The German War on American Workers: Deutsche Telekom in the United States
For the last twenty-five years, income and wealth in the U.S. have shifted to the wealthiest Americans. Workers’ wages have stagnated while productivity (output per hour of work) has increased by 25 percent. In real terms, median weekly earnings between January 2004 and third quarter 2013 were down 1 percent.1 This divergent trend between real wages and productivity means that working people are not reaping the gains of economic growth in the United States.
The national minimum wage is worth 23 percent less in real terms than what it was in 1968.2 The official poverty rate has grown to 15 percent of all Americans, with 46.5 million people living in poverty.3 Meanwhile, the top executives of large U.S. companies enjoy bountiful pay packages. The Economic Policy Institute found that the annual compensation of top CEOs has risen 835 percent since 1978 while private sector pay has risen 5 percent.4
Economists point to many different reasons behind the growing inequality in the U.S. In general, government has permitted market forces to reward a small minority at the expense of the overwhelming majority of wage earners. Public policy has shifted income and wealth to the top percentiles through regressive tax policies that have lowered taxes on the wealthy and reduced transfer payments to the poor.5
The assault on labor unions drives this inequality. The pervasive use of union avoidance consultants has discouraged workers from exercising their rights. The percentage of workers covered by a collective bargaining agreement has shrunk to under 7 percent in the private sector.6 The labor movement's political force is incapable of moderating the zealotry of the Right.
The National Labor Relations Act of 1935, subsequently amended, is the foundation for American labor law. Its preamble states that it is henceforth public policy to encourage “the practice and procedure of collective bargaining by protecting the exercise by workers of full freedom of association.” Unfortunately, political leaders have presided over the weakening of the NLRA. Employers have learned to game the rules, and the lack of political action to balance the playing field has gutted the legislation of its effectiveness. When employers threaten to close a facility during organizing drives (which they do over half the time) or fire worker activists (which they do one-third of the time), the right of workers to organize a union is an empty right.7 Sanctions hardly dissuade law-breakers: employers routinely file for delays in the face of complaints from the National Labor Relations Board (NLRB). If they are found in violation of the NLRA, employers are liable only for lost wages of a fired worker – minus any income earned after the dismissal. Most typically, employers settle complaints they are about to lose for a lesser penalty.
As foreign companies have invested in the United States, they too have adopted the anti-union practices of U.S. companies – in part because of the apparent cost advantages of low-road industrial relations afforded by weak labor law, and in part because of an unwillingness to contradict the behavior of U.S. managers.8
Deutsche Telekom is that kind of company. Its track record of worker abuse shows the extent to which it conspires with other companies in undermining and disregarding U.S. labor rights. DT’s weak excuses that its subsidiary T-Mobile obeys the law are belied by a pattern of increasingly abusive behavior at the workplace and a recent broad indictment by the NLRB. Not surprisingly, the assault on worker rights has degraded work at T-Mobile. As DT's largest shareholder, the German government has a responsibility to hold the company accountable for its violations of international labor rights.
The choices under U.S. labor law
U.S. labor law is premised upon exclusive representation; a work unit can have only one employee representative. The law requires, however, that a majority of workers must choose a labor union and they must do so independently of influence from the employer. The law offers wide latitude in determining such a majority: the employer may accept individual statements of support from a majority of the workers, or the NLRB may supervise an election. Under current law, the first is voluntary for the employer while the second is mandatory. Meanwhile, the company must not campaign for a union.
The company, though, may campaign against the union. This gives management an inherent advantage since U.S. unions have no guaranteed access to work premises. Instead, union representatives must meet with workers off-site and outside work hours. Inside the facility, workers may marshal arguments for collective representation, but only during non-work time. In contrast, the employer is free to use work time to argue that employees should reject a union at the workplace.9
U.S. companies display a range of behaviors along issues of freedom of association. AT&T, the largest telecom company in the U.S., accepts union authorization cards as a measure of support and it uses a third party (American Arbitration Association) to verify totals. When workers start signing up for representation, the company remains neutral and even trains lower level managers to abstain from comment. As a result, the Communications Workers of America (CWA) represents 132,000 workers at AT&T of which 44,000 work for AT&T Mobility, the wireless provider.
