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New York

Bowing to pressure, WeWork tells workers they can co-unionize

National Labor Relations Board argued parts of the 22-page handbook were unlawful

WeWork space in Brooklyn Heights (credit: WeWork) and Adam Neumann
WeWork space in Brooklyn Heights (credit: WeWork) and Adam Neumann

It doesn’t always have to be a labor of love at WeWork. The co-working giant settled a dispute with the National Labor Relations Board late last week, agreeing to inform workers that they have the right to form a union and discuss wages.

The labor relations board said in August that WeWork’s [TRDataCustom] policies, laid out in its 22-page employee handbook, unlawfully banned workers from discussing wages and unionizing. In one section, titled “Do the right thing,” employees were to ask themselves “how would I feel if it made headlines in news outlets,” when determining if their behavior was appropriate. The NLRB also grumbled about a section called “outside activities,” in which employees were told not to pursue certain activities if they “create a conflict of interest that may interfere with the objective exercise of judgment in the best interest of WeWork.”

The company, founded in 2010 and valued at $16 billion in March, agreed to make the changes on Friday as part of the settlement, first initiated by the Local 153 union, Bloomberg reported. WeWork will email employees and post notices around offices explaining that federal law gives people the right to unionize. A spokesperson told Bloomberg that it didn’t believe the handbook unlawfully banned legal activities, but will “make sure this language is absolutely clear.”

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Although it’s settled the dispute with the NLRB, WeWork has another labor beef to deal with. A former employee, Tara Zoumer, said she was fired from her job after she refused to sign an arbitration agreement with the firm. Zoumer unsuccessfully tried to enlist colleagues to file a class-action lawsuit for overtime pay, but a company policy that pushed disputes toward arbitration ended those efforts.

It has not been smooth sailing for the company lately. Earlier this year, a leaked document revealed it has downgraded profit projections by 78 percent. Company plans to expand into co-living operations have also been scaled back, amid higher-than-expected construction costs.

In July, The Real Deal took a deep dive behind the strange logic of WeWork’s ginormous valuation. [Bloomberg] — Miriam Hall