In this issue:
- Union Bailout Update
- AFL-CIO Buyer’s Remorse?
- How Many Jobs Could Dues Create?
- Escaping the Union Pension Plan
- Scoreboard, SEIU Watch, Sticky Fingers and more…
Insight by Phil Wilson: Boeing Shrugged
Who is John Galt?
I was very tempted to leave it at that for this month’s insight article. But for those readers who aren’t Atlas Shrugged fans (the first feature film of a trilogy was released last week and you should read the book if you haven’t – it is a slog but well worth it) I thought I would elaborate a bit.
This week the NLRB issued a complaint against the Boeing corporation alleging that they committed an unfair labor practice by moving part of its assembly operation to South Carolina. It is a perfect example of the worst kind of bureaucratic over-reach and exactly the kind of thing Rand wrote about in Atlas Shrugged.
The basic premise of the complaint against Boeing is that the company, by opening up a second operation in South Carolina, effectively neutered the “right to strike” among employees at the plant in Washington State. Because of that the General Counsel wants to force Boeing to bring its assembly line back to Washington, where they can remain hostage to the same group of knuckleheads who made this happen in the first place.
I guess you have to give the IAM credit. You have to be a pretty big pain in the ass to make it seem like a good idea to invest tens of millions of dollars to open up a new assembly line across the country and then spend tens of millions more to train a workforce to operate that new assembly line. Why on earth Boeing decided to invest those millions of dollars in the US is anyone’s guess. I bet they’re wondering the same thing now.
But like any good band of collectivists, the IAM wasn’t going to take this unanticipated (albeit completely understandable) economic action lying down. Once Boeing announced that the assembly line would move to South Carolina – removing the stranglehold the IAM once held and helping to ensure that Boeing could continue to operate its business during a strike – the IAM realized that since striking hadn’t accomplished their goals they needed a bigger stick. Enter the NLRB.
The IAM argued that Boeing’s move destroyed their members’ right to strike. But here’s the thing about the “right to strike.” While employees have the protected right to withhold their labor, the company has an equal right to continue to operate its business, including completely and permanently replacing a workforce out on strike for economic reasons.
Strikes are not supposed to be a one-way street for unions. Which is what makes the General Counsel’s complaint so curious. Boeing has the legal right to completely replace its workforce to counter the economic consequences of a strike. Apparently they made the error of being too big and complex of a company that has to plan its moves years in advance. They chose to prepare now for anticipated labor issues in the future instead of waiting for the next strike to happen.
A friend of mine likes to say that “capital is a coward” and it is true. Most employers are not like Boeing. Unfortunately most of them would respond to Boeing’s predicament by moving out of the US completely where they are not at the mercy of either the IAM or the NLRB.
This isn’t just some academic legal discussion. As our economy tepidly tries to recover from the recession our government should be doing everything they can think of to encourage investment. It should be trying to reduce the fear that those investments will be impaired by some bureaucrat in Washington. Right now we are headed in exactly the opposite direction.
If you were a unionized company and thinking about building a new plant somewhere else would you sit on the sidelines a bit to see how this case goes before investing? Would you be more or less likely to invest in the US if you thought the NLRB could hop in and make that investment worthless just because some union didn’t get their way? Who is John Galt?
Union Bailout Update
The NLRB has signaled it may be on the brink of making major changes in labor relation policy while ignoring the constraints of the Administrative Procedures Act. The APA requires federal agencies to adhere to certain standards when issuing new regulations including cost benefit analysis, provisions for public notice and the opportunity for public comment before implementation.
The process the Board has used to decide on so called “mini-unions” in Specialty Healthcare and Rehabilitation Center of Mobile is almost as alarming as the probable decision itself – a decision that would overturn decades of precedent without Board consensus or meaningful public debate in response to a case where neither party requested the probable resolution. Even more troubling, the anticipated “mini-union” decision would upend the long-standing belief that both workers and business are best served by the largest appropriate bargaining units. These actions by the Becker Board leave all to wonder what other established labor precedents would soon be reversed by fiat only to keep unions in business.
