In a recent article and our full-page ad in the Wall Street Journal, we explained the uncanny similarities between worker centers and labor unions. On July 23, the House Committee on Education and the Workforce expressed their suspicions as well by writing a letter to newly appointed Labor Secretary Thomas Perez. In their letter, they challenge Perez to clearly define Labor-Management Reporting Disclosure Act (LMRDA) filing requirements between worker centers and labor unions. These members of Congress have also requested an August 6response by Secretary Perez. Thomas Perez already has a proven track record of selective law enforcement and will be tested by his response to the concerns voiced by Congress.

A labor union is defined in the National Labor Relations Act, Labor-Management Reporting Disclosure Act, and IRS tax code. Congress has asked Perez to uphold the standards by which a “labor organization” is defined in the LMRDA.  Worker centers have repeatedly flirted with the limits of the LMRDA definition of a labor organization—if they cross the line, they must be subject to the filing requirements and should be regulated as labor organizations.   The parameters for a labor organization are as follows:

IRS:

The term “labor” is commonly accepted as meaning the performance of service as employees. Rev. Rul. 78-288, 1978-2 C.B. 179, citing Rev. Rul. 76-420, 1976-2 C.B. 153.

General usage defines a labor organization as:

2 An association of workers

2 Who have combined to protect or promote the interests of the members 2 By bargaining collectively with their employers

2 To secure better working conditions, wages, and similar benefits.

The term embraces labor unions, councils, and committees.

“Labor union” is a somewhat narrower term than “labor organization.”

Labor unions are labor organizations, but not all labor organizations are labor unions. IRC 501(c)(5) labor organizations do not need to be recognized labor unions.

 

NLRA:

(5) The term “labor organization” means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.

 

LMRDA:

(i) “Labor organization” means a labor organization engaged in an industry affecting commerce and includes any organization of any kind, any agency, or employee representation committee, group, association, or plan so engaged in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours, or other terms or conditions of employment, and any conference, general committee, joint or system board, or joint council so engaged which is subordinate to a national or international labor organization, other than a State or local central body.

(j) A labor organization shall be deemed to be engaged in an industry affecting commerce if it –

1. is the certified representative of employees under the provisions of the National Labor Relations Act, as amended, or the Railway Labor Act, as amended; or

2. although not certified, is a national or international labor organization or a local labor organization recognized or acting as the representative of employees of an employer or employers engaged in an industry affecting commerce; or

3. has chartered a local labor organization or subsidiary body which is representing or actively seeking to represent employees of employers within the meaning of paragraph (1) or (2); or

4. has been chartered by a labor organization representing or actively seeking to represent employees within the meaning of paragraph (1) or (2) as the local or subordinate body through which such employees may enjoy membership or become affiliated with such labor organization; or

5. is a conference, general committee, joint or system board, or joint council, subordinate to a national or international labor organization, which includes a labor organization engaged in an industry affecting commerce within the meaning of any of the preceding paragraphs of this subsection, other than a State or local central body.

Labor Secretary Thomas Perez will be tasked with determining the filing requirements of worker centers. The law suggests that the actions of worker centers are sufficiently similar those of labor unions to warrant LMRDA regulation: We worry that Perez’s colleagues in the heavily labor-backed Obama Administration will lead him to let worker centers continue operating in the grey area.

The public recognizes that worker centers are simply a front for union activity and now Congress is taking action to ensure that worker centers are recognized for what they are – labor organizations. While we hope that Perez will side with the law, we would not be surprised to see a pro-union administration that is flush with union political money side with labor once again.