Left Of Boom Origin, NLRB Moves, Organizing Petitions Surge- What’s Next
Michael Vandervort & Phil Wilson

Michael Vandervort: [00:00:10]

Hello, this is Michael Vandervort and we have rolled into the second half of the year. I can’t believe it. Hey, Phil, how are you doing today?

Phil Wilson: [00:00:19]

Good, Michael. Good to see you.

Michael Vandervort: [00:00:20]

You too. Hey, we’re going to do a quick show today, a quick episode of The Left of Boom show. And it’s just you and I, instead of us having a guest. And I thought it would be fun to start out with, since I get this question every time I try to book a guest who isn’t in our space, they want to know why The Left of Boom show. So, can you enlighten our listeners as to where Left of Boom came from and how you managed to write a book with that title?

Phil Wilson: [00:00:49]

Yeah, sure. Well, The Left of Boom Show, of course, is from the book Left of Boom. And Left of Boom is not my idea. So, it came out of the conflict in Afghanistan and Iraq. And actually, I talk about it in the book, but the first time I’d heard the term was in a conversation with a client, and the basic idea was that when we were fighting over in Afghanistan and Iraq. When we went in, the military just swept right into Iraq, and the soldiers were in theater and became targeted by terrorists using improvised explosive devices.

[00:01:40]

And long story short, there was this whole cat-and-mouse game that went on for several years where the terrorists would come up with new ways to either place bombs or detonate bombs, and the military would come up with countermeasures but they were really having no success at stopping these attacks. And they ended up bringing in a group that started treating these attacks like crime scene investigations. And they basically started going through.

[00:02:16]

Every single time one of these devices went off they would try to do everything they could to discover how it was built. Over time, they built this, they called it the [unintelligible 00:02:25], the mother of all spreadsheets to look at every single one of these different attacks and all the different data points that they could collect. And eventually what they were able to do was to start figuring out where these bombs were most likely being made.

[00:02:43]

And that’s the point where they really started having an impact. But how Left of Boom enters into this is they called these attacks booms. So, every time a bomb went off, that was a boom. And then there’s all these events that lead up to the boom. So, first of all, you have to have someone who hates you enough that they want to kill you with a bomb. And then you need to have somebody who can accumulate the material to make a bomb. And then they have to have the expertise to make one.

[00:03:17]

And it turns out that once you figure out how to make one that doesn’t blow you up, you keep making them that same way. And so, they end up having fingerprints. So, a bomb maker makes the bomb the same way every time, and so on. Well, all of those things they called “left of the boom”. So, before the boom happened, all these things had to occur. And then everything that happened after one of these devices detonated, you might go chase down and try to figure out who caused it.

[00:03:48]

And then you obviously have all the aftermath after the boom, and that’s “right of boom”. So, I looked at employee relations the same way. I make it clear in the book that I’m not calling unions terrorists and I’m not saying that employee relations issues are life or death like a like a bomb attack. But there are boom events in the lives of companies. And a union campaign would be like that or getting sued could be like that. Or God forbid someone gets hurt at work.

[00:04:22]

And there are events that lead up to that boom. And then there are things that happen after that boom. And the whole argument of the book is that employers, all your leverage is on the left side of boom, and you should be working hard to interdict all those different steps that would lead up to the boom event in the life of the company. And so, that’s where the book came from. And then, of course, we named the show after the book. But the whole idea of being Left of Boom, as far as the show is that we’re encouraging companies to operate on that left side of boom.

[00:04:56]

Be proactive. Be preventative. Solve small problems before they become big problems. Create an extraordinary workplace where people don’t feel the need to go outside of the relationship with their boss or the relationship with their company. Solve problems together directly.

Michael Vandervort: [00:05:16]

Right. Do the right thing. Be an exceptional workplace or exceptional employer, and you’ll never get to that point where there’s a disaster that strikes your company, or hopefully, you’ll never get there anyway. Thanks for the explanation. Now, I can refer people to this show and let them listen to it, and so that’ll be great. I knew the backstory, but I thought that other folks might like to hear it from you. So, as I mentioned at the top, the first half of the year is over.