Within the same industry, T-Mobile US (TMUS) represents the other extreme. Controlled by the German telecom giant Deutsche Telekom, TMUS takes the position that it can only recognize a majority of workers wanting a union if an election takes place.10 It also argues that employees need the “facts” before they can make an informed choice in an election. It is unabashed in communicating the message that the company does not want employee representation, taking full advantage of the law’s provisions in terms of employer speech. Employees are forced to listen to managers harangue the labor movement in general and CWA in particular. Meanwhile, managers can silence union supporters within the workplace. Elections are plagued with consistent employer badgering of employees to vote against “third parties.”
When pressed on worker rights, Deutsche Telekom claims that it respects the law of countries in which it operates. This is not entirely true, as the company has faced numerous complaints from the NLRB (see below). It argues that it cannot import German-style codetermination to foreign subsidiaries and that there is no single model of labor relations. DT further says it can only recognize a union representing a majority of workers in the U.S. if there is an election. It must retain its “free speech” rights to communicate actively and repeatedly to workers that it opposes organizing and union recognition.11
Corporate speech – in contrast to either employee speech (which is severely restricted) or the speech of low-level managers (who must speak with one voice) – is the wedge used by DT to intervene lawfully in the decision of workers to choose an employee representative. DT has been in the forefront of the industry suggesting that companies even have an obligation, not just to exercise their speech rights, but to use those rights to oppose workers attempting to organize. In its response to the Human Rights Watch report on the behavior of multinational companies in the United States (which included considerable material on Deutsche Telekom), the International Organization of Employers wrote a paper asserting that a company has “an obligation not to stand by idly.”12 The report benefited from the technical guidance of Deutsche Telekom’s U.S. attorneys from the law firm of Littler Mendelson. Deutsche Telekom has also circulated the report to stakeholders.
Deutsche Telekom in the U.S.
Deutsche Telekom entered the U.S. market in 2001 by acquiring VoiceStream Communications. For years, the company (re-named T-Mobile USA in 2002) was a cash cow for German investors, returning a steady stream of dividends back to the home office. Under-investment in 3G technology by DT, however, allowed industry leaders AT&T and Verizon to widen their lead over T-Mobile. AT&T attempted to purchase the company in 2011 but U.S. regulators scuttled the acquisition because of anti-trust concerns. The uncertainty around the deal, though, brought lower margins and customer turnover. The company lost branded contract customers for seven consecutive quarters until second quarter 2013.13 In May 2013, DT combined its T-Mobile USA assets with the small wireless carrier MetroPCS to create T-Mobile US, a public company listed on the New York Stock Exchange – of which DT now owns 67 percent of the shares.
The 2013 merger with MetroPCS promises to degrade the overall situation for workers at T-Mobile. MetroPCS served exclusively prepaid customers – those who do not buy long-term contracts. Prepaid customers – disproportionately low-income and seniors – tend to be more price conscious than other wireless customers, and therefore bring less revenue to the company. The company may now be positioned to compete favorably in the prepay niche, but that position will likely bring lower revenues per customer and put downward pressures on costs with workers being the largest cost item.
Nonetheless, T-Mobile has shaken up the wireless market by eliminating two-year plans, ending some early termination fees, and providing free international roaming. Consequently, a price war has broken out among the carriers at least for the short term. TMUS has increased customers in the last year by roughly 2.5 million and projections point upward for the short term. A number of analysts, however, suggest that grabbing customers comes at a high cost that may not be sustainable in the long run.14
Union hostility at T-Mobile
When DT made the initial offer for VoiceStream in 2000, the CEO of Deutsche Telekom, Ron Sommer, had a phone conversation with then-president of CWA Morton Bahr in which Sommer promised Bahr that if CWA supported the acquisition, DT would not interfere with workers’ attempts to organize local unions. As a result, CWA argued in favor of the acquisition in meetings with Clinton White House officials, in testimony before Congress, through lobbying Members of Congress who were seeking to limit foreign ownership, and through support at the Federal Communications Commission. Both the Department of Justice and the FCC approved the merger, and it closed in spring 2001.
