Office Workers on Strike: San Francisco 1981

Historical Essay

by Chris Carlsson & Caitlin Manning, originally published in Processed World #1, April 1981 & Processed World #2, August 1981


1980 Picket line, North Point St.

Photo: Chris Carlsson

OPEIU Local 3, a small AFL-CIO affiliated union began a 19-week strike against Blue Shield Insurance Company on December 8th, 1980. This was an attempt to preserve cost of living adjustment (COLA) raises and to reduce existing heavy production quotas. The union used peaceful and lawful tactics. They did not enlist any of the millions of other AFL-CIO members in this effort, and furthermore their “sister” union Local 29 actually undermined them by accepting a Blue Cross contract. Local 3 also lost leverage against Blue Shield by picketing, as this allowed for the workers to be replaced. Despite the direct action of a few individual employees, operating outside of the bounds set by the union, and due in part to the naive union tactics, COLA raises were eliminated, union jobs were lost, and the workers lost their wages and benefits for the duration of the strike.

Since December 8, 1980, 1,100 office workers at Blue Shield Insurance Company have been on strike. They are represented by the Office and Professional Employees International Local 3 (OPEIU), AFL-CIO. The union is pressing its demands to retain its Cost-of-Living-Adjustment (COLA) formula for determining pay increases (which has been in effect for six years and would allow for a 14.7% wage increase this year); to reduce current heavy production quotas (initial claims processors are expected to handle 383 claims in each 7.5 hour shift!); to base the “average production measurement” on a four-day week to allow for a bad day; special rights for Video Display Terminal operators; and to improve pension plan provisions.

Blue Shield is demanding no mention be made in the contract of production quotas or standards, claiming such a change would open these matters up to grievances and arbitration, thereby limiting Blue Shield's competitiveness. Production standards, the company insists, should remain a management prerogative. Blue Shield was offering a 9.5% wage increase this year with a reopener clause for wage negotiations in the next two years. Since OPEIU Local 29 in the East Bay settled for 9.5% this year, 8% next year, and 7.5% in the last year with Blue Cross, Blue Shield has offered the same package. Also, some management "takeaway" demands (e.g. a shorter lunchbreak) were reintroduced, after having been dropped to avert the strike.

The Company

Blue Shield is facing an increasingly competitive market. Several years ago it lost its contract to process Medi-Cal claims when they were underbid by a non-union data processing firm. Blue Shield is the only unionized insurance carrier in San Francisco though they do have four other non-union offices in California in Los Angeles, San Diego, Woodland Hills and Sacramento. At the time of the strike, San Francisco Blue Shield was processing 52,000 claims per day, 37,000 of them under a federal contract for Medicare processing. Medicare constitutes a $12 million a year business for Blue Shield, about 1.3 million claims annually. Though they have been processing claims at below-average cost in the past four years, they are expecting stiff competition from the numerous non-union data processing companies entering the market to threaten their Medicare contract.

As the only major unionized private corporate office in San Francisco, Blue Shield is on the front lines of the rising battle between management and the increasingly important clerical sector of the workforce. This fact is not lost on Blue Shield, OPEIU or the workers themselves. Blue Shield is clearly attempting to break the union outright or render it completely impotent.

Blue-shield-strike-1981 on-strike-graffiti.jpg

Photo: Chris Carlsson

The Union

OPEIU Local 3 won the right to represent the workers at Blue Shield in 1972 without serious resistance from the company. The 1,100 striking Blue Shield workers constitute 1/3 of the membership of OPEIU Local 3. A small union with a tiny foothold in the enormous office labor market of San Francisco, OPEIU Local 3 is fighting for its life in this strike.

OPEIU is affiliated with the AFL-CIO, and it pledges allegiance to U.S. labor laws. These laws impose severe limits on what workers and unions can do to achieve their demands (for instance, it is illegal to occupy a workplace). Their primary tactic in this confrontation with Blue Shield is the strike, a traditional walkout protected by National Labor Relations Act legislation. Out on the picket lines, however, workers no longer control the machines and data banks that are in their control daily when they are on the job. This divests them of the tremendous leverage they would have if they stayed in the offices and prevented their replacement by scabs.

Boycott & Labor Movement Solidarity

The second major tactic of OPEIU, in an attempt to gain support for the strike, has been to appeal to other unions for a boycott of Blue Shield insurance contracts. In fact, John Henning, secretary-treasurer of the state AFL-CIO, has issued an appeal for all unions and union members to cancel their insurance contracts with Blue Shield if they don't give in to union demands. This threat is less than “toothless” since it is only possible to break these contracts upon their expiration. In any case the medical insurance contracts of unions and their sympathizers represent a relatively small part of Blue Shield's total business, the bulk of which is processing federal Medicare claims. The vast majority of workers, who are not in unions, have no say over their companies' choice of insurance policies and their bosses are hardly likely to support a boycott. With the boycott tactic the union remains peaceful and within the law, but much of the strike's energy and resistance is diverted into hopeless boycott work.

