It starts with whispers. Employees huddling in the parking lot after shifts. Unusual questions about schedules and policies. Then someone hands you a formal letter: your workers are organizing a union. For business owners, how you respond matters enormously for your legal exposure and your business's future.
Disclaimer: This article provides educational information only and is not legal advice. Labor law is complex and heavily regulated. Consult with an experienced labor attorney before taking any action in response to union organizing.
What Is an Employee Union?
An employee union (or labor union) is an organization of workers who have joined together to negotiate collectively with their employer. Instead of each employee negotiating individually, the union bargains on behalf of all workers in the "bargaining unit". This work typically results in a contract that covers wages, schedules, working conditions, and procedures for discipline and termination.
The National Labor Relations Board enforces the National Labor Relations Act (NLRA), which protects most private-sector employees' rights to form, join, or assist unions. This includes restaurant workers, retail employees, and other service industry staff.
The Reality: Unions in Service Industries
Historically, service industries have had low union representation. According to the Bureau of Labor Statistics, only about 1.2% of food service workers are unionized, compared to 10% of all workers. But that's changing.
Recent years have seen organizing drives at:
- Starbucks (over 500 stores unionized since 2021)
- Amazon warehouses
- Apple retail stores
- Trader Joe's locations
- Independent coffee shops and restaurants
- REI stores
The Economic Policy Institute reports that while workers have won hundreds of union elections at major retailers, very few have actually secured contracts due to aggressive opposition from employers.
How Unionization Happens
The process typically follows these steps:
Step 1: Underground Organizing Workers begin discussing their concerns and exploring unionization. They may contact an established union (like UNITE HERE for hospitality workers or RWDSU for retail) or create an independent union. This phase is entirely legal and protected.
Step 2: Authorization Cards Organizers collect signed authorization cards from coworkers. If at least 30% of employees sign cards expressing interest in union representation, they can petition for an election.
Step 3: NLRB Petition The union files a petition with the NLRB, which investigates to ensure:
- The NLRB has jurisdiction over your business
- There are enough workers interested (30% threshold)
- The proposed bargaining unit is appropriate (e.g., all servers, or all employees at one location)
- No recent election has occurred (usually a one-year bar)
Step 4: Election Campaign Both sides can campaign. You can express your views on unionization, but there are strict rules about what you can and cannot do. The campaign typically lasts 4-6 weeks.
Step 5: Secret Ballot Election The NLRB conducts a secret ballot election. If more than 50% of voting employees choose union representation, the union is certified.
Step 6: Contract Negotiations Once certified, you're legally required to bargain "in good faith" with the union. This doesn't mean you must agree to their demands, but you must meet regularly and seriously negotiate.
Your Legal Rights as an Employer
Under the NLRA, you CAN:
Express Your Opinion: You may explain to employees why you believe a union is unnecessary or not in their best interest. Share facts about union dues, potential strikes, or how unionization might affect workplace flexibility.
Hold Meetings: You can require employees to attend meetings where you discuss the union campaign, though you cannot threaten retaliation.
Share Information: You can provide factual information about union finances, the union's track record, or how collective bargaining works.
Maintain Operations: You can hire permanent replacements for economic strikers (though not unfair labor practice strikers).
Lock Out Workers: In some circumstances during contract negotiations, you can lock out unionized employees.
What You CANNOT Do
The NLRB prohibits employer conduct summarized as "TIPS":
T - Threaten: You cannot threaten employees with job loss, reduced hours, closed locations, or worse working conditions if they support the union.
I - Interrogate: You cannot question employees about their union support or activities, or about others' union sympathies.
P - Promise: You cannot promise benefits (raises, better schedules, promotions) if employees reject the union.
S - Spy: You cannot surveil employees' union activities or create the impression of surveillance.
