The situation at Johnson Controls is not an isolated case. More than 90 per cent of registered trade union agreements in the country are "protection contracts" signed by "paper" unions, providing protection for the company not the workers.

"Protection contracts" are bogus collective agreements that prevent democratization and collective bargaining. They are signed behind the backs of the workers by employers and intermediaries that are registered by the labour authorities and whose main objective is to prevent the emergence of genuine and representative trade unions. They also keep pay and benefits low, restrict workers' rights and ensure labour relations that are advantageous to the company.

Characteristics of protection contracts include:

They are reached between trade unions and employer representatives without being discussed or approved by the majority of workers covered by the same;
They are reached by illegitimate parties that are not elected democratically by a majority of the workers they claim to represent;
They are administered and/or revised without reference to a majority of the workers; and
In some cases, workers are unaware that a "trade union" is representing them.

Although Mexican law allows there to be more than one trade union in a single company, this is rare. The corrupt and anti-democratic system, combined with anti-trade union management policies, make genuine unionization impossible. The system perpetuates itself because trade unions are required to request official recognition from the appropriate Conciliation and Arbitration Board (JCA), which is composed of representatives of the government, employer and the existing "trade unions" that sign protection contracts. Board members have an interest in maintaining the status quo and they create many obstacles to the registration of new independent trade unions. Consequently, in practice it is impossible to replace these "paper" trade unions, even though they do not have the support of the workers they pretend to represent. More serious still, workers who try to set up an independent trade union are often subjected to reprisals, intimidation, threats, violence, dismissal and blacklisting.

When establishing a new enterprise, many companies conclude a protection contract with a "paper" union before the first employee is even hired, effectively preventing employees from choosing the trade union of their preference. In most cases, these "paper" unions belong to a corporate lawyer who has officially registered the union. These "paper" unions are a legal simulation which defraud workers of their rights and represent a real obstacle to freedom of association. The "paper" unions go on to make a profit and earn money from the unprotected workers with companies paying between one to 3.5 per cent of the workers' salaries to the owners of the "paper" union.

Protection contracts allow companies to take advantage of the absence of genuine trade unions and to exploit workers, violate their rights and maintain political and economic control over the workforce.

Protection contracts in Mexico were not a neoliberal initiative. They are a manifestation of anti-trade union policies that date back to the beginning of the 19th century when the government began to introduce legislation to control the trade union movement. During the 1960s, a few genuine trade unions tried to extend the principles of autonomy, freedom of association and trade union democracy but were constantly prevented from doing so by the labour authorities and legislation. Protection contracts became prevalent with the arrival in recent times of the transnational companies and assembly (maquila) plants in the country.