[00:05:55]

It’s been a really busy year around here. It’s been a really busy year in the world of labor relations. And so, I thought we’d touch on a couple of things to wrap up Q2, I guess. One of the first ones is President Biden nominated a couple of people to the board. Renominated one and nominated Lauren McFerran, the current chair. And he also nominated a Republican replacement. So, do you want to talk to us a little bit about what’s going on with that?

[00:06:33]

Maybe Josh Ditelberg. I don’t really know him, don’t know much about him other than everything I’ve read said he’s a super smart labor attorney. But right now it’s the nominations happened, but there hasn’t been much action. So where are we at on that? What do you foresee?

Phil Wilson: [00:06:48]

Yeah, I’ve met Josh. All of the reports are correct. He is wicked smart. And he’d be a terrific member of the board. All of the board members, if you ever hear them talk, they want to have a full complement of board members. The board doesn’t really work well when there’s a seat open. Now, the president could have nominated that seat to be filled a lot sooner than he did. But in any event, he finally did nominate Josh and he’d be a terrific add to the board. And then Lauren McFerran, he renominated to be chair of the board.

[00:07:32]

And so, that that happened. And then the steps now are there are calls to have hearings at the Senate. They have to be confirmed by the Senate. And even McFerran has to be reconfirmed. There’s a lot of hand-wringing right now over whether she should be reconfirmed. There’s a lot of controversy about her being renominated. They typically do these votes as a package. And so, that package deal, the Democrats would be willing to let the Republican on if the Republicans are willing to let the Democrat on.

[00:08:16]

So, that’s where we’re sitting. The chances are basically zero that either of these two will be confirmed prior to the presidential election. And then pending the outcome of the presidential election, that would then determine whether or not these two would be voted in. And it and it could happen. If Biden were reelected, then it could happen during the lame-duck session. If Trump were elected, there would be no way that they would put McFerran back in because the chair would end up being a Republican and there would be a third Republican member.

[00:09:00]

And so, you would expect that President Trump would put in another Republican nominee in place of McFerran. So, I can’t imagine that there will be any action here until after the election. And then who knows what happens in the election? That’s an episode in and of itself.

Michael Vandervort: [00:09:24]

Yes. And I think when the nominations were first rolled out, there was some pushback from the Republican side, I think, where they said that Biden was trying to get McFerran reconfirmed because that would give her a longer-lasting term on the board.

Phil Wilson: [00:09:41]

They’re five-year terms, so it literally makes no sense to reconfirm her until the election happens. There would be no reason to do it because she would be on for five years. And if you’re on the Republican side, you would assume your hope anyway is that Trump wins the election and then he’s going to nominate a Republican for that seat. And he would not, at least as we’re currently situated, would not have a chance to renominate for that seat for five years. Now, one of the other Democrat seats would roll off before that five years was up. But yeah, why would you do that? There’s no way.

Michael Vandervort: [00:10:30]

Yeah. And then, I want to go to another person at the NLRB, but there’s this difference in status that has come out. So, Jennifer Abruzzo. As the Biden administration proved successfully with an unprecedented move when they fired the former GC, Peter Robb who had been appointed by Donald Trump. And then, that was appealed and the right to fire Robb was upheld. So, Jennifer Abruzzo, who’s the current general counsel and has been a very aggressive general counsel, trying to make a lot of changes, not really very beloved of the business community.

[00:11:13]

One might suppose that tit for tat in terms of the Biden response that if Trump was elected he may come in and try to fire Abruzzo on day one as it as Biden did with GG, Robb. And you can do that according to the courts. However, with McFerran, it doesn’t work the same way. Can you walk us through the differences?

Phil Wilson: [00:11:39]

Yeah. And I’m a little contrarian on this, but I’m not as convinced that day one of a Trump administration, Abruzzo, gets fired. Now, I know there will be a lot of people asking for that. And I think a lot of people just assume that would happen. It happened on the first day of the Biden administration. But I like to point out to people that we’ve already had a Trump administration once, and labor issues are just not a big deal. In the whole scheme of the things that Trump cares about and that administration cared about, labor was way, way down on the list. It took them a long time to even get the board seats filled.

