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Labor Issues

updated February 2010
Legislative Issue Update - January 2010


When the 111th Congress and President Obama were sworn into office almost exactly a year ago, organized labor and the business community had one thing in common: a firm belief that labor’s unprecedented investment in money and manpower in the 2008 elections would be rewarded with fast action on a number of labor’s key policy objectives, with the Employee Free Choice Act (EFCA) topping the list. Business braced for the onslaught – in fact a cottage industry developed as some corporate law firms prematurely started selling their services to advise businesses on how to comply with EFCA – and labor geared up for an intense new organizing effort under a union-friendly Congress and National Labor Relations Board (NLRB).

The President did issue a number of pro-labor Executive Orders in his first days in office. (One particularly odious order will require Federal contractors and subcontractors to post notices in their workplaces inaccurately describing worker rights under the National Labor Relations Act (NLRA). And Congress passed and the President signed into law the Lilly Ledbetter Act, reversing a Supreme Court decision and effectively repealing any reasonable statute of limitations on the filing of pay discrimination lawsuits.

Despite these early actions, organized labor has had far more cause for disappointment than satisfaction with the new Congress and Administration. Their top prize – EFCA – has not even been taken up by the House of Representatives where passage was assured, and it is all but certain today that the legislation cannot pass the Senate in its current form (EFCA is covered elsewhere in this report). Nor have any of the other issues topping their wish list – the Healthy Families Act, Family and Medical Leave expansion, Paycheck Fairness Act, the RESPECT Act, etc., seen significant legislative action.

The inattention to labor’s key priorities in 2009 is certainly no indication that support for those policies has eroded; it has not. But the full attention of Congress and the Administration was given early in the year to the Stimulus bill, auto bailouts, and then to the all-consuming health care debate. And with “the economy, stupid!” set to drive the agenda in 2010 – and the looming crises in taxes, spending, debt and deficits complicating the Administration’s new-found focus on jobs – it is an open question as to whether labor leaders will successfully persuade policy-makers in Washington to move their agenda to the front burner.

Labor leaders remained supportive of the Administration and the Congressional Leadership through most of last year; or at least they kept their disappointment “in the family” and refrained from public criticism. But toward the end of the year cracks began to appear in the veneer of solidarity as labor leaders expressed frustration with the President over his handling of health care. Key labor leaders adamantly supported a strong government-run option in health care reform legislation, and were frustrated with the Administration’s failure to aggressively fight for its inclusion in the bills moving through Congress. Some leaders equally adamantly opposed the Senate’s proposal to impose a tax on high-value insurance plans, arguing that many union-negotiated contracts had accepted higher benefits in lieu of wage increases and that the so-called “Cadillac plan tax” was in effect a tax on wages they never received.

As Congress struggled toward its Christmas Eve adjournment and the final votes in both chambers on Health Care Reform legislation, labor leaders convened widely-reported late night emergency meetings to discuss their next steps. The left-wing Huffington Post reported that aides described the meetings as “lengthy and, at times, emotional.”

As a result of those emergency sessions, both Service Employees International Union (SEIU) President Andy Stern and AFL-CIO chief Richard Trumka gave voice to their frustration. In a December 17th letter to his members, Stern wrote:

We know we will fight . . . We will fight for employers to provide their employees with coverage. And, we will fight to pay for all of it responsibly without a tax on your benefits.

But we aren't the only ones who must fight.

President Obama must remember his own words from the campaign. His call of ‘Yes We Can’ was not just to us, not just to the millions of people who voted for him, but to himself. We all stood shoulder to shoulder with the President during his hard fought campaign. And, we will continue to stand with him but he must fight for the reform we all know is possible. . . .

The AFL-CIO’s Trumka made a statement the same day echoing Stern’s concern: "For this health care bill to be worthy of the support of working men and women, substantial changes must be made," said Trumka. "The AFL-CIO intends to fight on behalf of all working families to make those changes and win health care reform that is deserving of the name."

The relationship between labor and the Administration and Democratic majority in Congress became more strained early in 2010, particularly after the Senate voted not to confirm a Labor favorite to the National Labor Relations Board (NLRB). (That nominee is covered separately in this report.) A February 10th story in Politico, with the headline “Unions bash Dems, warn of political fallout,” includes this quote from John Gage, president of the American Federation of Government Employees: “"Here's labor getting thrown under the bus again. It's really frustrating for labor, and a lot of union people are thinking: We put out big time in money and volunteers and support. And it seems like the little things that could have been aren't being done."

