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.”

After taking a few days to digest what is happening in Michigan, labor is still nauseous. Labor and its allies are hoping to keep their anger about the inevitable right-to-work law in the limelight with a visit from President Obama today. Over the weekend, some newspapers began to write the obituaries for unions in Michigan while those favoring forced unionism have drawn up ways to attack the bill on the streets and in the courts.

Some of the staunchest pro-forced-unionism talking points have come from The Nation. John Nichols, who must have a “Koch brothers” quota to meet, tries to draw as many connections to them and Dick DeVos as possible as a way to explain that it’s all part of a “sneak attack” on labor. Nichols leaves out the facts that labor fired the first shot in the fall when it put Proposal 2 on the ballot. The measure would have prohibited a right-to-work bill to be adopted by the legislature. The awful proposal failed in spectacular fashion in November. Allison Kilkenny provides a preview, complete with video, of the thousands of distraught labor protestors and their plans for Tuesday. Think Wisconsin, but worse.

But Lee Fang’s article takes the cake. Extending Nichols’s talking points about moneyed interests at play, he breaks down the spending of “Pro ‘Right to Work’ Groups” versus their “Union Counterparts.” For this, he considers the budgets of the Mackinac Center for Public Policy and Americans for Prosperity-Michigan versus Progress Michigan, with the latter being “the only comparable group in Michigan” that can take on the big, bad free-market folks. Progress Michigan is funded by some local unions in the state.

But Fang’s analysis is particularly lacking in one major group that spends in favor of union issues—unions. Labor does not need to assemble a new organization in order to spend money on its preferred policies and politics. Take 2010, when Governor Rick Snyder was first elected. Fang notes that Progress Michigan raised roughly $710,000 compared to AFP-Michigan at $1.1 million and Mackinac at $3.5 million. A quick glance at the federal filings for some of the largest Michigan unions show that their combined political spending that year far outweighs anything that Mackinac or AFP spent. The Michigan Education Association (MEA) led the way with over $3.5 million in political activities and lobbying spending, followed by AFSCME-Michigan’s Leadership Council 25, spending roughly $2.7 million—just to name the top two. And the United Auto Workers (UAW) national union, based in Michigan, spent roughly $10.5 million on political activities and lobbying in 2010. There are also the Political Action Committees that spent big bucks in 2010. The UAW’s Michigan PAC collected $1.75 million dollars and the MEA PAC took in $1 million-plus.

And a look at the issues this year shows that labor is not exactly at a disadvantage. Proposal 2 groups raised a record $45 million between both sides, with the labor-favored group pulling in roughly $21.5 million to push for the ill-fated constitutional amendment.

Fang’s comparison is also incomplete because it assumes that the only activities that Mackinac and AFP-Michigan engage in are related to labor unions. There’s little chance that organized labor has anything to fear from Mackinac’s Michigan Science project. On the other side of Fang’s flawed coin, any labor leader would undoubtedly say that the political activity and lobbying spending by the union would be in the union’s best interests—even if the union members don’t think that spending is appropriate.

Unions like to play up the fantasy that they stand for “the little guy.”  But that illusion quickly fades when labor leaders have to deal with those little people, and especially if those people are members of the union.

The latest exhibit is Mariam Noujaim, an Egyptian immigrant and member of the 95,000-member SEIU Local 1000, which represents the state employees of California. Since 2010, Noujaim has been on a quest to take a look at the local’s books in order to determine if the union has been wasting member dues. Jon Ortiz of the Sacramento Bee, who covers labor in California, reports:

State employee Mariam Noujaim said the tussle with her union started with a question: Why does the state pay for crossing guards to work on a lightly traveled street between two DMV buildings connected by a tunnel?

“I really believe we can help solve our crisis by spending our money on monitoring the waste rather than bribing political and special interest (groups),” Noujaim wrote in an indelicate April 2010 email to her Service Employees International Union Local 1000 representative.

Under the Labor-Management Reporting and Disclosure Act (LMRDA) any private sector union member has the right to see his or her union’s required federal financial filings as well as the “supporting records” if there is “just cause.” But that’s no help to Noujaim—since she is in a public sector union, such disclosure is not required. Under federal law, public unions must provide an IRS Form 990 and a more detailed Hudson notice—an independently audited report showing how the union dues are calculated. Under California Corporations Code Section 8333, Noujaim has the right as a member of the union to inspect the books “for a purpose reasonably related to such person’s interests as a member.”

After spending $18,000 of her own money and months and months in court, Noujaim was finally able to view Local 1000’s records—with limitations, of course:

After two years of legal battles to force SEIU to open its books, Noujaim and fellow activist Lisa Garcia had half a day to riffle through credit card records and expenditure statements from 2009 and 2010. They were not allowed to take photos, make copies or take anyone else to view the documents.

