Today’s Daily News and Commentary — September 17

The New York Times reports that nearly one in three migrant workers in Malaysia’s electronics industry works under forced labor conditions, according to a report issued today by a factory-monitoring group commissioned by the U.S. Department of Labor. The monitoring group Verité, which conducted a two year investigation, found that 32 percent of the country’s electronic manufacturing industry’s nearly 200,000 migrant workers were employed in forced situations because their passports had been taken away or because they were trying to pay back illegally high recruitment fees. Recruitment fees, fees paid by workers to secure a job at a factory, that amount to more than one months wages exceed legal and industry standards. According to the report, 92 percent of workers in the industry paid recruitment fees and 92 percent paid a fee that was more than one month’s wages. The report also found that 30 percent of foreign workers said they slept in a room with more than eight people, and 57 percent said they could not leave their job before their contract was finished because they would be charged an illegally high fine, lose their passport or be denounced to the authorities. These factories produce consumer products for many large electronic companies, including Samsung, Sony, and Apple.

According to the Salt Lake Tribune, a federal judge in Utah cited the Hobby Lobby decision in his order reversing a subpoena of a member of the Fundamentalist Church of Jesus Christ of Latter-Day Saints (FLDS). The subpoena, issued as part of a federal Department of Labor investigation, ordered the man to answer questions relating to alleged child and unpaid labor violations by corporations believed to be controlled by FLDS. Judge David Sam cited the recent SCOTUS decision in saying that the witness had a First Amendment right not to testify to questions offensive to his sincerely held religious beliefs. The subpoena sent to the FLDS man stems from the Department of Labor investigation into the 2012 nut harvest of a pecan ranch near Hurricane, Utah, during which the DOL believes children and other unpaid workers were ordered to help harvest nuts by Lyle Jeffs.

Workers in the Hammond, Indiana factory of Lear Corp., an auto part manufacturing company, will vote on a contract this week that will remove the current two-tier wage system in place at the factory, the Wall Street Journal reports. The two-tiered system, which allowed veteran workers to keep their pay while new hires earned about $10 an hour less, first gained acceptance from the United Auto Workers a decade ago when the parts industry was struggling, acceptance by the union was conditioned on job commitments by the company. Now that companies are healthy and consistently profitable, unions have negotiated diligently to cast off the tiered system that has resulted in wide wage disparity in their ranks, with far less coming home in the envelops of about two-thirds of the 760 hourly workers at the Hammond plant. Under the new proposed contract, new union hires would be paid the same as veterans. “The agreement shows that when workers stick together, we can win higher wages that help us support our families,” said Jaime Luna, president of UAW Local 2335 in a statement.

House Committee Examines EEOC Transparency and Accountability Legislation

On Sept. 17, the House Education and the Workforce Committee’s Subcommittee on Workforce Protections held a hearing to examine H.R. 4959, “EEOC Transparency and Accountability Act,” H.R. 5422, “Litigation Oversight Act of 2014,” and H.R. 5423, “Certainty in Enforcement Act of 2014.”

The media advisory sent out by the Subcommittee stated:

“The Equal Employment Opportunity Commission (EEOC) enforces federal laws prohibiting employment discrimination. At a recent oversight hearing, witnesses shared growing concerns with various EEOC regulatory and enforcement actions. For example, ‘guidance’ finalized in 2012 limits employers’ use of criminal background checks during the hiring process. The subcommittee also examined EEOC’s increasing reliance on systemic discrimination cases and the commission’s delegation of its litigation authority to the Office of General Counsel. In response to these concerns, a number of legislative proposals have been introduced:

  • H.R. 4959, introduced by Rep. Richard Hudson (R-NC), would increase EEOC transparency by, among other provisions, requiring the commission to post on its website and in its annual report any case in which the commission was required to pay court sanctioned fees or costs.
  • H.R. 5422, introduced by Rep. Walberg, would require EEOC commissioners to approve by majority vote all EEOC-initiated litigation involving multiple plaintiffs or allegations of systemic discrimination.
  • H.R. 5423, also introduced by Rep. Walberg, would provide a safe harbor to employers complying with federal or state mandates, such as a law requiring criminal background checks.

