LaborPains.org

By John Raudabaugh, Former NLRB Board Member

The Noel Canning decision by the D.C. Circuit Court of Appeals has the potential for far-reaching consequences in many areas of the law. The balance of powers between the executive and legislative branches have been recalibrated based on the court’s opinion that President Obama’s recess appointments to the National Labor Relations Board (NLRB) on January 4, 2012 were unconstitutional. The same issue is pending in other circuits, making the case all the more likely to come before the U.S. Supreme Court.

Where labor law is concerned, Noel Canning voids all NLRB decisions rendered since Richard Griffin, Sharon Block, and Terrence Flynn, Jr. were recess appointed to the Board on January 4, 2012. That’s because in the 2010 decision, New Process Steel, the Supreme Court ruled that the NLRB must maintain a quorum of at least three members. Since January 4 of last year, the Board has had no more than two legally sitting members at any one time. If the Supreme Court affirms the D.C. Circuit and invalidates the three recess appointments, parties would prevail in their appeals against the Board, and all Board decisions issued after January 4, 2012 would be void including the following radical decisions:

1.      Banner Estrella Medical Center, 358 NLRB No. 93 (July 30, 2012) [Griffin, Block; Hayes dissenting]. In a 2-1 decision, the Board held unlawful an employer’s practice of asking employees not to discuss matters related to an ongoing investigation with their co-workers. According to the majority, the employer’s directive violated Section 8(a)(1) of the National Labor Relations Act (NLRA) because it had a reasonable tendency to coerce employees in exercising their Section 7 rights to form, join or assist labor organizations. Hayes dissented reasoning that the employer merely made a suggestion and did not promulgate a rule.

2.     Costco Wholesale Corp., 358 NLRB No. 106 (September 7, 2012) [Pearce, Griffin, Block], Knauz BMW, 358 NLRB No. 164 (September 28, 2012) [Pearce, Block; Hayes dissenting], and Hispanics United of Buffalo Inc., 359 NLRB No. 37 (December 14, 2012) [Pearce, Griffin, Block; Hayes dissenting].  In the Costco and Knauz decisions, the Board held that confidentiality and social media policies which would chill employees in exercising their protected Section 7 rights to form, join or assist labor organizations were unlawful.  In Hispanics United, the employer fired five employees for their Facebook posts. A fired employee complained on Facebook that a co-worker “felt we don’t help our clients enough[.] I about had it. My fellow workers how do u feel?” In response, four co-workers posted that the criticism of their job performance was unfair. The Board found the Facebook conversation protected concerted activity because it was an effort to mobilize employees to take action in response to the criticism of their job performance. Hayes dissented because, in his opinion, there was no “evidence of a nexus for group action” but only individual venting.

3.      Finley Hospital, 359 NLRB No. 9 (September 28, 2012) [Pearce, Block; Hayes dissenting]. The Board held that employers must continue providing annual wage increases beyond the expiration dates of applicable collectively bargained agreements despite contract language clearly limiting such actions to the duration of the agreement. Hayes dissented noting that “employers must now bargain for contractual language expressly providing that no increase will be paid beyond the contract term…and unions have been given a powerful new weapon to use during negotiations.”

4.      Alan Ritchey Inc., 359 NLRB No. 40 (December 14, 2012) [Pearce, Griffin, Block]. The Board held that in the absence of a negotiated grievance-arbitration system, an employer whose employees are represented by a union must provide the union notice and an opportunity to bargain before imposing discretionary discipline (for example discharge or suspension) even when such discipline does not alter broad, pre-existing standards of conduct.

5.      Piedmont Gardens, 359 NLRB No. 46 (December 15, 2012) [Pearce, Griffin, Block; Hayes dissenting]. The Board overturned Anheuser-Busch Inc., 237 NLRB 982 (1978) to hold that employers can be required to provide a union representing employees involved in an issue of employee misconduct with witness statements obtained by the employer during its investigation. The Board majority announced a balancing test requiring employers to prove a legitimate and substantial confidentiality interest that outweighs a union’s need for such information. And, an employer must raise its confidentiality concern in a timely manner and bargain with a union in good faith regarding its confidentiality interests and the union’s need for the statements. Hayes dissented recognizing the long standing Anheuser-Busch bright-line rule protecting witnesses from intimidation, coercion and retaliation.

6.      WKYC-TV Inc., 359 NLRB No. 30 (December 15, 2012) [Pearce, Griffin, Block; Hayes dissenting]. The Board overturned Bethlehem Steel, 136 NLRB 1500 (1962), case precedent for more than half a century, to now require employers to continue deducting union dues pursuant to a contractual checkoff obligation even after the collective-bargaining contract expires. Hayes dissented reasoning that dues checkoff, no-strike/no-lockout, and arbitration provisions are all “uniquely of a contractual nature” and expire with the contract term.

It’s no mystery that labor union leaders are paid well. But a closer look at the numbers are still astounding.

The Washington Times has the full report today, compiled from information available at UnionFacts.com. The article, which features our managing director, J. Justin Wilson, details how union leadership spends millions of member dues on themselves.