[00:12:21]

And labor just wasn’t a huge priority. And you also have to remember, Trump has a lot of union support. Sean O’Brien is speaking at the Republican basically at the invitation of Trump. He doesn’t have the same fire in the belly against labor that Biden has in favor of labor. So, I would not just assume on day one that Abruzzo is fired. She could be. The legal authority is now that she can be. So, it could happen. And that would be upheld if Trump were to do that. I’m just not convinced that that’s going to be at the top of their list of stuff to do on day one.

Michael Vandervort: [00:13:13]

I suspect that there’s a much longer list of priorities aimed in other directions than the NLRB for day one, anyway.

Phil Wilson: [00:13:20]

Oh, yeah. There’s a lot of stuff that will happen. So, that’s that. But McFerran, on the other hand, the board seats, at least as we sit here today (this, by the way, is subject of, you know, constitutional litigation) are for five-year terms and the president cannot remove a board member during that term. And so, they’re not serving at the pleasure of the president like the general counsel is. So, because of that, McFerran would serve out her entire term if she were to be reconfirmed before the end of the year. She would be in that seat for five years. Now, that’s one of the reasons that there’s the argument in SpaceX and other cases that are saying that that is one of the things that makes the way the board is set up unconstitutional because they don’t serve at the pleasure of the president, and so it’s an unconstitutional delegation of executive authority to do that. But that hasn’t been ruled on yet with the board. It’s in front of the Fifth Circuit. At least the SpaceX case. There are a number of other cases where that is an issue. So, we’ll see how that turns out.

Michael Vandervort: [00:14:47]

Before we jump to what I had last on the agenda, this has been a busy week. Chevron and a bunch of other decisions. I didn’t ask you to prep for this, but you wrote some stuff about it. How much turmoil is this all going to cause? A lot, a little? Are we going to have litigation backing up in the courts with it? What’s your quick take on that at a high level?

Phil Wilson: [00:15:18]

Long term, it certainly increases the chances that there will be litigation. Those cases so far aren’t labor cases. And Chevron, the court said we’re not going backward. This is just [crosstalk 00:15:39]. So, basically what happens now is that the Chevron doctrine, which is basically that you have to defer to the agencies. Courts, don’t really have to defer to the agencies anymore, their interpretations of their statutes. And so, that means when you challenge some of their interpretations, the court gets to make its own decision.

[00:16:00]

Now, they could still agree with the agency’s decision. They just don’t have to defer if they disagree. So on the margin, you would expect there’s going to be probably more agency decisions that will be overturned than would have been under Chevron. But I don’t think it’s some giant watershed. I do think over time what’s going to happen is you’ll see probably more like regulations. So, there’s the overtime rule. OSHA just issued a rule on, on heat standards, the walk-around rule.

[00:16:36]

So, there’s a lot of these different rulemakings that are happening that I could imagine courts going look, this is way beyond what the statute says, you don’t have the authority to do this. And then that gets overruled. I think you’re going to see some of that happen. There’s another big case that came down yesterday that seems like a minor issue, but it’s actually massive. And they ruled that on the statutory claims, there’s a six-year statute of limitations.

[00:17:16]

So, once the regulation goes into place, there are six years during which you can bring a complaint about it, but then after that, it closes off being able to dispute the regulation. Well, the Supreme Court ruled yesterday that the six years start at the point that you’ve been injured. So, the injuries can be ongoing. You can go, “Well, this regulation, even though it’s been on the books for 25 years, you enforced it against me yesterday.

[00:17:48]

So, I have six years from yesterday to file my claim.” That’s a big deal because that means that a lot of regulations are now at risk of litigation and then now the courts don’t have to defer. As big as Chevron is, those two combined are a very big deal. So, I think you are going to see a lot more litigation. I think you’re going to see a rollback of some administrative interpretations. I don’t think it’s as bad as unions and folks in favor of the agencies say it is, but it is a big deal.

Michael Vandervort: [00:18:35]

Yeah. It seems like it’s a big shift away from the traditional agency solutions and stuff that especially Democrats have relied on for so long to push policy.

Phil Wilson: [00:18:46]

Yeah. It’s been a good week for the executive. Let’s just say that. The immunity case. The executive power over the administrative power. But the Chevron case is a little bit of a knockback of executive power because it lets the courts intervene against the administration.

