Dec 11, 2008

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Republic Windows Settlement: Score One for the Sit-in Strike?

  

 

 

Republic's Chicago HQ

Republic Windows & Doors’ former employees may be getting their WARN Act compensation from embattled financier Bank of America and another unlikely source – BofA’s competitor, Chase.  But was it really their sit-in strike that brought about the settlement?

Former employees at Republic Windows and Doors captured international attention when they refused to leave the plant where they worked after the company abruptly shut down.  Their biggest complaint – at least the one that the media pounced on – was against Bank of America, Republic’s lender, who pulled the company’s line of credit, ostensibly forcing it to close.

After days of sit-in striking and meetings and shout-outs from prominent political figures (including the President-elect himself), Bank of America has agreed to lend the defunct  window-maker about $1.4 million to satisfy its legal obligations to its employees.  Chase Bank also promised up to $400,000 to Republic – it turns out the BofA competitor owns about 40% of the company.

Some are calling this a win – maybe even a return to de rigeur status – for the sit-down strike, where workers essentially take over a factory floor in protest.  But that’s a stretch.  First, let’s not forget that the company in question was shut down.  So not only was the plant not running (which means it can’t be taken over) but the workers had nothing to lose.  If the Republic employees had done the same thing, but demanded that the company reopen and give them their jobs back, the story would have ended very differently.  Also, the main target (at least by the end of things) wasn’t even the employer.  It was the a bank – a bank that denied a company credit, forcing it to close shop and put people out of work.  You couldn’t ask for a better bad guy these days.

All in all, between the bank and the laid off workers and the city politicians and the holidays, you had a perfect storm of factors capable fo turning this sit-in into a media magnet.  And anything this media-intensive automatically invokes the law of diminishing returns.  It will not work as well for the next group that tries it, and once it’s tried a second time, woe be to the third, fourth or fifth local that tries to get back pay from a bank.  

So what is the takeaway from the story?  That part’s easy – it’s not that banks or employers will respond to organized protest or meetings with political envoys.  It’s that, even in this economy – especially in this economy – they will quickly fall beneath the weight of bad publicity.  Bank of America, after days of insisting it owed no duty to the employees of a company it lent to, eventually changed course after the news cycle kept the story moving for 6 full days.  And Chase, who arguably didn’t owe anybody anything, got its name in the papers as a last-minute savior.   

No, make no mistake – this is more about PR and market share than worker’s rights.  Straight-up capitalism at its finest.