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Outside the Gates: Unions Versus Big Tech 

Wednesday, Jul 3 2013
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Google's Mountain View campus is a sprawling checkerboard of manicured lawns and fountains around a cluster of sleek, blocky buildings. A small fleet of yellow and green bikes provides employees with an easy form of transportation along the winding streets and paths, and many of them lay scattered in various corners of the Googleplex. Buses pull in each day, squiring employees from their high-priced apartments in San Francisco. During lunch breaks people take yoga classes, enjoy concierge services, drink artisanal coffees, and wander around wearing the latest line of Google Glasswear. A squadron of part-time security guards forms a human moat around the buildings, protecting the machinery inside.

It's that latter group that Samuel Kehinde worries about whenever he visits Google. A tall, lanky Nigerian with a seemingly indefatigable work ethic — his cellphone rings nonstop on the drive from Oakland to Mountain View, and he always answers — Kehinde worked as a security guard himself after immigrating to the U.S. in 2003, and spent two years guarding food stalls at the Public Market in Emeryville. "We did not have a union, so we had no benefits, no vacation, and I only made $9 an hour," Kehinde says, citing the host of factors that led him to join the Service Employees International Union. After successfully unionizing his peers at the Public Market, he quit to work for the SEIU full time.

Now Kehinde coordinates various security worker campaigns for the SEIU, many of which have proved successful. Thus far, 13 companies have joined in San Francisco and the East Bay, including AlliedBarton, which serves Alta Bates Summit and the Southland Mall, and ABM, which serves Twitter's headquarters in San Francisco. Kehinde helped negotiate contracts at Kaiser hospital and at Oracle's Pleasanton campus.

But he and other SEIU representatives haven't gotten any Silicon Valley companies to sign on, yet. So while Securitas Security Services has several union sites in the East Bay and San Francisco, its guards at Facebook aren't unionized. The same goes for Andrews International, which contracts with Oracle. Guards at the Pleasanton campus have union representation; their counterparts at the company's Redwood City headquarters do not.

In June, the SEIU ramped up its campaigns to organize security workers in the tech sector, on the heels of successful contract negotiations in San Francisco and the East Bay. They'd set their sights specifically on employees of Security Industry Specialists Inc., a Culver City company that holds contracts with three of the "Big 5" tech companies on the Peninsula: Apple, Google, and eBay.

Union organizers accuse SIS of unfair union-busting tactics and poor labor policies. They say it keeps the vast majority of its workers on a part-time or "flex" system that prevents them from earning enough money to support their families, let alone rent an apartment in Silicon Valley. Organizers contend that because the company doesn't provide health benefits to most of its workers, it's forcing them to rely on public clinics or state-issued Medi-Cal. So in a roundabout way, the richest tech companies in the world are outsourcing their health care obligations to taxpayers.

Kevin O'Donnell, who directs communications for SEIU, says that many employees on the Apple and Google contracts have to live in single room occupancy hotels in San Jose, because they can't afford housing. Others shack up with their parents. He knows of middle-aged security workers who still need roommates.

"Our organizers have heard all sorts of housing horror stories," he says. "You can only imagine that would happen in one of the most expensive housing markets in the country, combined with wages we see as low as $9 an hour. When you take those low wages, and the high price of housing, you're going to get people who live in subsidized housing, or who are couch-surfing."

In other words, the same nickel-and-dime tactics that journalist Barbara Ehrenreich exposed, and other big-box retailers, is being replicated by the world's greatest innovators. Labor advocates say it's created a yawning and increasingly fretful class disparity in Silicon Valley and beyond. The wealth created by tech companies has raised property values enormously in both San Francisco and the surrounding Peninsula areas. A guard's $17,000-$19,000 annual salary won't pay for a one-bedroom in Menlo Park, or Palo Alto, or Mountain View, so most guards have to live in East Palo Alto or San Jose. In 2012, average apartment rental rates on the Peninsula hovered just below $2,000 a month, while median household income dropped below $100,000, according to the Silicon Valley index. Contract workers have an added cost burden of commuting to work, and they don't get to take the charter buses.

