WHOLESALE DISTRIBUTION BEST PRACTICES

Leading wholesaler-distributors depend on NAW Institute for Distribution Excellence groundbreaking research studies because they help solve real-world business challenges.

 

YOUR 5-YEAR GROWTH ROADMAP


 

Order copies of Facing the Forces of Change®: Navigating the Seas of Disruption for everyone on your team!

 

NAW News

Labor Issues

Legislative Issue Update - October 2007

The AFL-CIO and Change To Win:

In 2005 a group of large and powerful unions within the AFL-CIO took issue with the way the labor federation was being run, specifically objecting to the AFL-CIO’s focus on electoral politics rather than union membership building. As a result of the dispute, the dissident unions split off from the AFL-CIO, forming a new labor federation called the Change to Win Coalition.

Last fall the AFL-CIO leadership determined that the split in the labor movement was impairing their effectiveness in the 2006 Congressional campaigns, and made overtures to Change to Win to put their differences aside and work together to help Democrats regain control of Congress. Change to Win agreed, and this common goal brought the competing federations together; both put their considerable muscle and money into election campaigns, indisputably a key element in restoring Democrats to power in Congress.

For the 12 years that the GOP controlled Congress, they relegated Organized Labor’s legislative wish list to a back burner; the new Democratic majority moved that agenda to the very top of their list. Further, since the election, the AFL-CIO and Change to Win have continued to cooperate, and both have committed to supporting Speaker Nancy Pelosi’s (D-CA) legislative priorities as well as the labor federations’ own legislative agendas.

In short, Organized Labor is a legislative force to be reckoned with in this Congress, and business needs to take notice and get fully engaged in the process.

Minimum Wage [updated June 2007]:

The first issue on both the Speaker’s Legislative agenda and that of Organized Labor was an increase in the minimum wage. Early in the session, legislation to increase the minimum wage to $7.25 an hour passed both Houses of Congress with broad, bi-partisan support, but the House and Senate versions differed significantly, and a conference to reconcile those differences met with little success. The differences between the two versions of the legislation dealt not with the minimum wage increase, but with tax breaks that were included in the bill to help the small businesses that pay it, and the “pay-fors” to offset the loss of Federal tax revenue that will result from the small business tax breaks.

To put that in English: The Senate version of the legislation provided a little over $8 billion in small business tax incentives, and raised taxes on others by an equal amount; the House version provided only $1.3 billion in tax breaks and raised taxes by only that amount. Moreover, the tax breaks in both bills were very closely targeted to benefit small businesses, and the tax increases in the Senate bill applied almost exclusively to large corporations. Among the most contentious of the Senate tax increases were provisions to limit deferred compensation for highly-paid executives and to deny deductibility of certain fines and penalties in legal settlements.

For several months, Congressional negotiators made little progress in reconciling the Senate and House versions of the bill. Eventually Senate Finance Chairman Max Baucus (D-MT) and House Ways and Means Committee Chairman Charlie Rangel (D-NY) agreed on a compromise that included a $2.10 per hour increase in the minimum wage, phased in over two years, and $4.84 billion in tax breaks. Not included were special provisions to help restaurants and small retailers. Also gone were the tax increases targeted at large corporations.

To ensure final adoption of the legislation, on May 24th the House leaders added the minimum wage increase and tax provisions to the Supplemental Appropriations bill that provided additional funding for the Iraq war. The Senate accepted the now-modified Supplemental funding bill, thus finally sending the long-promised minimum wage bill to the President for his signature just before Memorial Day.

Employee Free Choice Act (Card Check) [updated June 2007]:

While the minimum wage increase was the first Labor-backed bill to be taken up in Congress, their top legislative priority was the mis-named “Employee Free Choice Act” (EFCA), or “card check” legislation.

Union membership has been on the decline in the U.S. workplace for years – down to 7.4% of the private sector workforce today. Card check legislation is organized labor’s response to that decline. It would remove the protection of government-supervised employee secret ballot voting from union certification elections, to make it easier for union organizing efforts to succeed, and force employers into binding arbitration on first contracts once the union is recognized.

Under the current provisions of the National Labor Relations Act (NLRA), a union attempting to organize a workplace must first obtain the signatures of 30% of the workers on authorization cards indicating their support for union representation. Presented with the signed cards, the employer may recognize the union, but it may also request an NLRB-supervised secret ballot election so the workers may vote in private on whether they wish to accept union representation. If the workers do vote to accept union representation, the employer and union begin negotiating a collective bargaining agreement with no deadline for reaching agreement as long as both sides are negotiating in good faith.

The card-check legislation would amend the NLRA and turn this reasonable and fair process upside down. Under card check, a union conducting an organizing drive would be immediately and automatically recognized as the certified collective bargaining agent if they are able to persuade 50% plus one of the employees in a workplace to sign authorization cards. Given organized labor’s history and practice, it is not difficult to assume that they would employ pressure tactics to convince workers to sign the card accepting the union. And the workers who chose not to sign an authorization card – possibly as many as 49%-plus of the workforce – would be denied any voice or vote in the process and compelled to accept the union as their bargaining agent.

