Published
January 30, 2024
In early January, a group of 33 Senate Democrats wrote to non-unionized auto manufacturers with plants in the United States demanding that they sign a “neutrality” agreement with the United Auto Workers (UAW). Neutrality agreements commit an employer to not discussing union issues with their workers and staying out of organizing campaigns at their facilities.
One unfortunate consequence of neutrality agreements is that they prevent employees from getting both sides of the story. They can also prevent workers from hearing rebuttals to union misinformation. This is critical because labor law does not prevent unions from telling workers things that may not be true or making promises that are completely unrealistic.
One such example of disconnection with reality is the demand by the UAW that the Detroit Three re-establish traditional defined benefit pension plans (as opposed to modern defined contribution plans like a 401(k)). Defined benefit plans are rare today due to extremely high costs that are simply unsustainable for many businesses. During the UAW’s strike, this was one of the major demands of the union, and, not surprisingly, it was a demand that went unfulfilled.
Yet UAW president Shawn Fain is now not only re-upping that demand but insisting that many other employers adopt defined benefit plans as well. During a speech at the UAW’s National Community Action Program Conference, Fain said: “When we talk about retirement security, it’s not going to be enough to win at GM, Ford, and Stellantis. … We have to win everywhere[.]”
This advocacy for defined benefit pension plans is surely something the UAW will use to encourage workers at non-union automakers around the country to join the union. Of course, the likelihood of these companies adopting defined benefit pension plans under any circumstances is, to be charitable, quite low, particularly since they already offer extremely generous retirement benefits that include lifetime income solutions, which is exactly what Fain seems to want. However, establishing traditional defined benefit plans would be extremely costly, and given that most workers no longer stay with the same employer for their whole careers, it would be of little utility to their future retirement security. But if the companies signed a neutrality agreement, no one would tell that to their workers.
Fain made a couple of other odd statements during his remarks. First, he claimed that if the Detroit Three did not restore defined pension plans, the UAW would “shut the companies down” in 2028. He then advocated for all unions in the country to synchronize their contracts to expire on May 1, 2028, so that a “general strike” would paralyze the country.
Finally, he pledged that if employers did not establish defined benefit pensions for all their workers, the federal government would, whatever that might mean. One can be sure that this is not in the cards since we already have a defined benefit system covering 96 percent of the American workforce (called Social Security). Creating a new retirement plan on top of that makes no sense and would add untold amounts to the national debt.
Unions tend towards hyperbole, and who knows if Fain really thinks he can restore defined benefit plans at union plants or anywhere else for that matter. But when it comes to making the decision about unionizing, workers certainly deserve to know the facts about retirement options and what actually works best for their own retirement security. Even the 33 Democratic senators who want to keep workers in the dark should know that.
About the authors
Glenn Spencer
Spencer oversees the Chamber’s work on immigration, retirement security, traditional labor relations, human trafficking, wage hour and worker safety issues, EEOC matters, and state labor and employment law.