The union believes that Apple and Google have the power to change this system simply by ordering the security company, SIS, to treat its employees better: Because SIS is desperate to keep those lucrative contracts, it will abide by any rules the tech giants set, union members argue. For its part, SIS has vigorously opposed the union, raising questions about its motivations and claiming it merely wants to have a wide sphere of influence in Silicon Valley. Although SIS spokesmen didn't want to comment on the record, they've provided a rebuttal on the company's website. They claim that the SEIU is targeting tech companies directly because it's failed to get workers to sign on.

But the bigger question may be whether the union can get the rest of us to sign on.

While it's become common for unions to put pressure on corporations, either by persuading consumers to boycott their products, or by picketing outside, or by infiltrating shareholder meetings, this particular corporate campaign has a sharper moral cast than others because of the role that Apple and Google play in pop culture. SEIU representatives have held these tech giants to a higher ethical standard, based both on their wealth and their do-gooder sloganeering. Not for nothing did SEIU reps crib Google's "Don't Be Evil" motto and appropriate it for their own campaign signs.

"Unquestionably they have that rhetoric, and they spend a lot of money to develop that sort of image," O'Donnell says. "In some sense security officers are asking them to live up to it."

For many consumers that rhetoric seems borderline evangelical. Tech companies have promised — in their advertising slogans, on their websites, through their lobbying groups on Capital Hill — that they're out to change the world. Google vowed to make all information accessible and useful; Apple turned enlightenment into a sales pitch by running images of Einstein and Gandhi in its "Think Different" commercial series. And we've held them to it, says South Bay Labor Council Executive Officer Ben Field, noting the media storm that precipitated over working conditions at Apple's supplier factories in China. To hear that the "thought leader" of corporations had engaged in exploitative labor practices felt almost like a personal betrayal to Apple devotees.

In February, Apple hired an international panel to audit conditions for 1.2 million workers at those Chinese factories, and ordered its Taiwanese supplier, Foxconn, to strengthen union elections. Media outlets interpreted that as a public mea culpa, while consumers breathed a collective sigh of relief. After all, tech companies don't just make our gadgets; they shape our values.

And yet industry practices back home show no signs of changing.

Since increasing their campaign efforts a few months ago, union representatives have posted ads on Bay Area BART trains with such alarmist slogans as "Google: Don't Be Evil, Use a Responsible Contractor." They've appealed to city council members in San Jose, filed a complaint with the National Labor Relations Boards, and placed several harshly worded ads on the search engine itself. They've used tech companies' own "precision" ad techniques to target Google employees on Facebook.

And, day after day, they've driven down to Apple's campus in Cupertino and the Googleplex in Mountain View, trying to catch up with security guards as they walk to and from work, and attempting to reach the company's high-up executives through any back door they can find. Kehinde and more than a dozen other organizers stood outside a recent Google shareholders meeting at the Googleplex with signs and leaflets in tow, accosting the Valley gentry as they disembarked from a line of charter buses.

Yet for all those efforts, their complaints have fallen on deaf ears. The National Labor Relations Board dismissed the union's claim that the security company had sent a mole to a union meeting, saying that although the claim had merit, it wasn't worth the trouble of launching a full investigation because SIS hadn't shown a pattern of such breaches.

Union representatives blame a standard tech company practice of contracting out all those services to outside companies, which leaves the Larry Pages and Mark Zuckerbergs of the world at much greater remove from the people who sweep their floors or protect them from burglars. It also creates a built-in incentive for the contractors to cut costs, by keeping workers part time, without benefits, O'Donnell says, because of competitive bidding. To top it off, the fractured structure makes all of these companies particularly resistant to a union campaign. It's hard to organize workers who rotate from campus to campus, and answer to a boss at some headquarters far away. It's also hard to hold big tech companies accountable for a labor force they don't directly employ.

