S02E08 - Activist Capture

This new episode of The Wild Side podcast deals with Activist Capture. Host Alan Wild describes the two forms of activist capture and shares regional examples of how it might play out. The first is where low voting in Works Council ballots results in the election of members who put their own interests before those of the people they represent. A similar issue is faced where thresholds for trade union representation are very low, and militant unions secure bargaining rights for the workforce despite having few members. The phenomenon is observed in rights-based employee relations systems and is a growing issue for Tech companies with no history of works council organization or trade union membership. The second form of activist capture is where internal company issues are hijacked by militant activists for their purposes, explode out of control in social and mainstream media, and are judged in the court of public opinion.

 

Key Takeaways:

• The two distinct forms of activist capture. [1:40]
• A recap of power-based countries and rights-based countries. [2:56]
• All European employees have a say in who represents them in elections. [4:21]
• Rights of Trade Union Committees in Nordic and Central and Eastern European countries. [7:37]
• Activist capture in the Tech industry in Europe. [9:28]
• Examples of socially-driven activist capture in the United States. [11:41]

Transcript

Hello, and welcome once more to the Wild side podcast. I’m Alan Wild senior advisor on Global employee relations for the HR Policy Association … the leading voice of CHROs today.

Today we are going to talk about what I call activist capture.  The idea is not new but seems to have passed under the radar. It’s been barely recognized as an employee relations risk in the world of trade union committees and works councils in rights-based countries. Its impact more generally in a world of social networking has brought it to the attention of employee relations practitioners through its exploitation by activist NGOs and militant trade unions.  The subject of “activist capture” sits somewhere between the episodes on formal relationships with trade unions and works councils and those on social network driven protest movements. Our most recent podcasts have been on works councils and the next are on the impact of social networks, so what better place to place it than between them. 
To be honest as I update and re-record my podcasts from 2020, by episode seven I was ready to write something new and original … so here it is.
As you know, I’m Alan Wild and you are listening to “a walk on the wild side” … managing international employee relations in modern times .. 10 minutes at a time. 

As I suggested earlier, activist capture comes in two distinct forms. This first is when militant trade unions or activists take over influential works councils and trade union committees and use them to represent their own, rather than employee interests. The second is where an often-legitimate complaint is seized on by militant activists and turned into a major protest movement.  Perhaps the best example of this is the French Gilets Jaunes movement. The movement originated with French motorists from rural areas who had long commutes protesting an increase in fuel taxes. They wore the yellow vests, the “gilet’s jaunes”, that, under a 2008 French law, all motorists are required to keep in their vehicles to use in the case of an emergency. It morphed into a series of Saturday street battles that sought to bring down President Macron and tear up the constitution of the Fifth Republic. A far cry from the weekend protests on traffic roundabouts that rural families brought their children to.
Lets’ go back the world of works councils. You will remember that in the power-based, or binary, system of employee relations, trade unions can only gain power through majority support of employees, either by card check or in a ballot.  This is the world of the US, Canada, UK, Singapore and Turkey.  In this case companies only need to develop constructive relationships with unions AFTER they are recognized.  This is very much not the case in rights-based countries. Trade unions populate important decision-making bodies like works councils with few or even no members.  In Germany just three employees can demand that a works council be established. In France works councils are mandatory.  I don’t apologize for repeating that the power-based system is about whether there is a table to sit around.  And the employer typically wants to keep unions out.  In rights-based countries … the table exists by law and the question is “who sits around it”. The challenge for employers is how you assure that those around the table are constructive and representative of employee interests. 

In works councils in Europe, the ability to stand in elections is heavily biased toward union candidates. In France only trade union members can stand in the first round of elections. Only if insufficient trade union members stand can independent candidates enter the race. In Spain independent members must demonstrate a very high degree of support in the form of employee endorsements to make the ballot. Trade union representatives need only the endorsement of the union. In Germany, unions and independents have equal rights to stand but the union candidates have the organization and funding of the union behind them. When it comes to the vote however, across all of Europe all employees have a say in who represents them. 
This is important. If employees are encouraged to be disinterested in works councils or feel that standing for election will result in them suffering negative treatment or damage their career, then voting will be low … and only the most motivated or funded candidates will succeed.  These tend to be union candidates, individuals with strong opinions or poor performers looking for job protection.  It is therefore in the company interest to promote voting and to encourage reliable employees to stand in elections.  Exactly the opposite behaviour one would expect in the US. In fact, in Europe promoting voting, even using incentives … … of course not telling people which way to vote … is far more free than it would be in the US. It is also OK in Germany to provide funding for the works council election slates … providing the same is done for all slates, including the union ones.  This levels the playing field for campaigning.  Of course, the key to success is that the most senior line manager on a site owns the election … not Employee Relations or HR. After all it is he or she that must live with the outcome of the election for the next four years.
Turning away from Germany, it is almost certain in big companies that union candidates will take all the works council seats.  In this case it is important that more moderate unions like CFDT in France or CCOO is Spain punch their weight against the more militant CGT, radical SUD, gilets jaunes unions or Si Cobas. Works council elections in France are even important as it is the strongest unions in the central works councils that then occupy the seats for the legally mandated pay negotiations.

