Democrats Claim 2008 Election Victory … What Does It Mean For My Company?

Of the many facets of your business to be affected by the landslide Democratic Party victory in the 2008 elections, nonunion employers are going to be bombarded with “paybacks” to organized labor in the form of new pro-labor legislation. After last night’s elections, you not only have a President-elect from the Democratic Party, but a Democratic majority in the House (251 - 173) and in the Senate (56 - 40, and a chance to add four more when the dust finally settles). Nonunion employers “put your pads on and tighten your chin straps,” as my old football coach used to say. I don’t know if you’ve really thought through all the pieces that have been put into play by Congress over the past couple of years, but in return for an estimated $1.2 billion (including hard and soft dollars) spent by organized labor during the campaign, there are three pieces of legislation ready to know you on your backside, and it doesn’t end there. There’s actually a fourth item that my magnify all of the others. Let me lay them out for you.

Employee Free Choice Act (H.R. 800/S. 1041) - This piece of legislation has been out there being contemplated and pushed around since 2005. But President-elect Obama went on record early this year saying that he would sign in into law as soon as it crossed his desk when he becomes President.  The number of people in the business world who don’t know what this thing is continues to amaze me. The primary purpose of the EFCA is to make it easier for unions to organize your workforce.  To be brief:

1. It eliminates the secret ballot election and a union is recognized when over 50% of your employees sign union authorization cards or petitions.
2. It puts financial penalties in place to try to keep your management team quiet while a campaign is going on - It quiets the opposition.
3. It eliminates true negotiation in getting your first contract, because if the company and union don’t agree to terms, an arbitrator will set the terms of the first contract for you.

A Washington insider has hinted recently that the EFCA will be passed during Obama’s first week in office!

Re-empowerment of Skilled and Professional Employees and Construction Tradeworkers(the RESPECT Bill, H.R. 1644/S. 969) - This bill was introduced in March 2007, and although it sounds harmless enough, its purpose is to change the NLRB’s definition of a supervisor. By doing this, the bill removes large numbers of your current supervisors from the ranks of management - as defined by the NLRB.

“No” Right-to-Work Bill (H.R. 6477) - This bill was introduced in July 2008, and without understanding the National Labor Relations Act, you’d never know what it means. But in plain English, it eliminates the so-called “Right-to-Work” laws that currently exist in 22 of the 50 United States. This bill, if passed, will simply require employees to join a union if a union already exists in their workplace. If they do not join the union, they lose their job. It’s another way to increase union membership and union dues.

National Labor Relations Board Appointments- The National Labor Relations Board has five members appointed by the President. There are currently three vacant seats on the Board, and President-elect Obama will have the luxury of appointing pro-labor members to these seats to insure that the Board wil be fully supportive of organized labor for the next several years. What this means to you is decisions coming from the NLRB for some unknown number of years will have a pronounced liberal, “pro-labor” tone. Liberal decisions in support of unionization will likely be the norm.

What Does All This Mean To My Company?  That’s a great question.  It means that the playing field has, or more accurately, is about to change. You’re not going to be playing on a level field any longer once these changes are implemented. The playing field is tilted strongly in favor of organized labor. I can’t tell you that each of these bills will become law, but I can tell you that they were each introduced by members of the Democratic Party, and each has a significant number of co-sponsors. EFCA passed the House in 2008, and nearly passed in the Senate. I can also tell you, as mentioned at the beginning of this article, that our new Congress is controlled by a Democratic majority in both the House and the Senate, makign it an easy task to pass any legislation they desire over the next two years. I can also tell you that the new President will have three seats to fill on the National Labor Relations Board.

I’ve been preaching this message to companies for the last year and a half. Now with a new President who favors unions and a like-minded Congress, we’re past the point of no return.  Putting a plan together on how to deal with the new arena is all we can do now - other than continue to pressure your Senators and Representatives to use reason in voting on bills designed to promote unionization.

Employee Free Choice Act - Designed to Cut Off the Flow

If you Google “Employee Free Choice Act”,  you get something like 275,000 hits. Most of the postings (the vast majority) are posted by organizations singing the praise of this proposed ammendment to the National Labor Relations Act, and claiming how it will revive the labor movement in the United States.  Some talk about how it will “level the playing field”; some talk about how it’s way past time to help the labor movement get back into the business of helping people.  Let’s spend a couple of minutes talking about what it really does.

