Four months into a bitter strike, labor groups are asking whether Palermo’s Pizza deserves its millions in public subsidies.
In a report released Tuesday and a legislative hearing Wednesday, strikers and their supporters charged that the non-union Milwaukee company isn’t offering the kind of good jobs that government funds and tax breaks are designed to encourage. The critiques, and an upcoming cross-country worker tour, represent the latest signs that advocates aren’t counting on labor law alone to punish Palermo’s mass firing of striking immigrants in May.
“When I started at Palermo’s I earned $7.50 an hour,” ex-Palermo’s worker Flora Anaya told Working In These Times just before testifying before the Wisconsin legislature on Wednesday. Anaya said that before going on strike and being fired by Palermo’s, she often worked long hours, for low wages, seven days a week. (Anaya and other strikers were interviewed in Spanish).
Now, Anaya says, “we’re reaching out to as many supporters and as much of the community as possible, and trying to get our voices heard, so Palermo’s will listen once and for all.”
Where is the NLRB?
As I’ve reported, the Palermo’s labor dispute has been raging since May 29, when management declined a request to grant union recognition based on signatures from workers. The same day, the company announced that workers would need to demonstrate their immigration status in order to keep their jobs, and the first wave of workers went on strike.
Nine days later, in apparent deference to a prior agreement with the Department of Labor intended to prevent immigration laws from being used to suppress organizing, Immigration and Customs Enforcement (ICE) announced the suspension of immigration enforcement at Palermo’s. But the following day, Palermo’s terminated 75 employees. Labor blasted the move as anti-immigrant union-busting, while management defended it as a legal responsibility.
This week’s volleys come as both sides urge swift action by the National Labor Relations Board regarding the union drive at Palermo’s. On May 30, after the company rejected their request for voluntary union recognition, workers filed a petition with the NLRB seeking a government-supervised election to win recognition for the independent Palermo Workers Union (PWU); the next day, they filed the first of several batches of Unfair Labor Practice (ULP) charges alleging illegal union-busting by the company. The union election, originally scheduled for July 6, has been postponed repeatedly, and now indefinitely: first by a second union, the United Food & Commercial Workers Local 1473, petitioning to compete on the ballot; and twice more in response to additional ULP charges from the PWU.
The immigrant-rights group and low-wage worker’s center Voces de la Frontera has spearheaded organizing at Palermo’s since 2008, and this year has partnered with the AFL-CIO and the United Steelworkers (USW) union on the campaign to form, and win recognition for, the PWU. (Disclosure: The USW is an In These Times sponsor.) At a July meeting, workers voted that if PWU wins recognition, they will pursue formal affiliation with the USW.
Voces and the USW charge that the first delay caused by the UFCW petition ruined the opportunity for a reasonably fair election, allowing the company more time for union-busting, and likely leading to an eligible voter pool that includes fewer of the fired strikers and more of the replacement workers.
Citing the three-quarters of workers who signed the May union petition, the mass firings, and other alleged union-busting, the USW and PWU are now calling for the NLRB to make a rare move: issuing a bargaining order. Rather than holding an election, that would mean the NLRB simply requiring Palermo’s to recognize PWU and begin negotiating a contract.
Bargaining orders are rare and sometimes get overturned in court. Interviewed last month, former NLRB Chair Wilma Liebman said that in general, a bargaining order has “a decent shot” of being upheld as long as not too much time has passed since the alleged union-busting, and the case involves “pretty serious unfair labor practices, including things like discharging key union adherents.”
Palermo’s insists that an election is necessary. “Rather than launching a rhetorical attack based on misinformation,” Director of Marketing Chris Dresselhuys said in an e‑mailed statement, “we encourage those who are delaying a worker vote to get out of the way and let the workers decide whether or not they want to have union representation.”
Company CEO Giacomo Fallucca took a sharper tack in a “Message from Giacomo” emailed to at least one Wisconsin legislator last week: “In response to our complying with federal law, a small splinter group has tried to manipulate the situation and cast our company in a disparaging light. This splinter group has used a variety of tactics aimed at pressuring our company into breaking the law and trying to embarrass us publicly.”
In similar situations – given the delays in the NLRB process, the opportunities for aggressive legal anti-union campaigning, and the weak remedies for illegal anti-union tactics – many unions have forgone NLRB elections entirely. Instead they’ve opted for tactics such as consumer boycotts, political pressure and workplace activism to push a company to recognize a union outside of the NLRB process. In such situations, it’s often the employer who insists – as Palermo’s is now – that the only fair resolution for the workers is an NLRB election.
“Palermo’s is really an example of how workers take a real risk when they choose to go through the NLRB process,” said Ana Avendaño, the AFL-CIO’s director of immigration and community action, in an interview last month. She predicted that the “very public campaign of shame and exposure” may force Palermo’s to recognize the union, rather than any action by the NLRB.
But Avendaño said that when a company is exploiting immigration status for union-busting, filing for an NLRB election is the best way to get ICE to suspend immigration enforcement. “The calculus made there,” she said, “was that the law that comes with invoking their request for an election would protect the workers in a way that if you don’t go that route, you can’t. … By filing for a petition for an election we actually were able to get protections for the workers.”
Voces de la Frontera says there had been no indication about when the NLRB will rule.