 In the trade union committee countries in the Nordics or Central and Eastern Europe … unions control the seats and either nominate representatives or they are voted on by their members.  This is not an issue in the Nordics where trade union membership is very high … indeed if any of the Nordic countries were to be power-based, they would get bargaining rights through membership.  As an aside it is interesting to see some US companies refusing to recognize CBAs in Sweden when in the US they would be forced to bargain within the company. It leaves the Swedish unions, people and authorities very confused. In Central and Eastern Europe trade union membership is typically low, but nonetheless trade unions (no matter how unrepresentative) have negotiation rights. Of course, they will never be able to call a successful strike, but they can use their power in discussions over work rules; use their rights communicate with the workforce to criticize the company; and call out unfair labor practices that bring the authorities onto site. Put simply they can become extremely disruptive. Let’s take Poland as an example. The largest unions … Solidarnosc and the All Poland Alliance of Trade Unions – OPZZ – generally behave well.  In a number of companies, organizations like the self-confessed anarchist union OZZ workers initiative have established a presence large enough to gain representative status and disrupt the company.  Whilst companies rarely want to encourage union membership, ensuring that moderate unions are larger than the militants is a sensible strategy. 5% membership is usually enough.  This is something to watch for!

Activist capture of this type is has become particularly important in the tech industry in Europe.  The industry has by and large avoided the establishment of works councils and gone under the radar.  But recent issues around leadership behaviours; the curtailment of working from home; and for the first time for many, experience of job cuts have led to strong willed employees seeking to establish works councils or join unions in large numbers.  They have effectively ambushed line leaders and HR managers facing unions and works councils for the first time. So, what are the lessons. 
First, companies with little or no history of works councils or unions, need to prepare well, and then fight for constructive representation case by case as elections take place. In companies with established works councils the battle for the shape of the committee takes place at the time of periodic elections. These are often national and take place for the most part every four years. Ceding power to militants is something a company must live with for a long time … and of course vice versa.
Up to now this has been a largely European view … but activist capture can happen in Latin America, and in any of the immature countries we discussed in podcast two.   We will cover that off in the country profiles to come.

Now onto social networks and activist capture. I’ll talk about this in more detail, in two dedicated podcasts … but I want to highlight it here.  Socially driven activist capture is a global phenomenon that has played out in the United States in employee relations as much as anywhere. I mentioned the gilets jaunes in France … and of course this was not a company targeted protest … but did give rise to a new militant trade union coming onto the works council election scene in France .. the gilets jaunes union. A good example of activist capture in the United States involved Susan Fowler Rigetti who wrote a blog post “Reflecting on a very, very strange year at Uber” on 17 February 2017.  She was a regular blogger but not a recognized activist … and her prior most popular blog had been called “If Susan can learn physics, then anyone can”. Her blog post, which she said she wanted to air whilst the feelings were still fresh, outlined the hostile work culture for female employees at Uber. She explained that the HR department had refused to punish her former manager who had propositioned her for sex.  The viral take-off of the blog resulted in investigations that were conducted and published by the media, and judged in the court of public opinion. It led to a backlash against sexual harassment in Silicon Valley, the resignation of Uber CEO Travis Kalanick and removal of tech investors Dave McClure and Justin Caldbeck.
Imagine what might have happened had the HR department undertaken a proper investigation of Susan’s claims?  Maybe it would have happened at some point anyway. After all, the Harvey Weinstein case was only 6 months after. At very least, some executive other than Kalanick would likely have been the villain. The #MeToo movement exploded onto the scene later in 2017 and the rise of the gender side of DE&I to the top of US board room agendas was set in stone.  The race side of DE&I was also spurred on by a series of events, not least the George Floyd killing in 2020 where employees demanded that their companies take a stand.

The issue of activist capture in Europe is very real.  How many HR people have experienced disruptive individuals, groups or majorities driven by their own agendas in their works councils.  As I said, this is coming to the fore in tech companies that have little experience of works councils to date but are today facing them over issues like downsizing and work from home initiatives for the first time. The capture of social networks is an equally important phenomenon that we’ll talk about in much more detail next time.
As you know, I’m Alan Wild and you’ve been listening to a walk on the wild side … until next time.