Private equity-backed companies union busting at higher rate than peers

As more workers petition to form unions, employers are turning to union avoidance firms and anti-union persuaders. Union busting firms use tactics like creating anti-union literature and holding captive audience meetings where workers are discouraged from voting for the union. In 2023, private equity-backed companies paid union busting consultants at least $799,804, though this number is likely an undercount as not all proper forms have been submitted to the federal Office of Labor-Management Standards by employers.^[1] Although with proper reporting, these consultants are generally allowed by law, they can create an atmosphere of intimidation that can restrict workers’ understanding of their freedom to join a union. The following companies recorded payments last year:

According to the American Investment Council, private equity firms employed 12 million people in 2022, making up 9.4% of the private sector workforce that year.^[2] Private equity-backed companies accounted for 15% of all labor consultant contracts recorded in 2023, outpacing their market workforce share.

Four of the companies contracted with LRI Consulting Services, one of the largest union busting firms in the country. LRI uses a subcontractor model, acting as a middle man that connects companies to consultants and takes a percentage of the payment. LRI’s revenues seem to be growing, as “payments to its persuaders increased by 29% in 2021, then by another 19% in 2022.” LRI persuaders make good money – in 2011, the firm offered “Guaranteed Consulting,” which cost companies $50,000 and came with a money-back guarantee that the employer would defeat the union in an election. While LRI and other companies collect millions, they attempt to silence workers through anti-union rhetoric.

GFL Environmental, a waste management company headquartered in Ontario, Canada, spent $288,715 on consultants in 2023. While most of the company’s workforce in Canada is unionized, GFL is pushing back against workers unionizing with the Operating Engineers in the United States. In Wayne, Michigan, the NLRB’s Office of the General Counsel charged the company with unfair labor practices including withholding wages, discharging employees, and refusing to bargain in good faith. According to the union, if found to have violated the law, GFL could be liable for nearly 1.2 million in back pay.

BC Partners and the Ontario Teachers’ Pension Plan acquired GFL in 2018. The investors began offering shares to the public through an initial public offering (IPO) in 2020, and have since continued to reduce their ownership stake in the company through secondarypublic offerings (SPO/2PO) and a private placement (selling shares to another private investor).

After GFL, Aspire Bakeries reported the most amount of money on union busting consultants. Owned by private equity firm Lindsay Goldberg since 2021, Aspire Bakeries hired GNE Consulting Services when workers in Ontario, California began organizing with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM).

In April 2023, BCTGM filed NLRB charges against Aspire Bakeries alleging “spying on union activities, harassment and intimidation of union supporters” before the union election, which the union lost by just one vote. Based on the evidence presented, the NLRB ordered a re-run election. Lindsay Goldberg refused to meet with workers about these labor violations. BCTGM President Anthony Shelton said, “Private equity companies like Lindsay Goldberg are used to hiding behind their portfolio companies and acting with impunity. Those days are over. Lindsay Goldberg owns Aspire Bakeries and is responsible for Aspire’s anti-worker actions.”

In April 2024, New York State Comptroller Thomas DiNapoli announced “Responsible Workforce Management Policy and Principles” for the New York State Common Retirement Fund’s private equity investments. The New York State Common Retirement Fund is one of the largest public pension funds in the United States, with more than $250 billionin assets under management –  $38 billion of which were allocated to private equity investments as of April. The principles cover a broad set of labor standards, including remaining neutral when workers seek to organize and collectively bargain. In recent years, the fund has committed capital to Lindsay Goldberg, H.I.G. Capital, and Ares Management, all of which own companies that hired union busting consultants in 2023. These firms risk further investments from New York State Common if the companies do not commit to neutrality.

Private equity firms are responsible for their portfolio companies – firms should commit to neutrality across their investment portfolio, respecting workers’ rights to freedom of association and collective bargaining. Rather than spend money on union busting, private equity-backed companies should invest in worker pay, benefits, health and safety, and professional development.

^[1] Data from LM10 and LM21 forms filed with the federal Office of Labor-Management Standards. LM10 forms, submitted by employers, are due 90 days after the end of the company’s fiscal year. Often, companies do not file this form: “For 2023, there should have been 149 employers filing LM-10s for persuader activity (there may be more filed for reporting payments to unions and union officials, but these are not reported here). As of 7/31/24, only 54 or slightly more than one third have filed their LM-10s.” See LaborLab report, page 7: https://laborlab.us/wp-content/uploads/2024/08/August-2024-Year-to-Date-Report-of-2023-LM-10-and-LM-21-Non-Filers.pdf

^[2] Bureau of Labor Statistics data estimated 128.7 million people worked in the private sector in 2022: https://www.bls.gov/cew/publications/employment-and-wages-annual-averages/2022/