(This November 23rd story clarifies that approximately two-thirds eligible U.S. workers have signed their cards.

Julia Love

SAN FRANCISCO, (Reuters) – Mapbox’s managers gave the following shocking news to their employees in June: They had lost $150 million. The blame lies with worker organizing.

Prior to the all-hands meeting over Zoom, roughly two-thirds of the SoftBank-backed startup’s eligible U.S. workers had signed cards indicating their desire to unionize, part of a wave of organizing in Silicon Valley.

But after Mapbox management disclosed the botched investment – and said they worried funding trouble would persist if workers formed a union – the tide turned, one current and one former employee said. Mapbox workers voted against unionization, which had been valued at over $1 billion at its latest private financing round. Mapbox has also engaged with blank check companies regarding going public.

Mapbox’s reply offers insight into how tech companies respond to unions seeking workers.

Communications Workers of America and Office and Professional Employees International Union started campaigns in Silicon Valley to organize workers for startups like Kickstarter and Glitch. CWA also created Alphabet (NASDAQ) Workers Union. This is a minor union with no collective bargaining rights.

As unions continue engaging with workers, a playbook among tech companies is emerging, according to interviews with tech workers and union organizers: Warn employees about the impact a union would have on the startup’s prospects and, in particular, its ability to raise funds. Workers should be reminded of the privilege they have to question why they require a union. To make the point more clear, you can also hire consultants and law firms to assist.

“Tech firms are willing to do whatever is necessary to keep unions out,” said John Logan, a labor professor at San Francisco State University. “They might think unions are fine for food-processing workers or for miners, but not in the tech sector.”

SHIFTING POWER DYNAMIC

The unions’ pushes are at an early stage, and it remains to be seen whether they will catch on widely. Interviews with workers indicate that there is a wider renegotiation taking place between tech companies, and employees.

Tech workers are not satisfied with the promises of large paydays. According to tech workers, organizers and managers, they also need safe work conditions and the assurance that products they create will not be harmful to society.

Workers at high-risk startups with high rewards are reluctant to risk their stock options or place their job at risk. Wes McEnany (a CWA Campaign Lead), said that warnings about funding are effective.

Ex-employees claim that management stated Mapbox and also suggested unionization might threaten funding of Kickstarter or Glitch in the future. McEnany stated that Medium’s Chief Executive Ev Williams warned workers investors could be reluctant to invest if the union won.

Mapbox stated in a statement that “after considering the benefits, and the costs, our employees voted against forming unions.” They made the decision, and it was clear that they were making it theirs. We’re now focused on growing our business and supporting our customers.”

Glitch and Kickstarter declined comment. Williams did not reply.

The U.S. laws state that companies can’t threaten workers with losing their jobs if they organize, but they are allowed to predict negative consequences. Gordon Lafer, of the University of Oregon Labor Education and Research Center, stated, “Companies cannot threaten workers with losing their jobs if you unionize.”

A very scary number

Reuters interviewed some investors and financial advisors who said that they see unions in startups as a disadvantage because it makes it harder for them to hire workers or establish compensation rules.

Roy Bahat from Bloomberg Beta venture capital firm said investors wouldn’t pass up an opportunity to invest because of the unionized workforce.

“In the same way that (venture capitalists) overcome lots of obstacles to investing – everything from PR dilemmas to regulatory vulnerabilities to cofounder issues – unions are just another aspect of a company,” Bahat said. “They’re not fatal.”

In August, Jackson Lewis, a law firm known for its work in union avoidance, released a podcast https://www.jacksonlewis.com/event/unlikely-marriage-unions-and-tech-employees episode titled: “The Unlikely Marriage of Unions and Tech Employees.” Jackson Lewis lawyer Laura Pierson-Scheinberg said she was inspired to record the podcast by the increasing number of calls she received from tech companies inquiring about the prospect of union campaigns.

Pierson-Scheinberg stated that the shift from working at home to work has weakened ties between workers and companies, opening up for unions.

Mapbox has strong connections to non-profits. However, in recent times, some Mapbox employees began to worry about how mapping technology is being used by clients. One current and former employee stated that this concern was growing over time.

Mapbox’s relationship with software company Palantir Technologies (NYSE:) Inc was of particular concern, one former employee said. In the case of future layoffs, workers also requested formal support from colleagues.

Palantir couldn’t be reached immediately for comment.

Mapbox Workers Union members wrote on their website that the group had come together to “build a durable, accountable and inclusive Mapbox.”

Mapbox management offered a range of reasons against unionization. However, workers were particularly sensitive to funding concerns. One employee said that workers could be seen looking confused as management talked about Zoom’s failure. Some workers had previously supported the union and told organizers that they’d had a heart attack.

One employee stated that the $150 million failed investment was “very large and scary”. “The fear that that instilled didn’t go away.”