As usual the union has not attempted to mobilize the millions of AFL-CIO members to support the strikers at Blue Shield (or anywhere else for that matter). Local 29 (OPEIU) in the East Bay, a “sister” union, undercut the bargaining position of Local 3 when they recently accepted from Blue Cross a contract which says nothing about production quotas or work rules, and accepts paltry wage increases for the next three years.

Meanwhile, office workers represented by the same Local 29 were on strike for six weeks against the Alameda County Council of Building Trades Unions demanding cost-of-living increases (which they finally got). The Council of Building Trades Unions used their power to prevent the Central Labor Council (AFL-CIO) of Alameda County from sanctioning the strike. One picket line-crossing union bureaucrat even went so far as to admit that he and his fellow bureaucrats were just of bunch of “hot air hypocrites who don't practice what we preach.”

The separation and isolation of workers from each other is clearly being furthered by the actions of these Bay Area locals... so much for the “labor solidarity” of trade unions.

Naive Union Strategies: Manipulation or Misunderstanding?

The union accepts the “necessities” of the marketplace, i.e. that costs must be cut for Blue Shield to remain competitive. The union's strategy is to blame a “malfunctioning data processing system” installed in '78 by another company called Electronic Data Services for the too-high costs and production quotas, and they are appealing to Blue Shield to cut the 50 cents per claim fee that EDS gets instead of lowering wages, and to get an improved data processing system.

It seems highly unlikely that Blue Shield would take such suggestions seriously. Demanding more efficient management or proposing viable economic solutions for the company obscures the basic conflict between profit motives and workers' interests. The union bases its strategy on the erroneous idea that the workers and the company have basically the same interest in the company's success. In reality, the company's success is measured by increasing profit margins. The main way of doing this is to cut labor costs by replacing workers with machinery, lowering real wages, or trying to get more work out of each working hour on the job. These are the very measures that the workers are striking against.

The union remains utterly naive in its political/economic perspective. In the concluding statement on their appeal for solidarity the union says: “Since Blue Shield does have a federal Medicare contract, union labor should be upheld, not undercut.”

Can the government be relied upon to support workers against management? The answer lies in the history of the role of the U.S. government as strikebreakers (1934 Longshoremen's strike in San Francisco, 1970 National Postal wildcat strike, invocation of Taft-Hartley Act in 1978 coal miner's strike to cite only three examples out of hundreds). The National Labor Relations Act has been hailed as a progressive landmark of workers' rights. But a closer look at the action of workers in the industrial mid-East of the 1930s suggests that the National Labor Relations Board was created primarily to contain widespread militancy (factory occupations and sit down strikes). At the same time as they gained the “right” to bargain collectively, workers were deprived by the courts of their most effective means of fighting when workplace occupations were made illegal.

Since its beginning in 1935, the NLRA has been amended by the Taft-Hartley Act of 1948 which further limited workers' rights to take effective action against their employers. The courts have repeatedly defined workers' rights to take action for themselves in the narrowest possible context. Now, in 1981, Blue Shield justifies its measly wage offer by referring to the President's wage guidelines as well as the pressure to remain competitive for the federal Medicare contract.

No one should hold any illusions that the federal government (or the state or the city) is in any way on our side (though there may be some effort to bolster the sagging AFL-CIO in order to control the upsurge of angry strikes which is bound to occur in the next few years). With Reagan's inauguration, the federal government will move to front and center in the attempt to impose austerity and sacrifice on us “for the good of the country.”

Blue Shield Workers Take Direct Action

Blue Shield workers have tried to break out of the confines of the union's tactics. During the two weeks preceding the strike the workers engaged in a widespread slowdown on the job. Since the strike began, workers have spray-painted all over the Blue Shield buildings “On Strike.” Superglue in the locks of automobiles of scab temporary workers and Blue Shield doors have also caused some difficulty for the company. On the 17th of December, a bicycle messenger who crossed the picket line to deliver a message returned to find his bicycle dumped in the street. He attacked one of the strikers and was beaten up, suffering lacerations and bruises. In mid-January, a pile of claims waiting for processing was hurled out of the windows at the Grant St. office of Blue Shield.

