Costly pro-union rulings inundate industry
Our captains of industry are frustrated with the Obama administration’s efforts to rewrite the rules governing labor relations. They disagree not only with the substance of many of the proposals, but also in the blatant attempt to avoid normal procedures and transparent debate.
Business groups are rightly upset with several rulings by the National Labor Relations Board that together represent a backdoor attempt to implement "card check" legislation that would mandate unions be the bargaining representative if they simply collected enough signatures from workers at a company instead of going through the secret-ballot process in place now. The Employee Free Choice Act was a top priority for unions when Obama took office, but has not generated enough support in Congress. Business groups say that allowing workers to publicly declare whether they support a union will lead to pressure and intimidation for those who don’t sign.
The NLRB a year ago decided in an administrative case involving automotive supplier Dana Corp. that "card check" is a legal organizing tool as long as the employer and union agree in writing in advance. Dana had agreed to ground rules by which the United Auto Workers would be recognized if a majority of employees signed cards in favor of representation. Conservative critics say the ruling opens the door for companies to strike deals with unions on compensation or other areas of interest at the expense of workers that do not want to join a union.
Last summer, the NLRB rolled back the right of employees to petition for a secret-ballot election when an employer and union voluntarily agree to a "card check" process that automatically creates a bargaining unit when a majority of workers sign up.
The board last December also proposed a rule that would require employers to publicly notify employees of their right to unionize. Business groups say that amounts to posting advertising for unions.
Now, the fight is on to counter the effects of the NLRB’s Aug. 30 Specialty Healthcare decision which allows workers to organize into micro bargaining units so that each job category within a business negotiates its own compensation and work rules. The unions’ goal is to represent similar employees even if it can’t organize the entire workforce. The rule involved non-acute healthcare facilities, such as nursing homes, but applies to industry across the board.
The Coalition for a Democratic Workplace, which represents hundreds of trade associations that want to retain private ballot union elections, says creating swarms of "micro unions" would overwhelm employers with conflicting work rules, pay scales and bargaining schedules.
The effect in the retail industry, for example, is that companies could be forced to deal with micro bargaining units for greeters, cashiers, fitting room assistants, stock room workers and others. They wouldn't be able to cross-train employees because each group would have specific rules spelling out what work they can and cannot do.
That means that when you’re stuck in a long line waiting to pay at Best Buy the manager won’t be able to pull someone from another area of the store to operate the cash register. The rule similarly would tie the hands of distribution centers because they would not be able to shift people around as needed to handle an unscheduled inbound delivery or rush order, thereby decreasing efficiency.
It’s possible that an employer would refuse to bargain if it lost an organizing campaign to a sub-unit of workers, in which case the union would petition the NLRB to rule on the alleged labor violation.
Sen. Johnny Isakson, R-Ga., has introduced legislation that would effectively overturn the Specialty Healthcare decision.
There are indications that Brian Hayes, the NLRB’s sole Republican, might step down this week to prevent the independent body from advancing a proposal for so-called "quickie elections." The NLRB has moved up to Nov. 30 a vote on amending rules and procedures governing procedures in union representation cases while it still has a quorum. It says the rules are intended to simplify procedures, make them more uniform and reduce unnecessary litigation.
The "quickie" or "ambush" election proposed by the NLRB’s majority would speed up a unionization election from about five weeks of notifying the NLRB to as few as 10 days. The business community argues that’s not enough time to muster facts and present its side to employees in response to an election, which is usually sprung on management without warning. Unions typically have a head start because they’ve been campaigning before the election is announced to rustle up preliminary support.
The temporary appointment of Craig Becker by President Obama will expire at the end of the year, dropping the board to two members. The NLRB has five seats, but there are now two vacancies and Republicans have vowed to block any new Obama appointments. Becker is the controversial former counsel for the AFL-CIO and the Service Employees International Union who the Senate refused to confirm and Obama installed through a procedural loophole.
Speculation that Hayes, who has been under pressure from conservatives for months, might resign increased when he sent a scathing letter on Nov. 18 to the chairman of the House Education and Workforce Committee criticizing his Democratic colleagues for trying to ram through election changes without three affirmative votes, as normally required by internal rules, and not giving him time to review the final election procedure rule, as well as the 65,000 public comments, and draft a dissent. Under administrative law, agencies are supposed to factor public comments into final rulemakings.
Hayes reportedly threatened to resign in a conversation with NLRB Chairman Mark Pearce last month.
Meanwhile, the Department of Labor is considering a rulemaking that would remove the exemption for companies to report when they use outside attorneys to advise them on labor issues, whether it’s updating an employee handbook on union campaigns or helping develop the negotiating strategy. The reporting requirement would include how much money was spent on outside counsel.
Business groups worry that the rule will be used by unions to demonize employers as willing to spend thousands of dollars on lawyers rather than benefits or wages for their employees. Small businesses that don’t have in-house counsel are most likely to be harmed, they say.
The fact that the "quickie election" and the "persuader activity" notice of proposed rulemakings were issued in June one day apart has raised industry suspicion that there is collusion between the agencies.
On top of all this pro-union activity, there is the NLRB’s action against Boeing Co. for deciding to transfer a second production line for its new 787 Dreamliner to a non-union facility in South Carolina. The NLRB says Boeing decided not to build the plant at its home in the state of Washington to punish the machinists union for a damaging strike in 2008. Under the law, a company cannot move a factory as retaliation for workers exercising their federally protected right to unionize or strike. The agency’s acting general counsel, Lafe Solomon, filed a complaint early this year to force Boeing to relocate the plant to Washington. The case is before an administrative law judge.
Solomon, it should be noted, is working in an acting capacity because the Senate won’t bring him up for confirmation vote. He also has instructed four states to ignore recent amendments to their constitutions guaranteeing the right of secret union elections.
Boeing says the decision was made for a variety of reasons, including South Carolina’s pro-business climate, financial incentives, lower costs and the need to diversify production locations and reduce production risk. In this case, the risk referred to is the threat of potential work stoppages. Boeing shouldn’t be penalized for hedging its risk for strikes by locating a plant in a right-to-work state. Diversifying operations to hedge against risk, whether it’s weather-related or man-made, is considered a good business practice.
The ruling has galvanized the business community and led the House to pass a bill that says the NLRB can’t mandate where a business locates a plant. The bill, which technically would have prevented the NLRB from using funding to pursue an order threatening the Boeing plant’s operations, failed to get out of the Senate Appropriations Committee.
The White House says it can’t intervene because the NLRB is an independent agency. While that’s true, Obama put the wheels in motion by appointing people he knew would push an activist union agenda. It’s a bit late to claim no responsibility.
In some regard, what is going on is a swinging back of the pendulum. For years, Republican presidents nominated pro-business people to the NLRB who didn't always look out for the interests of workers. Now, labor groups are getting their desserts while the getting is good.
What would be nice is regulation based less on ideological motivation and more based on common sense and a fair reading of the law.