Like Stabbey said, Backstab does work on Undead, it's just that they are resistant to piercing damage and (for whatever daft reason) you cannot use any blunt weapons such as a blackjack, the most thief-y weapon in the entire game, for backstabbing.
Back"stab"... How do you "stab" with a "blunt" item? If it was called flanking, id give you that.. But it can only be done with thrusting/piercing weapons.. If this was not the case, the Rogue class would have much less appeal..
I started a new EE run through recently, and i am currently in the undead forests around Cyseal.. On tactican.. Made the mistake of venturing out with Wulgruff, instead of Madora, oir Bairdotr.. His dual daggers worked just fine.. Admittedly, he was my only companion to go down.. As i stated in another thread (either here, or on Steam forum) there was some freak occurance, that caused 3 separate combat scenarios to pull all at once.. I survived all 3, with low lvl witch, fighter, Jahan, and Wulgruff.. Very not combat optimal team, fighting at above normal difficulty, and 3 separate groups..
We dont need to min/max our team for combat.. Dont forget to RP your crafters, thieves/sneaks, barterers, etc in with the group.. Youll find the game far more enjoyable, when you dont play it as a combat sim!
PS: i Used the blackjack just fine with my Shadowblade btw.. Its made with the minimum strength possible, for that very reason.. Thats why its always set, in the very 1st combat you will encounter.. (beyond the tutorial)