Michael Vandervort: [00:19:16]

Yeah. And it’s interesting. All this stuff touches on labor, but the impact isn’t direct like a lot of the NLRB cases and stuff. So, we don’t really know what the eventual outcomes will be, but it’s definitely going to be crazy.

Phil Wilson: [00:19:30]

Yeah. The Jarkesy case is an SEC case. It’s the same issue. That same issue is in play at other places. I was a little disappointed. That was a Fifth Circuit case, and the Fifth Circuit ruled that the way that the ALJs were put in place was also unconstitutional. The court never ruled on that. So, that’s the law in the Fifth Circuit right now. But the court didn’t rule on that. They only ruled on the Seventh Amendment claim. So, that’s an argument that’s also in front of the Fifth Circuit on the NLRB in that SpaceX. So, we’ll probably get a ruling that I would expect to be very similar, that the ALJs at the NLRB are also unconstitutionally put into place. So, we’ll see. But the Supreme Court didn’t rule on that. So, that’s to be determined.

Michael Vandervort: [00:20:24]

We’ve also got overtime rules and applicable new overtime rules everywhere for exemptions and stuff. So, it’s definitely an interesting time. We’ll be deciding stuff down the block, how do we feel about it, Broken Arrow versus Tulsa pretty soon. But anyway, to wrap up, the last thing, I’ve seen you do a couple of updates internally here recently and you were sharing some data. And by the way, I wanted to mention that our second quarter summary is up. Petitions and elections, that report will be coming out a little bit later this afternoon, which is July 2nd.

[00:21:01]

And so, there will be a link for that at some point in the show notes. But there’s a lot of activity, petitions, elections, and stuff. And I think you said in the last update I saw, I believe you said that activity is up 30% year over year. So, I want to talk about that a little bit, where we’re at, where we’re headed maybe into the new year.

Phil Wilson: [00:21:27]

Right. Well, the headline you’ll probably get is 12%. So, RC petitions are up 12%. But after the Cimex case last year, there’s been I think so far, the first half of the year, there have been 250 RM petitions filed. Almost all of those are certification cases. So, in other words, once the union makes a demand for recognition, they can file an RC. But if they don’t, the employer has to file an RM. And so, that’s happened 250 times just in the first part of this year. So, when you add up those cases, the number is 30%. So, it’s a 30% increase year over year of certification events is how I would call that.

[00:22:16]

It’s going to be very confusing. So, you’re going to hear crazy stats. Our report is coming out this week. Bloomberg will have one. The board themselves come out every quarter with an announcement of statistics. And it’ll be interesting to see. I don’t know how everyone else is handling it. But we report out both the RCs and the RMs because now the RMs are basically RCs.

Michael Vandervort: [00:22:45]

The question came up in one of the meetings we were in. Some of the RCs and RMs are kind of like duplicates. The union files, and the employer files. And then one may pull the petition. So, it’s a little bit hard to completely track where that’s at. So, the numbers look a little different depending on how you count them and report them. And I think you made a comment that you said you wish they would figure out some way to reconcile that. What could they do there?

Phil Wilson: [00:23:22]

Well, the way that we at least attempt to figure that out is you look at two petitions that are for the same employer in the same location and the same unit, and you tie all those two together and you go, okay, those must be the same location. But you do that by the address and by the unit description and things like that. Well, the employer or the union, it’s not uncommon that they define the unit differently or the address is a little bit different. A lot of these you can’t know absolutely for sure. But the board does know for sure.

[00:24:13]

Am I talking to the same lawyer and same union about the same location? The board knows that. So, you would hope that at some point they would figure out a way to tie those two together. Now, they don’t care. For them, the amount of activity, like double reporting petitions is good for them because they know, oh, we need more money because we’re so busy. So, I don’t imagine that they would do that. For those numbers to really be accurate, it would be a lot better if they had some way to either have the same docket number.

[00:24:51]

RM has always historically been a management only. And so, now they’re basically RCs. So, I feel like another approach would just be there are just RCs. If the employer files an RC, it would then be the same case. But that’s not how they’re doing it. They’re doing it with an RM. And so, now there is this issue of duplicates. We’re trying to identify those and not count them when we can. But it’s hard to do.