Immediately after the deal closed, technicians at VoiceStream in the state of Connecticut sought to organize a local union. VoiceStream management brought in attorneys known for their union-avoidance work and ran an anti-union campaign to dissuade workers from organizing. Among the tactics encouraged were threatening workers with loss of employment in the event of a strike, interrogating workers about the union, and issuing dire warnings of the consequences of voting for the union.15 In the representation election, the workers chose not to be represented. The fact that Deutsche Telekom now owned VoiceStream did not change management’s anti-union practices.
In 2004, workers at T-Mobile USA (DT changed the name in 2002) discovered a 150-page training manual for managers that showed systematically how to push workers to reject organizing local unions. The author of the manual wrote, “Preserving the union free privilege is an honor.”16 Among the many reasons the manual gives for “resisting the union” are the extra costs of paying workers better wages and benefits, the suggestion that unions create an adversarial climate, and the possibility of a strike. While pointing out that in several states union membership is not mandatory, it also laments the fact that non-members do not get to vote on contracts (correct statement) and suggests the union would not defend non-members (incorrect statement: unions have a legal responsibility to enforce the contract for members and non-members).
Although T-Mobile management later claimed to stop using this particular manual – while developing other materials that conveyed the same message – the actions at worksites have been consistently in opposition to workers freely choosing to exercise their rights of Freedom of Association. In particular, trainers show every new employee a slide show denigrating the union; one slide states: “we are better off communicating directly with each other, rather than through a third party, like the CWA.”17 The company also recommends: “your supervisor or HR is available for any questions you have about the union.”18 The company also ensures that managers toe the line: a 2005 job advertisement for human resource managers included the requirement of “maintaining a productive and union-free environment.”
Executing the union avoidance policy has meant monitoring worker attempts to organize. In Allentown, Pennsylvania, security guards routinely videotaped license plates of workers who talked to union organizers outside workplace parking lots.19 A 2008 memo from a manager of retail stores to subordinates in Oregon demanded that she be informed of all contact with unions.20 In 2011, managers in Frisco, Texas, were seen using binoculars to spy on conversations between workers and union organizers.
Whenever workers attempt to form local unions, management holds “captive audience” meetings. Typically, these meetings cover various aspects of work, and then devote time to dissuade workers from joining the union. There are numerous instances when managers claim workers will be forced to pay dues considerably in excess of CWA dues. Other arguments include references to the union as a “third party” that will interfere with management-employee relationships. Union activists are frequently referred to as “union bosses.”
During a representation election in Connecticut in July 2011 (the same unit that sought election in 2001), T-Mobile USA flew top executives from corporate headquarters in Bellevue, Washington, to meet one-on-one with workers to encourage them to vote against the union. A strong majority when the election was requested evaporated to a slim one-vote majority, and the unit was barely certified. Later that summer, technicians in upstate New York withdrew an election petition because management had chiseled strong support into a minority. In December 2011, top executives again met one-on-one with technicians on Long Island to encourage them to vote against the union, and pro-union workers lost the election.
In both the upstate New York and Long Island cases, various levels of management descended on the unit for mandatory meetings with workers in which management disparaged the union, labeled it a “third party,” and made inaccurate claims about the cost of union dues. Managers claimed that the union was spreading many falsehoods, and workers were encouraged to go to the company for the “facts.” Management claimed that once the union became the official bargaining agent, the slate would be wiped clean, collective bargaining would start from scratch, and, while workers might gain benefits, they might also very well lose them. Managers sent each worker a personalized email communication that tallied prospective dues. In the Long Island case, a union activist was singled out for wanting to be a “union boss,” and the regional manager stated he was not trustworthy.
The captive audience meetings were the most brutal for a small group of retail workers at a New York MetroPCS store who filed for an election in July 2013. Seven of the nine workers at the store were subjected to a total of 30 meetings in the basement, even after the workers signed a petition requesting the meetings cease because of the effect on morale. One worker stated he was forced to attend five meetings that lasted on average two hours over the course of two weeks. Local supervisors, regional managers, and even the Vice President from Human Resources flew in from the west coast headquarters to denigrate the labor movement, make insinuations about CWA, and dissuade workers from voting for the union. Even CEO John Legere showed up at the store during this effort. Nevertheless, on September 25, the workers voted 7-1 for representation.
