New York banker Gordian Group to advise Hostess’ bakery union

NEW YORK, Mon Jan 21, 2013 — The union and pension fund for Hostess Brands Inc. HTBRS.UL has hired Gordian Group, an investment bank specializing in distressed cases, to help preserve jobs and workers’ benefits at the bankrupt maker of Twinkies snack cakes as Hostess negotiates with buyers.

New York-based Gordian, which has no institutional loyalties to funds or bondholders in Hostess, will provide conflict-free advice for the welfare of the company’s workers, The Bakery and Confectionery Union and Industry International Pension Fund (Bakers Fund) said.

Mexico’s Grupo Bimbo and a partnership between Apollo Global Management and veteran food executive C. Dean Metropoulos are among the leading candidates to buy Hostess Brands Inc.’s snack cake brands, according to three people familiar with the matter.

In a separate announcement earlier this month, Hostess said Flowers Foods agreed to pay $390 million for Hostess’s Wonder and other bread brands, including Nature’s Pride and Butternut. That sale is still subject to a court-supervised auction.

The Bakers Fund said it intended to hold direct discussions with the bidders for Hostess and had chosen Gordian to advise it on the basis of the investment bank’s track record in distressed financial situations.

“The Bakers are here to work with bidders in any way as our sole goal is to maximize jobs and pension benefits for our members,” said David Durkee, who is chairman of the Bakers Fund.

How employers can address new NLRB rules that increase the chance of unionization

John Entenman, Member, Dykema Gossett PLLC

Under new National Labor Relations Board rules, your employees are finding it much easier to unionize. And with micro-units now permitted, even companies with fewer than 50 employees may find themselves dealing with more than half a dozen unions, says John Entenman, a member at Dykema Gossett PLLC.
“This is a tsunami coming at employers, and many are not prepared for the implications of the new rules,” says Entenman. “The next few months could see an explosion of union organizing.”
Smart Business spoke with Entenman about changes to NLRB rules and how employers can react proactively.

What new rules has the NLRB enacted?

Historically, the NLRB has only rarely engaged in rule making. But last fall, it decided two major rules would go into effect on April 30.
The first would have required employers covered by the National Labor Relations Act to post a notice, ostensibly designed to inform employees of their rights. It further said that failure to post would result in a per se unfair labor practice being committed by the employer, and that the six month statute of limitations on the amount of time in which a charge can be brought could not be used as an affirmative defense, resulting in open-ended liability for acts an employer may or may not have committed.
In a South Carolina lawsuit, a federal court said the NLRB did not have the authority to require posting. However, in a separate lawsuit, the federal district court in Washington, D.C., said the Board had the authority to issue the rule but not to declare the failure to post a per se unfair labor practice, nor to toll the statute of limitations.
However, on appeal the Board was enjoined from making employers post the notice until a final ruling is issued.

What other rules did the Board issue?

The second rule did go into effect on April 30 and allows for expedited union elections. It greatly shortens the time from when a union files a petition to the holding of a secret ballot election.
Previously, it was 30 to 40 days before a vote, giving employers time to communicate to employees why it hoped they would not vote for union representation.
Under the new rule, the period between filing a petition and holding a vote has been shortened to 10 to 15 days, meaning that employees will not get a meaningful opportunity to hear from their employer. In addition, matters that were appealable prior to the election are no longer appealable until after the election, so a secret ballot election could occur within 10 days.
We expect to see a significant uptick in the number of union petitions filed. Employers will be receiving documents from the NLRB, and by the time they meet with a lawyer and assess the situation, there’s an election in five days, and they’ve got problems.

How will the new rule impact employers?

This will greatly increase unions’ chances of winning elections from the current 50 percent  to a union success rate of 80 to 90 percent. An employer may not even be aware its employees are interested in a union until it gets a petition, and then there’s an election 10 days later. Many employers are going to blindsided.

How will the ability to form micro-units impact unionization?

