NEW YORK (FORTUNE) - By law, American workers have the right to form unions and bargain over wages and working conditions.

Trying to exercise those right is another matter entirely - workers are routinely fired or discriminated against for supporting unions, most employers hire anti-union consultants to block organizing drives and some go so far as to close down work sites when employees vote for a union.

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"There's a crisis in workers' rights," says Mary Beth Maxwell, executive director of an advocacy group called American Rights At Work. "The system is simply not working."

Between 1993 and 2003, an average of 22,633 workers per year were ordered to receive back pay from their employers by the National Labor Relations Board because they were fired, demoted or discriminated against because of union activity, the union-backed group says.

That's why the story of Cingular Wireless and its union, the Communications Workers of America, is so unusual - and worth a closer look.

Back in 2000, Cingular worked out what's called a "neutrality agreement" with the CWA. Each side agreed not to disparage the other, and workers were permitted to form unions at their job sites if a majority signed cards indicating that they wanted to do so. No name calling, no bitter battles, no distractions for the job at hand - which is, after all, providing wireless phone service to customers.

Today, about 39,000 technicians, customer support workers and retail sales people at Cingular belong to the CWA. The Atlanta-based company has about 70,000 workers in all and annual revenues of $32 billion. It is jointly owned by AT&T (Research) and Bell South (Research), which are in the process of merging.

The union's growth at Cingular runs counter to broader trends of declining union membership. What's more, most Cingular employees are under 40, white collar and located in the South - a region of the country that has historically been hostile to unions.

And how's Cingular doing since it made peace with the union? Very well, thanks - with about 56 million customers, Cingular is the nation's largest wireless carrier.

Now, it would be simplistic to suggest that Cingular's worker-friendly approach has driven its success. More importantly, almost surely, is the fact that Cingular has a customer-friendly policy of allowing people to roll over minutes from month to month. And some independent research shows that the service has fewer dropped calls than its competitors.

But Lew Walker, vice president for human resources, says a cooperative relationship with the union has also proven to be a competitive edge. When a company's managers are focused on fighting a union, "there is no way you can focus on growing the business," Walker said at a recent forum sponsored by the Center for American Progress, a liberal Washington think tank.

And, while business executives routinely complain that unions are obstacles to nimble, flexible management, Walker says of the CWA: "They very much recognize that we are in a competitive environment." Disagreements are common, but they are worked out cooperatively.

For its part, the CWA is doing all it can to help Cingular set itself apart from its rivals. It has created a Web site urging customers switch to Cingular (www.cingularswitch.com) and talks up the company at union gatherings.

None of Cingular's rivals are union-friendly, the CWA says. "Verizon Wireless, T-Mobile, Sprint, Alltel are the Wal-Marts of this industry," says Jeff Rechenbach, executive vice president of the CWA.

Maxwell, of American Rights at Work, says Cingular has replaced "an old-fashioned model pitting management against its workers with a profitable, collaborative approach."

Interestingly, a new survey by the National Consumers League and Fleishman-Hillard, the public relations firm, found that 76 percent of American consumers believe that a company's treatment of its employees plays a big role in consumer purchasing decisions.

Fleishman-Hillard's CEO, John Graham, says: "If companies want to maintain and strengthen their reputations, it will be essential for them to invest actively and visibly in their employees."

But whether or not you believe that consumers care enough to switch to Cingular, the company's cooperative approach makes sense. Certainly it makes more sense than the reflexive anti-union stance typically found in the executive suites.