Ever since Ronald Reagan faced down the Professional Air Traffic Controllers Organization (PATCO) in 1981, unions in America have been on the descent.  Today, unions sometime seem like anachronistic institutions and – worse still – bureaucratic stumbling blocks on the road to economic recovery for American businesses. In fact, some unions such as those representing teachers have even become political liabilities rather than powerful instruments of political persuasion.

But the case against unions is not as cut-and-dry as it sometimes seems, especially in an age of severe income inequality and a high level of work-related stressors. For example, labor unions have played a crucial role in the recoveries of GM, Ford and Boeing. Unions won a hard-fought 13-year battle to represent workers at Continental Airline in 2010, an action that the San Francisco Chronicle compared to Normal Ray’s legendary success at J.P. Stevens, the South Carolina textile company.

One case in point, a union representing hospitality industry workers in New York City, demonstrates that a well-run union helps both workers and the businesses they serve.

Local 6 of the hotel and restaurant workers’ union has done more than guarantee a living wage and decent benefits for its members. It has protected them from sexual harassment, unfair labor practices and even stealing of tips and wages by management, according to a story in The American Prospect.

“Absent a union, the boss can fire for any reason or no reason at all. Management can be as arbitrary as it likes in assigning shifts, defining jobs, deciding whom to lay off and whom to call back,” writes the magazine’s editor Robert Kuttner. “No formal process is required, and no explanation need be given. In a city with a large immigrant population at a time of high unemployment, there is a seemingly endless supply of workers willing to do casual jobs at low wages and fearful of being fired.”

Yet Local 6 has been successful at protecting worker rights while maintaining good relations with the hotels and restaurants that its members serve. How have they done it?

First, they engage the entire membership in the process of running the union. There is no “union boss” mentality at Local 6, and the operation has a squeaky clean, scandle-free reputation. Second, they employ a power move that is particularly effective with high profile operations in a tourist town: the lobby meeting, which publicly escalates a problem without taking it to the level of an outright strike. Third, the union writes sophisticated, intelligent contracts that provide management with the ability to resolve disputes without confrontations.

“Because of the union’s institutional power,” Kuttner writes, “the choreography of resolving disputes is mostly ritualized and peaceful. The contract spells out rights and responsibilities in detail, and the ultimate recourse to binding arbitration gives management an incentive to settle minor issues before they become major ones.”

Employees are thrilled with the result:

“The union,” says Mick Wannamaker, a veteran banquet waiter at Le Parker Meridien, “takes jobs and turns them into professions. It makes better managers out of management. The good ones get better—the bad ones don’t survive.”

In fact, Local 6 actions have resulted in senior people being fired because they harassed or cheated employees, or simply because they created a negative work environment that customers recognized and responded to with their pocketbooks.

The union has also forged political alliances in the city, but not with the usual cash contributions. Instead, it uses a sweat equity approach in which members knock on doors for candidates that they favor.

“They punch above their weight,” says Dan Cantor, executive director of New York’s Working Families Party. “Every mayoral candidate is seeking their support.”

While there are myriad examples of ineffectual, even corrupt, unions that are well past their prime, Local 6 serves as a reminder that a labor union can represent employees effectively, win friends throughout a community, and make work better for all concerned. It’s a model that other unions would do well to follow.