Negotiation: Universal Health Gets Spanked

In Las Vegas, Universal Health Services locked out its nurses after being unable to reach a collective bargaining agreement with them regarding staffing practices and levels. Las Vegas is experiencing a great shortage of nurses, and the company owned hospital wanted concessions about staffing levels, among other things. The nurses are represented by the SEIU (Service Employees International Union) .

This was not a strike. Once the sides failed to reach an agreement, the governor stated they should put another 30 days into negotiations. The nurses agreed, but Universal Health did not. They locked the doors and brought in replacement nurses from out of state. This is pretty standard anti-union hardball as practiced throughout much of America. Usually, firms fire potential organizers before a union even takes hold.

The nurses, led by the SEUI, fought back very effectively. They picketed outside the hospital, chanting about safety, their care and worry for their patients, and the importance of maintaining safe nurse to patient ratios. As it turns out, some statistics suggest the staffing ratios sought by management lead to predictable rises in hospital casualties, so the nurses were able to get publicity for their action by framing their priority as patient health and safety. Person on the street interviews on the news showed very sympathetic nurses coming across as very concerned about their patients. Having defied the governor's moratorium, bringing in out of state labor, the company looked very bad locally. Las Vegas is a pretty strong union town.

Universal Health system overreached and laid an egg. They did not predict the nurses under the SEIU would be so able and nimble in creating a wide audience for the company's actions, embarrassing management and framing the issues in terms of patient safety and health. They tapped into a more widespread feeling of middle class insecurity in America as well, which drove much of the midterm congressional elections results last month. Democrats won 35 races and lost none, and the Democrats who won were mostly economic populists sympathetic to labor.

The SEUI just organized a very sucessful janitor's strike in Houston, Texas, of all places, winning major concessions from property managers after police ran over protester's with their horses and locked protester's in jail with bonds higher than those meted out to murderers and rapists.

The political and social climate is changing in the US, and widespread lack of confidence with leaders who represent the corporate establishment is spreading, encompassing the Bush administration's monumentally failed international policy and often unpopular CEO's in corporate boardrooms. I don't think most of my clients and friends in corporate America realize how much the ground is shifting away from the generally pro-corporate direction of the country since the first election of Ronald Reagan as president in 1980. Most of today's senior executives have never known a powerful populist movement from the left in their lifetimes, but we have the makings of one brewing, like a swirling tropical storm off the coast that could become a major hurricane, hitting Washington DC and many corporate boardrooms very hard. How hard? It's too early to tell.

After taking a real beating in the press, Universal backed down, brought the nurses back to work and is resuming contract negotiations, but the momentum and leverage have shifted to the nurses, and the SEIU. They deployed classic negotiation techniques by 1) building leverage using a powerful positioning statement defining the terms of the conflict, 2) appealing to a wider audience and 3) applying standards to the dispute that tapped in powerfully to the interests of the public for safe hospital services. Universal and its labor consultants got spanked.

Stay tuned.