Richmond, CA—In California, the Kaiser name has long been linked to innovations in work organization, personnel practices and healthcare delivery.

During World War II, industrialist Henry Kaiser built America’s largest shipyard, virtually overnight, here in the East Bay. That now-famous facility turned out scores of “Liberty” ships, using new production techniques, female welders (a k a “Rosie the Riveter”) and African-Americans who had been excluded from higher-paying blue-collar jobs.

Kaiser’s wartime experimentation with a pioneering group health plan, tied to hospitals in Richmond and Oakland, paved the way for pre-paid medical coverage of millions of workers and their families. As a broader nonprofit Health Maintenance Organization, Kaiser Permanente (KP) now operates the largest network of unionized hospitals in the country and has long been known as “the HMO that labor built.” To keep the peace on its own far-flung properties, Kaiser formed a much-heralded Labor Management Partnership (LMP) with the Service Employees International Union (SEIU) and other unions in the mid-1990s. Through their embrace of “non-adversarial” labor relations, Kaiser caregivers were supposed to gain more say in workplace decision-making so they could improve service to patients. Their unions won the right to organize non-union KP workers without management interference—a “neutrality” deal only available to LMP participants.

By 2007, there weren’t many healthcare employers who appeared to be so “patient centered” or “labor-friendly.” So the union-backed lobbying-group American Rights at Work, bestowed its Eleanor Roosevelt Human Rights Award on Kaiser at a gala dinner in Washington, DC, attended by top union officials. As recently as this past July, the HMO’s “shared purpose” and “partnership approach” was still being praised on the AFL-CIO’s official blog.

Meanwhile, outside the Beltway, the HMO has been attracting more picket lines than plaudits. On September 22, more than 21,000 Kaiser employees conducted the largest work stoppage in California healthcare history. This unusual European-style protest strike reflected widespread worker concern about contract concessions sought by Kaiser despite profits of $5.7 billion since 2009.

At hospitals and clinics throughout the state, the one-day walkout (and accompanying smaller-scale strike activity the day before and after) generated unflattering publicity about Kaiser’s recent cost-cutting, rate increases, understaffing and unfair labor practices. The new National Union of Healthcare Workers backed up its strike-related critique of KP’s managed-care practices with a blistering report, released in mid-November, based on information provided by NUHW-represented social workers and psychologists, plus outside experts.

Titled “Care Delayed, Care Denied: Kaiser Permanente’s Failure to Provide Timely and Appropriate Mental Health Services,” the study documents Kaiser’s “systematic” failures to observe “recommended clinical standards” and thus meet the “mental health needs” of patients suffering from “conditions ranging from autism, anxiety and bi-polar disorder to depression, schizophrenia and suicidal ideation.” Accusing Kaiser of noncompliance with state laws requiring HMOs to provide “timely access” to appropriate care, the union is urging California state and federal officials to “initiate immediate investigations to determine the full extent of Kaiser’s regulatory violations.”

When the independent NUHW and the AFL-CIO-affiliated California Nurses Association (CNA) struck together in September to blow the whistle on management—and oppose benefit take-aways—their joint action exposed rifts within labor about when, how or whether to resist concessions. Other AFL-CIO and Change To Win affiliates have downplayed the giveback threat and refrained from any public criticism of Kaiser’s patient-care deficiencies. The largest partnership union, SEIU, even urged its Kaiser members to cross picket lines set up by their own co-workers—advice that was ignored by SEIU-represented rank-and-filers—about 1,000 of them, by NUHW’s estimate—who stayed away from work as well.

As documented by the National Labor Relations Board (and my own recent book, The Civil Wars in U.S. Labor), Kaiser’s respect for workers’ rights has become highly selective. The big HMO and SEIU have both tried to squelch support for NUHW, the breakaway union formed in 2009 after SEIU put a dissident California local under trusteeship. In late 2010, the labor board obtained a rare federal court order forcing Kaiser to provide $2 million in back pay that was illegally withheld from 2,300 workers who voted to replace SEIU with NUHW.

In July an administrative law judge for the NLRB overturned the results of the largest private-sector union representation vote in seven decades—a decertification election sought by NUHW among 44,000 Kaiser service and technical workers. Although SEIU won that contest, the NLRB ordered a new vote (still pending) because, the judge said, the incumbent union’s illegal campaigning—in conjunction with Kaiser’s own previous misconduct—“interfered with the exercise of a free and reasoned choice among employees.”

Among the strikers in September were Kaiser nurses represented by CNA and NUHW. (Two thousand members of the International Union of Operating Engineers were scheduled to picket, but legal pressure from Kaiser forced them to bow out instead.) RN Zenei Cortez, a CNA co-president and leader of its Kaiser bargaining council, explains that the labor agreement covering her fellow nurses doesn’t expire until 2014. Nevertheless, 17,000 of them struck for a day in sympathy with the 4,000 RNs and other professional staff, represented by NUHW, who have been negotiating with Kaiser since last year.

In its bargaining with NUHW and another independent union, the Guild for Professional Pharmacists, Kaiser seeks to replace defined-benefit pensions with individual retirement accounts, eliminate retiree health coverage and force active employees to pay more for their medical benefits. Howard Hertz, vice president of the Guild for Professional Pharmacists, finds these concession demands reprehensible in light of past collaborative “efforts [that] have given Kaiser ever greater profits and membership growth.” Says Hertz, “The benefit changes Kaiser is trying to impose punish people for their past loyalty…. they are not just wrong but immoral.”

According to Cortez, if Kaiser wins concessions from other unions, including SEIU, before CNA’s next round of bargaining, nurses will have a much harder time defending their own pensions, retiree health insurance and other contract benefits. Interviewed in Los Angeles earlier this summer, a dialysis nurse at Kaiser Sunset Medical Center (who wished to remain anonymous) reported that “a lot of experienced Kaiser nurses are already contemplating taking early retirement and leaving nursing practice” before any pension cuts take place. “Kaiser will save a lot of money,” she pointed out, “because they will hire new nurses and start them at a lower pay rate,” a trend she and others believe will have negative consequences for the quality of patient care in already understaffed Kaiser hospitals.

Kaiser spokesman John Nelson denied any knowledge of such shortcomings and expressed confidence “that we have appropriate staffing levels to meet our members’ needs.” According to Nelson, Kaiser is merely trying “to find ways to contain costs in partnership with our unions. Both management and labor have a stake in the financial challenges we face and meeting rising healthcare costs and costs of pension benefits.” Echoing SEIU spokesperson Elizabeth Brennan, Nelson was particularly critical of NUHW, saying it was “disappointing that they have chosen to strike instead of engaging in constructive action.” In Brennan’s view, the main risk facing Kaiser workers today is the choice some have made to join “a weak, ineffective group,” instead of SEIU. “While NUHW is facing major takebacks, SEIU-UHW members are now preparing for bargaining next year to extend good raises and lock in all of our benefits, pension and job security through 2015 and beyond,” she said.

Only time will tell which path pays off for Kaiser workers—the familiar partnership route, or the harder road of rank-and-file militancy and solidarity. At a time of dwindling strike activity nationally, the latter approach drew impressive rank-and-file support in late September. Just after that walkout, Kaiser suddenly announced a rollback of up to $30 million of premium increases imposed on 300,000 Californians employed by small businesses and nonprofit organizations—a rate hike vigorously opposed by NUHW and community allies like the Courage Campaign. In the new contested terrain of California healthcare, some workers’ willingness to link their own contract fights to broader public concerns about the cost and quality of patient care may prove to be the better prescription for resisting concessions and reviving unions.