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Labor Relations

Labor Relations

Chicago’s economic history would be incomplete without a major chapter on the development of labor union-management relations. As the only major metropolitan hub situated neatly between the coasts, Chicago was uniquely positioned to take advantage of the country’s expansion in the post Civil-War years, making it both a center of economic development and a hotbed of activity for the fledgling labor movement. Early encounters between companies and unions often were volatile, e.g. the Haymarket riots of 1886 and the Pullman strike of 1894.

But since those early days, Chicago’s industries and its workers have enjoyed a more peaceful coexistence and have worked together cooperatively to build a vibrant and diverse economy in the greater metropolitan area. Chicago’s favorable labor-management climate, coupled with a boatload of other positive attributes, have combined to make the city attractive to a broad range of businesses and industries.

However, recent changes in the union landscape on a national level will present significant new challenges to the business community, as our City seeks to capitalize on new growth opportunities while maintaining current strongholds. The biggest challenge on the human resources front is the recent defection of several major unions from the previously 14 million-member-strong AFL-CIO and formation of Change to Win, a coalition boasting an impressive total of six million current members with the potential for millions more.

AFL-CIO

Because the industries represented and companies targeted by these unions — service, hospitality, retail, healthcare, transportation, financial services, insurance, distribution, agriculture, among others — have a particularly strong presence in Chicago, the effects of the split will be felt throughout the Chicagoland region. Businesses should be prepared for an increase in union organizing activity, more aggressive bargaining, coordinated corporate campaigns, fall-out from union infighting, and shifting union coalitions. Since this increase in union activity will unfold nationwide, Chicago companies that are prepared in advance for this potential activity will enjoy a welcome competitive advantage in the marketplace. In doing so, they will allow the Chicago business community to convert the challenges into significant business opportunities.

Against this backdrop of shifting labor/management dynamics, Chicago is poised to utilize its highly skilled workforce as a vehicle for continued economic growth. The city’s many colleges and universities provide a high-caliber, educated workforce, one that is well-trained in growth fields such as technology, telecommunications, and healthcare.

Moreover, as the country seeks to recover from the devastating natural disasters in the South and unprecedented energy costs nationwide, Chicago’s diversified industries and its stable workforce make it a natural to assist in the rebuilding process, whether through sharp increases in manufacturing and construction, or the absorption of displaced workers. And, as the economy turns towards the creation of new jobs in the technology sector, Chicago business leaders should capitalize on these new opportunities for growth, through prudent investment in infrastructure development, local venture capital deals, and innovative partnerships with government and the academic research community.

In the coming year, the Chicago business community will undoubtedly face new challenges, as the global economy continues to grow and change and presents new opportunities. A commitment to strong, stable labor relations is an essential component for continued economic growth. With the business community and labor unions working together, the future of the “City of Broad Shoulders” looks bright indeed.

Gerald D. Skonin
Senior Partner, Seyfarth Shaw LLP

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