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OpenMarket: Labor and Employment

  • 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.

  • NLRB Denies Petition to Form College Athlete Union, for Now

    August 18, 2015 12:37 PM

    The National Labor Relations Board (NLRB) yesterday denied a petition by Northwestern University football players to form a union. While this is a rare show of restraint by a labor board that, under the Obama administration, has often acted like a pro-union advocate, the ruling is on such narrow grounds that it’s difficult to draw any broader conclusions from it.

    A ruling in favor of the Northwestern union petitioners would have affected all private schools in the National Collegiate Athletic Association’s (NCAA) top division, a mere 17 schools of 125. That raises the question: Would the Board have ruled differently if its decision were to apply across the board, or at least to the overwhelming majority of athletic programs?

    For more on the NLRB decision, see here.

  • The NLRB Declines Jurisdiction in College Athlete Unionization Case

    August 18, 2015 12:36 PM

    The National Labor Relations Board has declined the opportunity to rule on whether or not college athletes are employees and can therefore be unionized. The petition was brought by the College Athletes Players Association which desired election as the union for Northwestern University college athletes.

    CEI submitted an amicus brief in the case. In the brief, we pointed out the likely true motivation behind the push to unionize student athletes, and the problems it would cause for those students:

    [T]he United Steelworkers union is driving this whole initiative. The Steelworkers, one of the largest industrial unions in North America, are underwriting and financing the effort and have been trying to unionize students for a decade. The goal? Access to some of the millions of dollars associated with college sports. And Stanford, with its long and storied athletic history, is a prime target for the Steelworkers, with nearly 10 local union chapters in the area.

  • The Administration Is about to Upend American Business Practices

    August 13, 2015 7:45 AM

    It is probably the biggest change in American employment law since the National Labor Relations Act and its reform in the 1930s and ‘40s, but it could happen without the general public realizing it. The National Labor Relations Board (NLRB, a product of that 1930s legislation) is expected to rule any day now in a case that will affect thousands of businesses. Firms are bracing themselves for the fall-out.

    The case in point relates to Browning-Ferris Industries (BFI), which owns a recycling plant that hires employees from a staffing agency. The local Teamsters Union petitioned the NLRB to designate BFI as a “joint employer” of the workers alongside the staffing agency. Designation as a joint employer would mean that BFI would be liable for the employees’ working conditions alongside the staffing agency. That means they could be sued over contractual matters and working conditions.

    If the NLRB rules in favor of the Teamsters, it would have far-ranging effects for companies of all shapes and sizes. The start-up that employs a receptionist from a staffing agency would find it now “jointly employed” that receptionist. Your office that has cleaning staff come in from a different firm at night could easily find it jointly employing those cleaners.

    The whole American business model of contracting out non-essential services would be overturned overnight. Firms that have spent decades flattening their structures would be forced to vertically integrate. One employment owner told The Hill, “Every company will have to reexamine their business relationships… I’d rather be responsible for my own company than someone else’s.”

  • CEI Joins Coalition to Support Right-to-Work Protections in Missouri

    July 31, 2015 8:33 AM

    No individual should be forced to financially support an organization with which they disagree or risk penalty. However, in Missouri and 24 other states, private-sector employers and unions may agree to a contract provision known as a union security clause, which compels workers to pay union dues or lose their job.

  • CEI Joins Coalition to Support Right-to-Work Protections in Missouri

    July 29, 2015 3:15 PM

    No individual should be forced to financially support an organization with which they disagree or risk penalty. However, in Missouri and 24 other states, private-sector employers and unions may agree to a contract provision known as a union security clause, which compels workers to pay union dues or lose their job.

    Currently, Missouri is considering becoming a right-to-work state, which would allow workers to opt-out of paying dues to a union they may not support without risk of termination.

    While worker freedom is the most important aspect of right-to-work protections, other benefits arise from such laws. In a recent study conducted by the Competitive Enterprise Institute, “Interstate Analysis of Right to Work Laws,” found that real personal income, over the duration the study analyzed (1977-2012), grew by 123 percent in the United States, but right-to-work states saw faster growth rate of 165 percent whereas non-right-to-work states only saw below average growth of 99 percent.

    With respect to Missouri, the study’s economic analysis showed that the Show Me State's estimated per capita income loss associated with not having a right-to-work law was $3,040.

    The Competitive Enterprise Institute along with 54 other organizations signed on to a coalition letter showing our support for right-to-work protections in Missouri.


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