In this issue:
- Big Labor, Big Money, Big Trouble
- Planned Parenthood and Union Now Seeing Eye-to-Eye
- Auto Workers
- SEIU Watch, Sticky Fingers, Insight and more…
The bottom of each story contains a link to the individual post on our site.
Labor Relations Insight by Phil Wilson
The Deal-Maker in Chief is about to make one of the worst deals ever.
Reports suggest the White House is seriously considering re-nominating Mark Pearce to the NLRB. Yes, the same Mark Pearce who ran the NLRB while it overturned over 4,500 years of legal precedent and tilted labor law heavily in favor of Big Labor. Things like ambush elections, fractured bargaining units, an “anything goes” attitude toward workplace civility, taking a sledgehammer to the franchise business model, and much more.
This unbelievable development is supposedly part of a deal with Chuck Schumer to release a package of nominees being held up by Democrats. The nominees are rumored to be a handful of appointments to the Department of Labor plus Mitch McConnel’s brother-in-law, who is slated to run Pension Benefit Guaranty Corporation.
This deal is terrible for a bunch of reasons, but I’ll outline my top three:
- It rewards bad behavior. Senate Democrats are holding up nominees at an unprecedented scale. Doing a deal like this now – especially if the nominees that get freed up are just a few folks at DOL and PBGC – just encourages Democrats to continue holding up nominees. If you ever want to get nominees through you’re going to need a heck of a lot more leverage than a holdover Obama appointment. See suggestion 3 below if you really want to get some leverage for a deal.
- Re-nominating Pearce guarantees that much of the Obama-Board law stays put. NLRB personnel around the country are in outright resistance mode, starting with Pearce. The Hy-Brand recusal debacle is the most visible result of this resistance, but there is much more where that came from. Meanwhile, it took a year to get a full-strength Board in place. Even though we’ve had a Republican majority at the NLRB for several months there has been little to show for it. That’s not because Chairman Ring and members Emmanuel and Kaplan aren’t working their tails off (I guarantee they are). It’s because Pearce and others are geniuses at how to run the agency version of the four-corners offense. Any Democrat on the Board will continue to slow things down, but re-nominating Pearce puts Dean Smith on the opposing bench. Why on earth would the White House consider doing that?
- You can get a MUCH BETTER deal by letting Pearce’s term expire. If you are REALLY interested in getting nominees through the process you let Pearce’s seat sit unfilled. Here’s why. While that seat sits empty Republicans will be at leasttwice as effective at getting decisions made and rulemaking implemented. You’ll only have to wait on one dissent or coordinate with one person’s schedule. You will never have a Democrat majority on any panel. That’s important because a frustrating number of cases in the last few months have been 2-1 decisions where the Republican member writes a dissent – even though Republicans are in the majority! The last year and a half (with the exception of the very end of Phil Miscimarra’s term on the Board) have been mostly a replay of the last decade of board decisions. A 3-1 Republican-majority Board will be much more productive. And every single time they return labor law precedent back to where it was during the decades before the Obama Board showed up here’s what will happen. Labor unions will be lined up outside Chuck Schumer’s office demanding that he offer a better deal to get another Democrat on the Board. Eventually Schumer may come up with an offer the Administration can’t refuse. But this current deal isn’t anything close.
I completely understand why the Administration is considering this deal. The NLRB already has a Republican majority while other agencies are choked because nominees are stuck. Eventually there will probably be another Democrat in Pearce’s seat who will also try to stall things (although Republican seats remained empty for years during the Obama administration, which is one of the reasons the NLRB was so effective for Big Labor during his term). Why not strike a deal now and at least get a few more seats filled? After all, a re-nomination doesn’t even guarantee that Pearce is confirmed. The big reason is that this is a terrible deal.
It’s bad politically. Every single time one of the great dissents written over the last decade gets adopted by the Ring Board, the Administration can take a victory lap. As Republicans head into one of the craziest November elections in history, things like protecting the franchise business model, creating jobs, and reducing regulation are great things to talk about.
It’s bad optically. This deal looks bad because a big part of it is getting Mitch McConnel’s brother-in-law seated. I’m sure that’s not lost on Schumer. If this was part of a large package of nominees (or even a waiver of the debate rule on all remaining nominees) it would look a lot better, and I think a few months of Board decisions gets you that deal.
Finally, it sets a bad precedent. Doing this deal just encourages more stalling on Administration nominees. Everything stays stuck in neutral. If you want to discourage this behavior you have to make it painful. And one thing you know for sure is that anything that upsets Big Labor is going to cause pain for Democrats. Don’t get me wrong, other agencies are important. But the NLRB is the one that labor unions – the biggest donors to the Senators who matter – pay attention to.
The Trump Administration prides itself on doing great deals. That’s why it should not re-nominate Pearce while it holds out for the best deal possible.
