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OpenMarket: Labor and Employment

  • Promoting Economic Freedom in 2016

    January 4, 2016 1:00 PM

    It was Marxists who wanted permanent revolution, but it is capitalists who have delivered it. The last 50 years have seen a sustained revolution in the way people’s needs for goods and services are supplied.

    Businesses have revolutionized their structures to provide continuous improvement in the consumer’s experience.

    Innovation and creative destruction have swept away once mighty market powerhouses in a way that antitrust laws could never dream of—search in vain for a Borders or Blockbuster at your local mall.

    Payments systems have made purchasing services as well as goods much easier; you no longer have to pay a cleaner or handyman with cash, for instance, thanks to apps like Handy and Taskrabbit.

    And the old verification system of a businessman’s reputation has been bolstered by a variety of feedback mechanisms, like Lyft’s or Tripadviser’s ratings system.

  • Protecting American Workers and Job Creators with the Omnibus

    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.

  • Official Time and Criminal Misconduct by Federal Employees

    December 2, 2015 11:51 AM

    With under two weeks until Congress must pass an omnibus spending bill to avoid a government shutdown, one policy that should be on the chopping block is union official time, a practice that allows federal employees to conduct union business, instead of their public duties, on the taxpayers’ dime. Not only is official time an obvious waste, it also may breed corruption.

    Recent analysis at found that the American Federation of Government Employees (AFGE), a federal government union, led all American federal unions in criminal misconduct from January 2014 to June 2015, with 13 union officials found guilty and three indicted at the time the article was published.

    While it is unknown why AFGE leads the pack in criminal misconduct, the little known government union special privilege—official time—may explain some of the union’s proclivity for malfeasance.

    Five AFGE union officials found guilty or indicted of criminal activity ranging from embezzling to mail fraud to theft were granted 100 percent union official time, which means they never did any government work while paid by the taxpayer.

    As of November 17, 2015, the number of AFGE union officials found guilty is 14 with the conviction of former AFGE president Stephanie Hicks at the Birmingham’s Veterans Affairs Hospital. As The Gasden Times reports:

    A federal judge on Tuesday sentenced the former president of the federal employees union at the Birmingham’s Veterans Affairs Hospital to six months in prison, plus six months home detention, for embezzling more than $92,000 from the local chapter.

  • 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.”

  • House Committee Pushes Back against NLRB Assault on Small Business

    October 28, 2015 2:50 PM

    Today, the House Committee on Education and the Workforce passed H.R. 3459, the Protecting Local Business Opportunity Act, a bill that would restore the traditional joint-employer standard, which fostered the creation of thousands of beneficial business relationships including franchise businesses, contractors, and temporary staffing agencies. Now the bill is referred to the floor of the House of Representatives.

    In August, the National Labor Relations Board unilaterally changed what it means to be an employer by redefining the concept of joint employment. Under its new definition, companies may be held 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. In 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. It would jeopardize the future of franchise businesses, which have created jobs faster than other businesses in the last seven years, and endanger the jobs of the three million people who work for temporary staffing agencies.

  • 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.

  • More Affirmative-Action Red Tape for Contractors: Sexual Orientation Added in California

    October 26, 2015 12:17 PM

    Governments impose a cobweb of complicated and confusing affirmative-action mandates on government contractors. That imposes billions of dollars in compliance costs on contractors. It also reduces the pool of contractors competing for government contracts, sometimes massively increasing the cost to taxpayers of transportation projects and government services by weeding out the most efficient contractor.

    California provides the latest example: new sexual-orientation-based affirmative-action mandates, imposed for certain subcontracts by California Public Resources Code § 25230. Loan recipients must now provide “outreach” to “LGBT business enterprises” alongside enterprises owned by women, “African Americans, Hispanic Americans, Native Americans, and Asian Pacific Americans.” As I explain at this link, these mandates are of doubtful legality, since the California state constitution subjects sexual-orientation classifications to strict scrutiny, and California appellate precedent applies strict scrutiny even when a classification prefers a minority rather than a majority. UCLA law professor Eugene Volokh raises practical questions about the new mandate, such as how it may be gamed by heterosexual subcontractors who claim to be bisexual.

  • 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.


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