Wednesday’s hearing will provide members the opportunity to examine these proposals and ongoing concerns over EEOC’s regulatory and enforcement practices.”

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Today’s News and Commentary — September 16

Hundreds of migrants are reported to have died on Sunday and Monday in the Mediterranean Sea while attempting passage to Europe, seeking employment and haven from war-stricken countries, The Guardian reports. On Sunday, a ship carrying more than 200 African emigrants sank off the coast of Libya; fewer than 30 survivors have at this point been rescued. On Monday, it is estimated that as many as 500 migrant workers died off the coast of Malta after their boat was reportedly rammed by human traffickers’ vessels. Only a handful of survivors have been located. “If this story, which the police are investigating, should be confirmed, it would be the gravest case of recent years, since it was not an accident but a mass murder perpetrated by criminals without scruples or respect for human life,” the International Organization for Migration said in a statement. More than 2,200 people have died trying to cross the Mediterranean this year, according to the IOM and the U.S. News and World Report. “The numbers dying off Europe’s coasts are shocking and unacceptable,” said IOM’s Director General William Lacy Swing in a statement published by the organization. “These are women, children and men who only hope for a more dignified life. The risks they take reflect their desperation and we cannot keep abandoning them to their fate.”

Yesterday, Fortune profiled the worst paying, fastest growing job in the country; home care worker. America’s aging population and the home care needs that come with it, the “Age Wave” or “Silver Tsunami” as the phenomena has been called, are expected to grow the home care worker and aid industry by nearly 50 percent from 2012 to 2022. However, the increased demand on the services of home care workers has seemingly done little to leverage increased benefits for the people working and serving in American homes. Home care workers have historically been exempt from federal minimum wage and overtime laws. Though a planned January Department of Labor regulatory change will grant most home care workers wages of at least $7.25 per hour and overtime, on the state level discrimination towards this sector of employees persists, even in states taking steps to further worker rights more generally. For example, last week in California, Governor Jerry Brown signed legislation making the state the second in the nation to institute statewide paid sick leave. However, home care workers were exempted from relief in last-minute negotiations resulting in amendment, for “cost concerns.” Joe Caldwell, director of long-term services and support policy for the National Council on Aging said to Fortune, “the number of people needing care is going to double in decade, and fewer workers are going to be willing to work for nothing.”

The national poverty rate declined slightly last year from 15 percent to 14.5 percent, according to numbers released this week by the U.S. Census Bureau. With 6.4 million more people working fulltime, this is the first drop in the poverty rate since 2006, L.A. Times reports. However, it is likely not time to start the jubilee. Due to population growth, the number of people living in poverty did not improve significantly, which in 2012 amounted to about 45.3 million people living below the poverty threshold. The federal poverty threshold last year was an annual income of less than $23,624 for a household with four people, including two related children.

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Today’s News and Commentary – September 15

The New York Times reports that crowds in the main airports in Paris were thinner than usual on Monday “as thousands of passengers who normally would have boarded flights of the country’s flag carrier, Air France, stayed home or in hotel rooms because of a strike by the airline’s pilots.”  52 percent of Air France’s flights were cancelled due to a dispute with French pilots over the airline’s plans to shift much of its European operations to a low-cost subsidiary Transavia where most crew members would be paid less and would be based in other European countries.  Air France said it expected about 85,000 passengers to face flight cancellations or delays on Monday and that it had already alerted tens of thousands via email or text message of the possibility of disruptions later in the week.

MSNBC reports that Illinois is “labor’s next big battleground.”  After right-to-work and anti-union legislation recently passed in Wisconsin and Michigan, labor unions in Illinois fear they could be next due to a Republican challenger to Democratic Governor Pat Quinn.  “Bruce Rauner, a venture capitalist, has promised to establish “right-to-work” zones in Illinois if elected and dramatically revise the state’s public employee retirement system.  He has launched bromides against “government union bosses” and touted his donations to charter schools.  In other words, he’s everything that labor unions in Illinois fear.  And he’s winning.”  Unions have banded together to oppose Rauner and back Quinn, but Rauner leads in the polls.

