Hilda Solis: Will She Tackle Union Corruption?

Hilda Solis was confirmed as Secretary of Labor this week. After a bumpy confirmation process in which her nomination was held up by questions about her role as a lobbyist for the Free Choice Act while also serving in Congress, she was approved overwhelmingly by the Senate.
Unions are happy with Solis, who served on the Board of American Rights at Work, a non-profit, union-funded lobbying organization whose purpose is to garner for the Free Choice Act. Businesses are wary for the same reason. I’m sure she is anxious to get to work. She has big shoes to fill.

The Department of Labor under Elaine Chao did an excellent job, especially on the union democracy and transparency front. Among the highlights:

• More than 1,000 convictions and over $100 million in restitution for union members whose hard-earned dues payments were misappropriated by union officials.
• A complete overhaul of the LM-2 reporting requirements to make the information more useful to union members (I testified twice in Congress about these reforms and can tell you first-hand they did a very thorough and professional job with the regulations).
• They put LM-2 forms (along with many other DOL documents) up on the website so that union members can quickly, easily and cheaply (like for free) review the financial health of their union.
• They added reporting for union trust funds for the first time since the LMRDA was passed in 1959. These funds are vitally important to members and, unfortunately, are often targeted by corrupt union officials.

Unions, of course, didn’t like these changes at all. They tried to gut the funding of the Office of Labor Management Standards (basically the SEC for unions). After all, they know that the rules don't matter if there is nobody there to enforce them. They railed against the financial reporting changes, claiming that it would cost unions "more than $1 billion" to comply with the new requirements. The AFL-CIO said it would spend $1 million to comply with the new rules (actual cost: $54,150).

Unions have billions in assets. Most of their members have no choice about whether to pay these funds or not – they are forced to do so under “union security” agreements (which are illegal in Right to Work states). Unions have a fiduciary duty to spend these funds wisely and for the purpose of representing members. They are required to report how these funds are spent each year.

But a substantial number of unions fail or refuse to comply with these requirements. And the OLMS – already wildly understaffed and underfunded – is likely to receive even less support under Solis. When pressed about funding for OLMS during her confirmation process, Ms. Solis was non-committal. And that’s a shame.

Union democracy and transparency is not “anti-union” as many unions claim. On the contrary, it is vital to the continued viability of the labor movement. When corrupt union leaders – even though it is a small number of bad apples – get away with stealing from union members it destroys trust in the movement.

Unions have a real PR problem. Many working people think about organized crime when they think of unions. The Teamsters remain under federal trusteeship because of their ties with organized crime. Openness and democratic process is not really high on their priority list (after all, they are trying to get rid of the right to vote in organizing drives with the card-check bill).

Whatever actions unions can take to reassure members that their dues money is well-spent can only increase confidence. But unions don’t see it that way. They treat their financial disclosures like it is a huge, unnecessary burden and a burden that they would like lifted. Unfortunately it appears that they have a sympathetic ear with the new Secretary of Labor. I sincerely hope that is not the case.

Who Is On What Side? EFCA Editorials

Our friends over at Union Facts have compiled a nice list of newspaper editorials for and against the Employee Free Choice Act. If you need a reminder of what those who are paid to scrutinize and think through the issues are concluding about the misnamed bill, head on over and check it out. You might want to bookmark it for future reference.

EFCA, Stimulus Bamboozle, and India

Reason had a great post today, spinning off of the movie Slumdog Millionaire (no - I haven't seen it yet - but it's now on my high priority list). The movie is about an Indian orphan who wins the jackpot on Who Wants To Be A Millionaire. The author provides a bit of Indian history lesson, and teaches us quite a lesson as well:

For decades would-be entrepreneurs [in India] staggered under the weight of corruption and bureaucracy. Want to import a computer for your business? You'd have to get permission from a bureaucrat. Want to sell food from a small cart? You'd need all kinds of licenses.

But in the 1990s, India emerged as a high-tech powerhouse. What changed?

"In the 1990s India started liberalizing its economy," says Dalmia, "and it did three things: cut taxes, liberalized trade, and deregulated business." Although they failed to cut the kind of red tape that entangled Slumdog's orphans, the reforms did make it easier for more Indians to start businesses and hire employees.

And what is America doing?

Since the early 1990s, India has cut its poverty rate in half. About 300 million Indians-equivalent to the population of the entire United States-escaped the hunger and deprivation of extreme poverty thanks to pro-market reforms that increased economic activity.

Yet here in America we're turning away from market reform. Says Dalmia, "It's just this great conundrum that at the same time that deregulation and markets have produced such dramatic results in India, they are falling into suspicion in America."

Read the post, see the movie, get a clue. Here is what we DO NOT need:

1) The government handing out dollars to help "failing" businesses, and then dictating how those businesses will operate
2) Employee Free Choice Act encumbering American businesses with yet another layer of bureaucracy, AND allowing the government to write their labor agreements for them (read the law if you think it ain't so!)

