Unit Tests: Empowering Worker Organization

The Evolving Landscape of Work and Employee Empowerment

The nature of work has undergone a dramatic transformation in the past year. Particularly within the technology sector, nearly every aspect of the workplace has been adjusted to accommodate the shift towards remote operations.

These adjustments encompass everything from establishing remote accountability measures and onboarding processes to adapting traditional employee benefits for social distancing requirements.

A growing number of decisions impacting the workforce are now being made by employers.

Unit: A New Approach to Labor Organization

Recognizing this shift, an early-stage startup believes it’s time to redistribute some of that decision-making authority back to the employees themselves.

Unit, a company headquartered in New York, is addressing a particularly challenging and debated subject within the technology industry: the formation of labor unions.

The Benefits and Challenges of Unionization

Extensive research indicates that individuals represented by unions typically receive higher compensation and more comprehensive benefits packages compared to their non-union counterparts.

Conversely, many companies express opposition to unionization, citing potential impacts on profitability or a perceived reduction in managerial control and worker autonomy.

Unit’s Role in Facilitating Union Organization

Unit aims to simplify the process of virtual organization and management for labor unions, providing a means for employees to safeguard their interests against potential employer actions.

It’s important to note that Unit does not function as a labor union itself.

Instead, the company provides worker-organizers with a combination of software tools and human resources support to establish, affiliate with, and effectively manage a union.

Janitorial Entrepreneurship

James White, founder and CEO, observed the Occupy Wall Street movement during his time as a graduate student. He actively supported a group of janitorial staff from MIT and Harvard who were collaborating with the SEIU, the Service Employees International Union – an organization representing approximately 2 million service industry workers.

While dedicating his weekdays to research within an MIT bio-instrumentation lab focused on medical injection devices, White devoted his evenings and weekends to mobilizing student support for the janitors’ campaign for improved compensation and workplace conditions. He noted that the initial organizing efforts felt somewhat cumbersome and lacked efficiency, despite ultimately achieving positive outcomes after a period of several years.

For much of the subsequent ten years, White concentrated on securing employment in the medical device sector, gaining valuable experience in business and sales. Eventually, he decided to launch his own venture, continually revisiting the concepts surrounding labor unions.

The idea of utilizing technology to facilitate organizing consistently resurfaced as a compelling and potentially transformative approach. White believed it held the greatest promise for addressing income disparity and fostering individual empowerment, aligning with his desired societal changes.

A Comprehensive Solution for Unionization Efforts

Unit presents a complete set of resources designed to streamline the unionization process, beginning with educational materials. The company offers a freely accessible, step-by-step guide on its website detailing how to virtually organize a workplace.

Once a worker-organizer has decided to pursue unionization, Unit provides assistance in initiating the process. Individuals can visit the website, complete an eligibility assessment, and then begin extending invitations to colleagues to join the organizing platform. Those interested will complete the necessary documentation, and a core group will begin to develop within the organization.

Behind the scenes, Unit manages the essential legal automation required prior to approaching a national union, like the National Labor Relations Board, or a local union with a formal proposal. The startup collaborates with a legal firm based in Boston to file petitions on behalf of the employees.

“The most frequent feedback we’ve received regarding our organizing application is that users selected us over directly contacting a national union labor organizer or seeking volunteer assistance, citing the perceived speed of initiation,” White explained.

Following (and upon) union approval, Unit transitions into a role as a labor advisory service. The company employs a blend of digital tools and personalized support to deliver a “turnkey solution” for union administration.

The startup will facilitate voting and polling procedures, supply consensus-building tools, and oversee the drafting and review of the union charter – essentially, the governance structure – on behalf of the workforce. It also provides support for negotiation, including bargaining surveys, contract drafting and analysis, compensation assessments, and strategic planning. Furthermore, Unit concentrates on continuous organizing efforts, such as onboarding new members, strike preparation, and contract upkeep. While UnionWare concentrates on membership administration, Unit aims to offer a complete range of services.

“Our objective is to significantly reduce the time commitment involved by automating many aspects of the process,” he stated. “This includes enabling voting and updates through software, and facilitating the nomination and election of officers within these smaller unions via a digital platform.” Essentially, a Shopify-like platform for union organizers.

