Obama’s Stealth Push for Card Check

President Obama’s recent State of the Union touched on a wide variety of issues, ranging from the state of the economy to job creation to gays in the military. But one topic that the President failed to even mention was the Employee Free Choice Act (a.k.a. card check), no doubt enraging Big Labor. (SEIU President Andy Stern has called opponents of card check “terrorists”.) The Act would make it far easier for unions to organize without the use of a secret ballot, essentially bypassing the procedures set up by the National Labor Relations Board to stage fair and free elections for all employees.  Card check would virtually become the law of the land. While the president has been silent on the issue, AFL-CIO President Richard Trumka proclaimed on Sunday that the legislation will pass before the end of 2010. Trumka told CNN, “I think we’ll get health care done and I think we’ll get labor law reform done before the year’s up.”

However, some think the recent election of Scott Brown to the Senate may put the brakes on any such legislation. (In fact, nearly half of all union members who voted in the recent Massachusetts Special Election voted for Scott Brown.)  With 41 votes in the Senate, Republicans have enough votes to filibuster any Democratic agenda. Opponents of card check may sleep comfortably at night, with the belief that card check is essentially dead on arrival. Professor Richard Epstein of the University of Chicago, in a lengthy critique of the bill, has said it would “reduce income and employment across the board” and that “the level of unrest in labor relations will increase, and do so in a time when the economy is still likely to suffer from a general slowdown.”  However, recent developments involving the National Labor Relations Board may show that the president could still radically alter U.S. labor law, including some elements of card check, without receiving any approval from Congress.

First, a little background. In 1935, Congress enacted the National Labor Relations Act (NLRA),

… to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices, which can harm the general welfare of workers, businesses and the U.S. economy…

The purpose of the National Labor Relations Board, taken from the NLRB website, is as follows:

The National Labor Relations Board is an independent federal agency created by Congress in 1935 to administer the National Labor Relations Act, the primary law governing relations between unions and employers in the private sector. The statute guarantees the right of employees to organize and to bargain collectively with their employers, and to engage in other protected concerted activity with or without a union, or to refrain from all such activity.

Currently, three Democrats and two Republican appointees sit on the Board. The current members of the Board and the dates for their terms expire to expire are:

Peter Schaumber (R), August 27, 2010

Wilma Liebman (D), August 27, 2011

Brian Hayes (R), December 16, 2012

Mark Gaston Pearce (D), December 16, 2013

Craig Becker (D), December 16, 2014

Historically, the NLRB has enforced its mandate through adjudication. That is, when a dispute arises between management and labor, the issue is brought before the Board. The Board reviews the facts, interprets the rules, and judges a case on its merit. It does not, at any point, actually write the rules by itself. That has always been the responsibility of Congress and Congress alone. The Obama Administration, however, may seek to alter this policy. The possible changes are detailed in a report commissioned by the U.S. Chamber of Commerce.

These changes are not simply theoretical. The Chairman of the NLRB has even said as much. At a recent meeting of the American Bar Association, NLRB Chairman Wilma Liebman (who was appointed Chairman by President Obama in 2009) was quoted as saying, “…the Board could engage in rulemaking as a more coherent way to make policy changes rather than decisionmaking.” Such a move is unprecedented for the NLRB. Congress has been charged with the responsibility of making the rules; now, that duty could possibly fall to an unelected body of individuals appointed by the President, (along with the advice and consent of the Senate). They would be able to make sweeping changes to American labor laws without any input from Congress.

The Board may try to do this through an expansive interpretation of the NLRA. For instance, collective bargaining is a right that has historically existed between employers and so-called majority unions. It is a right granted by the Congress through the NLRA (as well as the Taft/Hartley Amendments). That is, if a majority of employees seek to form a union, they can basically do so and the employer will be forced to bargain with them. Under an expansive view of the NLRA, however, employers may be forced to bargain not only with majority unions, but with “members-only, non-majority unions” as well. In fact, seven unions petitioned the NLRB in 2007 to do just that.

Section 7 of the NLRA contains the phrase, “…employees shall have the right to bargain collectively through representatives of their own choosing.” Furthermore, Section 8 (a)(1) states that, “…it is an unfair labor practice for an employer…to interfere with…employees in the exercise of the rights guaranteed in Section 7.” The petitioners argued that because no actual limit is placed on which employees should be afforded the ability to collectively bargain, and furthermore that that right is guaranteed by the Act, it is therefore illegal for an employer to refuse to collectively bargain with a “members-only, non-majority union.” In plain English, through the rulemaking of the NLRB, employers could soon be forced to collectively bargain not only with majority unions, as protected by the Act, but also with all unions, large and small.