Field explains that the practice of contracting hourly services out is de rigeur at most large Silicon Valley companies. "Big companies outsource a lot of things," he says. "Their security, their janitorial services, their food workers. They have a lot of temp workers helping do clerical work, as well." Indeed, two companies called ABM and Brilliant General Maintenance (whose workers are unionized) handle janitorial work at Apple and Google. Palo Alto catering company Bon Appetit holds the contract for Google's cafeteria, as well as the other large cafeterias in Mountain View.

Although spokespeople from Apple, Google, Twitter, and Facebook didn't answer requests for comment on their labor practices, Field speculates that their rationale is mostly about convenience — a company whose main concern is building search engines or social networks doesn't want to concern itself with training in an-house staff of hourly employees. Many of these services require specialized training and expertise, and a whole infrastructure around them, which would be hard for a company to build on its own, says Stanford labor law professor William B. Gould.

"There's a real tradition of specialized companies providing this kind of work," Gould says, indicating that a company like SIS has its own recruitment process, its own uniforms, its own handbook, and its own built-in chain of command, all of which would be a huge headache for Apple or Google to replicate. "When someone else has done it already," Gould says, "they provide a service and an efficiency that [the big companies] don't otherwise have."

Yet Stanford economics professor Nicholas Bloom explains that contracting allows tech companies to stay nimble, and that it wouldn't make any sense for them to do everything in-house, or limit themselves to the one or two contractors with unionized security workers (Kehinde says that no security workers are unionized in Silicon Valley, anyway.) "From a personal viewpoint it's like having a house contractor you signed up to for the rest of your life," Bloom writes in an e-mail. "When you wanted new work done they would likely give you a very high bid, safe in the knowledge you had no alternative. If instead you had a favorite contractor, but said when you wanted to do new work you were getting in multiple bids, it would keep them on their toes."

Moreover, Apple and Google's duty to keep products affordable for consumers far outstrips their obligation to unions. If they prioritized worker rights, or tried to keep tabs on working conditions by doing everything in-house, our gadgets could be ridiculously expensive. An iPhone 5 would cost a lot more than $199.99, he says, just to absorb the added cost of bureaucracy. "Contracting out like this is very natural — firms do this all the time across countries and industries. ... Without [contracting], firms grow too large and can get dragged down by bureaucratic inefficiency."

That happened to Ford in the 1930s. The company's troubles began after it tried to integrate its supply chain all the way from the Brazilian rubber plantations (to make tires) to the final car. That made it fall behind the smaller and more flexible GM.

Competition also keeps costs down. If SIS were beholden to union demands, then it might have to throw more money at its workforce: The security company would no longer have the flexibility to underbid its competitors. Since Apple and Google's bottom line is economic, rather than altruistic, they'd logically just switch to another contractor, says Bloom.

But Field insists that Apple and Google shouldn't be stymied by economics. He points to a more innocent era when Silicon Valley was still quilted with orchards, Apple was still a glimmer in someone's eye, and David Packard, the young co-founder of a promising new technology company, told a crowd of grizzled CEOs that HP's commitment was "as much to their employees, their families, and the communities in which they did business as it was to their shareholders.

In the decades since, corporate culture in the Valley has shifted toward mass-producing and selling gadgets. "Maybe," Field suggests, "there ought to be a broader attitudinal change in society."

He disagrees with the idea that consumers would have to pay more for products to accommodate fair wages for workers. He says that while wages have stagnated since the 1970s, corporate profits have ballooned, and tech companies have enough cash to support their lowest-paid employees.

He argues too that the contract efficiency model comes at great cost: It creates a permanent but ever-changing supply line of workers who don't have benefits, and probably don't have a lot of job loyalty as a result, says Oakland labor lawyer Antonio Ruiz, who works with the SEIU. And one thing that nobody wants at the world's biggest information hubs is a jilted group of security guards. Ruiz and other labor pundits believe that turnover itself is a security risk, and that it profoundly affects the public interest.