There can be riches in standing up for the working class: The Boilermakers union president earned $506,000, plus hundreds of thousands of dollars more for travel expenses, while the Laborers union president made $441,000. The Transportation Communications Union leader made $300,000, bumped up to $750,000 with business expenses.

Patrick W. Flynn makes $435,000 a year in his capacity as treasurer of a 13,600-member Teamsters union local, and the $30,000 in business expenses he collects on top of costs associated with carrying out his duties around Mokena, Ill., approach that of a typical worker’s entire salary.

Some of the salaries top half-a-million dollars per year. And in relation to the size of the unions (most of which are shrinking) the staff costs seem to keep growing. Union leaders want to maintain their luxurious lifestyle, and they do it on the backs of their fellow union members. How? By increasing the costs of dues:

Those salaries are financed largely, of course, by dues paid by members, and the average dues paid to a local by each member rose to $401 in 2011, up from $272 in 2000, or $355 in inflation-adjusted dollars. But some dues were far steeper than others. Boilermakers Local 154 raised its dues from 4 percent to 7 percent of wages over the past five years, for example.

This practice is problematic, according to Wilson:

J. Justin Wilson, managing director of the Center for Union Facts, a union-watchdog group, said spending of members’ dues on officers’ perks represented a conflict of interest because “the board of the union has the fiduciary responsibility.”
“There have been more than a few instances of labor leaders living high on the hog at the expense of their members,” he said. Those excesses occur in the corporate world, too, but as nonprofits, “technically they are beholden to the taxpayers. In exchange for not paying taxes, there’s a greater degree of responsibility.”

Though some have started to issue their year-end and presidential-term-end reviews of federal labor law, some recent decisions turn the year on its head—not to mention at least one major chapter yet to be written.

Just last week the National Labor Relations Board (NLRB), ruling on Kent Hospital, decided that lobbying expenses could be considered chargeable expenses if they are “germane to collective bargaining, contract administration, or grievance adjustment.” This means that even if a union member opts out of permitting his or her dues to be used for politics (thanks to the Beck decision) certain lobbying would be still be funded. The problem is that the definition is so broad that a labor union could decide that almost all of its lobbying is germane for these purposes. The NLRB also ruled that Beck objectors are no longer entitled to a detailed audit showing that their dues were not spent on politics.

The Board also went back on half-a-century of labor law in reversing the Bethlehem Steel decision. The NLRB determined that even when a union is on strike or its contract with an employer has expired, the employer must continue to deduct dues and pay them to the union.

The Roundy’s case may be the most significant one that comes before the NLRB this year. And now the NLRB, free of any dissenting voices, can inflict more damage on labor relations than ever before.

The Roundy’s dispute is over access to an employer’s property by unions when that employer allows access for other groups, such as the Girl Scouts. The union wanted to hand out pamphlets encouraging a boycott of the grocer because Roundy’s was not a union store.

But there is a lot more to the case. The implications will likely extend to other forms of property–notably e-mail systems, and may overturn the Bush-era decision of Register-Guard, which stated that “equal” groups were cause-specific. For example, there could not be discrimination of one union over another, or union group versus an anti-union group, but the Girl Scouts and Red Cross could be permitted to operate there because they are groups not related to unions.

What’s at risk here is that the NLRB may use this opportunity to invoke Section 7 and determine that blanket rules banning work e-mail for personal use are not permitted, because e-mail is effective in communicating about organizing or other concerted activity.

In addition to this decision turning labor law on its head, there are serious constitutional concerns for employers. First, employers may be asked to severely compromise their physical property rights by being forced to allow unwanted persons to enter. In turn, depending on state law, there will need to be legal determinations of the status of that person—as in, is that person an invitee or a licensee—a distinction that often matters for purposes of tort law liability.

There are also First Amendment implications of forcing employers to open up their e-mail systems to facilitate speech. The next question would be, of course, to ask how far this must extend to be compliant. If company e-mail becomes a free-for-all, some companies may act to limit e-mail usage altogether. This will in turn hurt productivity.

This NLRB has made it a goal to push the envelope and give a distinct advantage to labor in all disputes. But a decision against Roundy’s in this case might be the most blatant unbalancing of the scales that we’ve seen. A line is crossed when a union is not only given equal standing with an employer, but a clear advantage.

Meanwhile, labor is gearing up for even more organizing in 2013. Truth-Out has given five reasons why it thinks labor will regain some power—all of which add up to more union insolence in the face of common sense and reality. It appears that the author missed the memo: actually making an argument and pounding the pavement to unionize employees is passé. If anything, more strikes and walkouts, for example, will only cause more people to turn their backs on unions.

Once, labor was concerned with preaching to the workers—changing hearts and minds, hoping to rally support among employees to stand up for their rights and effectively make gains collectively. Now, that model has failed, as unions have failed to help their members. Instead, unions will spend member money on politics to make sure that when a labor dispute arises, they only need to preach to the converted.