Some ideas that came up during a discussion of the situation on the picket line included cutting off the water necessary to cool the computer, thereby causing the computers to overheat and malfunction and cutting off the phone connections with the building. Some reluctance was expressed about taking such illegal actions, since the union would be blamed and would end up being tied up with legal and financial hassles, another example of how unions and labor laws constrain workers. Some strikers also wanted the union to bring in “some goons” to defend the picket line and prevent scabs from crossing them so nonchalantly.

While force by striking workers (not hired goons) is invariably necessary to make some headway, even a military force of strikers would be inadequate if the struggle remains isolated in one office, company or factory. Significant permanent gains can only be the result of networks of supporting actions throughout the workforce.

Insofar as they purport to represent specific groups of workers, trade unions are based on the separation of different types of workers and industries. It is becoming clearer that this is precisely what needs to be overcome. The isolation and separation of working people by sex, race, skill, job category, etc. is the single most useful tool that our “leaders” have in keeping us down. Trade unions, while occasionally paying lip-service to this idea, actually play an important role in maintaining and prolonging this isolation. Until office workers begin to make common cause with each other and all production workers, strikes will remain defensive and weak, with little chance of success, regardless of the militance of the particular workers involved. Still, the more direct control workers in any particular enterprise take over their workplace, the more likely they are to win their demands.

When in the U.S. Do as the Polish Do

According to Business Week (Jan. 19, 1981) workers' real income has been falling since 1978—the longest continuous decline since WWII — and is likely to continue dropping in the next few years. But fewer workers went on strike in 1980 than in any year since 1965, despite the worsening living standards. For years unions have been bargaining away control over the work process (i.e. agreeing to speed-ups and “job redesigning” layoffs) for increased wages and benefits. Now that the system is in crisis, owners and managers are no longer offering the carrot of wage increases in exchange for increased control. Today, they are turning to the stick of unemployment and falling living standards to keep us working for them on their terms.

Waiting for government or management solutions to our worries will get us nothing but less of everything (except maybe war). On the verge of a very serious recession/depression we will have to begin asserting our abilities to decide what we want and how we are going to get it. For those of us who work in offices the first step toward a better life is communication with each other.

At the workplace our strength lies in our control over the massive quantities of machinery and data which are necessary to the continuation of existing institutions of political and economic power. We must not be fooled by anyone — politicians, union bureaucrats or anyone else — who says we can get what we want through petitions, negotiations, or bargains with the existing order. For a world free from 9 to 5 drudgery and free from material scarcity and austerity, we will have to take over and transform the existing production/distribution/communication system. Polish workers have demonstrated this collective power we must make preparations to use ours.

Post-Mortem I: Blue Shield Strike

In Processed World #1 we published an article about the OPEIU-led strike at San Francisco's Blue Shield offices. In that article we criticized the union's tactics as ineffective and preemptive of the Blue Shield workers' power over data banks and telecommunications hardware. We also challenged the union's analysis of the situation at Blue Shield and in the U.S. today. The strike has since ended in a devastating defeat for the workers at Blue Shield:

• Lost wages and benefits for the duration of the 19-week strike.

• 448 Medicare claims processing jobs are being permanently relocated to other non-union Blue Shield offices.

• Elimination of cost-of-living wage increases, replaced by the infamous ‘Blue Cross settlement’ (agreed to in the midst of the strike by sister local 29 in the East Bay) which raises wages a mere 27% during the three-year contract.

• No provisions for additional break-time for VDT operators, though the company agreed in a separate “letter of understanding” to install glare screens.

• Of the original 1,100 strikers (since the strike's end the union is saying only 950 people were on strike) 350 returned to work before the strike's end. Combining the large defection with the relocation of 448 jobs, this will leave loyal union members in possession of only about 150-200 jobs. Less than 300 strikers actually voted on the new contract (275 for, 22 against).

Judging from the speech given on National Secretaries' Day, organizers at OPEIU are oblivious to these consequences for Blue Shield workers. In a brief conversation with OPEIU representative Tonie Jones after her NSD speech, she claimed that, although they didn't get what they demanded, the Blue Shield workers did gain experience in organizing and working together. Certainly it is true that successful collective actions by clerical workers will call for a good deal of organization and preparation. During the first weeks the strike probably did encourage people to air their dissatisfactions and helped create a sense of community and support among otherwise isolated workers. But for an experience to be worthwhile, problems have to be analyzed and errors understood so that they can be avoided or at least foreseen in the next round.


Sitting beneath the Embarcadero Freeway in Justin Herman Plaza on April 22, 1981, "National Secretaries Day."

Photo: Chris Carlsson

The basic orientation and legal function of the union must be analyzed in detail. The OPEIU militants who refuse to recognize that they were soundly beaten and need to reconsider their approach are either plain dumb or think the rest of us are.

Post-Mortem II: Racism and Restructuring at Blue Shield

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