Why is this significant? From a micro point of view, it demonstrates how the Board could bypass the legislative process and legislate themselves. But from a macro view, it shows that the Obama Administration could force through various labor rules, potentially such as card check, without any input from Congress.  Why bother passing the controversial EFCA, when you can simply bully management into submission through the NLRB?  The concerns of the petitioners’ action are summarized in the report:

It does not take much of an imagination to envision that such a rule would have the potential for forcing private sector U.S. industrial relations to undergo the biggest change since the 1947 Taft-Hartley Act, without any new laws being passed and without overturning any cases of the NLRB.

If adopted, the rule would certainly lead to a surge in unionization since unions would be able to organize and force an employer to recognize for purposes of collective bargaining small, nonmajority groups of employees within a proposed bargaining unit who support the union. Employers could be confronted with scores of small, non-majority bargaining units.

It would also wreak havoc with collective bargaining by encouraging fractionalized bargaining within a single worksite, promoting needless conflicts, leap-frog collective bargaining, more numerous strikes and work stoppages, and so forth.

Finally, forcing employers to recognize and bargain with non-majority units of employees would lead to serious problems in administration of the numerous collective bargaining contracts for multiple small groups of employees, including for example check off of union dues by the employer.

This expansive version of the NLRA could have profound effects on a wide range of management/labor issues. Longstanding precedent in labor law could be overturned. The most important  example of this involve the Dana/Metaldyne cases.

A landmark decision in 2007 named Dana/Metaldyne illustrates the point. Dana/Metaldyne involved employees at a Midwestern company who wanted to join the United Auto Workers Union. There are two methods in which employees can form a union. Under the first method, employees simply seek the assistance of the NLRB to form a union. Votes are then cast through a secret ballot. A union is formed if a majority of votes are cast in favor of unionization. The second method of forming a union is employed through the tactic known as card check. There, employees simply sign a card issued by an employer, stating their desire to join a union. A union is created if a majority of employees vote in favor of the union. Labor loves card check because it prevents employees from being exposed to anti-union lobbying by management. Management hates it because it allows employees to be subject to coercion by pro-union forces.

In this case, card check was used and a majority of workers signed their cards, thereby joining the union. However, a small number of employees disagreed with the decision, and petitioned the local NLRB office to allow for a full election through a secret ballot. The local office disagreed with the petitioners, stating that union certification is valid for one year after creation of the union. The case was bumped up to the NLRB, out of due process concerns for the petitioners. The majority opinion of the NLRB then overturned the decision of the regional office, holding that if at least 30% of the workers filed a petition challenging union certification within 45 days of the card check vote, certification was invalidated. According to the Board, requiring employees to meet the 30% threshold within 45 days, “…would strike the proper balance between the two important but often competing interests under the National Labor Relations Act: protecting employee freedom of choice on the one hand, and promoting stability of bargaining relationships on the other.” The due process concerns of a group of employees wishing to challenge the formation of a union were of utmost concern to the NLRB in 2007.

Unfortunately, in 2010, this may be a different story. The dissenting opinion in Dana/Metaldyne argued that the 45 day period was unnecessary. Instead, employees wishing to challenge union certification were bound to the vague standard of “a reasonable time.” This would effectively make it harder to roll back a union formed through card check once the union has been certified. In the rush to unionize, the due process concerns of some employees could be easily swept aside. Not surprisingly, one of the authors of the dissent was none other than current NLRB Chairman Wilma Liebman, who no doubt hopes to one day overturn the Dana/Metaldyne decision. The concerns of such a vague standard were set forth in the Chamber of Commerce report:

If Dana / Metaldyne is reversed, the period of a recognition bar would revert to the amorphous “reasonable period” of time following recognition before the employees could file for a decertification election and vote in secret ballot on whether they want to be represented by the union. If the union truly represents a majority of employees, it should have nothing to fear from an election where the employer has voluntarily recognized the union without an election.

If Dana/Metaldyne is indeed overturned, where does it stop? With a Democratic Chairman and a majority-Democratic Board, years of American labor law could be overturned in a heartbeat. Card check could become reality without Congress even debating the issue. Conservatives may gloat that the President will be unable to pass the EFCA now that the Democrats’ filibuster-proof majority has disappeared. But what they don’t realize is that it doesn’t take 60 Democrats in the Senate to radically alter U.S. labor law. It may only take 3 of them, sitting on the NLRB, unelected, unaccountable to anyone but the President, waiting for their opportunity to deliver ‘Change’ to an unsuspecting public.