Obama labor board flexes its muscles

Tuesday, September 1, 2015

Originally by Timothy Noah and Brian Mahoney for Politico

President Barack Obama may end up doing more for the struggling labor movement than any president in three decades.

Using a thin partisan majority on the National Labor Relations Board, Obama’s Democratic appointees have issued a string of rulings that favor unions — including six pro-labor decisions in just the past few days. On Thursday, the NLRB issued a momentous 3-2 ruling along party lines that may make it easier for McDonald’s to unionize, reversing a 34-year precedent. The board subsequently issued five additional decisions ruling for unions on less-momentous matters ranging from whether a worker may demand that a union rep be present during a drug test (yes) to whether an employer may exclude union reps from voluntary peer review committees (no). Two of these new rulings were made public Monday, concluding a flurry of NLRB votes from a board that observers say is more pro-union than any since the early 1980s.

Such decisions delight organized labor and infuriate the business lobby.

"As a management-side lawyer for 40 years," said Michael Lotito of the law firm Littler Mendelson, "I certainly have not seen such an activist board as this one on behalf of labor. Nothing close."

Larry Cohen, who recently stepped down as president of the Communications Workers of America, doesn't necessarily disagree. "The quality of this board is the best ever," he said. "The NLRB appointments is one place where President Obama would get a perfect score."

The NLRB is challenging the federal courts on whether a company may include "mandatory arbitration" clauses in employment contracts that sign away employees' rights to sue their bosses. The courts say such clauses are legal; the Obama NLRB has ruled, repeatedly, that they are not, even when workers are given the chance to opt out. An NLRB rule that largely eliminated management litigation prior to a union organizing vote — dubbed by business opponents the "ambush election rule" — has, since its April implementation, shortened by 40 percent the time it takes to hold a union election, according to The Wall Street Journal. Shorter election periods are believed more advantageous to union organizing.

More targets lie ahead, including another case on the so-called joint employer issue plaguing McDonald's and a possible injunction against Wal-Mart concerning store closures in California.

Nelson Lichtenstein, a labor historian at the University of California Santa Barbara, sees "total polarization on labor questions. There's no middle ground on that. But for this political moment, the liberals control the thing. And, frankly, it raises the stakes for Hillary or whoever it is even higher."

The middle ground disappeared, most agree, during the Reagan years. "The bottom line is there've been abuses by majorities on both sides," concedes Marshall Babson, a Republican who served on the board during the late 1980s, "and to not say that would not be an accurate comment. But we’re all paying a price for that now because of these huge swings that take place depending on who has the majority.”

Both sides agree that the NLRB, and the New Deal-era law that created it, are badly in need of revision to keep up with the times. Liberals complain that the NLRB lacks much ability to enforce its decisions; it can reinstate employees and require payment of back wages, but it can't levy penalties of any kind. Conservatives, meanwhile, point out that the economy it was created for was one dominated by a few large industrial employers — a very different environment from today's service economy. Neither side sees much hope in the prospect of Congress updating the National Labor Relations Act, given the chasm between liberals and conservatives. Indeed, the law hasn't been revised in any significant way since the 1950s.

Republican determination to deny the NLRB a three-member quorum prompted Obama in December 2011 to make three recess appointments. The appointees — Democrats Sharon Block and Richard Griffin and Republican Terence Flynn — didn't require Senate confirmation, Obama reasoned, because the Senate wasn't in session. Technically, though, the Senate had remained in session — at the insistence of the GOP minority, to prevent just such unilateral action by the president. A constitutional challenge ensued, and an appeals court ruling (later upheld by the Supreme Court) invalidated the recess appointments and all NLRB decisions that Block, Griffin and Flynn had participated in.

Obama renominated Block and Griffin (Flynn had by then left the board), but the Senate didn't budge on them. Then-Majority Leader Harry Reid, meanwhile, was so frustrated with GOP obstruction on these and other nominations that he threatened to restrict use of the Senate filibuster. After some haggling with congressional Republicans, the Obama White House agreed in July 2013 to drop Black and Griffin and substitute Democrats Kent Hirozawa and Nancy Jean Schiffer. Chairman Mark Gaston Pearce, whose term was soon to expire, was renominated, and the two Republican seats Obama filled with Philip Miscimarra and Harry Johnson III. All were confirmed, and shortly thereafter Griffin, whom the GOP had judged unfit for the board, won confirmation instead as the NLRB's general counsel — a post that confers, arguably, even more power.

Griffin used that power this past December to file 13 complaints against McDonald's putting the corporation on the hook for labor law violations allegedly committed by its franchisees. Although the franchisees are technically independent businesses, Griffin argued that McDonald's is a "joint employer" because of the control it exercises over them. The complaints, which are currently before an administrative law judge in Manhattan, got a boost last week when the NLRB adopted a new standard for determining who is and isn't a joint employer, restoring the standard in place before the Reagan administration.

The NLRB has since late 2003 had a freer hand than it's enjoyed in years. Schiffer's NLRB term expired in December 2014, but by then, Reid had made good on his threat, eliminating all Senate filibusters of executive-branch appointees, clearing the path for a Democratic replacement. Obama tried to reinstate Block; when the GOP bucked he pushed through Lauren McFerran instead. The term of Republican member Johnson ended last week, but the GOP Senate's resistance to filling a GOP seat won't likely be great; all obstruction would accomplish is a four-member board still in possession of a quorum with one fewer Republican. The next real opportunity for GOP mischief will be when Hirozawa's term ends. Blocking a replacement should give it a deadlocked board. But that won't be till August 2016. Until then, the NLRB has clear sailing.

Correction: An earlier version of this story dated the NLRB's free hand, erroneously, to 2003. It dates to 2013.