 First, it takes away a person’s right to a secret ballot election.  Now for those of you who have never been through a union campaign and don’t understand the intensity, the peer pressure, the intimidation, the arm-wrenching that can occur, this may sound good.  By the way, some of these things do come from both sides of the campaign. But when the company commits these acts, organized labor has the ability to step in and file unfair labor practices and even get an election set aside and earn a bargaining order - if the behavior is aggregious enough.  But what happens when organized labor behaves this way?  Basically nothing. So, back to the secret ballot election.  If you’re in a campaign and are being pressured to sign a union card today, you can do it to alleviate the pressure from the organizing team.  But, you still have the right to decide if you want to be represented by the union in the privacy of your voting booth.  No one looking over your shoulder; not the company, not the union.  Just you.  The Employee Free Choice Act will take that away.  Once this change is made, there’s no way to really stop the pressure and intimidation from the organizer - except to sign one of his cards.  The problem is once you sign it, your decision-making opportunity is over. When they get a majority of the employees to sign cards, the union is recognized. End of story.

Let’s look at another aspect of this change to the National Labor Relations Act, and one of the key ingredients that is not being discussed fully. EFCA also implements financial penalties on the company for committing “unfair labor practices”.  It does this by permitting the National Labor Relations Board to fine the company for committing the acts that are illegal (threats, promises, intimidation, etc…). Charges of this type are frequently filed when a representative of the company is talking with employees about the reasons not to sign a card and vote for union representation. The company may be communicating in good faith, but in the act of answering questions or trying to get a point across, a supervisor or manager screws up and says something that shouldn’t be said - or worse yet, is accused of saying something “illegal”.  Under EFCA, the Board has the ability to fine the company up to $20,000 for each violation!  Let’s think about this.  A worksite with 1,000 people may have 50 supervisors or first line managers. If only 20% of these (10 supervisors) have one charge filed against them, it can amount to as much as $200,000 in fines.  Now, don’t get me wrong, this shouldn’t happen.  But most companies can’t afford to face the risk of this kind of expense, especially in today’s environment.  In another example, you could end up with one bad apple in the management ranks who puts the company’s future in jeopardy out of pure stupidity before it is known and corrective action by the company can be taken. So, under EFCA what does the company do?  They shut off communication during the campaign to prevent the exposure to this kind of expense. When that happens, the only people doing the talking are the organizing team, and like in any argument there are two sides but employees only get to hear from one.  Sounds like it creates a one-sided debate, doesn’t it?  As my blog title says, this legislation is designed to “cut off the flow” of communication.  Not what anyone needs. It doesn’t help the employee and it doesn’t help the company. What it does is increase the adversarial relationship in the workplace. It will definitely help increase the union’s win-rate in its campaigns.  And by definition, the EFCA is legislation written to help increase unionization in America.  In life, COMMUNICATION is what it’s all about. Reduce it and nothing improves.

I mentioned increasing the union’s win-rate in the paragraph above.  Do you realize that the union is currently winning over 60% of its elections? Don’t believe me?  CLICK HERE to view a link to the most recent report from the NLRB for the month of August 2008. The problem is they can’t get enough campaigns to go to election, because under current rules the company has the ability to communicate freely with employees during the campaign. They can’t threaten, intimidate, promise or spy on employees (the old TIPS rule), but they can talk without fear of a discussion costing the farm. 

I’m sorry that organized labor can’t get more campaigns to reach an election, but there’s a reason for that. The reason is that when people have time to think through the problem and hear both sides of the argument, they’ll usually make the right decision. Many times the right decision is to work in an open environment free of any adversarial behaviors. Other times, the company’s management is “just plain dumb”, and the right decision is to have a third party represent employees.  But most importantly, without EFCA there is a private ballot election where the employee can go into that private booth and make a decision free of anyone’s pressure.

I can’t honestly say I’m a union proponent. I tend to lean the other way. I can say I agree there are companies who deserve to have to deal with a third party representing their employees.  But I can also say that I believe people deserve to hear the full story, not a one-sided version. I believe people should be free to vote in private, and not decide on union representation by signing an authorization card because of pressure and intimidation.

