LaborPains.org

Amid declining support and dwindling membership rolls, Big Labor continues its latest tactic to try to prevent its own demise. In the spirit of escaping the negative connotations associated with the “union” label (i.e. a history of corruption, driving companies into bankruptcy, and forcing employees to pay for political causes they don’t agree with), organized labor continues to hide behind so-called “workers centers.”

Two such “worker centers,” Fast Food Forward and OUR Walmart, performed coordinated efforts today:  the SEIU front group Fast Food Forward staged a “strike” in Chicago, while OUR Walmart, a group backed by the United Food and Commercial Workers (UFCW) union, performed similar protests.

It’s a new approach to organized labor’s same old game. But this time, Big Labor is avoiding the rules and transparency requirements that lawfully regulate unions—the federal National Labor Relations Act (NLRA) and Labor-Management Reporting and Disclosure Act (LMRDA)—through the thinly veiled mask of “workers centers.”

It’s a loophole exploited by organized labor, but not without criticism. A recent paper in the law journal of the Federalist Society examined several “worker centers” (including OUR Walmart) and determined that under NLRA and LMRDA, they should be regulated as labor organizations.

The protests and strikes by the union front groups may have made a lot of noise on the airwaves, but the decision to form a union should lie with the employees, not union bosses. That’s why real union reform with the Employee Rights Act is absolutely necessary.

Everyone knows that you have to break a few eggs to make an omelet, but did you also know that union bosses need to exploit a few union members to keep the labor movement strong?

That’s what MSNBC’s labor writer argues in the latest issue of Jacobin (an appropriately-named outlet for such a statement, given the Jacobin connection to the Reign of Terror). MSNBC’s Ned Resnikoff writes:

“Pro-labor sentiment demands that union employees tolerate their own exploitation as a necessary condition of working to free others from exploitation.”

This is a remarkable statement. Usually partisan union activists make the case for labor reform through their actions, rather than their words. As we’ve noted in our previous research, union coercion of employees is astoundingly widespread. In 2010, for instance, unions faced some 6,338 allegations of violating labor law—80.6% of which concerned a union attempting to “restrain or coerce employees in the exercise” of their rights under the National Labor Relations Act.

Now we have a prominent pro-union opinion writer arguing that such coercion and exploitation is sometimes justified—and even laudable.

For our part, we can’t think of a better way to show why the country’s employees desperately need reforms that will empower them while limiting the power of union officials.

That’s why the Employee Rights Act is more necessary than ever.  From the secret ballot to the criminalization of threats of union violence, there are a number of reforms in the ERA that would make the workplace both fair and democratic for all employees. Nowhere is this more needed than in the union hall, where apparently the Golden Rule can be sacrificed for the “Greater Good.”

The Obama Administration has made no secret of its efforts to stall the decline in union memberships not by reforming unions but by curtailing employee and management rights. The Department of Labor alone has reduced union transparency by abolishing certain reporting requirements and cut the number of investigations into union financial impropriety. Former Secretary of Labor Hilda Solis pushed hard for the failed secret-ballot-abolishing EFCA. The actions of the National Labor Relations Board (NLRB) and the non-recess “recess appointment” panel-packing scheme invalidated by a federal court also show the lengths to which the Administration will go to prop up its Big Labor (campaign) cash cows.

However, the biggest and most costly gift by the Administration to the unions may be yet to come. A Manhattan Institute report details a proposed rule which would require management to disclose any consultations with outside consultants—including labor law attorneys, whose consultations are currently protected by attorney-client privilege—during union organizing campaigns and that would require the consultants—again, including attorneys—to publicly list all their clients. The author, Diana Furcthgott-Roth, explains the cost:

We estimate that the total burden for the first year would be between $7.5 billion and $10.6 billion. The subsequent annual costs amount to between $4.3 billion and $6.5 billion. The total cost over a ten-year period could be approximately $60 billion.

This brings the cost of the proposed rule well over the $100 million level that requires the agency to perform a cost-benefit analysis. The department calculated no benefits from the proposed rule.

But there’s far more wrong with the rule than its underestimated cost to firms. In a page taken from the Obama Administration’s NLRB which eviscerated precedent at multiple junctures to make life easier for unions, the Labor Department is set to set aside a half-century of precedent and the plain text of the law (the Labor-Management Reporting and Disclosure Act or LMRDA) to enact this rule. Furcthgott-Roth explains:

The law’s broad objective was to improve transparency in the unionization process by establishing uniform reporting requirements for unions and employers, as well as for hired consultants who make presentations directly to firms’ employees.

But Section 203(c) of the law specifically states, “Nothing in this section shall be construed to require any employer or other person to file a report covering the services of such person by reason of his giving or agreeing to give advice to such employer. …”

The law clearly states that attorney advisers are exempt from the reporting requirement, but the Labor Department seeks to make this advice public in order to make it harder for firms to get advice about union issues.

Ultimately, the result of the move might be more infringements on employees’ rights. Since the rule would make consultations with labor attorneys public, more businesses might try to “go it alone” in dealing with union organizing campaigns. Without expert assistance, more firms might unknowingly transgress NLRB election rules. Also, more firms might be intimidated by the prospect of publicly disclosed consultations to enter so-called “neutrality agreements” which may contain a provision to take away workers’ rights to a secret ballot vote on unionization.

The Senate Health, Education, Labor and Pensions Committee recently began its hearings on Thomas Perez’s nomination to be Secretary of Labor. Many are asking questions about Perez’s record, but our Executive Director writes in POLITICO that Senators should be very interested in his and the Labor Department’s agenda:

The Senate’s HELP Committee should have no shortage of questions Thursday for Thomas Perez, the president’s nominee for secretary of labor. They should start by asking him whether he plans to continue the Department of Labor’s increased pro-union activity — or perhaps “activism” — from the past four years.

