Manufacturing News: Smithfield Foods Sues Union trying to Organize its Largest Plant under Racketeering Act

Manufacturing Focus: Our Weekly Feature Article on Topics Related to Manufacturing Management

- October 21, 2007 -

Manufacturing News: Smithfield Foods Sues Union trying to Organize its Largest Plant under Racketeering Act

UAW and the Auto OEMs May be Getting Along, but Still Lots of Strife Elsewhere

SCDigest Editorial Staff

With the recent agreement between the United Autoworkers and GM and – maybe – Chrysler as well, it may appear labor and U.S. manufacturers can chart a course that minimizes tensions; however, developments at Smithfield Foods, the nation’s largest pork processor, show tensions and trouble.

SCDigest Says:

In 2006, just 11.7 percent of US hourly workers in manufacturing were in a union. This marks the first time since the US Bureau of Labor Statistics began tracking these trends, and likely for the first time in U.S. history, that union membership rates were lower in manufacturing than in the rest of the economy (12.0 percent).

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Manufacturing unions have been in a tough spot, with membership falling amidst a changing economy, increased automation in U.S. plants, and growing offshoring to China.

In 2006, just 11.7 percent of U.S. hourly workers in manufacturing were in a union. This marks the first time since the U.S. Bureau of Labor Statistics began tracking these trends, and likely for the first time in U.S. history, that union membership rates were lower in manufacturing than in the rest of the economy (12.0 percent). The UAW made historic concessions around health care and tiered wage systems at GM that will likely be replicated at the other OEMs. Earlier, bankrupt parts maker Delphi was able to negotiate even more favorable concessions.

Smithfield Goes Nuclear

For almost a decade, Smithfield has been battling the Food and Commercial Workers Union, which has been trying to unionize the huge pork processing plant the company runs in Tar Heel, N.C. The slaughterhouse employs almost 5,000 hourly workers and processes some 32,000 hogs per day.

Last week, Smithfield filed suit in federal court in Richmond, Virginia, under the Racketeer Influenced and Corrupt Organization Act (RICO), a law originally passed to target organized crime but increasingly being embraced for other causes. The suit accuses the union of engaging in a public smear campaign that included seeking frivolous regulatory investigations and providing false statements to analysts aimed at depressing the company's stock price.

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The union, Smithfield said the lawsuit, conspired to force the company to recognize it as the "exclusive bargaining representative of hourly employees ... regardless of the degree of actual employee support for such representation, by injuring Smithfield economically until Smithfield either agreed to defendant's demands or was run out of business."

The lawsuit was filed two days after the Virginia-based company called off talks aimed at holding an organizing election at the plant. The talks broke down over whether Smithfield would be allowed to lobby workers against voting in favor of a joining the union.

Gene Bruskin, director of the union's campaign against Smithfield, said, "It's really a shame that ... the company is willing to spend millions of dollars on high-priced lawyers to fight the case rather than spending money to provide basic improvements for workers. You've got a plant with thousands of workers that are crying out for basic safety and health improvements."

Earlier this year, Smithfield reached a settlement with the National Labor Relations Board and agreed to pay $1.1 million in back wages, plus interest, to employees unfairly fired by the company during union elections held in 1993 and 1997.