Smashing Precedents

Obama’s NLRB pushes pro-union agenda

NLRB board members Mark Gaston Pearce, Sharon Block, and Richard Griffin /
January 7, 2013

The National Labor Relations Board unleashed a raft of precedent-busting, pro-union decisions soon after President Barack Obama’s reelection in November.

The board’s three Democratic appointees issued rulings that weakened checks on union power, including two high-profile decisions forcing employers to automatically deduct union dues from worker paychecks when contract agreements expire and limiting the ability of employees to exercise their Beck rights.

"The board is an inherently political institution because it is made up of political appointees," the Center for Union Facts’ managing director J. Justin Wilson said. "They are constantly overruling themselves. Unlike the Supreme Court, they do not like to overrule existing precedent."

The board overturned a 50-year precedent in a ruling that required companies to hand over employee wages to unions when collective bargaining agreements expire. Organized labor previously relied on voluntary dues from workers during negotiations. The ruling will enable unions to continue raking in forced dues throughout negotiations with employers.

The board’s three Democrats concluded that dues deductions were akin to automatic health savings account deductions and that relinquishing them could harm the collective bargaining process. Outgoing board member Brian Hayes, the NLRB’s sole Republican, blasted his colleagues in a blistering dissent.

"My colleagues point to no evidence that this approach has impeded collective bargaining or the peaceful resolution of labor disputes but today they abandon it all the same," he wrote.

David Phippen, a labor attorney with Constangy, Brooks & Smith, said the board engaged in "rhetorical gymnastics" to extend the dues deductions beyond the life of contracts. Dues deductions were previously held in the same manner as no-strike clauses in contracts. Preserving the union’s money supply during negotiations while allowing them to strike puts employers at an inherent disadvantage, according to Phippen.

"[The ruling] takes away one persuasive factor that would encourage a union to come to an agreement without having to exercise other weapons like a strike," he said. "Historically everyone has incentive to not be wasting time on an agreement and go on working. Stakes were high for both sides; that may not be the case anymore."

Obama’s appointees also helped boost union coffers by weakening the 25-year-old Beck Rule, which allows employees to opt out of union dues that are spent on political activities. The board held in the Kent Hospital decision that lobbying could be considered an apolitical activity, a standard that would force non-union employees to pay larger dues.

"This is a fundamental shift on how much of pie the union can take out; it looks like a backdoor attempt [to fund the union] to me," Phippen said.

The decision also dealt a blow to Beck’s transparency standards. Unions will no longer have to provide employees with accounting records that show employees what portion of dues applied to non-political activity under the decision.

"Previous board decisions said the union had to give Beck objectors audited statements of how dues were spent," Wilson said. "The current board eliminated the necessity of giving that."

The ruling was the latest blow to voluntary unionism. President Obama in 2009 signed an executive order that reversed a George W. Bush administration policy that employers notify workers of their Beck Rights in workplaces.

Phippen worries that the board’s departure from precedent threatens the stability of commerce since bargaining parties will have to shift their negotiating tactics without running afoul of the new standards or the whims of the three Democrats who sit on the NLRB.

"The more important thing is the stability in the law so that employers and unions can know what system is going to be," he said. "If the only certainty one can count on is change, all parties will somehow adjust to that constant change. Here where you have reversals on a series of things all at once, it doesn’t make sense if you want to enhance stability and productivity for anyone."