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How the Next President Can Improve Labor and Employment Policy

With the presidential election heading into the first debate, what can the next president do to improve national labor and employment policy?

The single most important action the president can make is appoint competent, non-partisan officials to the primary federal labor agencies—the Department of Labor (DOL) and National Labor Relations Board (NLRB).

It is necessary that the next appointees to the positions of Secretary of Labor and NLRB Board members/General Counsel take seriously the purpose of the agencies—to promote opportunities for all workers and to represent the public interest in labor disputes. Unfortunately, the opposite of that has occurred during the Obama administration.

As I discussed in The Hill, virtually all presidents since Eisenhower have appointed NLRB board members with a predisposition to favor unions or employers. President Obama has carried on the tradition of politicizing the NLRB. A flaw in how the NLRB is composed it that the White House chooses a majority of members to the board. This means that NLRB policy swings like a pendulum, creating immense uncertainty because Board precedent flip-flops depending on who is president.

While the President cannot unilaterally alter how the NLRB operates, he or she can certainly bring stability to labor policy by appointing level-headed individuals who care more about the free-flow of commerce and the public interest than paying back union or business allies.

As seen with the Obama administration, the enormous union bias at the NLRB has led to some pretty head-scratching decisions. For instance, The Daily Caller reported one such decision where the NLRB required Cooper Tire & Rubber Company to rehire a union employee they had fired because that employee screamed racist remarks at a protest:

“Hey, did you bring enough KFC for everyone?” Runion, a United Steelworkers member, allegedly shouted to the nonunion workers. “Go back to Africa, you bunch of fucking losers.”

Despite the NLRB concluding that Runion most likely made these comments, Cooper Tire & Rubber Company was ordered to reinstate him. The NLRB majority decision said, “His conduct on the picket line, while racist and offensive, was not violent in character, not accompanied by violent or threatening behavior, it did not raise a reasonable likelihood of an imminent physical confrontation, and it did not reasonably tend to coerce or intimidate employees in the exercise.”

This is just one of many examples where the NLRB has issued a decision where employees engaged in unacceptable workplace behavior have been reinstated since they are also participating in union activity. The NLRB has gone so far in propping up labor unions that they are prohibiting commonsense workplace policies that say employees must treat each other, customers and supervisors with respect. 

In addition to prohibiting employer policies require civility at the workplace, the NLRB has threatened most private-sector employees’ privacy, abused its subpoena power, declared students are employees in regards to unionization and made it more difficult to decertify a union among many other changes to longstanding precedent.

A reasonable Secretary of Labor is also crucial toward bringing labor policy back to reality. As my colleague Iain Murray told the National Review, the current Labor Secretary Thomas Perez is “possibly the most dangerous person in the administration right now.”

Similar to the NLRB, the DOL has finalized a number of regulations that stretch its power and disrupt how Americans are allowed to work and do business.

For example, the DOL recently finalized new overtime rules that greatly increases the number of salaried workers who qualify for overtime pay, raising the salary threshold from $23,660 to $47,476. That amount will rise every three years to match the 40th percentile of salaried employees in the lowest income region, normally the southeast.

President Obama and Labor Secretary Perez tell anyone that will listen that all this rule does is raise workers’ wages. However, that is the least likely outcome of the rule. A more likely employer response is that they will cut base pay, hire more part-time and hourly workers, limit workers’ hour to forty a week, and reduce benefits. Beyond that, many salaried employees on a management track will be downgraded to hourly status, which will have a negative impact on their long-term career prospects and earnings.

The DOL’s rule is so out of line of past changes to overtime regulations that two lawsuits were filed yesterday. One by attorneys general from 21 states and another by the U.S. Chamber of Commerce along with 50 other business groups.

Politico reports, the attorneys general lawsuit argues that the regulation “infringes upon state sovereignty and federalism by dictating the wages that states must pay to those whom they employ in order to carry out their governmental functions, what hours those persons will work, and what compensation will be provided where these employees may be called upon to work overtime.”

Randy Johnson, senior vice president at the Chamber of Commerce, claims the DOL’s salary threshold increase is “indefensibly high.” Another argument, Congress never authorized the DOL to put the salary threshold on autopilot to increase every three years.

On top of the overtime rule, the DOL has used what my colleague Wayne Crews has deemed “regulatory dark matter”—a maneuver agencies use to bypass the formal rulemaking process—to greatly increase the likelihood that two employers are considered one in regards to liability for Fair Labor Standards Act violations and contingent workers are classified as employees.

With a new president on the horizon, one way they could greatly reduce roadblocks to job creation and economic growth is to appoint officials to federal labor agencies that will do what is best for all workers and business, not politically connected special interests.