While these statements clearly demonstrate that the relationship between President Obama and union leaders is strained, their shared objectives in broad labor policy will keep them at the same table as the legislative agenda unfolds throughout the rest of 2010. As the Huffington Post noted in commenting on labor’s late night emergency health care meetings, “The labor community, while privately angry with the White House and Democrats in Congress, still needs the support of these lawmakers on other legislative priorities.”

Employee Free Choice Act (EFCA)

The content of EFCA is widely known today; a summary of its provisions is available at the end of this Labor report for anyone wanting a refresher course. This report covers the political situation and prospects for passage in this Session of Congress.

The President first disappointed organized labor by not putting their key issues at the top of his agenda. In fact, other than issuing a few Executive Orders, President Obama did not act quickly on any labor issues; symbolically, his nomination of Hilda Solis as Secretary of Labor was not among his top-tier and early Cabinet nominations, and the rest of the agenda followed suit.

However, the failure of Congress to act on EFCA cannot be laid primarily at the President’s door. Neither house of Congress has voted on EFCA since it was defeated in the Senate in mid-2007, and in the intervening time public opposition to the proposal has steadily grown.

With public opinion solidly against the provisions of EFCA, moderate Senate Democrats – especially those from Right to Work states – began voicing their concerns about the bill. Despite the eventual seating of Minnesota’s Senator Al Franken giving the Democrats the 60 votes necessary to overcome a filibuster, success in the Senate grew less, not more, likely as the year progressed. As a result, moderate House Democrats demanded that their Leadership NOT bring EFCA to the House floor for a vote until after the Senate had acted on it, arguing that they did not want to cast a politically unpopular vote only to have the Senate not follow suit or, worse yet, defeat the bill. With moderate Democrats in both houses being asked to cast very difficult votes – spending bills, Cap & Trade in the House, health care reform in both houses – resistance to voting on EFCA grew throughout the year in 2009, and in some cases member concerns became outright opposition.

With enactment of the original version of EFCA increasingly unlikely, a group of Senate Democrats began meeting to try to forge a compromise proposal that could garner the 60 votes necessary to overcome a certain filibuster. Those conversations continued through much of the year but produced no tangible results. While everyone understood that the elimination of secret ballot elections in organizing campaigns was a “non-starter” in any compromise, Senate Democrats were unsuccessful in crafting a compromise on the other provisions that was acceptable both to their Party’s moderates and to organized labor. Business support for specific compromise proposals was never sought, nor did the business groups opposed to EFCA believe organized labor would support any compromise that would be acceptable to the employer community.

By late last summer, with health care and the still-weak economy dominating the political debate, discussion even of potential EFCA compromises disappeared from the political dialogue. By late 2009, even some labor leaders were publicly acknowledging that action on EFCA was off the table in 2009, and questionable in 2010. And in January, the unexpected upset election in Massachusetts of Republican Scott Brown to fill the Senate seat held for decades by the late Senator Ted Kennedy made enactment of EFCA in 2010 an even more remote possibility.

A stalemate on EFCA throughout this Session of Congress would be very good news for business. Political pundits across both political Parties today concur that prospects for Republicans in the 2010 elections look very bright; unless the political winds shift again it’s likely that labor will lose support in the Senate in November, and decrease the chances for passage in the next Congress.

While we have had greater success in preventing passage of EFCA than anyone could have foreseen, especially after the 2008 elections, the Coalition for a Democratic Workplace remains vigilant, and is prepared for a battle on this issue if and when labor leaders and their allies in Washington decide to move.

Issue Policy Background

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.

National Labor Relations Board Nominee

While EFCA did not move last year, the Administration made an attempt to circumvent the legislative process through the nomination for a seat on the National Labor Relations Board of a controversial labor activist. The NLRB, of course, is the government agency charged with overseeing union organizing elections, issuing rulings interpreting and enforcing the National Labor Relations Act, and investigating union and employer labor practices and charges of unfair labor practices. The nominee to this critically important agency, Craig Becker, is Associate General Counsel for both the SEIU and the AFL-CIO. More important, his views on labor law are radical even for this pro-labor Administration; he is so far out of the mainstream that the business community organized opposition to his nomination – something that business groups rarely do.

Becker is believed to have authored the Obama executive order referenced earlier in this report requiring Federal contractors to post erroneous and inaccurate notification of employee rights under the NLRA. He is also well-published on labor issues, having written that secret ballot elections “are profoundly undemocratic,” and that workers should not have the option of remaining non-union: “At first blush it might seem fair to give workers the choice to remain unrepresented. But, in providing workers this ‘non-representation’ option, US labor law grants employers a powerful incentive.”

