions Have You in Their Sights

A recent union election among a handful of branch bank employees signals trouble ahead for financial institutions.  Just eight employees at a local branch of Wells Fargo bank voted on December 20th to be represented by the Communications Workers of America (CWA) Union.  The vote was 5 in favor and 3 opposed.  Next, the CWA will face the more daunting task of reaching agreement with management on a first collective bargaining agreement between the CWA and the bank. This is the first time a union has cracked through to become the exclusive representative of a megabank in the U.S.  The financial institution sector is perhaps the next industry to face widespread union organizing as unions have recently successfully organized workers in other sectors, such as at Starbucks, a handful of Apple Stores, and an Amazon warehouse.  

The CWA union has been attempting to organize Wells Fargo employees for several years and there will be elections soon at 2 other branches, one in Florida and the other in California.  The CWA refers to its organizing efforts as "Better Banks" and they maintain a website to encourage more union organizing in the banking sector. The CWA also had a scheduled vote for December 21st at a Wells Fargo branch in Bethel, Alaska, however the union withdrew the petition for an election just a day before the vote.  Undoubtedly, the union pulled back from that vote because they concluded they lacked majority support at that site and the CWA did not want a loss at the ballot box.  

Readers may recall the recent scandal at Wells Fargo that may fuel Wells Fargo workers' interest in union organizing.  Namely, Wells Fargo is still recovering from the years old sales program in which management set high sales goals that led to employees opening millions of phony accounts to receive incentive compensation.  Some workers allege that the pressure to add accounts and increase bank fees has resumed at Wells Fargo.

Wells Fargo has been asked by union officials and some politicians to remain "neutral" and not campaign or otherwise communicate about unions when faced with a union organizing effort.  Wells Fargo has rejected that "invitation" and instead has and will continue to communicate with its workforce about unions and the bank's desire to have a direct relationship with its workforce.  

Time will tell whether the CWA will gain a foothold in the banking industry. However, the Biden Administration has made organizing far easier and more likely to occur with its recent election rules that call for quicker elections, card check recognition, and less litigation and legal challenges around union organizing efforts. Those rules take effect December 26, 2023 – yes, a little holiday cheer for the already beleaguered employer community.  

Union organizing has historically been rare in financial institutions.  Currently only about 1 percent of workers in the financial industry are represented by unions. 

The management side lawyers at Michael Best expect more organizing in 2024 given the union-favored, newly implemented election rules of the Biden NLRB.  In particular, we foresee that more financial institutions will be targeted by the CWA and other unions.   If a financial institution has not already undertaken a union vulnerability assessment, has in place an active and recurring employee relations and communication plan, and taken other steps to maintain their union free status, better to do so now. It's not too late to take these proactive steps.  

The Unions are simply following the money as they seek new dues paying members.  Recall that famous quote of bank robber Willie Sutton from the 1930's when asked why he robbed banks:  "Because that's where the money is."

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