Consistent with the practice of unions only collecting fees after approval, Unit’s charges are only applied once the formation process is finalized. The standard cost for national union dues is 1.5% of earnings; therefore, an employee earning $40,000 annually would pay approximately $50 per month. Unit’s fee structure is set at 0.8% of those monthly earnings.

This “no obligation” business model implies that Unit could potentially lose a substantial portion of its clientele – up to 90% – once the union is officially recognized, White noted. The startup is currently establishing partnerships with major national unions, with the intention of receiving payment whenever a Unit-facilitated union affiliates through its network, based on the premise that it conserves union time and resources through its software.

Current clients include software developers, digital media firms, fast-food chains, and mental health organizations, with a particular emphasis on assisting smaller businesses in the unionization process.

‘It’s not a technical problem we have to solve’

Arianna Jimenez, a veteran labor organizer with two decades of experience at SEIU, voiced concerns regarding the potential for oversimplification when discussing unionization. She believes this could inadvertently create unrealistic expectations among workers.

According to her experience, the period of negotiation typically represents the most challenging phase of forming a union, often extending from half a year to a decade.

“Achieving signed authorization cards and gaining legal recognition as a union does not automatically improve a worker’s circumstances,” she explained. “Genuine improvement arises from workers participating in a legally protected process with their employer, aimed at modifying the employment contract – encompassing areas like enhanced benefits, healthcare provisions, and retirement plans.”

Despite the support offered by Unit and other labor organizers nationwide during negotiations, employers frequently employ oppressive tactics and instill fear, leading employees to hesitate and ultimately vote against unionization.

A recent example is Amazon’s anti-union campaign earlier this year, designed to dissuade employees from supporting organizing efforts. This campaign proved successful, representing a significant obstacle to the most substantial unionization drive in Amazon’s 27-year history.

Jimenez argues that unionizing cannot be approached as a simple, ready-made solution. She states that “the fundamental shift for workers – moving from a non-unionized to a unionized state – isn’t defined by a legal milestone, but rather by a more profound, intangible change.”

This transformation involves a shift from a state of feeling powerless and marginalized to one of empowerment.

Jimenez suggests that for Unit to achieve significant growth, substantial revisions to existing U.S. labor laws would be necessary.

“The core issue isn’t a matter of technical difficulties; it’s fundamentally a question of priorities and values,” she concluded.

The Underlying Tension in Unit's Growth

According to White, achieving significant growth for Unit necessitates reliance on venture capital funding. In July 2020, Unit successfully secured $1.4 million in funding through a round that included investors like Bloomberg Beta, Draper Associates, Schlaf Angel Fund, Haystack, E14, and Gutter Capital.

This reliance on VC funding represents a core challenge for Unit, as White explains. While scaling requires capital, accepting investment from venture capital firms can appear contradictory to the company’s core mission.

Consider, for instance, the potential scenario where Unit assists employees within companies owned by its investors in forming unions. Could this create a conflict of interest? Might Unit be pressured to deprioritize these clients to maintain favorable relationships with its investors?

The passage of California’s Proposition 22 last year serves as a relevant example. This legislation effectively supported Uber, Lyft, DoorDash, Instacart, and Postmates in classifying gig workers as independent contractors, rather than employees with full labor rights. This outcome was a setback for worker advocacy groups globally and highlighted how venture-backed companies may prioritize outcomes that limit access to benefits and worker protections.

White acknowledges that venture capital was the most effective path to rapid expansion, but he also expressed concerns about potential investor influence in future funding rounds, particularly if the founding team loses majority control of the company. He aims for Unit to operate with minimal venture capital for as long as possible, delaying or avoiding such conflicts.

Siri Srinivas, an investor at Draper, views Unit as a tool designed to improve a complex and regulated process. Essentially, she sees it as a Software-as-a-Service (SaaS) solution with inherent value.

“As VCs, we invest in technologies that meet market demand,” Srinivas stated. “Our team deliberately avoids investing in products we deem harmful (like tobacco), but we don’t see investing in software for regulated industries as fundamentally different. Unit facilitates worker equity and has the potential to create substantial value for its users, aligning our interests completely.”

Currently, White anticipates continued demand for improved workplace solutions will drive Unit’s business and generate revenue.

“The impact of COVID-19 was unforeseen, but it undeniably sparked increased dialogue around labor and workplace safety,” he noted. “When these issues gain national attention, they often resonate with a wider audience simultaneously, prompting collective consideration.”