Michael Vandervort: [00:25:39]

Yeah. And especially when a union files, like we’ve seen. Going back a bit, we’ve seen Starbucks where there are different addresses even though it’s probably the same store, but they use a different street address or describe it differently or whatever it is. It is really confusing. So, to wrap up. Once we’re done with this, I’m headed to vacation for a few days, so I don’t want too much to stand between me and the door.

Michael Vandervort: [00:26:15]

Who does that? No PTO.

Phil Wilson: [00:26:18]

That’s how we do an extraordinary workplace.

Michael Vandervort: [00:26:22]

That’s right.

Phil Wilson: [00:26:23]

We get a day off.

Michael Vandervort: [00:26:24]

Twice a year. No. All joking. But seriously, to wrap up. The election is coming up, and not to get all political, but we’re this last half of the year is going to be filled with all kinds of volatility and all kinds of uncertainty. And that’s an environment that for employers, not even tied to politics just in general, the uncertainty of people for employers, if they’re if their workers don’t know what things are going to be like. The Biden administration leaves and their support for union leaves.

[00:26:55]

Just prognosticate as best you can, realizing you’re looking into a very dim and murky crystal ball here. Where are we headed once the dust settles? I know it depends on who wins the election in large part, but let’s just say Trump wins. Does that aggravate unions and raise their activism? Or does the change in the government philosophy that will occur settle things down a little bit? Or is it just impossible to tell?

Phil Wilson: [00:27:26]

I think it’s very possible to tell. If Trump wins, it will be more chaos just like it was the last time he was in. Unions are going to be very upset. They will rail against anything that they believe the administration is doing to hurt them in any way. I’ll go back to what I said at the beginning, which is that Trump is not … This isn’t just Trump. When the Republican Party comes into power, on the labor side, they’re just not as energetic as the Democrats are. The Democrats when they land, on day one, already know what they’re doing for the next four years. And that’s really not as true on the Republican side.

[00:28:27]

So, I think in that sense, unions are going to be upset. Their guy will have lost. Joe Biden is without question the most pro-union president that we’ve ever had. They’re going to lose that. All of the agencies will flip over. There’s been a lot made from Trump himself and from his folks about dismantling the administrative state. And if they really follow through on some of the stuff that they’re talking about, then you could certainly imagine funding at the NLRB, getting gutted. The House just proposed a $200 million pay cut to the board.

[00:29:19]

So, if anything close to that were to go into place, that would be a massive, massive change. Unions would be very upset. So, you can certainly see like possibilities of all of that stuff happening. Again, I think Trump has a lot of union support. I don’t think he’s going to be nearly as aggressive against unions as Biden was for unions. I also just don’t think he cares that much about labor issues. And so, I think in that sense, probably as far as the labor world itself is concerned, you’ll get a Republican majority board.

[00:30:03]

There will be a lot of rollback of the decisions that came out during the Biden administration. So, all of that stuff will happen. But I think the bigger picture is going to be what other chaos is happening. And that probably sounds like I’m saying that’s horrible. There were winners and losers in the chaos the last time. Trump is clearly way more aggressive on trade, and way more aggressive on immigration. There are a lot of other things that impact employers besides the labor laws that I believe Trump will be way, way more aggressive about.

[00:30:53]

And it’ll be those areas where he is going to be active on day one. And so, I think from an employer community standpoint, that is really the area of most focus, not as much the labor policy side.

Michael Vandervort: [00:31:12]

I would guess, at least in the short-term post-election, it probably doesn’t quell or back backtrack on the trend of more elections, and more petitions. I think that’s going to continue for a while.

Phil Wilson: [00:31:27]

Yeah, totally. Unions don’t become less popular because Trump gets elected. Unions don’t organize less because Trump gets elected. All of that I think continues apace and to some extent maybe accelerates right. There will be a lot of anger about the results of that election on the left. And union activity, strike activity, and a general strike, I can imagine a lot of that sort of stuff happening as a response to Trump being elected. So, I don’t think it slows unions down at all.

Michael Vandervort: [00:32:15]

Right. Well, that brings us to the end of the end of another edition of The Left of Boom Show. And if you listen to this show now, you know how it got its name. Anyway, have a good have a good upcoming holiday weekend.