What was it that helped Noujaim to earn the “suspicion” of the local?

“She supported Meg Whitman,” [union spokesman Jim] Zamora said, referring to the 2010 Republican gubernatorial candidate whose name became a virtual epithet among state workers for her promise to cut 40,000 state jobs and tear down public pensions.[emphasis added]

This would be serious cause for concern for a private union. As far as we can tell, federal law doesn’t distinguish the rights of union members based on their political affiliation—despite what union political spending records may suggest.

Noujaim’s website www.helpsaveourstate.com, alternatively known as “OCCUPY SEIU,” has chronicled her journey to make the union responsible to its members. Noujaim said that what she was able to see on Tuesday showed large expenses for hotels, restaurants, and travel, which she viewed as potentially unnecessary, excessive spending. Noujaim believes that the union could and should work as a watchdog to fight waste throughout the California government, as its employees are on the front lines.

On its website, Local 1000 encourages members to blow the whistle on “wasteful private vendor contracts” in order to help the state save money (and to give the jobs to government union employees). But the union doesn’t want to be open to the same critique. You’d be hard pressed to find any detailed financial information on the union, and what you can find is only readily available through another website.

Accountability and transparency are near the bottom of labor’s priorities. Instead, unions prefer to focus on political activity and personal attacks. Noujaim would like to see labor improve:

“They’re becoming a special interest group so we’re trying to go back to the original goal and purpose of the union to work for their members not to be a special interest group and work for politicians.”

This isn’t the first time that Local 1000 has been in the news this year. Another California state employee, Dianne Knox, opposed a special fee for politics assessed against her, a “fair share” member. The case, Knox v. SEIU Local 1000, was decided 7-2 in her favor in late June after several years of litigation.

Only days later, Local 1000 agreed to cut the compensation of union members in exchange for more time off. The union’s leader, Yvonne Walker, had a tough go of it explaining those cuts to members, though eventually, 65 percent of them did. The bad times that labor has endured in November seem to pale in comparison to SEIU Local 1000’s bad year.

But Noujaim should count herself lucky, considering the only tactic used against her was stalling. Members of SEIU Local 1000 were accused of attacking another state employee-critic in 2009. The victim, Ken Hamidi, dared to question where dues were going, especially after a 50-percent increase.

Unions like to portray themselves as the ones who fight back and balance out the equation between employees and management. But realistically, they are the yin to the company’s yang: employees and employers are interdependent, and one cannot exist without the other.

This lesson is most clear today at Hostess, where 627 employees lost their job after Hostess Brands, Inc. announced on Monday that it is permanently closing three of its 36 bakeries in response to a strike by the bakers union that began on November 9 with a walkout in Kansas. The strikes spread throughout the country, but those working at the bakeries in Cincinnati, St. Louis, and Seattle will be striking against factories that will not reopen.

Yet even with hundreds of workers out of jobs, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) has not called off the strike. It could be that BCTGM smells blood. The strike may bring the company to the brink and force it to liquidate. The maker of Twinkies filed for Chapter 11 bankruptcy in January and has been trying to restructure its debt to stay afloat. Hostess has toyed with a number of resolutions, even offering unions a 25 percent stake in the company. The Teamsters have already decided to accept a new collective bargaining agreement with the company. Because BCTGM didn’t settle with Hostess, a bankruptcy judge allowed the company to cancel its agreement with the union and impose a new contract that included wage and pension cuts.

Although the strike is only a few days old, it has already proved costly for BCTGM workers, but there are no signs that the walkout will cease anytime soon. Hostess’s CEO, Gregory Rayburn, stated what he thinks is on the mind of the BCTGM:

Some employees are apparently under the misimpression that if they force Hostess to liquidate, another company will buy our bakeries and offer them employment… The fact is, the bakery industry already has far too much capacity, and there is a strong risk that many of our facilities may never operate as bakeries again once they are closed. I believe the leadership of the Bakers Union knows this fact, but is willing to sacrifice its Hostess employees for the sake of preventing other bakery companies from asking for similar concessions. [emphasis added]

Some might question this as an empty threat, but business appears to be seriously affected.

This is another case of unions destructive behavior. In October, American Airlines pilots were aggravating the company and thousands of customers by calling in excessive maintenance repairs, causing massive delays, as a form of putting union pressure on the management. This, too, occurred while American Airlines faced, and continues to face, Chapter 11 bankruptcy. This hurt the brand and put it the company at further risk of losing more business.  It now appears that the pilots and the airline are close to a deal, so perhaps the prospect of job losses (and a legal threat over the allegedly illegal job action) came into play.

The Hostess scenario is a repeat of the pilots union experience—except that Hostess is more willing to close up shop than be fiscally irresponsible and give in to union demands. Nevertheless, BCTGM continues to strike despite the very real threat to — and now realized loss of — union employee jobs.

