An Obama rule to make com­pa­nies dis­close the use of anti-union ad­vis­ers is blocked by a fed­eral court

▶ Em­ploy­ers can keep anti-union con­tracts un­der wraps, for now ▶ “Dis­clo­sure is … a ruse for a larger at­tempt to si­lence em­ploy­ers”

Bloomberg Businessweek (Asia) - - CONTENTS - Josh Eidel­son

More than 70 per­cent of com­pa­nies fac­ing union-or­ga­niz­ing cam­paigns bring in con­sul­tants to help them fig­ure out how to re­spond, ac­cord­ing to the U.S. Depart­ment of La­bor. The con­sul­tants craft talk­ing points for man­agers to use in dis­cus­sions with work­ers. Typ­i­cally, the work­ers aren’t told that their su­per­vi­sors have been pro­fes­sion­ally coached.

In March the Obama ad­min­is­tra­tion moved to change that with reg­u­la­tions re­quir­ing em­ploy­ers to dis­close such con­sult­ing con­tracts. La­bor Sec­re­tary Thomas Perez says the change would help level the play­ing field for unions, which are legally re­quired to re­port their or­ga­niz­ing ex­pen­di­tures. In a state­ment at the time, Perez said, “Work­ers should know who is be­hind an anti-union mes­sage. It’s a mat­ter of ba­sic fair­ness.”

Busi­ness groups have filed three law­suits to block the rule. They ar­gue that it would in­fringe on their First Amend­ment rights by tar­get­ing an­tiu­nion speech and as­so­ci­a­tion. On June 27 they scored a vic­tory: U.S. District Judge Sam Cum­mings, a Rea­gan ap­pointee hear­ing a case filed in Texas that’s been joined by 10 states, is­sued a pre­lim­i­nary in­junc­tion block­ing the rule from go­ing into ef­fect

na­tion­wide. He wrote it posed “a sub­stan­tial risk that at­tor­neys will cease pro­vid­ing cer­tain ad­vice, in­clud­ing some le­gal ad­vice, and that em­ploy­ers would cease to seek it.”

“The feel­ing is that the depart­ment is try­ing to set up a sit­u­a­tion where all em­ploy­ers must sim­ply dis­close ev­ery­thing all the time, and that’s not help­ful to any­body,” says Patrick For­rest, vice pres­i­dent for the Na­tional As­so­ci­a­tion of Man­u­fac­tur­ers, which sued in Arkansas to block the ad­min­is­tra­tion rule. “Dis­clo­sure is, in our opin­ion, a ruse for a larger at­tempt to si­lence em­ploy­ers and to tip the scales in fa­vor of union­iza­tion.”

Un­der ex­ist­ing law, com­pa­nies are free to fight union­iza­tion by per­sua­sion. A 1959 law re­quires em­ploy­ers to dis­close pay­ments to con­sul­tants who meet di­rectly with rank-and­file em­ploy­ees to dis­suade them from vot­ing in fa­vor of bring­ing in a union. The law didn’t cover con­sul­tants work­ing in a purely ad­vi­sory role; the La­bor Depart­ment con­tends that, be­cause the ex­cep­tion has been read too broadly, most con­sul­tant con­tracts aren’t dis­closed.

Un­der Obama’s new rule, the ad­vice ex­cep­tion would be read more nar­rowly. Com­pa­nies would have to re­port when con­sul­tants train or di­rect their man­agers on how to dis­cour­age union­iza­tion, or pre­pare cus­tom­ized ma­te­ri­als for them to use in meet­ings with em­ploy­ees. “It’s a whole psy­cho­log­i­cal sci­ence that the con­sul­tants have de­vel­oped that in­cludes rep­e­ti­tion and iden­ti­fy­ing in­di­vid­ual em­ploy­ees’ vul­ner­a­bil­i­ties, what they worry about most, and then ham­mer­ing away at that par­tic­u­lar point about the sup­posed dan­ger of a union com­ing in,” says Cor­nell la­bor law pro­fes­sor Lance Compa. “Mak­ing th­ese kinds of im­plicit threats re­ally has an ef­fect on shak­ing peo­ple’s be­lief or con­fi­dence that the union can help them im­prove things.”

Em­ploy­ers say the new rule goes too far in unions’ fa­vor. “Bur­den­ing speech that is dis­fa­vored by govern­ment of­fi­cials un­der the guise of ‘trans­parency’ is an old ruse,” the Work­law Net­work, a group that sued in Min­nesota, ar­gued in its fil­ing. The group leaned on a 1958 U.S. Supreme Court rul­ing that found un­con­sti­tu­tional an at­tempt by the state of Alabama to force the lo­cal NAACP to dis­close its mem­bers.

The claim that anti-union em­ploy­ers are in a po­si­tion re­motely anal­o­gous to NAACP mem­bers in Jim Crow Alabama has drawn crit­i­cism. “The ac­tual pur­pose of the dis­clo­sure was to in­tim­i­date peo­ple into not join­ing the NAACP by threat­en­ing them with phys­i­cal vi­o­lence,” says Seat­tle Univer­sity law pro­fes­sor Char­lotte Gar­den. “In con­trast, here the em­ploy­ers and oth­ers who are ob­ject­ing to the rule are say­ing, ‘Well, we don’t want to be crit­i­cized.’ ”

The Obama ad­min­is­tra­tion has un­til late Au­gust to ap­peal the in­junc­tion. The La­bor Depart­ment de­clined to com­ment, cit­ing on­go­ing lit­i­ga­tion. Union lead­ers have made clear they want to see the reg­u­la­tions go into force so work­ers can see for them­selves how their em­ploy­ers re­act to or­ga­niz­ing ef­forts. “Peo­ple will say, ‘If you’re sin­cere, why are you spend­ing all of this money? Why are you us­ing this paid gun?’ ” says AFL-CIO Pres­i­dent Richard Trumka. “It’ll ex­pose a lot.”

The bot­tom line Em­ploy­ers and anti-union con­sul­tants say an Obama ad­min­is­tra­tion rule steps on their First Amend­ment rights.

“Mak­ing th­ese kinds of im­plicit threats re­ally has an ef­fect on shak­ing peo­ple’s be­lief or con­fi­dence that the union can help them im­prove things.” ——Cor­nell la­bor law pro­fes­sor Lance Compa

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