A worsening climate
TMUS has begun using selective terminations to cut down organizing drives. A top performer at the Wichita call center was disciplined and eventually fired for wearing a union T-shirt and for publicly supporting the union. Two union supporters were fired in Albuquerque for their pro-union stances. Other union leaders at both the Wichita and Albuquerque call centers have been formally disciplined for their union work. The message is clear to worker-organizers: if you build a union, you could lose your job.
The NLRB has taken notice. In late March 2014, it consolidated several of its complaints against T-Mobile – the labor law equivalent of an indictment – into one national complaint. It charged TMUS US with the three illegal terminations and with the disciplining of two other workers in Wichita, Kansas and Albuquerque, New Mexico as well as having harassed and intimidated workers in retaliation for their union activity. The NLRB also accused TMUS of subjecting workers to overly broad rules – in the code of conduct and employee handbook and elsewhere – thereby preventing them from discussing the terms and conditions of employment.21
The indictment represents a government response to repeat offenses and also to the escalation of anti-union hostility by TMUS. The NLRB previously issued numerous worksite-specific complaints that TMUS interfered with legally protected activity. Complaints typically resulted in “settlements” by which the company promised not to engage in similar behavior. Instead of keeping these promises, however, TMUS committed the same offenses at other workplaces. The company then intensified its overall campaign leading to the firing and suspension of visible union supporters.
The NLRB determined that TMUS is engaging in a centrally directed campaign to prevent employees from obtaining union representation. Evidence from the first day of the Wichita trial in February 2014 showed that managers reported any union activity to corporate headquarters in Bellevue, Washington, which coordinates company response.22 The corporate response includes counter points to union literature as well as supplemental management training. The sheer number of these “Third Party Activity” reports suggests a company-wide strategy to asphyxiate any sort of collective action.
The degradation of work
Scant union representation at T-Mobile – only two bargaining units totaling 25 workers in a company with 40,000 employees – enables first-line managers to act as they see fit to increase productivity. CWA’s conversations with T-Mobile workers around the country detail worker abuse, humiliation, and extraordinary job-induced stress. What we have found at T-Mobile is not unique, but is nonetheless shocking.
Call center coaches blast loud music to “motivate” workers. Managers shake workers’ chairs and tell them to work faster. In the face of this antagonism, the customer service representative is expected to maintain a pleasant and courteous tone with the often-irate customers who call.
Some managers use humiliation to spur productivity. A call center worker in Chattanooga, TN, was forced to wear a dunce cap because she did not meet her performance standard. The hat was then passed around to others in her pod when their metrics dropped. In Albuquerque, a group manager at the call center required coaches to wear a backpack shaped like a monkey if their team scores declined. (Thus, workers were encourage to “get the monkey [of low scores] off the back” of the team.
Meanwhile, the performance standards that workers must meet are changed on a regular basis. At times workers are forced to sell a certain value of extra services (even as they attempt to troubleshoot customers’ technical or service issues). At other times it has been the rate at which customer problems are resolved with one call only. Or it might be the length of the call handling time.
In general, call center workers are expected to be on the phone with customers 96 percent of the time while spending a short amount of time (380 seconds for General Care) with each customer. This means pregnant workers must clock out – effectively lowering their income – before using the bathroom to avoid lowering their metrics.23 Such metrics affect one’s overall standing at the workplace which determines the bidding queue for semi-annual shift bids. Lower standing means unfavorable schedules, presenting real problems for parents of small children or those who care for the elderly. CWA has documented numerous instances of workers quitting because of bad schedules.