In other news, the NLRB recently ruled that an employer was in violation of the Act in terminating an employee who secretly taped a meeting with his supervisor. In Stephens Media, LLC d/b/a Hawaii Tribune-Herald -and- Hawaii Newspaper Guild Local 39117 the Board ruled that this secret taping was protected concerted activity because the employee made the recording to protect his Weingarten rights. The taping was also ruled protected because the employee discussed his intent to tape the meeting with his co-workers before the meeting started therefore (using Becker Board logic) the employee was not acting solely for his own benefit but to safeguard the Weingarten rights of his co-workers by simply bragging to them about it.
The Board has also expanded its most recent social media decisions to now include Twitter posts. The board asserts that the Thomson Reuters news division violated a reporter’s right to discuss working conditions when her supervisor reprimanded her for posting a message on the company’s Twitter service, “One way to make this the best place to work is to deal honestly with Guild members.” The Board appears to be following a mandate to establish all forms of social media as safe havens for any sort of anti-employer or union-promulgating activity.
In breaking Board news, on April 21 the Board issued a complaint against Boeing for deciding to transfer a second production line from its unionized facility in Washington State to a non-unionized facility in South Carolina. The company has invested millions in the South Carolina facility and hired over 1000 workers there. However, the Board could rule that the company must keep a second line running in its Seattle area facility that the Machinists have taken out on strike three times in the past six years.
In recent negotiations, Boeing had asked the AIM for a no strike clause and longer contract terms to keep the second line in Washington. In response the union demanded the company agree to keep all future plane production in the Puget Sound area and agree to remain neutral in all future AIM organizing efforts against Boeing nationwide. Boeing is acutely critical of the Board’s complaint, especially as it was issued a full 17 months after the company first announced its intent to move the second line to South Carolina.
And in this issue’s last piece of NLRB news, Board Chair Leibman appeared before the House Committee on Appropriations to request increased funding for the Board testifying that after years of decline the number of Board cases is now creeping steadily upward. (Perhaps because the Board is passing out union hugging decisions like Halloween candy?)
Finally, while many programs are being cut or reduced under the last minute budget agreement that averted a federal government shut down earlier this month, the measure allocates at least $21,332,000 in new money to the Secretary of Labor “for the purposes of program evaluation, initiatives related to the identification and prevention of worker misclassification, and other worker protection activities.” Bottom line – giving Hilde Solis an extra $21M to spend this year just can’t be good for business.
AFL-CIO Buyer’s Remorse?
In a speech in Detroit on April 7, AFL-CIO president Rich Trumka officially declared the labor movement not dead and as “resilient as Democracy itself.” He also predicted that, based on the up and down history of the movement, labor would bounce back to fleece the majority of the middle class in no time. Trumka attributed labor’s thirty-year slide into irrelevancy solely to the proliferation of “modern day Pinkertons” (aka labor relations consultants) armed we can assume with LM-2s in lieu of batons. Trumka also dismissed out of hand the notion that unions just might be in any way responsible for their own problems or that forced collectivism has become less popular with the working public than it was a century ago.
Trumka did however admit that “the tools that worked 40 and 50 years ago don’t work anymore” and added, “we need new tools, new models. You know, one hallmark of the labor movement is our practicality, the way we fashion answers out of the questions at hand.” Credit to Trumka for publicly acknowledging the unionist preference for fashioned answers over facts.
Meanwhile, The Center for Public Integrity has analyzed White House visitor logs and shook out something interesting – apparently the Obama White House has been doing a lousy job of documenting the nature of meetings with hundreds of White House visitors including Trumka. On top of twelve fully documented visits for ceremonies and social events, Trumka made at least thirty-six poorly documented visits to the White House last year, including two visits with the President and one with Joe Biden where no record exists of the reason for or nature of those visits.
Even as it appears Trumka has assumed Andy Stern’s role as Chief Resident White House Union Honcho, all is not well between Obama and the AFL-CIO. In a closed session of the federation’s executive board last week, insiders say furious union presidents hauled off on the White House and Harry Reid for union bruising budget cuts and trade agreements as well as Obama’s unwillingness to contribute any promised presidential shoe leather to union protests in Madison and other state capitals. In a pique of buyer’s remorse one union leader said, ““Now, not only are we getting screwed by the Republicans but the Democrats are doing it too.” Board members refused to go on the record with their frustrations and official announcements from the meeting were polite, if terse. “President Obama does not yet have the balance right between spending cuts and new revenue,” Trumka said calling for “significant new revenues.” Last week, the federation released a stronger, “deeply disappointed” statement on the free trade pact with Colombia.
