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NAW News

Labor Issues

- January 2009

LABOR ISSUES [updated January 2009]

Organized labor, frustrated with the lack of Congressional action on their legislative agenda even after Democrats regained the majority in Congress in the 2006 elections, promised a record-setting, all-out effort to increase the pro-labor majorities in both houses of Congress in last year’s election. Estimates of the amount of money they spent on the Congressional elections range from several hundred million dollars to as much as a BILLION when you factor in the hundreds of labor officials who worked full-time on the elections.

And they produced results. Pro-labor Democrats gained more than twenty seats in the House of Representatives, and almost enough Senate seats to give them the 60 votes they will need to shut down Republican efforts to block legislation.

Union leaders are now demanding that the Congressional Majority act on labor’s agenda to repay their massive election effort. They have a long wish-list of legislative objectives, with the so-called “Employee Free Choice Act” (EFCA) topping the list.

While they also expect labor-friendly policies from President Obama, there were initial disappointments from the new Administration. When the President named his Cabinet choices and key advisors on economic issues he did not include a new Secretary of Labor, sending signals that he would not include the Labor Secretary as a major advisor on economic policy. He did eventually name a staunchly pro-labor former Democratic House member, Hilda Solis, as Secretary of Labor, but she was among his last Cabinet appointments, raising questions about how aggressively the new President will push Labor’s agenda.

The Employee Free Choice Act:

Union membership in the United States has been on the decline for decades for a number of reasons: with a more mobile workforce workers more frequently change jobs; women are an increasingly large part of the workforce and less likely to join unions; the sharp increases in productivity resulted in jobs moving away from the highly-unionized manufacturing sectors; companies able to do so choose to locate in the mostly-southern right-to-work states. Union “density” today is under 7.5 percent of the private sector workforce. Labor leaders are seeking to reverse their declining membership by making it easiser and less expensive for unions to conduct organizing campaigns.

Under a card check system, a union conducting an organizing drive would be immediately and automatically recognized as the certified collective bargaining agent if it is able to persuade 50 percent plus one of the employees in a workplace to sign authorization cards. The right of the employer to demand that his employees be permitted to vote by secret ballot on whether or not to accept union representation would be eliminated. Workers who decline to sign an authorization card – which they would have to be willing to do in the presence of union organizers – would therefore 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 on a “first contract” 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. That agreement would be binding on the employer for two years. Again, the workers would be denied the right to vote on whether to accept the union contract. And a binding contract negotiated by a disinterested arbitrator could easily impose work rules which would remove an employer’s ability to be flexible and could, especially in these difficult economic times, threaten a company’s survival. We are seeing the results of that type of union contract today in Detroit.

While organized labor will certainly succeed in getting some of their agenda enacted, their demand for enactment of EFCA is likely to be frustrated yet again. The struggling economy will clearly demand the immediate attention of Congress and the new President, stalling the anticipated quick action on EFCA. Public opinion has solidified against this ill-conceived bill making support for it politically risky, particularly for Southern Democratic senators representing right-to-work states. Further, the public awareness of the role of the UAW in bringing the Detroit automakers to the brink of bankruptcy has made it difficult for advocates to make the case that increased union density is good economic policy.

While we believe we can defeat EFCA again this year, it is critically important that the employer community stay fully and actively involved in the issue. Members of Congress need to hear from businesses in their states and districts; they need to know that a vote for EFCA is a vote against business and job-creation, and that their constituents will be watching how they vote.

Other Labor Issues [updated January 2009]

While “card check” is labor’s top priority, they will not limit their legislative initiatives to that big prize. In addition to the expansion of the Family and Medical Leave Act which is covered in a separate staff report, there are numerous other labor issues which were introduced in the last Congress and are likely to be considered again this year. Among them:

  • “Ledbetter Fair Pay Act” – would reverse a Supreme Court decision and effectively eliminate the statue of limitations on pay discrimination lawsuits. This bill passed the House of Representatives, but was defeated in the Senate by a Republican filibuster last year. However, six Republicans joined the Democrats in support of the legislation giving them 57 votes, only three short of the 60 necessary to end the filibuster. With the Democrat gains in the Senate in the November elections, it is fairly certain that this legislation will pass early in this Congress and be signed into law by President Obama;
  • The Paycheck Fairness Act – would amend the Equal Pay Act to include unlimted punitive damages in pay discrimination cases without showing of employer intent, weaken defenses available to employers under the EPA andm establish “comparable worth” evaluation of employers’ pay systems;
  • “The Respect (Re-Empowerment of Skilled and Professional Employees and Construction Trade Workers) Act” – this bill would change the definition of “supervisor” to make it easier for unions to include supervisors in bargaining unit;
  • “Healthy Families Act” – would require that employers of more than 15 employees provide minimum paid sick leave and allow that leave to be used for family as well as personal medical needs (introduced in House and Senate);
  • “Davis Bacon Act” expansion and extension (more than 30 separate measures were introduced in the last Congress; and
  • Ergonomics – business should expect that the new Labor Department may review the OSHA and Ergonomics regulations that were proposed by the Clinton Administration.