It is not surprising that call center workers, in particular, suffer a high level of job-induced stress. “From a scale from one through 10,” recounted a call center worker from the now-closed Brownsville facility, the stress level “was an 11.”24 At another call center, a former worker lamented, “I would leave work and take that frustration and anger home with me.”25 At a third shuttered call center, an ex-employee reported:
There were times where it got pretty stressful. I actually had to seek treatment for high blood pressure, stress-related tension in the muscles. I had to see a therapist for that – just for massages. I had to take high blood pressure medicine. And so it was pretty stressful.26
A former worker from the Wichita call center reported:
I don’t know how many times you go into the bathroom and somebody is puking. And it’s because they’re stressed. They can’t get their numbers.27
Several T-Mobile employees have reported that the stress had serious medical implications. A woman who worked in the call center in Lenexa, Kansas (since closed), reported:
I remember leaving [training] and I thought I was having a heart attack. I came home and told my husband I need to go: ‘You need to take me to the emergency room. I think I’m having a heart attack.’ Blood pressure was sky-high and it was just the stress from making the numbers and having a coach who stood over you.28
One worker from yet another closed facility in Frisco, Texas, bluntly summed up the feelings of many T-Mobile workers: “I was working in a mill, in a slave mill.”
The global response
The Deutsche Telekom labor practices in the United States have not gone unnoticed around the world. The International Trade Union Confederation has pushed DT to alter its union hostility in its “We Expect Better” campaign. ITUC General Secretary Sharan Burrow highlighted a distinguished panel of local, national, and international leaders who listened to worker stories in South Carolina in February 2013.28 Secretary Burrow pushes organizing rights in general and T-Mobile US organizing rights in particular in every possible venue.
UNI Global Union has been in the forefront of an effort to encourage Deutsche Telekom to sign a global framework agreement that would include organizing rights in the United States. UNI almost succeeded in reaching an agreement in 2006 but when DT changed leadership (both CEO and Global HR Director), the company changed tack, resisting an agreement that would rein in its U.S. managers. UNI has met with DT executives over the years to reach a resolution. It has also encouraged affiliates within DT to push organizing rights. UNI General Secretary Philip Jennings has met with union activists in the U.S. and verified the cards of a majority – that eventually evaporated into a minority – of workers before the Long Island election.
The core of the global response has involved ver.di, the large German services union, which represents over 100,000 DT workers in Germany. Since 2001, ver.di and its predecessor unions have supported efforts to bring labor-management practices in the United States into conformity with both its practice in Germany and the company’s policies as expressed in its “Social Charter.” Likewise, it worked with CWA and UNI to achieve a global framework agreement.
In 2008, CWA and ver.di formed TU, a joint organization to represent T-Mobile USA workers. Within TU, CWA organizes workers and meets with community and political leaders in the U.S. while ver.di pushes the German management of Deutsche Telekom and meets with German political leaders. Both CWA and ver.di participate in bargaining. Over 1,000 workers have signed TU membership cards.
To facilitate a close working relationship between CWA and ver.di, the two unions coordinate actions, meet on a regular basis, and provide materials in both languages. CWA has hired bilingual staff. Ver.di has arranged for TU activists to speak at DT shareholder meetings. In May 2013, TU activists testified before the Bundestag about working conditions and met with both national and local political leaders. CWA President Larry Cohen addressed the ver.di congress in 2011 and spoke to strikers at DT in 2012. CWA activists provided solidarity messages during the ver.di strikes.
CWA and ver.di have sought to educate every single Deutsche Telekom employee in Germany about working conditions and union hostility in the U.S. They have developed worksite-to-worksite partnerships that involve regular contact through phone calls, e-mail communications, and site visits. Deutsche Telekom worksite leaders, typically works councilors, use vacation time to visit the U.S., talk with T-Mobile workers, participate in organizing activities, and meet with community and political leaders.
Partners then return to Germany and recount those conversations in a variety of ways – ver.di national publications, worksite newsletters, and works council meetings. Works councilors and ver.di national leaders have addressed worker assemblies – mandatory all-employee meetings under German Codetermination – to present the T-Mobile story. Regular telephone calls and an active German social media presence keep concerned observers current.
Ver.di has also engaged in individual actions in Germany to publicize the plight of T-Mobile workers. Deutsche Telekom is a sponsor of the Bayern München football club, and ver.di members have protested in front of the gates to games. In a DT meeting with small and medium sized companies in September 2013, ver.di members stood in silent protest. Later, Berlin activist Nadine Jüngling debated then-CEO René Obermann about the situation in the U.S., telling him, “I have been to South Carolina, I have met those workers, I know what I am talking about. You are out of touch.”