Pizza pork report
Tuesday’s report, released by the AFL-CIO, tallies $26 million received by Palermo’s in loans, subsidies and tax cuts from city, state and local government. The report, “Too Much Pork in the Pepperoni Pizza?,” notes that public funds from the Wisconsin Economic Development Corporation (WEDC) were tied to commitments to create good jobs, and that the state’s Legislative Audit Bureau has criticized the WEDC’s transparency in assessing its beneficiaries’ job creation. The report argues that due to the limited, and much-redacted, information filed by Palermo’s and made available to the public by the WEDC, there’s no proof Palermo’s has delivered on its promises.
“An employer like Palermo’s is being rewarded for doing the opposite of what the mission of these programs is,” report co-author Julie Farb Blain said in a Tuesday interview.
The AFL-CIO report questions the consistency of various jobs statistics provided by the government and Palermo’s. While Palermo’s stated that its average starting wage for production employees is $12.90, the report says that the WEDC hasn’t furnished data with which to assess the claim. The labor federation says that its own survey of pay stubs provided by 55 recent or current employees suggest an average wage of $10.55, which falls 33 cents below the WEDC’s minimum wage requirement. The report urges that the WEDC include labor-law compliance as a criterion for grants and impose “clawback” penalties on companies that don’t perform.
The report shows that “it’s not just the workers that are being taken advantage of, that it’s also the taxpayers,” says Voces Executive Director Christine Neumann-Ortiz.
In an email statement in response to the report’s release, Palermo’s Marketing Director Dresselhuys said, “The real result of this attack is that it hurts Milwaukee and the very workers some presume to support…Palermo’s has met and exceeded the commitments it made with WEDC and other governmental agencies as it relates to job creation every year since we located our manufacturing facility in the Menomonee Valley.”
Dresselhuys says the company has paid more than $130 million in wages and benefits, invested more than $60 million in its facility, paid more than $2 million in property taxes, strongly supported local non-profits, and “created 208 good paying new jobs for local residents” since 2006. But report author Farb Blain tells Working in These Times that Palermo’s still wasn’t providing the evidence necessary to evaluate these claims. She adds that while Dresselhuys cites job creation since 2006, “the tax credits tied to job creation that they became eligible for didn’t start until 2010…they’re not being straight here.”
On Wednesday, Farb Blain appeared before the Wisconsin Legislative Audit Bureau with fired Palermo’s workers to outline the report’s conclusions.
Asked about the report, WEDC Communications Manager Tom Thielding wrote in an email to WITT that the organization pledges “to exceed past efforts and current expectations for accountability and transparency.”
Palermo’s has benefited from local political support. In a July op-ed in the Milwaukee Journal-Sentinel, Democratic Milwaukee County Executive Chris Abele said that he didn’t “know what the facts are yet” in the dispute, but touted Palermo’s as “a pretty generous employer,” highlighted the company’s charity work, and condemned “allegations that are questionable at best and outright lies at worst.”
According to the USW, several current Palermo’s workers reported last week that they were told by management that they would be getting a raise beginning with their next paycheck. Voces sees this as an attempt to pre-empt agitation from workers and taxpayers about the report.
Comprehensive campaign escalates
“From the get-go, there was an understanding that the legal strategy was one strategy, and we hope the workers’ right to organize prevails,” says Neumann-Ortiz. “But there was always an understanding that you can never solely rely on the legal strategy, that we also need to build public support for the strike.”
So far, the striking workers appear to have gotten less traction with management from their NLRB charges than from their comprehensive campaign against Palermo’s customer base and political support. In July, they launched a national boycott against Palermo’s frozen pizzas. The boycott, backed by the AFL-CIO and United Students Against Sweatshops, has primarily focused on Costco, the supermarket chain where the majority of Palermo’s product is sold. Supporters have held rallies outside dozens of CostCo locations around the country.
“Costco has to put pressure on the owners of Palermo’s and hold them accountable,” says fired striker Benita Garcia.
In August, AFL-CIO President Richard Trumka met with Palermo’s CEO Giacomo Fallucca in Washington, D.C. The meeting came at Palermo’s request, which Voces credited to behind-the-scenes pressure from Costco. It ended without any resolution to the dispute. Interviewed last month, USW International Vice President Fred Redmond said that in the meeting, the CEO reiterated his public position that the workers should have an election.
Along with the new scrutiny of Palermo’s subsidies, Neumann-Ortiz said to expect an escalation of the boycott. Students at Wisconsin campuses have picked up the boycott campaign, including at University of Wisconsin-Madison, where Palermo’s is “the official pizza of the Badgers” (the school’s team), and Palermo’s pizzas are sold in school stores under a “Bucky Badger” label. In a September 24 letter to the university chancellor, the campus United Students Against Sweatshops affiliate said it was “very troubled” by the university’s association with Palermo’s. The university’s licensing commission will meet next month to consider a proposal to cut ties.
Voces also plans to intensify the pressure on CostCo. Neumann-Ortiz said that later this month, Palermo’s workers will take their boycott message on the road, visiting states including Illinois and California before arriving at CostCo headquarters in Issaquah, Wash. to seek a meeting with top management on November 16.
“I still see lots of people supporting us,” says fired striker Enrique Martinez. “Even though it’s been four months, going on five months, and it’s been difficult, I still see the support coming out from the community. And we’re in it for the long haul.”