"Turnover is especially problematic in an industry that requires familiarity with the location and with the patterns of people coming in and out," he says.

That's as important in the world of information systems as it is in San Francisco's Financial District, where workers are deputized to guard big banks. But they're in a much better situation, Ruiz says. "They've got collective bargaining agreements, better wages, and enhanced training opportunities."

Stanford law professor Gould agrees that from a common-sense standpoint, workers who lack union protections tend to turn over more frequently, creating a less reliable workforce. And in the case of security, that would, in turn, leave a company more vulnerable to breaches.

But no one has done an empirical study correlating union practices with security break-ins, and Anthony Riedel of the Virginia-based National Right to Work Legal Defense Foundation (which openly opposes the SEIU) says it's never come up in any of his cases. He believes the SEIU's claims are purely hypothetical.

What union organizers do have at their disposal is evidence that non-union companies have higher turnover — up to 300 percent per year for low-bid contractors, according to a report released in 2010. Union representatives argue that since the entry barriers for security officers are low, a "revolving door" contractor puts company assets and operations at risk. A current employee and a former employee both say people were quitting all the time, but the security company says its turnover actually isn't that high compared to the rest of the industry: Last year it was 27 percent, according to company spokesman Tom Seltz.

Riedel remains dubious of the revolving door argument. "The [union] makes a lot of claims," he writes in an e-mail. "But their primary motivation is more union dues."

He and other skeptics have been hammering that argument home for years. They accuse the SEIU of viewing security guards as a revenue source, since its workers earn higher hourly wages than their counterparts in other industries. That translates into more union dues that the SEIU can then funnel into political campaigns.

Riedel says that since California is not a "right-to-work" state, workers represented by unions are obligated to pay dues whether they want the union or not. "If you're in a bargaining unit that the SEIU has monopoly control over, then you have to pay for representation," he says, adding that workers often get tricked into paying for the union's political activities as well, because they have a limited period to opt out. Since the SEIU stands to gain money every time it organizes a workforce, it has good reason to persevere — even when the chips are down.

Stanford economics professor Bloom says he's suspicious of a union's motives any time it tries to organize a domestic labor force, which already has federal minimum wage laws and labor protections at its disposal, rather than trying to change working conditions abroad. "Usually the unions are doing this to raise their own salaries at the expense of the customer (or user)..." Bloom writes.

O'Donnell counters that since a union is a social and political organization, rather than a business, the "monopoly" analogy isn't fair. "The mission of a labor union is to build the middle class," he says. "Obviously we're going to try to do that as far and wide as possible."

Yet skepticism over the union's motives might explain why the workers themselves don't seem to be interested in changing their lot, either. Many declined to comment for this article. Union organizers pin their complacency on a culture of fear that seems to be part of the company's strategy, according to Field.

"The security officers are not free to talk with organizers at all," he explains, drawing from his own and others' experiences trying to recruit on campus grounds. "They're required to inform superiors immediately if anyone has made contact with them. The tactics are very heavy-handed."

A former SIS employee who asked to remain anonymous says he's heard other workers express fear of retribution from the security company. But the former guard also admits he wouldn't have gone out of his way to change his own working conditions. "For me it was just extra money," he says. "Did I hear rumbles about 'I need more hours,' that sort of thing? Sure. But legally I'm not sure if [SIS] violated any laws."

Labor activists also blame an ethos that, they say, is endemic to Silicon Valley. The tech sector is nearly devoid of any union culture at all. Well-paid executives and engineers have little incentive to unionize since they already receive so many benefits, and would only gain the added burden of union dues. Yet their attitudes trickle down to the lower-paid employees.

"There's an idea that's been promoted by the industry of being cutting-edge, new age, and progressive, and that the need to engage in collective action is somehow anachronistic," Ruiz says. "But that doesn't apply here. A fair share of the wealth that's created isn't making its way down to workers."