EFCA Misguided Mini-Messages

Big Labor has no lack of imagination. These buttons (see more here) are part of their PR strategy to attempt to win Americans over to the idea that giving unions free reign among American businesses is a positive economic move, on both a micro- and macro-scale. Unfortunately, the messaging is riddled with myth and falsehood.

Check out these dandies.

Employees already have the freedom to decide, via the most protected mechanism available - a private secret ballot. They can receive no recriminations from employers or unions because neither side needs to know the outcome of their final choice.

The answer to a financial depression & the rebuilding of our economy? Just bog American businesses down with non-competitive global wage scales, restrictive work rules, and additional bureaucracy, and see how long it takes us to slog through the current financial quagmire.

Thriving industry provides jobs. Thriving industry creates the incentive for competitors to enter the market place, creating more jobs, and fostering a "sellers market" for talent. With everything that the Obama administration is doing to shackle our industries (yes - all of the "bailout" money going to banks, financial institutions, auto companies, etc, WILL come with unnecessary and burdensome bureaucratic restrictions attached), what we don't need is the additional anchor of union impediment hanging around the necks of our businesses.

Conflict of Interests Doesn't Phase New Administration

Our friends at Americans for Job Security sent out a bulletin last month, describing the lobbying group American Rights at Work. Quoting the summary of the bulletin:

American Rights at Work (ARAW) is a non-profit organization formed in 2003 to act as a think tank and grassroots lobbying organization for organized labor. The chair of the organization’s board is Hon. David Bonior; others on the board include Senator John Edwards and Secretary of Labor Designate Congresswoman Hilda Solis.

American Rights at Work receives funding from unions affiliated with both the AFL-CIO and the Change to Win coalition. Since November American Rights at Work has led labor’s public campaign for the Employee Free Choice Act.

Although these are obviously not strange bedfellows, it again flies in the face of Obama's campaign promise to weed out obvious lobby influence in his administration. Hey - it's who's paying the bills! (to keep them in power, anyway).

ARAW has ponied up some big money ($3 million pledged) in their campaign to promote the EFCA, by confusing the issues. Their intent is to divert the discussion from card check and mandatory arbitration to job security, employment benefits, and the economy.

Big Labor Tactics - Watch It Play Out on EFCA

This email from Anna Burger of the Service Employees Union International is indicative of the strategy that will be used as the congressional fight over the Employee Free Choice Act heats up. There will be a campaign to bombard those "moderate" senators (like Spector, Snow, and Collins) with plenty of pressure to cave in and align with the Democrat/Labor front. As is evident from the vote on Obama's "financial incentive" package, these three are likely to succumb to such pressure.

I'm sure Big Labor is salivating, now that they've identified those Republicans willing to throw their hat in the liberal ring.

Unions Threaten Banks

I am constantly amazed but never surprised by the double-speak and double-standards of Big Labor. An article in the WSJ today is a case in point. Anna Burger, of the Change To Win labor federation, wrote that financial services firms and their trade group should "immediately cease all lobbying and advocacy" against "card check" [the Employee Free Choice Act]. The letter was directed to the head of the Financial Services Roundtable, a banking and financial industry lobby, with copies sent to Congressmen who are overseeing the bank bailout.

Burger's supposed reasoning is that the government typically restricts the use of federal funds to directly lobby Congress. She is attempting to extent this concept to any organization that secures funding from the government, which in the case of banks includes recent capital injections used to bolster their balance sheets.

As usual, she is talking out of both sides of her mouth. Unions receive plenty of government money for the running of job training and other programs. As the WSJ article points out, many employees of companies that have received bailout cash (auto industry for example) use some of their wages to pay union dues, which are then used to heavily influence political affairs (how about $450 million during the last election cycle).

Once again - Big Labor wants to selectively use the rules of the land in their favor, without having to obey them themselves.

Card-Check Not a Cure, Just Another Symptom

When todays employers attempt to highlight the many reasons why union representation is not in the best interest of their employees, they often point to the many laws on the books to protect them. Minimum wage, Health and Safety, EEOC, Family Leave and many others are now laws that employees can count on in providing fairness in the workplace. They'll point out that before these laws were passed, unions often provided these services, and as such, perhaps justified their existence.

But no more.

What gets left out of the conversation is that these very laws are on the books today as a result of the very intense pressure and lobbying efforts from yesterdays labor unions. Unions that once took their charge as a voice for all working Americans, not just union members, seriously. They believed that raising the standards of all Americans would also lift up their members. A rising tide as it were. They spent millions of their members money to help make these important changes to our work culture. And they made a difference.

Labor is now spending many more millions of dollars in an attempt to pass The Card-Check bill, hyping it as a cure-all to what ails them. However, I think this bill provides an excellent opportunity for employers to point to as a perfect example of what's really important to organized labor today. EFCA is a symptom of the disease, and hardly the cure for it. In stark contrast to all of those other bills above, this legislation lifts up not one worker. It doesn't address any issue of concern to everyday, working Americans. It's sole attempt is to help bail-out unions. And it does so at the expense of those very workers who they're charged with speaking for. Unlike all of the other legislation that gave workers new rights, today's modern version of unions are spending millions to take them away from your workers.