Employees now own a different narrative when the company tries to explain away the U.S. problem. Deutsche Telekom recognizes that the U.S. subsidiary is creating legitimacy issues in Germany. Tomas Lenk, head of the Berlin call center’s works council, recounted the exchange at a worker assembly in Hannover in fall 2013. After hearing that T-Mobile US workers frequently must clock out to use the bathroom, a worker complained that her first-line supervisor had given her only 10 minutes of bathroom time outside of statutory breaks. A manager popped up to say he personally would resolve the problem.
The partnership program helps organizing in Germany. Ver.di members recognize that the company’s practices in the U.S. could easily be re-imported to Germany.
The German government has a direct responsibility for the continued assault on worker rights in the U.S. It owns 31.7 percent of DT, making it the largest single shareholder in the company. DT's behavior should be a matter of international concern for the German government: through its unwillingness to end the union hostility of DT and other German companies, the German government contributes to the growth of social inequality.
Furthermore, DT has flouted U.S. law twice in the last two years. In 2012, T-Mobile announced the closure of 7 call centers and the displacement of 3,300 workers. Workers reported that much of the call volume was going to overseas vendors. CWA applied to the U.S. Department of Labor for enhanced benefits for those workers. Trade Adjustment Assistance provides two years of unemployment compensation, training vouchers, and subsidized health care coverage. CWA provided evidence from workers at the vendors in the Philippines and Central America proving that some of the work had been offshored. Throughout the process, even when directly questioned by the Department of Labor, T-Mobile declared the work was not being sent overseas.30 The company not only sought to deprive its former employees of their rightful benefits, it openly deceived the U.S. government.
In 2013, the U.S. State Department gave DT the opportunity to resolve its U.S. labor conflict. CWA, ver.di, and UNI Global Union filed a complaint in July 2011 under the OECD Guidelines for Multinational Enterprises, alleging that T-Mobile had “engaged in a pattern of conduct designed to undermine and frustrate employees’ efforts to choose union representation freely and to deny employees their rights to collective bargaining.” The U.S. National Contact Point (housed in the State Department) found that there was a basis for mediation between the company and the unions. DT withdrew from the process after having expressed doubts about the impartiality of the Federal Mediation and Conciliation Service (FMCS), a U.S. government agency that has existed since the 1940s.
According to the UN Guiding Principles on Business and Human Rights adopted in 2011, businesses have a responsibility to respect human rights “over and above legal compliance with national laws and regulations.” It is not enough for DT to excuse the behavior of TMUS by claiming (incorrectly, as we saw above) that it “obeys the law.”
Rather, the company must have a due diligence process to report possible abuses, and must remedy the reported violations. DT does engage in Corporate Social Responsibility reporting. However, the only mention of U.S. labor issues in recent CSR reports is a mention of a collective bargaining agreement with the Connecticut technicians, not the allegations of union-busting.31 The absence of any reporting on Freedom of Association issues in the U.S. suggests either a failure at due diligence or a lack of transparency. Companies have a responsibility to remedy problems they uncover. The withdrawal from the OECD process suggests that the company is not interested in remediation.
Under the UN Guiding Principles, governments have a duty to respect human rights beyond their territorial borders, especially if they are key stakeholders in the company. Unlike Corporate Social Responsibility guidelines, the UN Guiding Principles are not voluntary: governments have a mandate to respect and enforce the rule of human rights law.
The German government has the responsibility under the UN Guiding Principles to “investigate, punish and redress private actors’ abuse.” In late 2012, members of the Bundestag called on the government to account for the behavior of T-Mobile in the U.S. In its March 2013 response, the government tepidly urged the companies in which it owned shares to participate in the UN Global Compact and the OECD Guidelines, both voluntary processes. It claimed that it did not enjoy any “direct right of intervention” in the affairs of German companies. DT’s withdrawal from the OECD case made a mockery of German voluntarism.
Deutsche Telekom's abuse of workers in the U.S. and its disrespect for U.S. and international law tarnish Germany's reputation as a country of strong social partnership. It is time for the Merkel government to shed its reluctance to intervene in the affairs of German companies and exercise its responsibilities under international law.
