Bloomberg Businessweek (North America)

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”

- 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

“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.”

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.”

——Cornell labor law professor Lance Compa

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

Newspapers in English

Newspapers from Canada