Who are the winners (and losers) of the labor movement? Don’t guess, just check the LRI Scoreboard
Union Leaders’ Salaries at a Glance
According to the Center for Public Integrity, scores of union leaders earn above six figures and hundreds of millions of dues (and tax) dollars go towards the salaries of top union officials. The Center found compensation of the international president of the top ten unions ranged from $173,000 for the UAW to $618,000 for the Laborers’ Union. The study also notes the number of union officials and staff making over $200K annually.
President’s compensation at top ten largest unions (2009):
Union: National Education Association — Dennis Van Roekel, $397,721
Union: Service Employees International Union –Andy Stern $306,388 (Mary Kay Henry current)
United Food & Commercial Workers — Joseph T. Hansen $360,737
International Brotherhood of Teamsters — James P. Hoffa, $362,869
American Federation of State, County & Municipal Employees — Gerald McEntee $479,328
Laborers’ International Union of North America — Terence O’Sullivan, $618,000
American Federation of Teachers — Randi Weingarten $428,284
International Brotherhood of Electrical Workers — Edwin D. Hill $375,767
International Association of Machinists and Aerospace Workers — Robert Buffenbarger $284,975.
UAW — Ronald Gettelfinger $173,065 (Bob King current)
How Many Jobs Could Dues Create?
RedState has posted an interesting piece in response to this press release from the AFL-CIO:
In 2010, Standard & Poor’s 500 Index company CEOs received, on average, $11.4 million in total compensation. Based on 299 companies’ most recent pay data for 2010, their combined total CEO pay of $3.4 billion could support 102,325 median workers’ jobs.
RedState did its own math and calculated that American unions collect $8.8 billion in dues annually, based on 14.7 million unionized workers paying an estimate average of $50/month in dues. Applying AFL-CIO logic to those numbers, union dues collected in this country could create 265,447 “median workers jobs” or over double the number created by forcing all corporate executive officers to work for free.
Of course, two steps forward and one back — if unions stopped collecting dues tomorrow that move would cost the American economy the jobs of ten of thousands of six figure union VPs, EB members, Comm directors and assorted other essential officials while seriously damaging union dependent suppliers here and abroad impacting particularly hard the confetti cannon, drum circle and tee shirt printing industries as well as, of course, Hilde Solis and the NLRB. Oh yes, and Danny Glover.
Escaping the Union Pension Plan
Teamsters from local 443 in Orange, Connecticut have been out on strike since early March because their employer Dichello Distributors refuses to continue contributing to the Teamsters grossly under-funded pension account. The company is also asking for a ten percent co-pay by employees for their health insurance which is currently 100% employer paid. The strike is dividing the town of Orange and tensions on the picket line are high as replacement workers cross the line for work and interviews.
The New England Teamsters and Trucking Industry Pension Fund is underfunded to the tune of $3 billion dollars and Dichello’s share of that liability alone would be over $21M should the company remain in the plan. The plan covers retirees of dozens of employers, many now out of business, from twenty-one Teamsters locals. Dichello wants to shift to a 401K plan for its employees who it feels will never see checks from the critically underfunded Teamster fund regardless of Dichello’s continued participation.
A restoration plan for the mismanaged fund is about to go into effect that would require Dichello and other struggling employers to increase their contributions by at least 10%. And if Dichello does not exit the plan now its costs for the plan will skyrocket even after the company has faithfully paid into the plan for its own employees for decades.
Estimates are that private sector union pension plans are underfunded by a total of $165 billion dollars placing retirees, current union members and the companies they work for in dire financial jeopardy. Allowing companies like Dichello to exit these failing plans saves thousands of jobs while providing viable retirement options for current employees. Desperate to maintain the status quo, the Teamsters have called Dichello’s attempts to contain company costs and end pointless liabilities as “union busting”.