Moreover, once the union is recognized, if the employer and union fail to reach an agreement within 120 days, the union can demand that the negotiations be referred to “interest” arbitration in which a third-party arbitrator – with no responsibility for the economic health and profitability of the business – will decide the terms of the agreement. And that agreement would be binding on the employer for two years.

It is noteworthy that card check legislation does not threaten just those businesses which have large workforces to organize. Under a card check system, small businesses would become prime targets because the low cost of a card check campaign would make it economically practical for unions to target small workforces.

Labor and its allies in Congress moved quickly on card check legislation in the House of Representatives. The bill was introduced in the House in early February by Labor Committee Chairman Congressman George Miller (D-CA). The Subcommittee with jurisdiction on the issue held one hearing in which pro-card check witnesses outnumbered opposition witnesses by a three-to-one margin. The legislation was then approved by the full Labor Committee on a straight party-line vote, without further hearings, and referred to the full House of Representatives. The bill was passed by the full House on March 1st – not even a month after it was introduced. It is rare for legislation of this magnitude to be rushed through the legislature so quickly and with so little deliberation.

The House-passed bill, H.R. 800, was sent to the Senate, where Majority Leader Harry Reid (D-NV) placed the bill on the Senate calendar, making it available for floor action at any time. On March 27th, Senator Kennedy’s Labor Committee held a hearing on the EFCA – even though he had not yet even introduced a Senate version of the legislation. Again, three pro-card check witnesses were called to testify, with the minority allowed only one witness in opposition.

On March 29th, Senator Kennedy finally introduced the Senate card check bill, S. 1041, which was referred to his Labor Committee for further consideration. With S. 1041 in Committee and H.R. 800 on the Senate calendar, it was set up so that floor action on the card check bill could occur at any time by a simple motion of the Majority Leader. The Republican Leadership, on the other hand, vowed to defeat the measure whenever and however Senator Reid attempted its consideration.

There was no further action on card check for more than two months. Then, in early June, several large labor unions announced that they had scheduled a major rally in support of card check in Washington, D.C. – and as many as 100 more locations across the country – on June 19th. Clearly coordinating his actions with the labor rally, Majority Leader Reid moved to proceed to the card check bill on the same day as the labor rallies, and filed cloture on his motion in order to cut off an anticipated Republican filibuster and force a vote.

Finally, on June 26th, the Senate voted NOT to invoke cloture on H.R. 800 by a vote of 51 to 48, falling 9 votes short of the 60 votes necessary to invoke cloture. On this almost straight party line vote (Senator Arlen Specter of Pennsylvania was the only Republican voting “yes”), card check legislation was shelved, presumably for the rest of the year. But Labor leaders and their allies in Congress promise to resume the fight to enact this legislation in the next Congress.

NAW is on the management committee of the Coalition for a Democratic Workplace (CDW), a pro-business coalition formed for the purpose of organizing an intense lobbying and grassroots campaign to ensure defeat of the card check legislation. NAW and the other members of CDW are committed to a multi-year effort to defeat this legislation, and believe that American business must also stay focused and engaged in the effort.

Family and Medical Leave Act: [added June 2007]

The Family and Medical Leave Act (FMLA) was enacted in 1993. It allows any employee who has worked at least 1,250 hours during a 12-month period in an organization of 50 or more employees within 75 miles to take up to 12 weeks of unpaid leave for the birth or adoption of a child; the care of a child, spouse or parent who has a serious health condition; or a serious health condition that prevents the employee from performing the function of his/her position.

The family leave provisions of FMLA have worked well, however, the medical leave side has been problematic. The Department of Labor (DoL) has issued opinion letters that contradict one another and appear to be in conflict with Congressional intent. This has bred a lack of clear understanding as to what constitutes a “serious health condition” and employers have struggled to deal with unscheduled intermittent leave.

NAW and the approximately two dozen other employer organizations in the National Coalition to Preserve Family Leave (NCPFL) have called on DoL to clarify these and other issues which are causing problems in workplaces across the country. A DoL Request for Information promulgated in December 2006 and closed in February 2007 has yet to yield a new proposed rule to address these matters.

Legislatively, a proposal to expand the application of the FMLA has been introduced by Reps. Carolyn Maloney (D-NY-14) and Sheila Jackson-Lee (D-TX-18). H.R. 1369, the “Family and Medical Leave Expansion Act” would: extend FMLA coverage to employers with 25 or more employees (currently 50); allow employees to take FMLA leave to address issues relating to domestic violence; and allow employees to take 24 hours of “school involvement leave” during any 12-month period to participate in academic school activities of a child or in a family literacy program. H.R. 1369 has been referred to the committee.

Further, the “Healthy Families Act” (S. 910/H.R. 1542) was introduced last March by Sen. Edward Kennedy (D-MA) and Rep. Rosa DeLauro (D-CT-3). S. 910/H.R. 1542 would require employers with 15 employees or more to provide seven days of paid sick leave annually to employees who work at least 30 hours per week and a prorated amount for those who work at least 20 hours per week, but less than 30 hours per week.

NAW opposes the Family and Medical Leave Expansion Act and the Healthy Families Act, and will oppose any further proposal to require paid leave under the FMLA.