The Republicans gave the Democrats a spanking in the mid-term elections this week. Voters rebuked Democrats in an unprecedented manner. The election results raise a number of perplexing questions. What are Democrats planning to do about the Tea Party movement? For that matter, what are Republicans going to do about them (after all, in retrospect the Tea Party probably cost the Republicans control of the Senate by nominating a couple of nit-wits in the Nevada and Connecticut races)? What is going to happen to health care and financial reform?

For our readers a more important question is probably top of mind: what impact is this election likely to have on labor policy and labor unions? Here is our take:

1. EFCA is dead. In case you haven’t heard, unions REALLY wanted EFCA. Unions managed to snatch defeat from the jaws of victory on that by not forcing Obama to allow a Senate vote as a condition of supporting health care. Big Labor has been rattling its sabers ever since including during the campaign season where they threatened action during the lame duck session. I’m not saying EFCA won’t come up, but it has zero chance of becoming legislation any time in the next 2 years. That includes compromise versions. It’s just not going to happen. Heck, almost nothing is going to happen in the next 2 years other than campaigning for President. Anything that does pass is NOT going to be sweeping labor law reform.

2. DOL rulemaking will attempt to put pressure on employers. The Department of Labor just announced this week that they will issue their final rules on the “persuader” reporting requirement revisions sometime in November. It is a given that these rules will expand what is considered reportable activity to include most services provided by law firms and consultants during union organizing campaigns. That is likely to have a big impact on legal services and, to a lesser extent, on consulting services. More important, we believe that the new rules will also include a requirement for employer reporting. That will be a major regulatory change.

This new employer requirement will certainly face legal challenge (after all, the law explicitly exempts payments to bona fide employees). In addition the DOL may want to avoid over-reaching now that the Republicans have a solid majority in the House. During the Clinton Administration the DOL and NLRB were de-funded to prevent enforcement of decisions or regulations that the Congress didn’t approve of. That is very likely to happen again over the next couple of years on all kinds of issues.

3. NLRB decisions and rulemaking will also turn up the heat on employers. We are already seeing the NLRB ask for 21-day elections and see no reason that they won’t just make that policy sometime soon. The only real deterrent is the risk of de-funding discussed above. This would let the Administration argue to unions that they threw them a bone. Democrats need union support now more than ever. Even though unions couldn’t overcome the energy of the Tea Party in this election, things have a way of changing quickly in politics. Look no further than this week’s election - if you argued on November 3rd 2008 that Republicans would take over the House in 2010 you would have been put in a straitjacket.

The NLRB is also likely to make decisions or rules that will tilt the playing field in favor of unions. They’ve already asked for proposals to do electronic balloting (essentially card-check by computer) and recently made a decision requiring electronic notice-posting. They have announced their intention to litigate in federal court when employers terminate workers during union campaigns (one might ask why they don’t instead just speed up their own process given the substantial reduction in NLRB filings over the last few years, but I guess that is just asking too much). At the most extreme they might even issue rulemaking on members only or minority bargaining units.

4. Self-help by unions will increase. We are seeing more and more “self-help” activity (sabotage, job actions, corporate campaign activity, strikes) by unions now than in years. Unions are very frustrated by the events in Washington and are beginning to feel powerless to stop it. They are already trying to do to Democrats (think Blanche Lincoln in Arkansas) what the Tea Party is doing to the Republican party. But rest assured they will not go down without a fight. This means employers need to be prepared not just for run of the mill organizing activity, but thinking very clearly about their strategy to deal with things like anti-corporate campaigns and negative PR.

Our advice? Relax, but keep a wary eye out. Unions may still get some Washington support for a bit longer, but now that the sun is setting on their ownership of the administration, they will look for other ways to survive. One solid strategy is to focus more on offense than defense now. Do the things you can to strengthen your employee relations environment - get feedback from your employees about how you’re doing, and how they’re feeling; put some effort into training your line supervisors and managers; find innovative ways to reward and motivate employees (flex scheduling, shared leadership, company-sponsored training). You’ll get double dividends from these efforts - a more productive workforce and a decreased vulnerability to whatever tactics Big Labor tries next.

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