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OpenMarket: Labor and Employment

  • 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.”

  • Fed Reacts to Job Reports, Why Doesn't Department of Labor?

    October 2, 2015 10:39 AM

    We had another jobs report below expectations this morning, coupled with a rare revision downwards of last month’s jobs report. This ends a summer of jobs reports that have revealed just how soft the economy is.

    The economy added just 142,000 jobs last month, well below economists’ expectations of 203,000. Moreover, the numbers for August were revised downwards by a substantial amount—37,000—which is something that usually only happens during recessions. Hourly wages even went down, albeit by an insignificant penny.

    The economy looked like it was regaining momentum earlier in the year, but that is now lost. There had been hints that the Federal Reserve might move to raise interest rates as early as its October meeting, but as Politico reports, that seems unlikely now. The Federal Reserve, for all the mystery that surrounds its operations, at least takes account of current market conditions.

    The same cannot be said of the nation’s employment regulators like the Department of Labor and the National Labor Relations Board. Both bodies have made moves over the past few months that make flexible working arrangements difficult. Thereby, they have discouraged both businesses from hiring and workers who would prefer flexible arrangements from getting the working conditions they want.

  • 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.

  • NLRB Joint Employer Decision Creates Barrier to Job Creation

    September 22, 2015 1:51 PM

    In a 2010 speech, President Obama said small business “is as American as apple pie. Small businesses are the backbone of our economy.” He went on to say his administration is guided by a simple idea that “[g]overnment can’t guarantee success, but it can knock down barriers that keep entrepreneurs from opening or expanding.”

    Clearly, the members of the National Labor Relations Board must not take President Obama’s speeches too seriously. The Board’s decision in Browning-Ferris erects another barrier for small businesses and entrepreneurs. At a time when 94 million Americans are looking for work, now is not the time for a group of unelected bureaucrats to stifle small businesses that create 60 percent of all new jobs.

    Browning-Ferris overturns decades-old precedent on when an employer is responsible for another employers’ employees. Greatly expanding the standards of what constitutes a joint employment situation threatens to ensnare businesses all across the nation in labor relationships they never expected to be in, and make them liable for employees they didn’t know they had. The NLRB decision will disrupt the stability and flexibility on which thousands businesses across the country rely.

    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.

  • 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.

  • Federal Labor Agencies Attack Workers and the Economy

    August 27, 2015 1:10 PM

    Today, CEI released a report on the Obama administration’s effort to pay back its union allies by way of federal labor agencies.

    The National Labor Relations Board and Department of Labor are using their regulatory and adjudicatory powers to prop up labor unions that are experiencing a decades-long decline in membership. Not only do the agency actions serve as political payback to a special interest group, the rules and decisions severely disrupt the workplace and how companies do business. Further, the actions stand in stark contrast to the NLRB and DOL’s missions to protect worker rights, not benefit special interest groups like Big Labor.

    And this regulatory barrage could not have come at a worse time. Currently, 6.5 million workers are seeking full-time employment, but federal regulations have subjected them to part-time work. In addition, labor participation rate is at a 38-year low of 62.6 percent. Worse, federal agencies upsetting common business practices via regulation is a surefire way to keep the below-average employment numbers where they are.

    The report focuses on three significant actions coming out of the DOL and NLRB: DOL’s proposed overtime rule change, NLRB ambush election rule, and the upcoming NLRB joint employer decision.


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