Congress: Federal Labor Board Must Be Fair to Both Employers and Workers

Yesterday the House Subcommittee on Health, Employment, Labor, and Pensions held a much-needed hearing, aptly titled “Restoring Balance and Fairness to the National Labor Relations Board.”

At the Competitive Enterprise Institute, we have suggested, for years, that the National Labor Relations Board (NLRB) has become an overly political agency that, as currently constructed, does more harm than good. It is in dire need of reform.

It wasn’t supposed to be this way. As Board Chairman Walberg noted in his opening statement, Congress created the NLRB to act as a “neutral arbiter” and an “unbiased judge” in labor disputes. The NLRB was meant to act more like a referee than a player in the game.

Under the Obama administration, however, the NLRB has clearly been taking sides. Given that the White House chooses a majority of the Board’s members, there will always be some changes in its orientation between administrations. In the past eight years, though, the agency tilted the playing field dramatically in favor of organized labor. Recent research from the Workplace Policy Institute found that the Obama NLRB overturned a combined total of 4,559 years of Board precedent.

Nearly all of the NLRB decisions eased union organizing. Some of these decisions were discussed at the hearing.

For example, Reem Aloul, a franchisee owner of BrightStar Care of Arlington, commented on the impact of the NLRB’s “joint employer” decision that muddied the waters of when a franchisor is liable for labor violations of franchisees:

The decision by government officials here in Washington to change the joint employer standard is a baffling one … The policy is so broad and unpredictable; it could be applied to nearly any conceivable business relationship. As a franchisee, one of many, joint employer unfairly changes the rules of business in the middle of the game. I invested a career’s worth of savings in this business. And now joint employer liability threatens everything I’ve worked for.

Another witness, labor attorney Kurt Larkin, cited in his written testimony actions that the Board has taken to ease union organizing at the expense of worker choice and stability in the workplace, inclduing the ambush election rule and the decision to allow micro-unions. According to Larkin, the Board has:

Promulgated onerous new election procedures that dramatically reduce the time employers have to respond to union organizing campaigns and which paralyze them with burdensome administrative tasks.

Established an obtuse new standard for creating collective bargaining units that too easily allows unions to gerrymander bargaining units based only on the extent of their organization, setting up the potential to balkanize an employer’s workforce into multiple bargaining units and paralyze it with endless and competing labor negotiations.

It is a welcome development for Congress to better understand the great uncertainty the NLRB has caused—uncertainty which deters job creation and business formation. Job creators rely on predictability and a level playing field. For years, the NLRB has failed to issue fair, balanced, and consistent decisions on labor relations. It is long past time that Congress introduce legislation to limit the power of the Board so that it cannot overturn longstanding precedent on a political whim.