Workers at Geico, one of Western New York’s largest employers, are attempting to organize a labor union, an effort that, if successful, would be the insurance company’s first-ever union.
But workers told Investigative Post that Geico is attempting to stop their organizing, an effort that could bring union representation to some 2,500 employees. Two emails sent by company vice presidents last month show the company attempting to dissuade workers from signing a petition for a union election. In one email, the company officials even suggested that employees should call the police on their coworkers if they ask them to sign a union petition.
Workers who spoke with Investigative Post said they’re unionizing to bring stability and fairness to their jobs.
They said that during the COVID-19 pandemic, Geico changed work responsibilities, moved employees to different departments and wouldn’t reimburse workers for equipment they had to purchase to work from home. More recently, they said, Geico has cut or reduced benefits including freezing 401k contributions, cutting short-term disability benefits and reducing parental leave. Additionally, the workers said, Geico doesn’t factor seniority into annual raises, meaning some longtime employees were earning similar pay to new hires.
“It’s the disparity between senior management getting big raises and the workers … having their lives switched around without care by management, and they see their salaries are stagnant,” one employee, Lonnie Konikoff, said.
That, Konikoff said, “really created the seeds for a union effort.”
“This doesn’t happen in union jobs. You don’t wake up and your job isn’t what you thought it was,” said Lila Balali, an employee and one of the organizers. “This is for them, we’re trying to protect the employees.”
The employees are organizing independently, under the Geico United banner. Organizers said they’ve begun collecting petition signatures from their coworkers and hope to file for a union election sometime next year.
Investigative Post reviewed emails and other documents and interviewed three Geico employees about their organizing effort for this story. Two of them, Balali and Konikoff, spoke on the record while a third asked to remain anonymous because he feared he could lose his job for speaking out.
Representatives from Geico, in a statement, said the company “respect[s] our associates’ rights to make their own decisions about union issues.”
“Associates have a legal right to support union representation and to oppose having a union. We recognize these important rights,” the statement continued. “We also believe that it benefits everyone to have an open and transparent dialogue with our associates without the constraints that are associated with collective bargaining. We are committed to supporting all of our associates and hearing directly from them about important issues.”
Geico received large subsidy
When Geico announced in 2003 that it would locate in Amherst’s CrossPoint Business Park, bringing 2,500 jobs to Western New York. The company received a $110 million subsidy package from the state and Amherst Industrial Development Agency to locate to Amherst. Then-Governor George Pataki and Berkshire Hathaway CEO Warren Buffett came to Buffalo to celebrate the decision to set up shop in Western New York.
That subsidy included property tax breaks, discounts on hydropower and other incentives.
At the time, the deal was one of the largest in Western New York history.
For years, employees said, those jobs were good jobs. Geico today pays a minimum of $16.84 per hour for entry-level employees and as much as $91.70 per hour for upper management, according to records reviewed by Investigative Post. The employees who spoke with Investigative Post said they make between $20 and $30 per hour, or between $40,000 and $60,000 per year.
But the COVID-19 pandemic, they said, rocked Geico’s business, causing the company to make a number of adjustments in short succession that changed employees’ jobs.
That’s an industry-wide trend, said Tim Zawacki, an expert on the insurance industry with S&P Global Market Intelligence. Inflation and increased costs of used cars and parts meant Geico and other companies, have “fared increasingly poorly,” he said.
Changing job duties
Prior to the pandemic, Geico sales agents were only required to sell car insurance for eight states, meaning they were trained and licensed for those states’ individual regulations, Balali said. But during the pandemic, Geico made agents sell insurance in other states that the organizer said employees weren’t fully trained for.
Then, in April, the company stopped selling car insurance over the phone altogether in 16 states, including New York. All of those changes meant that employees’ jobs were in flux.
“There’s a general lack of transparency,” Balali, who’s been with the company since 2014, said. “We find out about things after they’ve already happened, and we have no control over what happens in our working lives.”
All of those company-wide changes are in addition to pressures at the local Buffalo office, Balali said.