The union has a living example of this disparity in the form of a soft-spoken, bespectacled 24-year-old named Manny Cardenas. He first joined the union in 2010, two years before landing a job at the Googleplex. Cardenas worked for a company called AlliedBarton, which posted him outside various tech companies by the San Jose Airport. A friend from a rival security company introduced him to a union rep, and Cardenas began attending meetings out of curiosity.

Soon he would become an unlikely poster child.

Cardenas, who lives with his parents and young daughter in North San Jose, has worked in the security industry for seven years. He took a part-time "flex" gig at Google last summer, clocking up to 40 hours a week at $16 an hour, enough to pay for groceries and gas, but not quite enough to support his 4-year-old daughter. Cardenas still uses his dad's health insurance, and his daughter is signed to Medi-Cal.

Cardenas says he spent the bulk of his job casing Google's campus and preventing concertgoers at Shoreline Amphitheater from using the parking lots. It certainly wasn't a cakewalk, he says. Standing and patrolling for eight hours a day can be taxing. Writing up incident reports requires vigilance and attention to detail. Sometimes the work was easy, but "easy" didn't translate into guaranteed hours, health insurance, yearly raises, help paying for uniforms (Cardenas says he still has to buy his own boots and borrow jackets from Google), or safeguards against firing without cause — all protections that Cardenas hopes to get if his fellow workers ever vote the union in. At present, the only way for SIS employees to protest a wrongful termination is to file a complaint in court, and many have done just that.

Over the past three years, civil judges in Santa Clara and Alameda counties have seen a spate of lawsuits from SIS employees, some of which led to settlements; others are pending. Although SIS acknowledges it's had to settle some court complaints of wrongful termination or wage and hour violations, it deems them a cost of doing business.

For many union organizers, the goal of shielding workers against a capricious employer trumps that of raising hourly wages, especially since SIS pays better than other security companies, at $16-$20 an hour. Guards in California earned an average hourly wage of $13.33 last year, according to the Bureau of Labor Statistics. Most that contract with Silicon Valley tech companies pay similar wages. Facebook's contractor Securitas wouldn't disclose its pay rates, nor would Twitter's unionized contractor, ABM. Genentech contracts with a firm called Guardsmark, which starts employees at $13.25 an hour. Security guards at Oracle's Redwood Shores headquarters, who work for Andrews International, earn about $12-$13 an hour plus options for minimal healthcare, which is too costly for most of them, according to a union spokesman. The SEIU has tried, unsuccessfully, to organize them, too.

Yet the issue that rankles union organizers isn't hourly pay, or even the fact that many workers are kept part time (a charge that an SIS representative denied, though he didn't have statistics to show the ratio of part-time to full-time workers). What angers the union more is the security company's public resistance to the union's attempts to organize its workers. SIS even goes so far as to include a "Union" page on its website that essentially serves to indict the SEIU.

"For three years, the SEIU has undertaken an aggressive campaign of lies and distortions against SIS," the page says. "For its part, SIS rarely has responded. This web page represents our effort to give our employees and the public the other side of the story — the side the SEIU does not want you to know about." The page includes links to various wage documents that show SIS scoring higher than other security companies, and to a resignation letter from an employee who cited "outside union harassment" as one of his reasons for quitting.

The rival smear campaigns haven't done anything to boost SIS' s reputation in the Valley, but it also hasn't helped the SEIU rally workers. After three years the union organizers haven't earned much ground-level support, save for a few signatures on online petitions, and a few workers who show up to meetings. (Cardenas was the only one willing to speak on the record.) Even with backing from local politicians, such as San Jose City Councilman Ash Kalra, who cameoed at a recent union protest outside Google's quarterly shareholder meeting, the union still has the cast of a left-wing fringe movement.

When about a dozen union organizers picketed outside the shareholder meeting in identical purple shirts, banging drums and chanting protest jingles, their target audience seemed visibly uncomfortable. Well-dressed attendees appraised the spectacle as though it were put on for entertainment; security guards fidgeted and looked the other way.

