Submitted by: Stateside Associates

Yesterday s election for the Wisconsin Supreme Court seat was a reminder that the fight over public pensions and collective bargaining rights is going to have a significant impact on business. With the lead changing hands multiple times throughout the night, this race may very well end up in a recount. Before the public sector unions turned this election into a referendum on the recently passed collective bargaining changes, Justice David Prosser was expected to easily win re-election over state Assistant Attorney General Joanne Kloppenburg.

They turned a low key election into a multi-million dollar national fight, and highlighted why corporate executives should be concerned about the fight over collective bargaining. The Supreme Court election could change the balance of power on the court whose decisions could have far ranging impacts on business. But it isn t just about the Supreme Court. This is a fight about the future of public sector unions, not about the pay and benefits of the workers themselves.

If it were just about pay and benefit levels, business could probably keep clear of the issue, but the unions see the collective bargaining issue as critical to their future. Therefore, they will drag anyone and everyone into this fight to try to preserve their right to bargain on working conditions as well. They decided to take on the Supreme Court race because they are challenging the new collective bargaining law in court. And more directly, the unions were going after companies and trying to drag them directly into the fight.

For example, The Wall Street Journal s Best of the Web blog recently described how several Wisconsin public unions threatened Wisconsin companies with boycotts if they did not publicly oppose Governor Walker s efforts to curtail collective bargaining. Rather than urging a boycott to express dissatisfaction with a company position, the unions threatened a boycott if the company didn t support the union position.

Public unions have also stepping up their rhetoric against corporations. For example, to promote a national day of protest for collective bargaining on April 4, the American Federation of State, County and Municipal Workers (AFSCME) called those legislators who have supported public sector pension and benefit reforms corporate-bought politicians on the AFSCME website. This is part of a strategy of trying to shift the focus away from the issue of pay and benefits for public employees and toward corporations and linking them to Wall Street and the recession.

As a result, some companies have decided it might be easier to simply stay on the political sidelines, hoping to keep out of the political crosshairs of unions or other activist groups. However, that could be a mistake, and not in the best interests of the company or its shareholders. Economics (and other social science) students will remember the Prisoners Dilemma, and a variation of it is applicable here. If only one company decides not to participate in politics, they will benefit from other companies participating. However, if many companies all make that same decision, they will cede the political field to those who do not have their best interests at heart and then all companies will suffer from the resulting public policies.

A much better strategy is to continue, or even increase, a company s political activity and have a proactive corporate communications strategy ready to defend the corporation s political contributions as in the best interests of the public, the company s employees and its shareholders.

It is likely that we are just at the beginning of a multi-year struggle over the future of the size and scope of government, which affects public sector unions directly. Companies should decide now which side of that fight they want to be on, because it is much easier to make a thoughtful decision about corporate political strategy when the spotlight is elsewhere. But the spotlight is likely to shine regardless of the choice a company makes. Unions are making the argument that the public policy choice is between teachers/police pay versus corporate tax breaks. So companies need to decide whether to support candidates that will fight for a good business climate to create private sector jobs, or stay out of the fight and see their taxes increase and potentially have to lay off workers. The public sector unions are making sure this is the choice. If corporations stay silent, it will be a very one-sided fight. The Supreme Court fight in Wisconsin was just an opening salvo. There will be more to come.

About the Author: With deep expertise in both strategy and execution, Stateside Associates transcends the conventional categories of government relations consulting. Learn about Stateside Associates’ breadth of proficiencies at

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