Obama’s Big Labor Wins a Big One

Unions have been disappointed by the Obama administration's inability to move their agenda forward. But they finally won a victory last week. This is bad news for America's transport sector, not to mention travelers and businesses of all sizes that rely on rail and air shipping, because it could cause major disruptions to travel and commerce.

Last year, the National Mediation Board (NMB), the government agency charged with overseeing labor relations in the railroad and airlines industries, changed voting rules to favor unionization. On Friday, December 16, 2011, the U.S. Court of Appeals in the District of Columbia upheld the rule change as consistent with the Railway Labor Act (RLA).

However, as dissenting Circuit Judge Karen Henderson explained, the NMB failed to provide any justification for changing a rule that had stood for 75 years.

The Act clearly states: "The majority of any craft or class of employees shall have the right to determine who shall be the representative of the craft or class." A craft or class is any job classification that may be organized as a bargaining unit of like workers — for example, railroad engineers or airline pilots. The new rule makes it possible for a minority of the employees of a craft or class to vote in a union.

The rule change predictably met with strong objections from most of railroad and airline companies. The Air Transport Association of America and U.S. Chamber of Commerce filed a lawsuit challenging it. But this is no simple labor versus management dispute. Several Delta Airlines employees also filed suit on the grounds that the rule change violated their rights of freedom of association.

Congress passed the RLA to govern railway unions in 1926 and expanded it to include airlines in 1936. In order to avoid disruptions to America's transport network through strikes and other kinds of work stoppages, the Act imposed mandatory mediation and gave the president the ability to order workers back to work.

The RLA allows unions to organize workers for the purpose of negotiating a collective bargaining agreement as the workers' exclusive representative. However, unlike the National Labor Relations Act (NLRA), which regulates labor relations in other industries and allows unions to organize on a location-by-location basis, the RLA requires a bargaining unit to include all the workers of the same classification throughout an entire company.

By requiring unions to organize on a company-wide basis, the RLA helps to avoid the creation of a patchwork of work rules that would result from piecemeal unionization at various facilities. It also prevents localized issues from disrupting nationwide transport networks. Balkanized work rules detract from the standardization and economies of scale upon which network industries rely.

In addition, the RLA requires a union to gain votes from a majority of all workers it would represent in a bargaining unit in order to be certified. This ensures that a union truly enjoys the support of the majority of workers in a given craft or class. The rule change now requires merely a majority of votes cast. Thus, under the new rule, a bargaining unit of 100 employees could be unionized with only 41 employees voting for the union in an election in which only 80 votes are cast.

The court also failed to address the fact that the NMB made no effort to educate workers about the rule change. It issued no postings, memos, letters, or public service announcements to that effect. The original rule had been in place for 75 years, so to say that the employees would find a rule change surprising and disruptive is an understatement. Employees who once could simply abstain to express their desire not to join a union would be in for a rude shock.

That's not all. Under the NMB's rule change, there is more than one way for a union to receive "yes" votes. First, the new ballot includes a "write in" section where any vote cast automatically counts as a vote for the union, because "no union" votes may only be entered in the section so labeled. Second, if there is a runoff election, it may only include the top two union vote getters, with the "no union" option left out.

Reforming the Railway Labor Act is a job for Congress, not an unaccountable agency. This case deserves to be either reheard by the full circuit or taken up by the Supreme Court.

For its part, Congress should consider reforming the Act in a way that protects employees' right to decide for themselves whether to join or refrain from joining a union. Specifically, it should change the voting procedures back to 50 percent-plus-one of the craft or class and allow runoff elections to include the "no union" option. It should also hold the National Mediation Board accountable, and make it clear that it is not a mechanism to grant favors to the president's union allies.