Union Bailout Update
The NLRB General Counsel’s office has apparently begun the “restructuring” announced earlier by GC Peter Robb. A July 30th memo announced the creation of committees within the various NLRB Regions that will be responsible for drafting pre-election decisions. The memo also outlines other attempts at streamlining decision-making processes. Download a copy of the memo here.
It appears the NLRB may take rules regarding employer email restriction policies away from the current Purple Communications ruling and back to the standard of Register Guard, allowing for neutral restrictions in the use of non-work emails. The board is accepting public input until September 5th.
The appointment of Geoffrey MacLeay as a policy advisor for the Office of Labor-Management Standards could signal an intention to force worker centers to file financial disclosures with the agency. MacLeay, a former attorney at the National Right to Work Foundation, was connected to an effort earlier this year to encourage Labor Secretary Alexander Acosta to provide a new test to expand the coverage of the Labor-Management Reporting and Disclosure Act to include such centers.
New York sued the DOL over its pilot program to allow employers to resolve violations of federal overtime and minimum wage laws without incurring penalties. When the program was first announced back in March, New York and several other states sent a letter expressing concerns over the six-month pilot. The program was designed to help employees receive wages owed more quickly, but several states are concerned that employers would require employees to waive their rights under state law, which sometimes provide more protection than federal laws. The lawsuit asks for records of DOL communications regarding the development of the plan.
New York City also lowered the boom on ride-hail services by placing restrictions on new drivers and setting a wage floor. No new drivers will be allowed for one year while the City Council “studies the program.”
New Jersey Governor Phil Murphy signed a law allowing striking workers to obtain unemployment benefits. According to the article on NJ.com:
Under the new law, workers can file for unemployment insurance in labor disputes when an employer violates the terms of an employment contract or collective bargaining agreement. And striking workers would be eligible after a 30-day waiting period if the dispute isn’t prompted by an employer’s failure to comply with contract terms.
The California Supreme Court defied the federal Fair Labor Standards Act by ruling that employers must pay employees for insignificant off-the-clock tasks. The ruling was the result of a six-year legal battle between Starbucks and an employee over the 4 to 10 minutes per day it took him to close the store after clocking out. The fight will now move to the 9th Circuit appeals court.
The California Court of Appeals, on the other hand, held that certain union activity could be enjoined by local courts without conflicting with the National Labor Relations Act. In this case a retail employer asked for a temporary and permanent injunction against union protesters when they disrupted a store during business hours. The court found that the union violated state trespassing laws.
Big Labor, Big Money, Big Trouble
Money (as opposed to worker’s rights) has always been Big Labors god. Witness the stealing of Medicaid funds from caretakers in states across the nation (that theft amounted to more than $150 million in 2017 alone, and from 2000 totals $1.4 billion). Those whose pockets were picked received absolutely nothing in return.
With the recent Janus decision, Big Labor just took a huge one in the shorts, as unionized government workers can no longer be compelled to pay dues. It could get even uglier for unions if employees are allowed to sue for back dues extracted from their checks - to the tune of billions of dollars. Although some suggest that retroactivity won’t be allowed because Janus is a change of 41-year-old precedent, others remain hopeful that the various states will allow claims based on statutes of limitations.
Public unions may face even more “music,” to the tune of having to comply with the Labor Management Reporting and Disclosure Act (LMRDA), which they have been exempt from since its inception in 1959. The law was interpreted from the beginning to apply only to private sector unions, but that could soon change. Big Labor is between a rock and a hard place at the intersection of Janus and this potential DOL rule change. On the one hand, they are attempting to convince public employees that they will not misspend their money if they choose to pay dues, while on the other hand, they will most likely fight hard to retain the right to conceal exactly what they do with all that dough.
The Americans For Limited Government foundation recently released a report listing improvements that should be made in the scrutiny of union finances after eight years of Obama-administration neglect. Click here to review the 11-page report.
And no mention of unions and money (or the mishandling of it) would be complete without the latest revelation of hands-in-the-cookie-jar. In this case, Norman Seabrook, president of the Correction Officers’ Benevolent Association, accepted a $60,000 bribe to invest retirement funds in a risky hedge fund, Platinum Partners, which ended up costing the Association members over $20 million of lost retirement.
SEIU is known for deducting dues money from individuals who are not actually members of the union. They did it for years with home health care workers in Washington State. And now, in the wake of the Janus decision, the union could be forced to return up to $100 million in fees collected from persons who did not agree to the dues deduction.
Debora Nearman will stand as one of the first. After suing the Service Employees for deducting $3000 in dues money, without consent, from her paychecks, the union has agreed to return the amount in full.
Click here to hear from one SEIU officer who believes the Janus decision will actually be good for unions because it will force them to give members the attention they deserve.
In other news, Dave Regan gets harped on for a lot of things (for good reason). But accusations from earlier this month may take the cake. In a lawsuit filed by Mindy Sturgis, Regan has officially become one of the accused in the #MeToo movement. Many expect the discovery in Regan’s trials to expose a history of unethical power dynamics within the organization.
