February 3, 2016 8:51 AM
West Virginia, which appears poised to become the nation’s 26th right to work state, may soon enact another major labor law reform. The state Senate is set to vote on a bill repealing the state’s prevailing wage laws. The legislation, HB 4005, was voted out of the Senate Government Organization Committee on Monday, February 1, and now moves to the full Senate.
Prevailing wage laws set price floors for contractors working on government-funded projects. This often turns out to be the union wage, which hampers nonunion contractors’ ability to bid for such projects.
Prevailing wage laws—along with project labor agreements, which impose prevailing wage and other requirements that favor union contractors on a per-project basis—disproportionately affect minority contractors, many of whom are not unionized. That impact may be unintended today, but it wasn’t always so. The federal prevailing wage law, the Davis-Bacon Act, was intended to disadvantage African American workers on federal construction projects. Davis-Bacon’s shameful history should make other laws like it similarly suspect.
February 1, 2016 3:54 PM
West Virginia may soon become the nation’s 26th right to work state—making the number of right to work states a majority for the first time. The West Virginia Senate passed the right to work legislation, Senate Bill 1, on Thursday, January 21. The state’s House of Delegates, where Republicans hold a 64-36 majority, held a public hearing on the bill last Friday, January 29.
Republican lawmakers made passing right to work a priority after gaining control of both chambers of the legislature in 2014, in an effort to revive the state’s economy. “We’re the only state in the nation to have lost population,” said Senate Majority Leader Mitch Carmichael (R-Jackson). “If this bill providing workers the freedom to join a union or not join a union, if it gives one person a job, it’s worth doing.”
Carmichael’s characterization may be an exaggeration, but it isn’t far off the mark. West Virginia is only one of six states to lose population from 2013 to 2014, and second only to much larger Illinois in total numerical population decline. And as Ohio University economist Richard Vedder and researcher Jonathan Robe find in a CEI study, approximately 4.9 million people moved from non-right to work states to right to work ones during 2000-2009 (p. 11). Vedder and Robe also found that while real total personal income grew by an average of 123 percent during 1977-2012, it grew by 165 percent in right to work states and by only 99 percent in non-right to work ones.
January 25, 2016 1:22 PM
CEI applauds Browning-Ferris’ stand against the National Labor Relations Board's upending of employment liability and flexibility, otherwise known as the new joint employment standard.
The NLRB regulators last year unilaterally changed the definition of who is a joint employer in a way that could expose tens of thousands of businesses nationwide to increased costs and liability by making one employer responsible for another’s actions. The NLRB’s action will block a path toward entrepreneurship, reduce job creation, expand employer liability, increase employment insurance costs, lead to a surge in lawsuits, and disrupt thriving business models. It's a move that aids labor union organizing at the expense of jobs and economic opportunity.
Regulators also set a bad precedent. The Board overturned decades-old employment law that held a joint employer relationship existed when one company exercised “direct and immediate” control over another company’s workforce. But now, under the NLRB’s new definition, companies may be held legally liable for labor violations committed by other employers with whom they contract, even if they only exercise indirect control, unexercised potential control, and a vague notion of “economic and industrial realities.”
January 22, 2016 12:39 PM
Labor policy reform was a fast-moving issue during in the past year. At the federal level, labor policy became more tilted in favor of union organizing, while state reform was a mixed bag.
Outside the Beltway, Wisconsin became the 25th right-to-work state, giving workers the right to forgo paying union dues to a union they disagree with. Major cities around the country approved $15 minimum wages, including Seattle and Los Angeles.
The coming year looks to continue rapid pace of labor policy changes. While 2015 was the NLRB’s year, it looks like the DOL is going to take the reins in 2016.
December 9, 2015 5:06 PM
This week, Congress is working against the clock to avert a government shutdown and pass new spending legislation before the current continuing resolution expires on Friday, December 11. As lawmakers continue to discuss a variety of policy riders during omnibus negotiations, here’s why the joint-employer rider should be a bipartisan no-brainer and be included in any spending legislation that funds the National Labor Relations Board (NLRB).
The joint-employer policy rider prevents enforcement of the NLRB’s new joint-employer standard in the 2016 Labor, Health and Human Services Funding bill. The policy rider restores the traditional joint-employer standard, which fostered the creation of thousands of beneficial business relationships, including franchise businesses, contractors, and temporary staffing agencies.
In August, the NLRB unilaterally changed the definition of joint employment in a way that could expose tens of thousands of businesses across the United States to increased costs and liability. For decades, the NLRB held that a joint-employer relationship existed when one company exercised “direct and immediate” control over another company’s workforce. Under the NLRB’s new definition, companies may be held legally liable for labor violations committed by other employers with whom they contract, even if they do not exercise direct control over that company or its employees.
By making employers liable for the practices of contractors, franchises, and temporary staffing agencies, companies will likely bring many functions in-house, take greater control of operations, or eliminate jobs. Defining companies that merely contract with each other as joint employers, the NLRB threatens entrepreneurship and the ability of American businesses to grow and create jobs. Moreover, the NLRB’s redefinition of joint employment threatens franchising, which has provided countless small entrepreneurs with the opportunity to start their own businesses.
November 18, 2015 3:14 PM
No one accuses the government of being responsive to the public. Whether you are a veteran seeking care or need to renew your license at your local DMV, you can expect to wait. Another area where the public can expect to wait on the government: responses to public records requests.