His views are just as radical on employer rights, as noted in a May, 2009 Wall Street Journal editorial:

In a 1993 Minnesota Law Review article, written when he was a UCLA professor, [Becker] explained that traditional notions of democracy should not apply in union elections. He wrote that employers should be barred from attending NLRB hearings about elections, and from challenging election results even amid evidence of union misconduct. He believes elections should be removed from work sites and held on "neutral grounds," or via mail ballots. Employers should also be barred from "placing observers at the polls to challenge ballots."

More extraordinary, Mr. Becker advocated a new "body of campaign rules" that would severely limit the ability of employers to argue against unionization. He argued that any meeting a company holds that involves a "captive audience" ought to be grounds for overturning an election. If a company wants to distribute leaflets that oppose the union, for example, Mr. Becker said it must allow union access to its private property to do the same.

Mr. Becker isn't clear about which of these rules can be implemented by NLRB fiat, and which would require an act of Congress, but his mindset is clear enough. He's willing to push NLRB discretion as far as possible to tilt today's labor rules in favor of easier unionization.

 While those critical comments come from the business-friendly Wall Street Journal, similar descriptions of Mr. Becker can be found in the left-wing The Nation magazine.  In an article published on January 20th, they wrote, “Becker has argued that employers `should be stripped of any legally cognizable interest in their employees' election of representatives.’ In practice, this means that employers could no longer oppose union organizing drives through NLRB or other administrative proceedings but would instead become mere bystanders in that process, removing one of the most powerful tools in the employer arsenal of antiunion strategies.” 

Both organized labor and the business community considered this nomination as important as the Employee Free Choice Act, and in many ways a proxy vote in the Senate on EFCA. 

The Senate had not confirmed Mr. Becker when they adjourned sine die on Christmas Eve, so the nomination was returned to the President.  Business hoped that the President would not re-nominate Mr. Becker given his extreme and controversial views, but the nomination was sent back to the Senate early in 2010. 

The Senate attempted to move the nomination very quickly in the new session of Congress.  The Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing and “mark-up” on the nominee and reported it favorably to the full Senate in the first week of February.  Majority Leader Harry Reid (D-NV) scheduled an almost-immediate vote of the full Senate on the nominee, raising serious questions about whether the Majority was attempting to have the vote on Mr. Becker before newly-elected Massachusetts Republican Senator Scott Brown could be sworn in and be the 41st vote against Becker.

But if that was the mission, it was thwarted when then Senator-elect Brown asked that his swearing-in be moved up several days, ensuring that he would be in the Senate and voting before the vote on Becker was scheduled to occur.  

The Senate voted on the Becker nomination on February 9th; and as it turned out two Democrat Senators joined the Republicans in opposing the nomination, defeating the nominee by a final vote of 52-33 (15 senators were absent due mostly to the back-to-back winter storms in Washington that week; had all senators been present Mr. Becker would still have received only 57 votes, three short of the 60 necessary to overcome Republican opposition). 

Despite the losing vote in the Senate, this may not be the end of the story.  The President has the authority to make “recess appointments” to Federal positions – to act while the Senate is in recess to appoint individuals to government positions that would normally be subject to Senate confirmation.  This process allows a president to circumvent the Senate confirmation process, and the appointee can serve until the end of the next session of Congress.

Recess appointments are often controversial since they bypass the confirmation process; a recess appointment of a nominee who has been proactively rejected by the Senate even more controversial than the appointment of a nominee on whom the Senate has not acted.  As of this writing, the President has said that he is considering making some recess appointments in response to the Senate’s failure to confirm some of his nominees, but has not indicated whether he would consider a recess appointment of Mr. Becker.   Organized labor is encouraging President Obama to “recess appoint” Mr. Becker.  Republicans in the Senate are arguing against such an appointment, and business obviously would be in opposition.

Even if Mr. Becker is not appointed to the NLRB, close attention should be paid to see who the President nominates as a replacement candidate.  The nomination of Mr. Becker was clear proof of the President’s intent to appoint an aggressive pro-labor activist to this critically important post, so the employer community will be watching this issue very closely.     

Other Labor Issues

There are a number of labor initiatives that have been introduced this Congress or may be pursued through the regulatory process of which business should be aware. Among them:

  • The Paycheck Fairness Act – would amend the Equal Pay Act to include unlimited punitive damages in pay discrimination cases without showing of employer intent, weaken defenses available to employers under the EPA and 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;
  • “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 Ergonomics regulations that were proposed by the Clinton Administration.