The German war on T-Mobile workers is only a slight exaggeration. Other European and Japanese transnational companies have also been known to sink to the lowest levels of U.S. labor law. The Volkswagen case – in which the company was willing to install a works council at the Chattanooga assembly plant – was an exception. The German management team at Deutsche Telekom, backed by the management members of the Supervisory Board, acquiesced to the anti-labor actions of T-Mobile management.
Such hostility to unions has contributed to the inequality of American society. The absence of significant union presence at T-Mobile has enabled the company to drive down wages so that a significant number of full-time employees qualify for government assistance.32 The company responds that its wages and benefits are competitive with those of other wireless carriers. While starting wages are comparable, there is no salary progression to reward seniority and no negotiated pay increases, so worker pay stagnates. New workers frequently make more than workers with 5 years or more of seniority. The freeze on pay announced in 2013 would not have been possible with a collective bargaining agreement.
The war on workers within T-Mobile may not even be a cost-saver for the company. At least partly because of the brutality of management, T-Mobile experiences an employee turnover that exceeds 100 percent annually in some call centers.33 Thus, on top of labor costs for those employees engaged in productive work, the company pays high training costs and employs workers with little experience.
Unfortunately, there is little indication that Deutsche Telekom will back away from its blanket support for T-Mobile’s anti-worker actions. Despite the innovation of the CWA/ver.di partnerships, Deutsche Telekom has not ended the destructive anti-worker behavior of its controlled entity. Likewise, the bad press that DT has received because of the behavior of T-Mobile has not diminished its support for its subsidiary.34
The intransigence of DT has wider implications. The continuous assault by T-Mobile management on worker rights has not gone unnoticed by socially responsible investors. These are not gadfly activists. Most of the European pension funds take corporate social responsibility seriously and base investment decisions at least in part on CSR records. The firings, the disciplining, and the NLRB complaints undercut the credentials that DT has fought hard to build.
It may take increasingly aggressive worker actions to move either Deutsche Telekom or T-Mobile to change anti-worker management. Whatever those actions, they will clash with the model of social dialogue built by German companies. Put another way, the union hostility practiced abroad by German transnationals has the potential to undermine the German model.
Such worker actions may eventually affect the business model of T-Mobile. As we saw above, the company sees future growth in the prepaid segment and among price-sensitive consumers. Growing support for the workers among student and low-income communities alone has the potential to erode key markets for T-Mobile.35
Deutsche Telekom intransigence may be driven by its desire to sell its U.S. assets, calculating that a non-union asset would fetch a higher price. The company may not find an easy exit, however. The most likely purchaser is Sprint, and both the Department of Justice and the FCC have given pretty clear indications that they will not allow Sprint to purchase T-Mobile. Therefore, the company will likely be in the U.S. market for the foreseeable future.
The struggle for worker rights at T-Mobile promises to be a long one. What will break the current deadlock is uncertain. The struggles at T-Mobile, like the struggles at other non-union companies, are part of a larger fight over democracy. T-Mobile workers will need to work with other progressive forces not just on their own campaign but on a wider campaign to take on corporate power and restore our democracy.
*An earlier version of this article appeared in International Union Rights, Vol. 20, Issue 4 (2013). The author, a Research Economist at the Communications Workers of America (CWA), is grateful to the editors of IUR for permission to publish this expanded and updated version. Much of the information presented here is based on the author’s direct experience of more than ten years as a union staff-member. The views expressed here are those of the author and do not necessarily reflect those of CWA.
1. U.S. Bureau of Labor Statistics, November 1, 2013. www.bls.gov/news.release/pdf/wkyeng.pdf. See also Lawrence Mishel and Heidi Shierholz, "A Decade of Flat Wages: The Key Barrier to Shared Prosperity and a Rising Middle Class," Economic Policy Institute, August 21, 2013.