Since President Obama took office, despite having little to do with unions (the National Labor Relations Board has most of the responsibility) the Department of Labor has enacted several pro-union measures. In addition to considering a proposal that the American Bar Association has written could “chill and seriously undermine the confidential client-lawyer relationship,” the Labor Department has reduced its investigations into union corruption and reduced union disclosure rules. Our Executive Director explains:

The most notable change in policy has been the decrease in the department’s investigations into union financial reports. Intended to ensure that unions are faithful to the federal statutes that protect members from corrupt practices, DOL’s financial and compliance audits plummeted by 38 percent between 2009 and 2011. The average of 736 audits between 2005 and 2009 reached a disturbing low of only 461 by 2011.

Lest people be left wondering where the new DOL stood, the bureaucrats charged with ensuring that America’s unions are fair and honest also axed the regulations requiring union officials to disclose potential conflicts of interest. It’s no surprise why the updated LM-30 perished so quickly: The AFL-CIO had previously tried to stop the regulation’s implementation via a lawsuit.

Unions have made every effort to avoid transparency and reform, and the re-election of President Obama for which unions spent tens of millions of dollars ensures that the Labor Department will likely keep that away for the time being. But the Employee Rights Act offers a way forward through the people’s representatives to ensure that administrative meddling does not reduce the responsiveness of unions to their members.

In summer 2011, the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) union — the same union whose strike killed Hostess — representing workers at American Crystal Sugar rejected a final contract offer and were locked out of their jobs. The union demanded that competitiveness-harming policies like seniority promotion remain in the contract, so despite the company’s agreeing to increase wages by 13 percent over five years, the union rejected the deal.

The lockout lasted 20 months, but finally a depleted group — company officials say 640 locked-out employees resigned or retired — gave in and approved the contract. The union didn’t get the concessions it wanted, so the lost wages were all for nothing.

Union leaders’ conduct during the work stoppage received criticism from many quarters, including former local union officials. We can’t know exactly what the union officers told employees before they rejected the contract, but they badly miscalculated American Crystal’s resolve.

BCTGM officials may also have miscalculated the willingness of Hostess buyers to hire back the employees who lost their jobs when Hostess went bust. At a time when unemployment remains relatively high at over 7 percent, most people are content to hold the job they have. Unfortunately for members, the BCTGM is willing to put their wages and employment at risk for union negotiating power.

A couple of weeks ago at the beginning of April, the Senate held a so-called “vote-a-rama” on dozens of amendments to the Senate version of the budget. One of those amendments, introduced by Sen. Tim Scott (R-South Carolina), was a provision which would forbid federal agencies from automatically deducting union dues from employees’ paychecks. And in the interests of ensuring employees’ freedom to associate, Heritage Action for America — a 501(c)4 group affiliated with the Heritage Foundation — formally “scored” the vote on the Scott Amendment in the vote-a-rama.

The Scott Amendment resembles a provision of the Employee Rights Act that Scott co-sponsored as a member of the House of Representatives in the last Congress that applied to private-sector employees under the National Labor Relations Act. That proposal would have required unions to get an employee’s affirmative consent before using his or her dues for political purposes.

Unfortunately, the amendment did not pass. (You can review the vote here, on the Senate website.) But with major national groups noticing the importance of employee rights provisions, perhaps Big Labor’s vaults of campaign cash taken from members’ paychecks whether they support the candidates or not will meet some countering forces.

• The Washington Examiner reports that the former secretary of the International Association of Heat and Frost Insulators and Allied Workers pleaded guilty to embezzling $200,000 in Political Action Committee contributions for which she was responsible. She previously admitted internally to taking $7300: A Department of Labor investigation revealed that she had actually written $502,586 in checks on the union’s PAC fund to cash. She had deposited $180,000 of that to her personal accounts.
• Tampa Bay Online reports that the former treasurer of United Steelworkers Local 458 has been indicted by a Florida grand jury for allegedly embezzling $44,000 in dues money. Court records indicate he paid himself roughly 10 times what he told the union he had been paid.
• A former office manager for Local 32 of the Laborers International Union of North America has been sentenced to 17 months in the federal pen for embezzling $190,000 in union money. She had been responsible for depositing members’ dues and fees into the union’s accounts.

The Wall Street Journal reports on what might be the next great federal bailout. The Teamsters Union Central States pension fund has been in trouble for some time—UPS pulled out of the fund in 2009—but now it’s advancing towards a point of no return.

It seems the Teamsters Union’s Central States pension fund is going bust fast, with companies like Republic Services pulling their employees from the fund. The Journal notes:

Investment losses during the financial crisis and hard times for trucking companies that pay into the Teamsters’ Central States Funds have sapped the fund of money it uses to pay promised benefits.

With just 60 cents of assets for every $1 in obligations, the Teamsters pension fund is considered in “critical” status by the Pension Benefit Guaranty Corp., the federal agency that backstops failed pensions.

You read that right: “backstops.” If the Central States fund goes bust, taxpayers could be on the hook. And how deep is the sea of red that drowns the fund’s ledger? The Journal continues:

The pension plan pays about $2.8 billion in benefits a year but takes in only about $700 million in employer contributions. “You have to make up the rest with investment returns,” said Mr. Nyhan, which he thinks is unlikely over the long term.

Companies are trying to preserve their employees’ retirements by trying to reform pensions. Unions want employees trapped in these dying funds.