For example, Konikoff and Balali said, Geico workers who answer phone calls from customers are timed on everything and receive limited breaks, creating a stressful environment that leaves some with anxiety and other health issues. That’s in addition to what they described as micromanaging from supervisors.
When Geico switched to remote work during the pandemic, some employees had to purchase new equipment — like laptops that would run company software and headsets — and weren’t reimbursed, Balali said.
Balali also said Geico doesn’t factor seniority into annual raises, meaning that when the company raises its minimum salary, more senior employees end up making little more than the new starting wage.
All of those changes made employees’ positions unstable, Konikoff and Balali said.
“You buy houses based on that, you send your kids to school off that,” Balali said. “The employees in auto are not making what they used to make. Pay is all over the place. They’re not paying us enough money and they’re not designed to keep tenured employees.”
Zawacki, the analyst with S&P, said that because the insurance industry has gone through a rough patch, companies have likely tried to make up for losses.
“I would think that most companies, when underwriting profitability is under pressure, they’re going to look to address that in a number of different ways whether that’s raising rates or cutting costs or a combination of those steps,” he said.
Company counters organizing effort
After Geico workers started organizing, company leadership sent emails that seemed to discourage employees from joining the union or even speaking with an organizer.
Because many Geico employees are still working from home, organizers have been knocking on doors and visiting their coworkers at home to ask them to sign a union petition.
In an Aug. 12 email sent to all Amherst-based employees, Mindy Seibold, the regional vice president for Buffalo, and Pete Rizzo, a company vice president, wrote an email that implied union organizers had improperly obtained their coworkers’ addresses and suggested employees call the police if they wished.
“GEICO has not authorized any home visits from union representatives, and you are not required to speak with them. Additionally, GEICO has not given any associate’s home address to any individuals associated with a union,” Seibold and Rizzo wrote.
A Reddit user posted the text of that email online, and Investigative Post verified the date and content of the email, as well as which executives sent it.
“If you feel uncomfortable about an uninvited visitor showing up at your home, or if you have experienced any form of intimidation or harassment, you have every right to contact the police,” the email continued.
Seibold and Rizzo later suggested that employees shouldn’t sign the union petition from organizers who knock on their door.
“Do not sign anything without knowing the legal consequences,” the pair wrote. “No associate should sign documents, cards, petitions, or anything else just because someone asks you to do so.”
A subsequent email sent to all Buffalo employees on Aug. 19 was tamer in tone, but warned employees of the risks of joining a union and argued that joining a union isn’t guaranteed to produce better benefits for workers.
In that email, Seibold and Rizzo cited union organizing at Starbucks, and claimed those efforts had produced nothing.
“If you want to know whether ‘Geico United’ will secure or guarantee higher wages or benefits, ask what ‘Workers United’ produced at Starbucks,” the pair wrote.
The National Labor Relations Board said in June that Starbucks had used an “array of illegal tactics” in seeking to subvert union organizing efforts. The company has also so far refused to bargain with workers who have successfully formed unions.
Seibold and Rizzo refused to answer questions about their emails for this story.
The National Labor Relations Act requires that at least 30 percent of workers at a given workplace sign a petition. The employer then has the opportunity to recognize the union voluntarily or demand an election. If an election is held and the union wins majority support, the union bargains with the employer on behalf of the employees.
Balali was unequivocal: “Geico is union busting.”
It’s not the first time a company owned by Buffett’s Berkshire Hathaway has been accused of interfering in union organizing. In the early months of the COVID-19 pandemic, for example, workers at CORT Furniture in New Jersey alleged they were fired for organizing a union. That case is ongoing.
Sen. Bernie Sanders wrote Buffett last year when workers at a Berkshire Hathaway subsidiary went on strike. The senator asked Buffett to support the workers. Buffett declined, but noted in a letter that Berkshire Hathaway has a history of good relations with unions.
Another union organizer said Geico’s tax breaks, plus the alleged union busting, illustrates that the employees are not on a level playing field with the company.
“It’s socialism for the rich, rugged individualism for the rest of us. We deserve to live comfortable lives,” the employee said. “It’s great the government takes care of them. They need to take care of us.”
Editor’s note: This story has been updated with a statement from Gecio.