The Teamsters, on the other hand, saw the writing on the wall.

“This was a difficult decision [to approve of Hostess’s offer],” said Teamsters General Secretary-Treasurer Ken Hall in the statement. “Our members are frustrated at being in the position to bail out the company again, but overall we’re willing to accept modifications with the hope that Hostess will recover and be in a better position in the years to come. At the end of the day, our members recognized that they can’t replace their pay and benefits in the nonunion sector.”

Rhetoric aside, the Teamsters recognized that a job with reduced benefits is better than no job at all. For consumers, it might be hard to part with the Twinkie and other Hostess treats (although there are some good recipes out there for making your own small batches at home). But BCTGM members, as well as other union employees, may find themselves out of work in short order.

Unions in California are busy playing politics this season. In addition to labor’s push against paycheck protection, the AFL-CIO has been particularly outspoken in supporting—and funding–a San Jose referendum that would increase the city’s minimum wage to $10 per hour. (The campaign even appears to be headquartered at the offices of the AFL-CIO’s South Bay Labor Council.)

Proponents claim that it improves the lives of low wage employees. But a new report from University of Kentucky economist Aaron Yelowitz explains what has happened in San Francisco since the city voted for a similar proposal in 2003: Teen unemployment has risen, and their hours worked have fallen. It’s not a surprising result, given that 85 percent of the most credible economic studies on the subject find that job loss does occur after a wage hike.

Don’t tell that to activists in San Jose, who have set aside real research and chosen to rely on Big Labor’s think tank for their “analysis and expertise.”

Of course, EcPI and labor unions will continue to perpetuate the myths of wage floors beyond November 6. Be sure to check MinimumWage.com for a fact-based response to all of them.

–The SEIU sees blood in Arizona, and a chance to cash in. They put together a hotline for anyone traveling to Arizona to call in and get travel advisories. The hotline, if set up by anyone not far left of center, would result in pejoratives being hurled at them by ….everyone.  But because the SEIU is in a category of scandal all its own, nothing has come of their activities….yet. Want to see how uncomfortable the hotline is? Call it at 1 (800) 958-5068 or just read the text here. Oh, I almost forgot to mention:  Call the hotline number from the cellphone of a coworker you hate.  The SEIU is using the hotline to collect phone numbers.

–Organized Labor has been particularly laborious and organized this primary season. Need a primer on today’s primaries? Check out the Daily Caller’s here. Pay attention to Arkansas.

–The SEIU has abandoned the “legalize pot” campaign [I-1068] in Washington State, and the head of the campaign had some terrible colorful things to say about the SEIU:

“F*** them all,” he said of the three groups his campaign is now directly or partially blaming. “I don’t know what happened or why they (SEIU) walked away,” he added. “But in the end… they’re afraid to support us because they’re either politically afraid or because they’re mommies will find out they smoke weed. A bunch of chickensh** rich people.”

–The SEIU workers who have been picketing the Red Cross have ended their 5-day work stoppage. Yay for sick people.

–Ohio’s home care and child care workers were effectively unionized by gubernatorial order. Now some workers aren’t so happy that dues are coming out of their pay checks:

“…some workers are not happy about joining a union, and other critics say Strickland is helping the Service Employees International Union and American Federation of State, County and Municipal Employees collect millions of dollars in dues and fees that can be used to support the governor’s re-election bid and other Democratic Party campaigns.

Patricia Griggs, a nurse from Loveland in Hamilton County, said she doesn’t want union representation, nor does she want money withheld from her paycheck for union fees to be used to support candidates or causes she might oppose. “I’m self-employed. Why do I want to be (in) a union?” Griggs asked. “The state will begin to take (union fees) out of our checks without us signing anything. … It’s stealing.” [...]

Griggs said she will pay $12 a week. Even though she hasn’t joined the SEIU, Griggs is covered by the union contract and must pay an assessment to the union.

Higher public sector unionization means higher public sector debt (speaking of the debt, have you seen our sister organization, the Employment Policies Institute’s Defeat the Debt campaign?). Labor unions generally ignore the connection, or claim its caused by something else, but when public sector employees are draining state coffers, like California’s, into deeper debt, it’s an unavoidable connection.

From Boortz.com:

The Cato Institute did a little study on states and their rising debts. Interestingly enough, they discovered something common among states with high per-capita debts.

That something in common would be a high level of unionization of government employees. Yup, the states with the highest per-capita debt also happened to be the states with the largest government union workforces. You can see a handy little chart if you click here, but here are some of the details:

Among states whose government workers are less than 40 percent unionized, median per capita state debt is $2,238.

Among states with between 40 and 60 percent of their government workers in public sector unions, the average debt is $3,609.

Among states with more than 60 percent of the government workforce unionized, the average (median) per capita debt is $6,380.

Image courtesy of Jeff Belmonte.