Additional prohibited actions:
- Disciplining employees for union activity
- Treating union supporters worse than other employees
- Refusing to hire applicants because of union affiliation
- Granting pay raises or benefits timed to influence the election
- Threatening to close the business if employees unionize
Violations of these rules are "unfair labor practices" that can result in:
- Reinstatement of fired employees with back pay
- NLRB-ordered bargaining even without an election
- Court injunctions
- Significant legal fees
Horror Stories: Costly Union-Busting Mistakes
The Starbucks Example: According to Economic Policy Institute research, as of early 2025, Starbucks faced 771 unfair labor practice charges related to their response to unionization. Federal judges have ordered the company to reinstate at least 73 fired workers. Despite winning elections at 500+ stores, workers still lack contracts, but Starbucks has spent millions on union-avoidance consultants and legal fees.
The Closed Location: A Chipotle location in Augusta, Maine, was the first in the chain to file for union representation in 2022. Shortly after, Chipotle closed the location, citing staffing challenges. The NLRB filed a complaint alleging the closure was retaliatory. Cases like this can result in orders to reopen, pay back wages to all employees, and bargain with the union.
The Surveillance Allegation: An Amazon facility was found to have used sophisticated tracking to identify workers involved in organizing. The NLRB ruled this constituted illegal surveillance. The company faced orders to cease the practices and post notices of workers' rights throughout the facility.
The Illegal Firing: A small Brooklyn restaurant fired a worker who was openly organizing for a union. The NLRB found the termination was retaliatory. The business was ordered to reinstate the employee with full back pay ($23,000), post notices of employee rights, and read those notices aloud to all employees in the owner's presence.
Why Service Workers Are Unionizing Now
Several factors have driven the recent surge:
COVID-19 Impact: The pandemic highlighted how essential frontline workers are. Many risked their health for low wages while corporate profits soared.
Wage Stagnation: Despite inflation, many service jobs haven't seen proportional pay increases. Workers feel left behind.
Unpredictable Scheduling: Last-minute schedule changes, on-call requirements, and insufficient hours make life planning impossible. Unions can negotiate predictable schedules.
High Turnover Costs: Workers are tired of seeing experienced colleagues leave due to poor pay and conditions. Unions can push for wages that retain talent.
Labor Shortage Leverage: In a tight labor market, workers have more power to demand changes. They know you need them.
Social Media Organization: Modern organizing happens digitally, making it easier to coordinate without traditional union infrastructure.
What Unions Typically Negotiate
If your employees unionize, expect negotiations about:
Wages: Minimum hourly rates, annual increases, pay scales based on seniority, premiums for less desirable shifts.
Scheduling: Advance notice requirements (7-14 days is common), limits on schedule changes, minimum hours guarantees, restrictions on on-call scheduling.
Benefits: Health insurance contributions, paid time off accrual, sick leave policies, retirement contributions.
Job Security: "Just cause" termination standards (you need a documented reason to fire someone), progressive discipline procedures, seniority protections for layoffs.
Working Conditions: Staffing ratios, break policies, safety equipment, temperature controls, security measures.
Grievance Procedures: Formal processes for resolving disputes, often including arbitration for termination decisions.
Union Security: Requirements that employees join the union or pay fees, automatic dues deduction from paychecks.
The Cost of Unionization
Unions affect your bottom line in several ways:
Direct Costs:
- Higher wages (union workers earn 10-20% more on average)
- Better benefits (health insurance, retirement)
- Union security clause costs (if negotiated)
- Legal fees for negotiations
Indirect Costs:
- Reduced scheduling flexibility
- Difficulty terminating poor performers
- More formal HR procedures and documentation
- Time spent in negotiations and grievance procedures
Potential Benefits:
- Lower turnover (union workplaces often have better retention)
- Better trained workforce (seniority systems keep experienced workers)
- Reduced manager drama (formal procedures handle complaints)
- Improved morale if contract is fair
Responding to Union Activity: Do's and Don'ts
DO:
- Consult a labor attorney immediately when you learn of organizing
- Train managers and supervisors on what they can and cannot do
- Document all employment decisions carefully
- Continue enforcing policies consistently
- Listen to employee concerns that prompted organizing
- Consider whether addressing concerns voluntarily makes sense
DON'T:
- Panic and make rash decisions
- Single out union supporters for discipline
- Promise improvements to defeat the union
- Threaten consequences of unionization
- Interrogate employees about organizing
- Drastically change policies during a campaign
GRAY AREAS (get legal advice):
- Giving wage increases during an organizing campaign
- Changing schedules of known union supporters
- Disciplining employees for behavior that might be protected
- Closing underperforming locations that happen to be organizing
The Reality of Contract Negotiations
Even if employees vote for a union, getting a contract is a lengthy process. The law requires you to bargain "in good faith," but:
You don't have to agree to union demands You can make your own proposals Bargaining can take months or years Either side can declare "impasse" and implement final terms The union can strike; you can lock out employees
According to NPR reporting, many newly-unionized workplaces still lack contracts years after certification. Amazon's Staten Island warehouse unionized in 2022 but has yet to begin formal negotiations. Over 500 Starbucks locations are unionized, but none have contracts yet.
