Union Corruption Today: The Risk to Employers?

While there many not be any major motion pictures in the works about today’s union activity, once upon a time, union corruption was a hot topic in the entertainment industry. Audiences lined up for a look at the inner workings of labor unions, and they got a glimpse of connections with organized crime, embezzlement, and worse. Though fictionalized, these films touched on a critical topic: union corruption and the impact on both employers and the workers that unions are supposed to represent.

Hollywood might have lost interest in exposing the seedy side of unions, but massive scandals persist. Regular news reports on this issue are a stark reminder that union corruption is still a major concern. In fact, U.S. Department of Labor records show more than 300 union locations uncovered theft in the past two years. Incidents of theft range from $1,051 up to nearly $6.5 million, and of course, records only include cases where the individual was caught. It is likely there are many more issues that have not yet been uncovered.

These are just a few examples of recent union-related scandals:

Fiat Chrysler and the United Auto Workers Union

A $4.5 million corruption scandal involving Fiat Chrysler executives and the United Auto Workers Union has resulted in criminal charges, many of which are still working their way through the court system. In one allegation, Fiat Chrysler executives are accused of making more than $1.5 million in payments to UAW officers and employees for the purpose of influencing contract negotiations in favor of the automaker. A significant portion of the misappropriated funds were explicitly intended for employee training and development – that is, for the benefit of the very individuals the union is supposed to serve.


International Brotherhood of Boilermakers Local 684

Another recent case involves the Secretary-Treasurer of International Brotherhood of Boilermakers Local 684. The union officer stole a total of $24,600 from the organization, more than $21,400 of which came from a special account intended to provide financial assistance to union members experiencing catastrophic illness or other significant personal tragedies. Instead of ensuring the funds were used as intended, she diverted them to pay for a variety of luxuries, including a cruise. She has now pled guilty to embezzlement.

United Steelworkers Local Union 12-990

In a similar incident, the Secretary-Treasurer of the United Steelworkers Local Union 12-990 embezzled approximately $40,000 in just nine months. He has pled guilty to the charges, and he admitted that he took the money for personal use.

Unfortunately, these three are just the tip of the iceberg when it comes to 21st century union corruption.

When union funds are misappropriated, both employers and employees are negatively impacted. Your workers don’t receive the benefits they expect as a result of paying their dues, and you are tasked with the impossible job of negotiating a fair agreement with individuals more focused on what is best for their personal financial situation than the best interests of the workers they represent.

The solution is simple. Union organizing in your organization is a direct result of your management practices, which means you can create an environment that is union-proof. Transparency, equity, and employee-centered management practices go a long way towards keeping your company union-free. Learn more about how to create a union-proof environment with specialized training from Projections.

About the author

Jennifer Orechwa

In over 25 years of helping companies connect with their employees, Jennifer has gained a unique perspective on what it takes to build a UnionProof culture. By blending a deep understanding of labor and employee relations with powerful digital marketing knowledge, Jennifer has helped thousands of companies achieve behavioral change at a cultural level.