The New York Times memorialized Andy Stapp, a man who opposition to the Vietnam War by “joining the Army and proceeding to do a very unmilitary thing — form a union among soldiers that demanded, among other things, the right to elect officers and reject what they viewed as illegal orders.”  In the early 1970s, Mr. Stapp’s American Servicemen’s Union claimed to have tens of thousands of members, issued  issued membership cards, published a newspaper, and helped form chapters at military bases, on ships, and in Vietnam.  “Although the Army never came close to recognizing the union formally, it certainly recognized it as a problem. Mr. Stapp brought colorful idealism to his counterintuitive cause, and the Army did what it could to silence him,” reports the obituary.  The American Servicemen’s Union ended alongside the Vietnam War in the late 1970s.

Weekend News and Commentary – September 13-14

The Metropolitan Opera has announced that it is eliminating 22 of its 254 administrative positions (9% of its nonunion staff) mostly through layoffs.  The Met has been struggling financially, resulting in recent tensions with unions representing Met employees.  However, with wage cuts and budget reorganization, “labor savings and cost reductions are expected to save the Met some $90 million over the next four years,” says the New York Times.

Dave Jamieson at the Huffington Post believes that Obamacare could be a “huge boon to alt-labor groups” like Working America, the AFL-CIO’s non-union affiliate that hopes to bring non-union workers into the labor movement.  Alt-labor groups like Working America have struggled to become financially self-sustaining outside the framework of collective bargaining.  However, Jameison thinks that Working America’s new deal with a private insurance exchange to guide its members and would-be members into health plans will be the “most promising funding lead” for the alt-labor group.

More than half of Boeing’s machinists at its St. Louis fighter-jet plant have signed up to take voluntary buyouts, reports the Wall Street Journal.  “The International Association of Machinists and Aerospace Workers said 1,317 of its 2,300 members at the factory had registered with the company by a July 31 deadline to take the voluntary buyout offer, which was part of a contract extension deal reached in February.”  Boeing has had financial and union difficulties over recent years, and earlier this year it secured “deep concessions” from 32,000 machinists in the Pacific Northwest in January after “bitter negotiations deeply divided the workforce.”

The New York Times reports that Air France-KLM warned on Saturday that it was preparing to cancel around 60 percent of its scheduled flights on Monday because of a dispute with pilots.  “Frédéric Gagey, chief executive of the company’s Air France unit, said negotiations with union leaders would continue through the weekend in the hope of reaching an agreement with pilots, who are seeking to ensure that the 250 new pilots the group aims to hire for its budget carrier over the next five years will be employed under the same contract as those flying under the main Air France brand.”  The company estimates that 60 percent of Air France’s more than 3,800 pilots would strike on Monday, making extensive flight cancellations inevitable.  The strike comes on the heels of Thursday’s announcement that Air France-KLM will double the size of its unprofitable low-cost unit, Transavia, by 2017.  The announcement angered Air France pilots, “who oppose moving a number of popular leisure routes to Transavia, where crew members are paid less.”

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Guest Post: Another Response on Sweeney and Members-Only Unions

Catherine Fisk is the Chancellor’s Professor of Law at University of California, Irvine. This post is part of a series: Heather Whitney’s initial post, Mr. Sherk’s reply, Ms. Whitney’s response, Professor Catherine Fisk’s reply, and Mr. Sherk’s response.

James’s response overlooks a federal law that prohibits unions and employers from resolving the right-to-work free-rider problem by agreeing that the union will represent only its members. As I explained in my prior post, current federal law requires unions to negotiate collective bargaining agreements on behalf of all of the employees in a particular bargaining unit, and it preempts most state law regulating union-member relations, including state laws that would give employees a right to engage in members-only bargaining.

The state authority to ban contracts requiring employees to pay for union services is an exception to broad federal preemption of state law. Section 14(b) of the NLRA allows states to outlaw “agreements requiring membership in a labor organization.” A literal reading of that section would allow states to forbid only collective bargaining clauses that required that a worker actually become a member of a union. But the Supreme Court has held that section 14(b)’s definition of “membership” is broader. In Retail Clerks International Ass’n, Local 1625 v. Schermerhorn, 373 U.S. 746, 756–57 (1963), the Court held that a contract requiring all employees in the bargaining unit to pay the equivalent of the dues and fees paid by members “is the ‘practical equivalent’ of an ‘agreement requiring membership in a labor organization.’”