Micro-units are a new phenomenon. In 2010, a union petitioned to represent a collective bargaining unit of poker dealers. The employer (a casino) said that was not appropriate because the result would be separate unions for each card game it offered. The NLRB decided, only 2-1, that a unit solely consisting of poker dealers was not an appropriate bargaining unit.
A year later, a union petitioned to represent only CNAs at a nursing home and the NLRB approved the petition. The nursing home objected, saying it didn’t have many employees and couldn’t deal with a multiplicity of unions, but the ruling held.
Finally, in a recent case at the Denver International Airport, a union wanted to represent just rental car agents at a car rental company. The NLRB ruled that was fine, that each job category could form its own separate union.
As a result, unions are poised to represent these micro-units. And most employers are not going to fare well if their work forces are composed of multiple unions all whipsawing each other. If one union goes on strike, and the others observe the picket line, the employer could be in real trouble.

What can employers do?

It starts with sitting down with a labor lawyer, who can help assess your situation and define what, if anything, you should be doing. If you haven’t yet prepared for this new legal environment, you need to do so immediately.
Employers should also be educating their employees, explaining what unions may mean to the workplace. Tell them there are reasons to believe they may be approached by a union organizer and that you want them to know the good, the bad and the ugly about what is involved with union representation.
Tell them you are educating them so that if a union asks them to sign an authorization card, they will know something about this and will have heard the employer’s side of things.
Employers may not want to raise the subject with employees, and that may work for some, but you take the chance of employees only hearing one side of the argument, that of the union. It’s better to be proactive, because union organizing is expected to increase significantly the next few months.

John Entenman is a member at Dykema Gossett PLLC. Reach him at (313) 568-6914 or [email protected]

Insights Legal Affairs is brought to you by Dykema Gossett, PLLC

How Laura Striese of Brand Synergy Group finds power in personalized partnerships

Laura Striese, Partner and Vice President, Brand Synergy Group

NIVEA Global was looking to partner with a celebrity who could genuinely represent its skincare products in a worldwide marketing initiative celebrating its 100th year. Enlisting the services of Brand Synergy Group, a marketing firm with strong ties in the entertainment industry, NIVEA discovered a perfect match in singer Rihanna, who had been introduced to the brand by her grandmother.

BSG Partner and Vice President Laura Striese joined former Island Def Jam Music Group co-worker and current BSG CEO Jeff Straughn when he founded the firm two years ago, combining their experience in strategic marketing for the entertainment industry to build a marketing agency that pairs celebrities with corporations for advertising and promotional campaigns.

The five-person firm’s portfolio has grown to include partnerships across various industries between well-known names such as Cee Lo Green and Duracell.

“(We) create strategies, really take time with our clients to sit down and decide what it is they’re looking to accomplish and how we can partner them with artists to help them do so,” Striese says.

Identifying constituents’ needs and goals is the first step to facilitating a successful partnership. Begin by reviewing clients’ past methods and strategies, identifying failures as well as successes.

“You never want to spin your wheels and work on something that’s already been vetted, tried and executed, and failed,” Striese says.

This interaction should be direct and personal.

“It’s really important to maintain that level of face-to-face interpersonal communication,” Stirese says. “You have to spend plenty of time sitting down with the client and really getting an understanding of what they’re looking to achieve. And it’s not just a matter of sitting in one meeting; it’s a matter of spending a lot of time with them to understand their long-term goals. Work alongside their existing agencies. … All the information is out there – the goals of all their different silos, be it digital or sales, whatever.”

In addition to giving deeper insight, this personalized association fosters trust – a necessary element for collaboration.

“It’s a bit intimidating,” Striese says. “Where do you begin? How are we going to be able to work together? How do we even begin to have that conversation?”

“A lot of this comes down to word of mouth and the element of trust. … They feel comfortable sharing the information with us and letting us know where projects are going, because they too see the value in this partnership marketing.”

Maintain this personal level of interaction even when not face-to-face to strengthen the relationship, as well as bolster creative exchange.

“Pick up the phone and call people when you need to speak to them, and really work through ideas that way,” Striese says. “E-mails (you) can rely on to follow up and do the next-step-type stuff, but the conceptualizing and getting those ideas fleshed out, we need to really speak to one another.”

Direct communication also ensures clarity.

“When you can deal directly with the brands and with the artists, you understand what both agendas are – you don’t have other people weighing in about their cut of that.”

Once the needs and goals of your constituents have been identified, you can more accurately plan potential partnerships. Brand Synergy Group uses a methodology called Brand Alignment Matrix to evaluate artists’ and brands’ compatibility.

“On one axis we list all of the artists we’re considering for a campaign, and on the other we list all of the brand’s attributes,” Striese says. “We determine which artists are really going to fit for the brand and make sure they will resonate with the brand consumers.”