The NEA Fattens Its War Chest
In response to state legislatures across the country limiting the power of public sector unions, the National Education Association (NEA) is fighting back in the only way it knows how – by tapping members’ wallets to buy more political influence. In February the NEA, the country’s largest union with 3.2 million members, enacted a two-fold increase in members’ dues earmarked for political campaigning. This $10 increase will add another $40M to the union’s already massive political war chest further bolstering the union’s position as the single largest donor in American politics. (And yet we still wonder why Johnny can’t read.) Meanwhile, state NEA chapters are charging their members one time increases to finance efforts to regain union control over their state governments.
The NEA is also soliciting donations from the usual progressive suspects for its new “51 Fund” to “help feed volunteers, organize rallies, and get the message out to people everywhere that the right to collective bargaining ensures a strong middle-class.” Historically contented to simply buy and control local school boards, the NEA now appears to be entering a new era of fiscal militancy.
Unions as Union Busting Employers
It’s perhaps the least reported and most blatant, widespread and egregious hypocrisy (of many) in the labor movement – the firing of union staff members by their union bosses for daring to try to organize their own staff unions. Little if any true investigative reporting has been done on union bosses as employers who wipe their feet on the NLRA. And the question is seldom if ever asked why all union staff members are not working under their own collective bargaining agreements even as they preach the paramount importance of union contracts to others.
In the most recent example, David Highnote, the former Assistant Director of Communications of the Amalgamated Transit Union (ATU), filed an unfair labor practice charge with the NLRB on April 12, alleging the ATU first threatened and then fired him for organizing the union’s professional staff. The union’s president, Larry Hanley, is also under DOL investigation for (excuse the tautology) “illegal and corrupt union election practices”.
Only two weeks after Highnote signed his union card and started an organizing campaign, a senior advisor to Hanley allegedly threatened, “I only want to say this once. Larry (Hanley) is sensitive to all of the things going on in and outside of the office. If we find out that you are discussing workplace conditions with co-workers or anyone else, then one strike and you’re out.”
One has to applaud Highnote’s courage in filing his ULP complaint against his former employer, as it’s safe to assume that action has essentially ended his union career. Congratulations, Dave and trust it’s all uphill from here.
We can also add Dave’s story to the ever growing list of examples of unions bosses behaving badly including UFCW staffers being called “completely clueless, unappreciative, and incompetent” for attempting to organize, AFSCME staff members being denied card check and the UAW imposing a staff contract their staff members had voted down.
Social Media Spotlight
Union: There Could Be an App for That
The site CyberUnions posed the suggestion last week for a phone and iPad app for union members and offered a list of functions for a union app such as:
o Who is my shop steward and can I contact them directly from the app?
o Where’s the nearest union office, and how do I contact them?
o When is the next local meeting?
o How can I get more involved in my union?
o How is my employer doing financially?
o What have average settlements looked like across the economy?
o Does this violate the NLRA?
o And a guide to discipline and grievance procedures
We could suggest a few more functions for a union app:
o What is my union rep’s salary, what does he drive and what exactly does he look like?
o When is the last time someone ran against my union president and lived to talk about it?
o Who do I have to know to get a copy of my contract or my union’s constitution?
o Is voting allowed in my union? How can I find out before an election if one is about to occur?
o Does my union own a private jet? Can I get a ride on it?
o How many tons of shrimp did my dues dollars pay for last year?
o And, can I get fired for deleting this app from my phone?
An SEIU organizer is answering questions on Reddit. Someone asked, “I’ll assume you’re an honest and morally upstanding guy. So what’s the most unethical thing you’ve witnessed a fellow union organizer do to get a worker to join a union?”
Here’s a snippet from the organizer’s answer –
“I’m sure there is promises some of the younger and or less skilled and desperate organizers make to workers that they can’t keep, like raises etc. I’ve also heard of people faking card signatures, but anyone the least suspected to usually get’s fired. I would say there is probably a more lighthearted taking folks out for food thing, but I’ve never heard of anything fancy, and it’s usually just to get people on your side. Not recommended organizers! People need to believe in your cause and respect you and trust you. Not just have a good feeling they’ll get good cool stuff from you!
I would say the area where most unethical stuff happens is probably in easier campaigns, ones that have employer guaranteed neutrality, or even a certain level of employer cooperation. In those instances organizers get lazy, they slip up, and the take the easiest route to finish and move on.”
Current charges or sentences of embezzling union officials:
April Franklin UA $275,000