That suggests the security company's scare tactics have worked, Field says. But it also shows how difficult it is for people to wrap their heads around the idea of an invisible, malevolent contractor, and figure out how Apple and Google fit into the equation.

Tech CEOs at Apple and Google are also generally unaware of working conditions for any group not on their payroll. Field says that despite months of petition drives and letter-writing campaigns, both Tim Cook, of Apple, and Eric Schmidt, of Google, seemed flummoxed when he confronted them over their security contracts. Over the past three years that the union has waged its campaign, he's shown up to shareholder meetings at both Apple and Google, and urged them to address the issue. He appealed to Cook by comparing security guards in the Silicon Valley to workers at the FoxConn factories in China, which generated a major public outcry against Apple.

"Apple has sought to improve its contracting practices in the wake of public controversies related to Foxconn..." Field said during the meeting, reading from a prepared statement. "However, right here at Apple headquarters, Apple is using a security contractor, Security Industry Specialists, Inc., with a history of treating its workers unfairly."

The FoxConn reference was enough to send Cook on a rambling explanation about Apple's efforts to improve factory conditions overseas, Field recalls. But he ducked the part about helping workers at home, claiming to have no knowledge about SIS or its operations. "He said he was not aware of the issues, and that he would look into it," Field says.

Google's executive chairman Schmidt seemed a little more receptive when Field tried the same tactic at the company's shareholder meeting in June; although like Cook, he claimed to have no insight about SIS' s practices. As always, Field prefaced his question with a statement — this one was about Google's "Don't Be Evil" credo, and how it should extend to the company's bottom tier.

"I told him SIS had demonstrated that it was a company that was not behaving in a way that's consistent with Google's highest aspirations for itself," Field says. "Google holds itself up as a company that tries to do the right thing... so it should change its practice of working with low-road contractors like SIS."

He says that Schmidt agreed, and also promised to look into it. Field hopes he'll follow through.

In truth, changes in Silicon Valley's security practices may be a long time coming, especially if the union can't drum up enough worker support to win, or even hold, a union election. SIS representatives claim that because the union failed to placate its desired audience, it decided to go through a back door instead — by targeting the companies themselves. Union organizers believe that if they lobby hard enough, and rally enough public support, they'll force Apple and Google to set conditions for its contractors. They hope that SIS in turn will bow to the new rules, lest it lose three of its most high-profile clients. They also hope the public will hold rich tech titans to a higher ethical standard than other companies.

"The federal minimum wage is seven bucks and change," Ruiz says. "And in the state of California it isn't that much more. But when you're talking about Silicon Valley and the cost of living, it's just so out of line."

Many consumers might find that argument persuasive on a gut level. The question is whether they'd be willing to pick up the tab, should Apple and Google sign on. Someone will ultimately have to pay that cost, Gould says. Either tech companies will have to reduce their labor force (or profit margin) overall, or consumers would have to agree to pay a higher sticker price for their iPhones and Android gadgets. So in the end, it's less a question of whether Apple and Google value high pay and health benefits than whether the rest of us share those values, as well.

As for the union, even after buying up BART ads, leafleting at the tech campuses, posting online petitions, targeting Google employees with precision ads on Facebook, and purchasing ad space on the company's own search engine, it still doesn't appear to have a critical mass among workers.

But Cardenas remains a steadfast presence at most Googleplex union protests, recognizable for his small stature and blocky glasses, and for the mop of black hair that he now keeps below SIS's earlobe-regulation length. He showed up to the shareholders meeting, and to the June 20 protest at which SEIU workers whipped out a petition and demanded to see Google CEO Larry Page. (Google denied their request, but an employee agreed to accept the petition on the company's behalf.)

Cardenas can only hope that his lot will eventually improve. He still has a young daughter to feed, and he still relies on the state for health insurance.

About The Author

Rachel Swan

Rachel Swan

Rachel Swan was a staff writer at SF Weekly from 2013 to 2015. In previous lives she was a music editor, IP hack, and tutor of Cal athletes.


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