After taking the time to identify and align constituents’ needs, you then need to facilitate communication between the involved parties.

“Often times they probably feel as though they’re speaking different languages, but at the same time, ultimately, you can help decipher what they’re saying because at the end of the day, they’re both looking to achieve the same thing,” Striese says.

How to reach: Brand Synergy Group, (212) 584-8045 or

Direct approach

Personal communication is a key focus internally for Brand Synergy Group.

“Work really hard as a team to make sure that the team members have all the information that they need, that they’re well-informed, that they have the insight they need to be confident in their ability to create and execute a strategy,” says Laura Striese, co-founder and vice president.

Face-to-face interaction is integral to ensuring employees are well informed.

“Even though we’re in this digital age where e-mails are supposed to help keep businesses moving and flowing, I think a lot of times … that can slow you down,” Striese says. “Get up, get out of your chair and go talk to them.”

This will also push employees to be more independent.

“If you can always reach somebody by e-mail, you can always ask somebody else what you think you should do,” Striese says. “It’s really about delegating and making sure there are great people on the team that are all responsible for different aspects of the business.

While we all work together to strategize and execute, ultimately one or two people are going to be closest to the project and be responsible to make those decisions. So they feel confident they don’t always have to check with everybody else – sometimes there are just moments where you have to make those decisions on the fly, and because they’re closest to it, it’s a well-educated decision.”

American Airlines parent may reject union pacts

NEW YORK, Thu Mar 22, 2012 – The parent of American Airlines Inc. was preparing to void union contracts through the bankruptcy process within one week unless there was a “profound change” in the unions’ labor proposals, a lawyer for the company said on Thursday.

Harvey Miller, who represents AMR Corp., told a federal bankruptcy judge at a hearing in New York that there appeared to be no basis to expect “real forward movement” obtaining union concessions, and avoid the rejection of collective bargaining agreements. Talks were ongoing, he added.

AMR has been trying to cut labor costs, including thousands of jobs. The third-largest U.S. airline filed for Chapter 11 protection from creditors in November.

UAW expects GM contract deal after ‘much progress’

DETROIT ― The United Auto Workers union has made “much progress” toward reaching a new contract with General Motors Co. to replace a deal on wages and benefits that expires just before midnight on Wednesday, a senior union official said.

“We are confident that we can reach an agreement that will meet many of the goals we set at the beginning of negotiations,” UAW Vice President Joe Ashton said in an electronic update on negotiations for the 49,000 union-represented workers at the top U.S. automaker.

The comments from Ashton represented the most upbeat assessment from the union since negotiations entered a more intensive phase over the past week.

Ashton said the union’s goal was to reach a tentative contract deal with GM, rather than face arbitration.

The union was barred from calling a strike at GM under the terms of the automaker’s restructuring in its 2009 bankruptcy funded by the Obama administration.

“Our negotiations with management have reached a critical stage as we near the expiration of the national agreement,” Ashton said.

A day earlier, Ford Motor Co and the UAW agreed to extend their contract to allow for the union to reach an initial deal with GM or Chrysler Group LLC.

Negotiations in Detroit between GM and Ashton’s UAW negotiating team broke off around 11 p.m. on Tuesday night, a person familiar with the talks said.

Talks continued at Chrysler late the night on Tuesday. The union’s Chrysler negotiating team said it was working “tirelessly” to reach a deal in an update on its Facebook page.

In these talks, which will set wages and benefits for about 113,000 workers for the next four years, the companies are focused on keeping labor costs down. The UAW is angling for more auto production jobs in the United States as well as one-time bonuses because of the industry’s improved profitability.

The negotiations are being watched by investors as an indication of how much Detroit has changed since the steep downturn and sharply tighter financing that almost forced GM and Chrysler out of business in late 2008 and threatened Ford.

GM Chief Executive Dan Akerson and Vice Chairman Steve Girsky have been involved in the GM talks over the past week, people with knowledge of the proceedings have said.

Chrysler Chief Executive Sergio Marchionne left the Frankfurt auto show on Tuesday night to return to Detroit, a source said.

If the deadline is not met, the union and the company teams would have to agree to extend the current contracts, which is seen as a routine matter, analysts have said.