Independent Unions vs. Established Unions
Workers can choose between:
Established Unions: Organizations like UNITE HERE, SEIU, UFCW, or Teamsters have resources, experienced negotiators, and legal support. They may have industry-specific expertise. But they also have their own agendas and structures.
Independent Unions: Worker-created organizations like Restaurant Workers United emphasize worker democracy and local control. They're more flexible but have fewer resources for sustained campaigns.
For employers, independent unions can be easier to work with (less bureaucracy) or harder (less experienced negotiators, more passionate workers).
State Variations in Labor Law
While the NLRA is federal, state laws affect unionization:
Right-to-Work States: 27 states prohibit requiring union membership or fee payment as a condition of employment. This makes union security harder to maintain but doesn't prevent unionization.
Public Sector Unions: State and local government employees aren't covered by the NLRA. Each state has its own rules for public sector unionization.
State NLRA Equivalents: Some states have "little NLRAs" that extend protections to workers not covered federally (like agricultural workers or independent contractors).
Mini-WARN Acts: State plant closing laws may interact with union contracts about layoff procedures.
Should You Voluntarily Recognize a Union?
If organizers present authorization cards from a majority of employees, they may ask you to voluntarily recognize the union without an election. This is legal and sometimes strategic.
Pros:
- Avoids contentious election campaign
- May lead to better labor relations
- Demonstrates respect for worker choice
- Recent NLRB rules make resistance more difficult
Cons:
- No chance for employees to reconsider in secret ballot
- You accept union's claimed majority without verification
- May encourage organizing at other locations
- Employees who opposed unionization may feel steamrolled
Most employers opt for the election process, but voluntary recognition is becoming more common as NLRB rules tilt toward unions.
Long-Term Strategies
Whether you're facing unionization now or want to prevent it:
Pay Competitively: If your wages are at or above market rate, unionization is less attractive. Review compensation annually.
Create Predictable Schedules: Unpredictable scheduling is a top driver of unionization in service industries. Give more advance notice and limit last-minute changes.
Have Clear, Fair Policies: Arbitrary enforcement of rules creates resentment. Document policies and apply them consistently.
Listen to Concerns: Create channels for employee feedback. Onboarding surveys, anonymous seasonal surveys, regular check-ins, and open-door policies let people raise issues before seeking union help.
Train Managers: Supervisors often drive employees toward unions through bad management. Invest in leadership training.
Maintain Good Relationships: Treat people with respect, recognize good work, and address problems quickly. Good culture is the best union prevention.
Don't Retaliate: Nothing drives employees to unions faster than feeling wronged. If someone complains or criticizes, respond professionally.
Aligning With Unions
Unions are neither inherently good nor bad. They're simply a response to worker concerns. Whether employees feel they need collective representation largely depends on how you run your business. If workers feel heard, fairly compensated, and respected, unionization is unlikely. If they feel exploited, ignored, or mistreated, unions become attractive.
If your employees do organize, remember: the law protects their right to do so. Fighting unionization illegally creates massive liability. Work with experienced labor counsel to navigate the process lawfully while protecting your business interests.
The service industry is changing. Today's workers expect more voice in their working conditions. How you respond to that expectation will define your business's future.