Lost in all of this is the missed opportunity that labor has to redefine itself as relevant to workers. Their failure to enter the discussion on more important issues like Universal Health Care, our national trade policies, and other important topics ripe for discussion should be used as an example when talking to your employees about what is really important to organized labor today.

Bail Out Honesty

Compelling read from a small business owner to the president of General Motors. I share his views, and it's a shame our viewpoint is falling on deaf ears in Washington.

What American businesses better wake up to is this: the Big Labor/Dem coalition wants nothing less than a complete take-over of American businesses, via either strings attached to so-called bail-outs, or via unionization, leading to federally written 2-year employment contracts. American businesses have only one real strategy of defense: treat your employees in such a way that they do not feel the need for third-party representation, and make available the information they will need to face down union organizers when they come knocking.

It is no joke. If you are an American business owner, you don't have many options left.

Employee Free Choice Act - Gould Says Mandatory Arbitration Unconstitutional

In yesterday's Congress Daily former NLRB Chairman (and current labor scholar from Stanford Law School) William Gould had this to say about the mandatory arbitration provisions of the EFCA:

Gould said the arbitration provision could hit legal roadblocks. "The law as presently written would probably be unconstitutional because there are no criteria under the law for the arbitrator to follow," Gould said.

Gould is certainly not the only legal scholar to note this problem (he later cites the H.K. Porter Supreme Court decision) but he is the highest profile pro-labor person I've seen discuss it. The arbitration provision is the truly poison pill of the proposed legislation. And while I hope that in the end Gould is correct and that such a provision would be ruled unconstitutional, my preference is that we don't have to find out.

A Pro-Unionist Argues to Give Up Card Check

As we have been saying for a while now, it is highly likely that the Democrat-Union coalition will retreat on the card-check component of the Employee Free Choice Act in exchange for the more damaging provisions of forced arbitration and harsh penalties.

In a lengthy article that includes an actual case-study (if all the facts are to be believed), the author makes a compelling argument for Big Labor to give up on the card-check provision of the EFCA in order to keep the to more choice components, and discusses shortened elections as an alternative.

I just took a call today from an older, disabled gentleman who works part time as one of those guys who brings the shopping carts in from the parking lot at a grocery store. Somehow he stumbled upon our web site, and called me to ask, "What can I do to help stop the EFCA?" He said he knew that if his store were unionized, his job would probably be cut, and he is probably right. I had to tell him that there was nothing he could do to prevent the bill from passing - if you look at the actions of the Obama administration, it is a foregone conclusion that some version of an EFCA-type bill will be foisted upon us. What I did tell him was to have his company visit our web site. The only way to avoid working under a federally written contract, and paying extreme penalties for "unfair labor practices," is to first, prevent a union from gaining a foothold in your company, and second, understand the laws so as to avoid actions that could trigger penalties.

American businesses better learn these lessons fast. Unions will be coming, and they will have new ammunition in their arsenal! Referring back to the article I referenced at the beginning of this post, if union organizers could say to the employees, "sign this card, and we'll have a new contract within 4 months," defenses may falter, especially if those businesses are not handling their employee relations efforts properly or effectively.

Want to Start A Union?

Here are 10 tips on how to start a union. Two of these steps make me cringe when I read them, because they are indicative of the clash between the idealism and naivete of the author. Don't get me wrong - I'm all for passionate idealists. But expending such passionate energy on quests in which the end result strays so far from the intended ideal is such a sad squandering of energy.

Step 6 says to "make it your union." If only. In the past 2 months I have been involved in interviewing 4 different former union organizers. They were all passionate individuals who threw themselves into what they felt was a worthy cause. They were all broadsided by the reality of just "who" they were working for. Unions exist to feed themselves - to collect dues and expand their internal and political power bases. They do not exist for the benefit of the workers. They do as little as possible on behalf of workers to keep those workers believing that the union has their interests in mind, so they can continue to collect dues.

Which leads me to the second point, Step 8, "education." Why is it less than 8% of the American private work force is unionized? It is mostly due to the fact that unions have not been in the business of serving their members for decades, and most Americans know it. When an organizing drive begins, the most effective means of defeating it is to simply communicate the facts about unions - how they spend their money, how effectively they do their job (handling grievances, negotiating contracts, etc.), and how well they deliver on the promises made during organizing campaigns. Revealing the facts and dispelling the myths are about the most effective anti-union strategies there are.

Yes - there are companies who do not do a good job of managing their work force. When faced with an organizing drive, they may react and lash out, even perpetrate acts of intimidation. Typically, they get the union they deserve. There are also occasions where good companies are dealt a tough hand, due to a host of possible issues (local union density, the interest of a particular union for assaulting a particular company, non-English speaking workforces, unscrupulous practices by union organizers). Of those companies that don't do a very good job of exposing the truth about unions during a campaign, about half lose the battle. When companies employ solid communication programs, they win around 90% of the time. The truth works wonders, when well communicated!

Every worker would do well to heed Step One of the authors advice: "be the best worker at your workplace." It will pay off! You'll get far better value out of this one simple thought than any union will ever be able to achieve on your behalf.