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OpenMarket: Private Unions

  • NLRB Attack on McDonald's

    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.

  • Republicans Should Support Rep. King's Amendment to Prohibit Davis-Bacon Requirements

    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.”

  • Return of the Employee Free Choice Act

    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.

  • Why Isn't There a Joint Union Standard?

    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.”

  • Bill Introduced in Senate to Strip NLRB of Adjudicatory Power

    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.  

  • NLRB Doubles-Down on Expanded Joint-Employer Standard

    September 28, 2015 1:59 PM

    As I detailed here last week, in a case involving Browning-Ferris Industries, the National Labor Relations Board decided to greatly expand when an employer is responsible for another employers’ employees. By overturning decades-old precedent, the NLRB decision threatens jobs across the country and disrupts thousands of successful business relationships. But, unfortunately, the NLRB is not done interfering with common labor arrangements across the country.

    Until September 30, the NLRB is inviting amicus briefs to address issues raised in Miller & Anderson. The Board asks whether it should overturn precedent established in Oakwood and allow employees to organize mixed bargaining units that include solely employed employees and jointly employed employees.

    Amy Cocuzza submitted the brief on behalf of the NLRB’s Office of the General Counsel and it shines a light on how the Board members are likely to ultimately rule. Cocuzza’s brief makes two primary arguments on why Oakwood should be overturned: 1) the current precedent unnecessarily constricts employees’ statutory right to self-organization, and 2) the changing employment landscape and increase in contingent workers.

    Under Oakwood, temporary or contingent workers may not be included in a bargaining unit with employees of the user company employing these workers without the consent of both the user employer and the labor supplier employer.

  • Missouri Can Make History with Right to Work Override Vote

    September 16, 2015 11:55 AM

    Today, the Missouri legislature is scheduled to vote on overriding Governor Jay Nixon’s veto of right to work. If Republicans can muster enough votes—several GOP members have received substantial union funds and stand in the way—for the first time in American history a majority of states will protect workers from being forced to pay union dues or lose their job.

    At risk of losing coercive power to extract dues from workers, labor unions have their political machine set on overdrive and are spreading misinformation. Union-funded ads claim right-to-work (RTW) “takes away our voice” to collective bargain wages and work conditions. Other messaging cautions, “Workers in right-to-work states make on average $1,500 less per year than workers in states that allow employees to bargain for fair wages and benefits.”

    To dispel the union myths about RTW, the Competitive Enterprise Institute released a report that highlights the positive attributes that arise from ending forced union dues payments.

    First and foremost, RTW is about worker freedom. Workers should have the choice in how they spend their hard-earned paychecks. Providing workers a choice on whether or not to pay dues does not weaken labor unions or impair collective bargaining negotiations, common false union rhetoric against RTW.

    For example, if RTW was so devastating to labor unions, why has union membership seen an overall increase of 39,000 in RTW states between 2011 and 2012 while non-RTW states lost 390,000 members?

  • NLRB's BFI Decision Deserves Overturning

    September 9, 2015 4:11 PM

    Who’s the boss? That’s not often a difficult question to answer. But thanks to the National Labor Relations Board (NLRB), it’s no longer so easy. The NLRB’s recent decision in Browning-Ferris Industries overturned three decades of precedent for determining who can constitute a joint employment situation—where a party other than the direct employer of a group of workers exercises control over those workers. In doing so, the Board threw a wide variety of employment arrangements into uncertainty, including franchising, contracting, and temporary employment.

    The Browning-Ferris decision threatens to be economically damaging, and deserves attention from Congress. Today, Sen. Lamar Alexander (R-Tenn.) and Rep. John Kline (R-Minn.) introduced legislation to restore the joint employer standard that had prevailed for three decades before the NRLB unilaterally and without any compelling reason—other than to give unions bigger targets to organize—overturned it on August 27.

    Under the new standard, the Board’s majority held that a business need not prove actual or exercised control, but merely the potential for control, to qualify as a joint employer. Under the old standard, control needed to be direct and exercised; under the new standard, it no longer need be. Widely broadening the criteria of what may constitute a joint employment situation threatens to potentially ensnare businesses all across the nation in labor relationships they never expected to be in, and liable for employees they didn’t know they had.

  • Workers Deserve Labor Law Reform

    September 4, 2015 2:30 PM

    Unions use Labor Day as an occasion to remind workers of their past good deeds and deploy their usual rhetoric claiming to have workers’ best interests at heart.  

    In theory, labor unions represent workers in order to secure better working conditions and compensation, but unions don’t always work that way. Unfortunately, unions always negotiate one-size-fits-all contracts that make them the sole representative of those workers. Besides bargaining for contracts that are not responsive to all workers’ needs, labor unions commonly advocate for more coercive power that harms worker rights.

    Unions use their vast political funds to advance legislation and regulation that keep in place an outdated system of exclusive representation where workers lose autonomy in contract negotiations at organized workplaces—ensuring that individual workers have no right to negotiate with management over working conditions, pay, or benefits.

    And if workers take issue with a union’s inept collectively bargained contracts or political activity that does not align with their beliefs, unions commonly resort to using intimidation tactics that keep workers under their control and political clout to advance public policy that does the same.

    Unions have access to employees’ personal information available to them through the new ambush election rule, which compels employers to provide employees’ contact information to union organizers, including personal cell phone numbers, email addresses, and work schedules—without an opt-out provision for those who prefer not to share their personal data.

  • NLRB's Joint-Employer Ruling: Payback for Unions at Workers' and Business' Expense

    August 31, 2015 8:18 AM

    In a radical new ruling, the National Labor Relations Board (NLRB) late last week threw all American franchise and contract businesses into a state of uncertainty. In a 3-2 decision, the NLRB ruled that companies can now be held responsible for labor violations committed by franchisors and contractors. It’s hard to overstate the potential fallout from this decision.

    First, the NLRB has turned the clock back 30 years in American employment practices, which have seen massive growth in flexible, more autonomous business and employment arrangements—such as franchises, contracted work, suppliers, and so on. I said as much in my initial review of the NLRB ruling.

    Reading the lengthy, full decision, it is surprising how explicit the majority opinion is in that endeavor. They are proudly reactionary when it comes to labor and employment standards, wanting to rein in the developments of the past three decades in American employment practices. Time and again, the majority refers to Board decisions and Supreme Court opinions from the 1970s or earlier.

    This decision makes contracting specifically much less attractive to companies. It essentially raises the transaction costs of hiring. And, as we know from Ronald Coase, lowering transaction costs is the main reason why we have corporations in the first place. More functions will be brought in-house, and with the raised costs, people will lose their jobs as a result. They will certainly lose the flexibility many people value of working for staffing companies rather than one particular employer. Unions may well not benefit at all, and those who have lost their jobs will be able to blame them for their place in the unemployment line.


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