The Employee Free Choice Act is serious. Sure it can result in increasing the membership roles of labor organizations nationwide. But there are downsides. We’ll talk about those over the next couple of days.

August 2008 NLRB Activity Report

Click Here to Download the August 2008 NLRB Activity Report

July 2008 NLRB Election Results

Click the link below to access a .pdf file containing July’s NLRB information:

July NLRB Election Results

NLRB June Election Report

Each month I plan to post results from NLRB conducted elections around the country, as a reference source. The most current data available is for the month of June 2008.  Feel free to comment or contact me for information.

Click Link to Review Report:  June 2008 NLRB Election Results  After clicking here, you’ll see the link again with a couple of other comments.  Click the 2nd link to open the report.

Phil Rasnick

Unintended Consequences: Is Card Check a Mistake for Unions? by David Denholm

     Labor unions as we know them in America’s private sector are dying. It is a natural death. In some respects they are victims of their own success. In a much broader sense, as was so well stated by Michael Wachter, labor unions are “A corporatist institution in a competitive world.”
     Unfortunately, for the American public and the vast majority of American workers the unions’ death throes may have some nasty unintended consequences.
The law of unintended consequences may be at work when it comes to organized labor’s drive to replace secret ballots with card checks for certifying unions as representatives of employees.
     Does anybody imagine for a moment that taking away the right to a secret ballot vote on union representation and replacing it with an undemocratic process like card checks will make employers any less anxious to avoid the unionization of their employees? All a card check will do is move the battle line.
     Let’s assume that you are an employer and that you would rather deal directly with your employees than through a union. Let’s also assume that you know that if a majority of employees sign union authorization cards, for whatever reason, you will be required to recognize the union as the representative of your employees.
     To paraphrase Mr. Rogers, “Can you say psychologist?” Almost every job application process involves testing and an interview. Most of the test questions are looking for honesty and character. Some of the questions are very direct. Some of them are subtle. They were designed by psychologists because they know that a job applicant when asked, “Are you a thief?” is going to say, “No.”
     Do you imagine for a moment that a good industrial psychologist couldn’t slip in a few questions to determine a prospective employee’s attitudes about organizing a union?
     So what happens? A person who tests as likely to want union representation, whether that is accurate or not, doesn’t get a job offer. That’s an injustice but it is an inevitable consequence of going from secret ballots to card checks.
     The old adage “be careful what you wish for” may be appropriate to union support for card check certifications. They might get much more than they bargained for.

David Denholm is the President of the Public Service Research Foundation, a non-profit research and education organization concerned with public policy on unionism in public employment and union political influence on the size, cost and quality of government services. He is the senior editor of the Foundation’s quarterly academic journal Government Union Review. This article reprinted with permission.

Right-to-Work Laws Under Attack: H.R. 6477

Supreme Court Ponders Whether to Invalidate California’s Union Neutrality Law

The Supreme Court has taken under advisement a case which may have a profound effect on labor relations throughout the United States, as a number of state legislatures and state houses, beholden to political allies in organized labor, seek to use their power of the purse in dispensing funds to private employers, especially those in healthcare, to sidestep the neutrality mandate of federal labor relations law so as to foster union organizing. Chamber of Commerce v. Brown, No. 06-939 (U.S. Nov. 20, 2007). The law under consideration was enacted by the California state legislature to prohibit employers from using state funds to “assist, promote, or deter union organizing.” Cal. Govt. Code § 16645(a).

For the Full Article Click This Link:  http://www.jacksonlewis.com/legalupdates/article.cfm?aid=1331

Pay Attention to Today’s “Reorganized Labor”

This article was written by attorneys at the law firm Jackson Lewis and printed HR Magazine.  A link is provided to the full article on their website.

Back in 2005, when many unions were pulling out of the huge labor federation AFL-CIO, organized labor’s power seemed on the decline. Now, three years later, with plenty of money to spend, the organized labor movement is roaring again. “Labor leaders see the 2008 presidential election as an ace in the hole, expecting a new administration and federal legislation that would make union organizing far easier,” says HR Magazine’s insightful article, “Reorganized Labor”.

Read the Full Article by Clicking Here

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Phil Rasnick, Owner, PML Programs, LLC