GM has about 49,000 UAW-represented workers, Ford has about 41,000, and Chrysler, controlled by Italy’s Fiat SpA, has about 23,150.

How the new labor board will impact union-free employers

Mike Stief, Partner, Jackson Lewis LLP

Mike Stief, Partner, Jackson Lewis LLP

There are two main ways to modify existing labor law: through legislation or through the National Labor Relations Board.

“The Employee Free Choice Act appears to be dead in the water,” says Mike Stief, a partner with Jackson Lewis LLP. “It is unable to be enacted in any form in the foreseeable future.”

Therefore, any change would have to come through the current NLRB.

Smart Business spoke with Stief about the new labor board and how it will impact union-free employers.

How can the makeup of the board affect labor law?

The current NLRB is made up of three Democratic appointees. There are supposed to be two appointees by the Republican Party, but there is one open seat. So you have a majority of the labor board who are very beholden to organized labor. The chairperson of the board, Wilma Liebman, was a minority member of the board during President Bush’s presidency. The most controversial member of the new labor board, Craig Becker, is a recess appointment. He is one of the more controversial figures on the labor board in recent memory.

Becker believes employers should be stripped of any legal cognizable interest in their employees’ election of representatives. He takes the position that we shouldn’t even have union elections anymore. He wants to restrict or eliminate an employer’s right to communicate with its employees during an election campaign. His views are very extreme; some even are in direct violation of the current National Labor Relations Act, which permits employers to communicate with their employees on this topic. Those rights have been in place since 1947.

Are any of those extreme changes realistically going to happen?

President Obama appointed the majority of the labor board. He owes a lot to organized labor, which helped get him elected. I’m not suggesting every one of Becker’s views will be adopted, but the board majority may take a close look at a lot of those issues.

How does the new labor board impact employers?

The board can affect change and impact non-union employers in two distinct ways: one is adjudication, which is developing a new body of case law.

The second way is rulemaking: the labor board can adopt rules that also could change the labor landscape. Just recently, the labor board proposed creation of a rule which would require every employer in this country to post in the workplace a notice of employees’ right to join a union. Right now, that only applies to certain federal contractors and subcontractors through an Executive Order signed by President Obama. If adopted, this proposed rule would require it for every employer. You may have to post it electronically, as well, if that is a way you customarily communicate with your employees.

This would be a constant reminder to the work force of the right to unionize, and therefore make it more likely that you will be the subject of organizing in the future.

Other potential rules that we might see deal with expedited elections, the more frequent use of mail ballots and/or e-voting.

Historically, people have voted in elections by elections being conducted at the worksite during work time. The NLRB does a very good job of running elections. Having an election on-site is beneficial to employers because it ensures the maximum number of employees vote. Statistics show in elections where the ballot is mailed to your home, voter turnout is less than elections that occur manually.

How may the board affect labor law through adjudication?

There are cases that are going to be decided by this labor board that will be very union-friendly. Among them: making it easier for temporary employees from a temp agency to vote in union elections along with the company’s regular employees.

This labor board will most likely overturn a decision issued by the previous labor board, which found it lawful for a company to prohibit the use of its computer systems for the purpose of organizing.

This labor board may also go back to a decision from the President Clinton-era board that provided non-union employees the right to have a co-worker witness present during an investigatory interview that could lead to discipline. Usually, those types of investigations involve highly sensitive matters. It might be a harassment, theft, or substance abuse issue, and an employer usually tries to keep those investigations as confidential as possible. That confidentiality could be compromised if there is a co-worker witness present.

What are some things union-free employers can do to minimize the impact of these potential changes?

They need to really examine their whole philosophy of remaining union-free. They need to make it an ongoing process. The best way to remain union-free is to eliminate or reduce the issues that cause people to look elsewhere for help.

The keys are a well-trained management staff, selecting supervisors with good people skills, not just good technical knowledge, training those supervisors, and regularly conducting vulnerability assessments to understand which issues exist in the workplace in an effort to correct them.

What should employers be doing now?

On February 17, 2011, from 8:30 to 10:30 a.m., Jackson Lewis LLP is conducting a complementary seminar titled: Surveying the New Labor Law Landscape: 11 Changes in 2011: Tips for Employers. Business owners that are interested should contact our offices to register.

Mike Stief is a partner with Jackson Lewis LLP. Reach him at (412) 232-0138 or [email protected]