2. Sylvia A. Allegretto and Steven C. Pitts, "To Work With Dignity: The Unfinished March Toward a Decent Minimum Wage," Economic Policy Institute, August 26, 2013
3. U.S. Bureau of the Census, “Income, Poverty, and Health Insurance Coverage in the United States: 2012,” Washington, D.C., September 2013. www.census.gov/prod/2013pubs/p60-245.pdf
4. Lawrence Mishel, “The CEO-to-Worker Compensation Ratio in 2012 of 273 Was Far Above That of the Late 1990s and 14 Times the Ratio of 20.1 in 1965,” Economic Policy Institute, Economic Snapshot, September 24, 2013.
5. Joseph E. Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers Our Future (New York: Norton, 2012), Chapter 4.
6. BLS, private sector coverage from the Bureau of the Census, Current Population Survey, 2012.
7. Kate Bronfenbrenner, “No Holds Barred: The Intensification of Employer Opposition to Organizing,” Economic Policy Institute and American Rights at Work Education Fund, May 20, 2009. www.epi.org/publication/bp235/
8. Harold Wilensky, American Political Economy in Global Perspective (Cambridge and New York: Cambridge University Press, 2012).
[9. See Lance Compa, Free Speech and Freedom of Association: Finding the Balance, ITUC Position Paper, June 2013. www.ituc-csi.org/IMG/pdf/free_speech_and_freedom_of_association_final.pdf
10. TMUS is a company controlled, according to New York Stock Exchange standards, by Deutsche Telekom which owns 74% of TMUS and appoints 8 out of 11 directors.
11. Letter from Dietmar Frings, Deutsche Telekom Senior Vice President Employment Policies and Relations, to Rosa Pavanelli, General Secretary, Public Services International, February 8, 2013.
12. International Organization of Employers, A Response by the International Organisation of Employers to the Human Rights Watch Report — “A Strange Case: Violations of Workers’ Freedom of Association in the United States by European Multinational Corporations,” Geneva, Switzerland, May 2011. www.uschamber.com/sites/default/files/comments/IOE_HRW_Response.pdf
13. Engadget, April 4, 2013.
15. National Labor Relations Board Settlement Agreement, Case No. 34-CA-9800, December 3, 2001.
16. William R. Adams, “For Your Information,” 6th ed., Adams, Nash, Haskell & Sheridan (law firm), 1983, p. 8.
17. “New Employee Orientation,” 2012, slide 13.
18. “New Employee Orientation,” 2012, slide 14.
19. National Labor Relations Board Settlement Agreement, Case 4-CA-34590.
20. The National Labor Relations Board forced the company to post a notice that it would not require employees to report union contacts. National Labor Relations Board Settlement Agreement, Case 36-CA-10359.
21. [citation for this NLRB accusation?]
22. [reference for Wichita trial?]
24. Interview with Xavier Solis, former employee, T-Mobile, Brownsville, Texas, November, 2012.
25. Interview with an anonymous former employee, Fort Lauderdale, Florida, Nov. 2012.
26 Interview with Jerry Smith, former employee, Frisco, Texas, November 2012.
27 .Interview with Pam Smith, former employee, Wichita, Kansas, July 15, 2012.
28. Interview with Katherine Ramzy, former employee, Lenexa, Kansas, November, 2012.
29. See CWA, TU, ver.di, “Standing up for Good Jobs in Charleston: T-Mobile Workers Speak Out,” May 2013.
30. A Freedom of Information Act Request to the DoL showed that the company answered that the work had not been sent offshore.
32. Read the profile of a Wichita call center worker and the comparison of her pay with that of her CEO: www.aflcio.org/Corporate-Watch/Paywatch-2014
33. [documentation for this point?]
34. “Brutaler Psychoterror,” Der Spiegel, November 22, 2012. www.spiegel.de/international/business/union-campaign-takes-on-t-mobile-usa-working-conditions-a-868525.html. See also the 8-minute exposé of Deutsche Telekom on the Monitor program aired by the German TV Channel ARD in September 2011, www.youtube.com/watch?feature=player_embedded&v=pjp037P7dkE
35. For the student campaign at T-Mobile, see United Students Against Sweatshops, Justice for T-Mobile Workers: http://usas.org/campaigns/tmobile/. Ministers from African-American churches have spoken out forcefully about the treatment of T-Mobile workers in several call center communities, including Charleston, SC, and Nashville, TN.