Labor's Bail-Out Demands

Thursday, January 1, 2009 - 00:00

When the Obama administration takes over, Big Labor will likely seek its own bail-out from the government. But rather than basing its plea on flawed business decisions that, left uncorrected, will have a catastrophic effect on the nation's economy, Big Labor will argue that it should get something in return for the $400 million it invested in the political campaign. The Obama administration - and a Congress that was a huge beneficiary of Big Labor's support - must be careful, however, that the "pay-back" will not make it more difficult for American businesses to function in this highly volatile and complex world. Four issues in particular must be watched. Three of them are at the top of Big Labor's list of demands, and the fourth is a much-needed overhaul of a law that is critically outdated. This overhaul, unfortunately, is likely to be ignored for lack of an advocate unless the business community meets the challenge.

Employee Free Choice Act :This legislation, as proposed, could be the most far-reaching and dramatic reordering of the American economic system in history. Not only would it reject secret ballot elections as a trustworthy means of determining the will of any constituency, it would also nullify the right of private businesses to have their financial information and strategic plans free from discovery by the public, including competitors. Sanity and clear thinking must somehow be injected into the debate and, if new legislation making union organizing easier must become law, it should not destroy the ability of employers to compete or force them to make unwise union contracts to avoid publication of their proprietary information during the course of an interest arbitration.

RESPECT Act :The reaction of organized labor to the National Labor Relations Board decisions in response to the Supreme Court's Kentucky River instructions regarding the definition of supervisor in the National Labor Relations Act was overblown and extreme. The legislation intending to overturn the Board's holdings in Oakwood Healthcare, Inc. and its companion cases dubbed the RESPECT Act (HR 1644; S969) is an unvarnished and ill-advised reflection of the insanity of that reaction. The proposed legislation all but removes supervisors as a class of workers excluded from representation by a labor union. The legislation would remove the functions of assigning and directing work from the definition of supervisor altogether and require the worker to be engaged in the hiring, firing, rewarding or disciplining of employees a majority of his/her work time to be considered a supervisor. Under that definition, virtually no worker would be considered a supervisor with no divided loyalties. The new administration should send an early signal to Congress that it will not participate in such a drastic rewriting of the country's labor law and will not, especially when companies must become more efficient and well run, so significantly diminish the ability of employers to manage their workforces by removing such a large segment of workers from the ranks of management.

Labor Board Appointments : Unlike its predecessor, this administration will have a virtual free hand in appointing the majority of the members and general counsel of the National Labor Relations Board. The administration should use this freedom wisely and not appoint pro-union ideologues. The pressure on the Board to reverse some of the decisions of the Bush Board will be extreme. High on Big Labor's hit list will be the Board's decision in Register-Guard, in which the Board not only affirmed the employer's ability to control its own electronic communication system but also brought reality into the definition and application of solicitation and distribution of literature rules. In Register-Guard , the Board recognized that the guarantee in the National Labor Relations Act against discrimination on the basis of union activity should not restrict an employer's ability to permit solicitations of a kind or class that differs significantly from those of non-charitable organizations such as unions. There is no question that the changes in the way American companies conduct business and the way they communicate have outstripped a law based on the way business was transacted in the 1930s. Fashioning a new labor policy may be the challenge of the new Labor Board, and the new administration should not jeopardize the ability of American employers to compete by pushing the regulatory pendulum too far to the left.

Fair Labor Standards Act : Drafted in 1938, this law has also failed the test of time despite recent attempts in the new regulations. Such issues as the definition and treatment of employees exempt from overtime rules, the treatment of travel time, the definition and application of the salaried rules and the definition of compensable time in the context of a mobile, flexible and connected workforce need significant and nuanced revision. These revisions are unlikely to happen if the new administration does not appoint personnel to the Department of Labor who possess a balanced perspective and then direct them to make only those changes that are intelligent and realistic and align with the way business is actually conducted.

The Obama administration faces unprecedented economic challenges but also commands substantial legislative strength. As a result, it will have the capability to drive policy and new laws virtually at will. Hopefully President Obama will be able to withstand pressure from those who think it is payback time and will prevent extreme changes in the nation's labor laws that might derail our economic engine at a moment when it must be running at its most efficient.