Here, at the Competitive Enterprise Institute, we are all too familiar with waiting on FOIA requests. For example, “EPA has stonewalled CEI repeatedly and continues to slow-walk CEI’s ‘Windsor’ request, insisting it need only process 120,000 records at the glacial pace of 100 records processed per month; that is, it says it will conclude this production in 100 years.”
On the other hand, the federal government doesn’t like to wait and will use its power to extract information it wants from the public.
In Investor’s Business Daily, I summarize the National Labor Relations Board’s attempt to use its vast powers to force McDonalds to handover proprietary data:
Last year, NLRB General Counsel Richard Griffin consolidated dozens of unfair labor practice charges against McDonald's franchisees and named McDonald's USA LLC as a joint employer responsible for alleged labor-law violations of privately owned franchises all across the country. The case had stalled because the NLRB has asked for multiple continuances.
The NLRB claimed the case has been held up because of a purported lack of transparency from McDonald's. It complains that McDonald's has heavily redacted information that it needs to make its case.
In defense, McDonald's contends the blacked-out information is not relevant to the case or concerns business practices that are proprietary information. In September, the NLRB opposed McDonald's request to commence the case, but a trial is tentatively set to start Jan. 11. It's about time.
McDonald's has produced over 100,000 pages of documents and calls the NLRB's discovery requests excessive. McDonald's has gone out of its way to supply the NLRB with the information it will need to question witnesses, build its case and begin the hearing.
November 4, 2015 2:16 PM
The House of Representatives is voting on the Highway Trust Fund this week. Numerous amendments have been added to the bill. One that should garner support from fiscal conservatives is Rep. Steve King’s (R-Iowa) amendment that makes sure tax dollars spent on federal construction are used efficiently by repealing Davis-Bacon Act price-fixing requirements for projects funded by the bill.
The Davis-Bacon Act increases government construction costs by requiring contractors to pay prevailing wages on federally funded projects instead of market wages. Without having to pay inflated Davis-Bacon wages, the federal government could undertake more construction projects—build more bridges and buildings, employ more workers—or save the government money.
Tax dollars should always be used wisely and there is no reason the federal government should use more of the taxpayers’ money than necessary to perform construction.
On average, the Davis-Bacon Act forces the government to pay up to 22 percent above market rates on construction projects. Unions, always a proponent of distorting markets and wages, benefit from the inflated wage requirement because it protects them from competition on federal construction projects. With the fixed wage required by Davis-Bacon, a non-union construction firm cannot underbid a union firm on a job.
According to the Congressional Budget Office, repealing the Davis-Bacon Act could end up “saving $13 billion in discretionary outlays from 2015 through 2023.”
October 26, 2015 3:51 PM
Labor law has dramatically changed under the Obama administration via the pro-union National Labor Relations Board. Many longstanding Board precedents have been tossed aside in favor of policies that inappropriately advantage union organizing.
Sen. Bernie Sanders (I-Vt.) wants to further tilt the playing field in favor of unions with the recent introduction of the Orwellian-named “Workplace Democracy Act.”
The Workplace Democracy Act (WDA) is as poorly named as any labor bill in recent memory—save the Employee Free Choice Act (EFCA). A pillar of the WDA and EFCA is the policy known as card check, which replaces the current standard of conducting secret-ballot elections to determine union representation.
October 2, 2015 1:09 PM
On September 29, an official and members of Boston’s Teamsters Local 25 were indicted on extortion charges, which U.S. Attorney Carmen Ortiz described as “old school thug tactics to get no-work jobs,” for allegedly threatening the company that produces the television show Top Chef.
The appalling actions of the Teamsters were set in motion when Mark Harrington, the secretary-treasurer of Teamster Local 25, got wind that the production company was not using union labor.
According to the Federal District Court filing, once Harrington learned of this he contacted the production company and “advised the producer that he did not care about Company A and that all he cared about was that some of his guys get hired on the show.”
The producer simply replied that all jobs on set had been filled. Harrington did not take no for an answer. Later on, Harrington and another union official “warned the producer that if Company A did not make a deal with Local 25, they would start to follow them and picket.”
September 30, 2015 12:56 PM
On September 28, Senator Mike Lee (R-Utah) introduced The Protecting American Jobs Act, S. 2084, which would relieve the National Labor Relations Board of its power to prosecute and adjudicate labor disputes.
The NLRB no longer operates as Congress intended—as neutral arbiter that represents the public interest in labor disputes. Under the Obama administration, the Board has overturned a number of longstanding precedents that arbitrarily benefit labor unions at the expense of worker choice and the economy.
By removing the NLRB’s adjudicatory power, private-sector labor law would no longer flip-flop on the whim of political appointees and which political party holds the executive office. This would bring increased certainty to labor relations, a benefit to all parties involved—workers, unions, and business.
As Sen. Lee said in a statement, “For far too long, the NLRB has acted as judge, jury and executioner for labor disputes in this country… The havoc they have wrought by upsetting decades of established labor law has cost countless jobs.”
For example, in a case involving Browning-Ferris Industries, the Board overturned 30 year precedent that determined when a company may be held liable for labor violations committed by another employer with which they contract. This decision has far-reaching implications that will disrupt many kinds of business arrangements—contractors, franchises, and all types of contingent work—that are responsible for creating jobs. At a time when millions of individuals are looking for work, it is especially inappropriate to impede the growth of small businesses that create 60 percent of all new jobs.