Overall, it’s been a pretty bad year for the Service Employees. Check out this article for a run down.
Planned Parenthood and Union Now Seeing Eye-to-Eye
After months of fighting the unionization effort at 14 of Planned Parenthood’s 24 locations, the company has finally changed their tune and is now standing arm-in-arm with the Service Employees union.
While it’s always interesting, but not necessarily surprising, to see liberal groups oppose organizing attempts at their facilities; we can’t help but wonder: what caused this change in Planned Parenthood’s tune? No doubt, time will tell.
And of course, we’ll be sure to keep an eye out for any anonymous, or otherwise blatantly obvious, donations with Planned Parenthood’s best interests at heart.
Union Pension Turmoil
Late last month, a group purporting to represent 22,000 Teamsters retirees sued the federal government for approving a benefit reduction plan that reduced retiree benefits by 29%. Members would like the federal government to reimburse them the benefits they have been stripped of. These pension cuts went into effect last October.
In New Jersey, a different course of action is being proposed by a task force headed up by Steve Sweeney. Rather than cut retiree benefits, the task force is recommending that current and future members of these underfunded pension plans move over to some sort of contribution plan (such as a 401k). Not surprisingly, unions aren’t too keen on the idea.
Fight for $15
North Carolina just passed a $15 minimum wage for about 10,000 state government and university system employees, including secretaries, hospital workers, security guards and housekeepers. This comes as a little bit of a surprise being that North Carolina has so many Republicans in service. Many speculate that this may be a political move as we approach midterms in November.
In a less surprising move, Democrats are hoping for the same thing by introducing a minimum wage measure in Missouri. Coming fresh off the right-to-work rebuttal, we’ll likely see a win here as well.
As a result of recent contract negotiations, Disneyland Resort in California will increase their base pay to $15 an hour for more than 8,500 workers beginning in January of next year. This puts Disneyland a few years ahead of the already passed $15 minimum wage that has been hitting California in steps. How’s the increase going over in the state so far? Click here for an in-depth look.
And on the national front, Fight for $15 proponents are pushing the NLRB to recuse two board members from the decision over whether or not McDonald’s unlawfully fired two employees who were promoting Fight for $15 in the workplace. This comes after the NLRB was forced to overturn a major decision in the Hybrand case earlier this year due to a failure of one member to recuse himself.
Right-to-work took a hit when voters in Missouri used the referendum process to reject the right-to-work law that had been enacted in 2017. Opponents of the law outspent supports by a 5-to-1 margin during the campaign, and 67.5% of voters rejected it.
Standing in stark contrast to the Supreme Court’s Janus decision, some see the move as an indication of a growing groundswell of general public support for unions.
Union proponents have claimed for years that “wages are higher in non-right-to-work states,” but the data indicates otherwise. According to NILRR.org, workers in right-to-work states see about 6% higher income.
One of the Auto Workers primary organizing tactics these days is to push for reorganizing groups of workers into ‘micro units.’ In a recent attempt to do so, the Board ultimately decided that a group of 12 workers at Edcor Data Services had ‘too much in common’ with the 20 other call center employees to be considered a separate group.
Here’s your update on the FCA scandal…
Earlier this month, former Fiat Chrysler labor negotiator, Alphons Iacobelli, indicated that the arrangement to funnel money out of the FCA/UAW training funds was set up long before he was brought into the fold. FCA officials say they’ve found no evidence to validate Iacobelli’s statements.
On the Auto Workers side, a former labor official told federal prosecutors last month that UAW President Dennis Williams actually directed subordinates to use training center funds to pay for ‘union travel, meals, and entertainment.” Williams has not been officially charged with any wrongdoing at this time. Additionally, despite being named as ‘target’ in the FBI’s investigation, Cindy Estrada has officially been moved from the UAW’s General Motors division to head the FCA division. What’s the deal with Cindy Estrada? Check out this article.
Labor Around the World
The UK is facing their own version of gig economy questions. Who is an employee? Who isn’t? Who qualifies for employment rights? To read more about the debate on employment status for our neighbors across the pond, click here.
The first labor elections in 12 years in Egypt were held at the end of June. Despite the appearance of a fair election, the exclusion of certain candidates from the electoral process implies that there is more to the story. Dive in here.
Current charges or sentences of embezzling union officials:
- Shantel Hunter – USW: $5,000
- Travis Hunter – USW: $7,500
- Luke Kljajic – IKORCC: $50,000
- John Zehm – Tile Setters & Finishers Union of Northern CA: $950
- Audonus Duplessis – AFGE: $11,300
- Rose Marie Lyons – NEA: $200,000
Labor Relations INK is published semi-weekly and is edited by Labor Relations Institute, Inc. Feel free to pass this newsletter on to anyone you think might enjoy it.
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Contributing editors for this issue: Phillip Wilson, Greg Kittinger, and Meghan Jones
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