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CUNA Mutual’s contract fight takes on new urgency in an era of remote work

The Madison-based company embodies the challenges for labor organizing as the financial-services industry evolves.
A photo illustration shows the now-demolished circular headquarters of CUNA Mutual Group on Mineral Point Road. The background of the office campus is set in black and white while the building is foregrounded in color.
Like CUNA Mutual’s old circular headquarters building on Mineral Point Road, its once-cordial relationship with unionized employees is a thing of the past.

The Madison-based company embodies the challenges for labor organizing as the financial-services industry evolves.

Is there an end in sight for contract negotiations between the 450 members of the Official Professional Employees International Union (OPEIU) Local 39 and the CUNA Mutual Group?  Will Madison see more full-time, union-member employees with benefits, or will CUNA Mutual continue to move jobs elsewhere using remote contractors? 

OPEIU Local 39 has been in negotiations with CUNA Mutual Group—which provides insurance and investment services to cooperatives and credit unions—for seven months. The union faces an aggressive long-term company plan to reduce Madison-based employment to the lowest number possible. So far, the firm has cut approximately 800 union jobs in the last six years, replacing them with contractors throughout the United States and the world. Unless the union is able to change the balance of forces and limit the use of third-party contractors, even a good settlement regarding the wages and working conditions of current employees will not alter the company’s drive to employ fewer and fewer Madison-area residents over the long run. TEKsystems, an example of a CUNA contractor, is a leading provider of IT staffing, talent management, and services. According to the company’s website, every year the firm deploys “more than 80,000 IT professionals at 6,000 client sites across North America, Europe and Asia.”

The aggressive use of contractors coupled with the growing popularity of remote work is a challenge that the local political leadership as well as the trade union movement must address. Financial services and insurance companies make up three of the 10 largest employers in Madison, according to the Wisconsin State Journal’s 2020 “Book of Business.” Neither Madison, nor its working class, can afford the replacement of full-time jobs with benefits with remote work.

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For many years, OPEIU Local 39 and CUNA Mutual enjoyed a non-conflictual relationship—placid might be the best description. CUNA employed well over 1,000 union members. It was seen as—and saw itself as—a service organization for cooperatives and an advocate for co-op banking. 

CUNA Mutual states on its website, “Our company was founded more than 80 years ago by credit union leaders who were looking for an insurance and investment partner they could trust. For generations, we’ve helped credit unions, businesses and hardworking Americans build financial security.”

That was true enough for a time. But that began to change in the mid-1990s as the banking industry itself changed, and CUNA began to see itself as it does now. After 1990, more and more smaller credit unions consolidated or closed and larger ones no longer needed CUNA’s services. The leadership at CUNA began to act and think like conventional bankers—expanding out of state, and increasingly targeting the workforce in terms of working conditions and overall compensation. The company aggressively moved work out of Madison, using the available technology of the time such as call centers and training facilities in India. The company also transferred work to Iowa, reducing the unionized Madison workforce to approximately 800 in 2004.

Today the company is pursuing a trajectory that will eviscerate the current unionized, Madison-based workforce of 450 out of approximately 1,300. The pandemic illustrated for all to see that the financial services industry in general and CUNA Mutual in particular did not really need a resident workforce to serve customers. In other words, the prime leverage of any unionized workforce—the ability to halt the business activity of the firm—is increasingly diminished.

There are no concessions that the workforce could make that in and of themselves can change the ability of the financial services industry to distribute and coordinate work. This is a structural issue and a political issue, as employment law is a political issue.

CUNA has perfected the use of remote work in the US and abroad. Since the early 2000s, computer and information systems have achieved greater capacity, allowing the sharing of more data in real time around the world. The company is no longer bringing H1B visa holders to the US for training; the foreign employees are subcontracted and stay in their own country. In the early 2000s, it was possible to impede the company’s use of H1B visas via political mobilization as the union demonstrated that there were plenty of Wisconsin workers able to take on the work in question. Nor is the firm hiring contractors directly and thus challenging the union in obvious ways, CUNA has instead made arrangements with firms that specialize in providing contract employees. In turn, those firms have hired individuals to do the work employees in Madison used to do.

Like all firms, CUNA has the right to employ contractors and faces few limitations in current labor law. The union can try to restrict that use via contract language, but firms are not required to bargain over the use of contractors as long as they discuss the effects of their decisions. In early 2008, CUNA’s use of workers in Iowa and Texas to do work associated with Madison was constrained by a successful union sponsored publicity attack on CUNA. Specifically the union and its consultants targeted CUNA’s expansion to IOWA with billboards lining the highways approaching Madison. The union also sent organizers down to the Iowa and Texas locations of CUNA with leaflets explaining the benefits of unionization. At that time, CUNA wanted to be considered and treated as a Wisconsin based-company responsive to Wisconsin. That plus the unity of the union around economic demands and the unpopularity of the management team allowed the union to stabilize the employment situation. But not for long.

Without the ability to reach the workers employed by the contractors—especially if they are doing a significant bulk of the work—the union in Madison has limited ways to pressure CUNA Mutual in the normal course of collective bargaining discussions. This means Local 39 will eventually die or become irrelevant unless the labor movement changes its approach.

Weaknesses inherent in the National Labor Relations Act developed in a different time for different industries are ever more apparent. The law needs to be changed to respond to the new structure of industry. In particular, legislators need to give unions the right to get meaningful contract labor employment data, but that is a long-term and uncertain path.

Since time is of the essence, our movement must make it more expensive and more difficult for firms to employ the use of contractors. This can be accomplished in at least two ways:

1) The union can mobilize its political and economic resources in Madison to put as much pressure on the company as possible to force them to change the structure of the contract, limiting the ability of management to ship work to any place in the world;

2) The labor movement—organized labor—can identify the contractors used by CUNA and organize the workforces contracted by these third parties. This is a difficult organizing challenge but it also puts front and center the need to alter the NLRA to respond to the reorganization of the workforce that is underway. 

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In the immediate case, CUNA Mutual is a small player in the world of contracted work and probably in the financial contribution it makes to any of the firms it employs to subcontract its work. Thus identifying the contractors and digging deep into their work practices and publicizing them might help turn the tide.

There are of course other concerns that CUNA Mutual customers might have, such as privacy, stemming from the fact that one’s personal financial information is now spread around to numerous locations, and individuals. 

Negotiations between CUNA Mutual and OPEIU are in their seventh month. Workers are united in their demands regarding wages, hours, and working conditions. But even if the firm meets these demands, the issue of the structure remains. Runaway shops, which relocate production without consulting the union, have been part of the American labor world since the 1920’s. But they had a physical dimension, and it was possible to find and organize the new factory. Now we face a much more elusive foe.

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