The Chicago Tribune and WGN-TV reported today that bosses in the Laborers International Union of North America (LIUNA) are set to receive benefits from two and even three pension funds upon retirement from their positions. The highlights:

Union pension benefits are not public record, but the Tribune and WGN-TV obtained information confirming that at least seven union officials are accruing benefits in multiple pensions and another retired official already is receiving money from two pensions.

One labor leader stands to reap more than $400,000 a year from three pensions — the city laborers fund, a union district council fund and a national union fund — all covering the same time period.

The Tribune reports that union bosses are using a loophole in a state pension law that prohibits union members who receive city pensions from “receiving credit in any pension plan established by the local labor organization based on his employment by the organization.”

The LIUNA bosses and the city pension fund argue that the “Construction and General Laborers District Council of Chicago and Vicinity” does not count as a “local labor organization” and thus they are entitled to claim the city pension and the union pension. And boy, do they stand to claim quite a pretty penny. The Tribune gives this example of a boss’s benefits:

Among those in line to reap multiple pensions with the blessing of city pension fund officials is Liberato “Al” Naimoli, president of Cement Workers Local 76.

Naimoli retired in 2010 from a $15,000-a-year city job that he hadn’t worked at in a quarter-century. He now receives a city pension, based on his union salary that pays him about $158,000 a year, more than any other annuitant in the city laborers’ pension fund.

In order to get that inflated city pension, Naimoli signed an application in 2009 that stated he was not receiving credit in any local union pension plan. Yet information obtained by the Tribune and WGN-TV shows that the local has been sending pension contributions on his behalf to the union fund since 1977. He is now eligible to receive about $60,000 a year.

For comparison, the Tribune reports that the average member’s benefit is $29,000 per year from one pension. Being the boss has its benefits.

The Associated Press has unearthed troubling political goings-on in Ohio, where Governor ted Strickland apparently bent over backwards to accommodate his political backers from the Service Employees International Union. The AP reports:

SEIU donated $90,000 to Strickland’s gubernatorial campaign last year, a portion of the $2 million it has given statewide to Democratic party committees and candidates since last year, campaign finance records show. AFSCME has given just more than $76,000 to Democratic candidates and committees since last year, including about $6,000 to Strickland’s campaign from its political action committee and executives.

In the e-mails, dealings between the unions and the administration appeared cozy. Strickland took office in January, marking the first time in 16 years that Democrats, historically pro-union, have controlled the governor’s office.

In one of the governor’s office e-mails, Kristen Rankin, the state’s chief labor lawyer, provided the governor’s two main lawyers, Kent Markus and Kimberly Cocroft, with a lengthy rundown of SEIU’s plans for organizing various categories of home health workers once the order was in place.

In an e-mail exchange later the same day, Cocroft told Medicaid Director Cristal Thomas that language had been added to the draft order giving unions a chance at organizing additional state workers as program definitions changed. She said SEIU “specifically asked” for the language and the governor’s office had accommodated.

But, the governor’s flack notes, the union didn’t get everything it wanted:

The directive neither forces workers to unionize nor requires them to pay dues for union representation they don’t want …

Apparently the union not only wanted to add a bunch of members through a dubious political payoff, they wanted to force everyone to become a member. Classy.

Head over at National Right To Work’s blog … and then, you know, head back over here.

Members of the behemoth known as Service Employees International Union Local 1000 in California aren’t happy about having their dues and fees schedule jacked to Kingdom Come by union officials. Now some people who pay an unfair share fee — people who are forced to pay for union “services” even though they don’t want to be union members — are fighting back and trying to escape. And it could cost the union big time:

With unit members paying an average of $75 a month in dues, according to Hard, and fair-share employees paying a couple dollars less, SEIU 1000 stands to lose about $12.5 million a year if the rescission campaign succeeds and it carries over into the next contract. That amounts to about 29 percent of the $44 million in revenue the union declared last year.

The fight over the fair-share payers comes at a time when petitions are circulating on a ballot measure that would reduce pensions on state employees hired after July 2009. Meanwhile, the union’s contract with the state expires next year, with Gov. Arnold Schwarzenegger’s budget writers already projecting an $8.6 billion operating deficit.

When it comes down to it, the problem is summed up by the guy leading the charge against SEIU’s union bosses: “There is no mechanism within the union for members or nonmembers to take that has an effective impact on the union.”

Two brave Safeway employees in Montana, aided by the National Right To Work Legald Defense Foundation, have won a settlement from United Food and Commercial Workers officials who had been stonewalling the pair on preventing the union from using their money on politics. The AP reports:

Among other things, the settlement announced Wednesday requires the union to reimburse a portion of the workers’ dues and honor their resignations from membership. It also requires the union to notify workers of their Beck rights, which state employees forced to pay union dues only have to pay for membership activities and don’t have to pay for the union’s political activities if they don’t want to.

But this is too rich:

The union was prepared to defend itself against the workers’ claims but opted to take the “high road” and settle, rather than spending thousands of dollars of membership money on attorneys fees, UFCW Local 4 president Nicolai Cocergine said in a written statement.

Indeed, taking the “high road” would be the road less traveled for the UFCW. NRTW’s blog post here.