Schermerhorn means that state right-to-work laws can ban collective bargaining agreements that “require membership” in a union, including the financial equivalent of membership. Ben and I argue in a forthcoming article in the UC Irvine Law Review that agreements requiring employees to pay less than full dues do not “require membership,” and, therefore, states do not have authority to ban them. But neither the NLRB nor the federal courts have yet so held.

The NLRB has held, however, that employees do not have a federally protected right to engage in members-only bargaining. Although members-only bargaining is permissible under the NLRA if the employer agrees to engage in it, the NLRB has held that employers are not required to bargain with their workers on a members-only basis. In Dick’s Sporting Goods, when management declined to recognize or bargain with a Council formed by a minority of employees, the NLRB General Counsel refused to issue a complaint, stating simply that the law leaving an employer free to refuse to bargain on a members-only basis is “well settled and is not an open issue.”  The Board has also held that an employer does not violate its legal duty to bargain when, during the term of an agreement negotiated on a members-only basis, it unilaterally subcontracted out work to a nonunion contractor and laid off union members who had done the subcontracted work. Don Mendenhall, Inc., 194 N.L.R.B. 1109, 1110 (1972).

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Guest Post: A Reply on Sweeney and the Takings Clause

James Sherk is a Senior Policy Analyst in Labor Economics at the Heritage Foundation.  This post is part of a series: Heather Whitney’s initial post, Mr. Sherk’s reply, Ms. Whitney’s response, and Professor Catherine Fisk’s reply.

Thanks to Heather and Catherine for their thoughtful replies about the Takings clause and Right-to-Work. To respond to Heather’s second point first, Congress has given unions a choice of becoming exclusive representatives or not. They certainly receive benefits from doing so. These include mandatory employer recognition and the power to impose contract terms (like seniority systems) on unwilling workers. Congress has coupled these benefits with a condition—in right-to-work states unions may not compel non-members to pay for (potentially unwanted) representation. Unions need not seek exclusive representation if they feel the costs outweigh the benefits.

Members’ only unions remain legally free to use other tools at their disposal—such as strikes or corporate campaigns—to pressure employers to bargain with them. Before Congress passed the NLRA in 1935 unions did exactly that—and they represented a greater proportion of workers then than they do now. Unions today frequently use corporate campaigns to compel recognition outside NLRB elections. (The AFL-CIO claims 80 percent of their new members join after card-check campaigns). Unions could just as easily demand members-only recognition through such means. Unions choose exclusive representation; they could operate without it.

For this reason Takings problems do not arise in Sweeney. Right-to-work laws do not force unions to transfer their own property to anyone. They merely condition the benefits unions get from exclusive representation on voluntary dues. I am a labor economist, not a lawyer, but the government modifying the terms on which it grants unions (or any other organization) powers seems a far cry from a Takings. In Koontz v. St. Johns River Water Management Dist., the Court dealt with extraneous conditions put on exercising property rights. However, unions have no more property right to unionized workers’ wages than McDonald’s does to its customers’ income.

As to Heather’s first point about preemption, federal law does not provide “unions the right to be the exclusive representative of a bargaining unit, with reimbursement from non-members for those additional costs, when the union achieves majority status.” § 8(a)(3) of the National Labor Relations Act (NLRA) prohibits discrimination on the basis of union membership, with an exception not thereby prohibiting mandatory membership. This non-prohibition does not itself mandate agency fees from non-members. Individual employers can refuse to include mandatory-dues provisions in their contracts. States can also make agency fees voluntary without violating federal law.

Preemption issues do not arise because “the purpose of Congress is the ultimate touchstone” in preemption cases. And as the Supreme Court has recognized, Congress added § 14(b) to make clear that the NLRA does not preempt state laws prohibiting forced dues. As Justice Douglas wrote in Retail Clerks International Assn., Local 1625 vs. Schermerhorn (1963):

Congress undertook pervasive regulation of union-security agreements, raising in the minds of many whether it thereby preempted the field under the decision in Hill v. Florida and put such agreements beyond state control. That is one reason why a section, which later became § 14(b), appeared in the House bill—a provision described in the House Report as making clear and unambiguous the purpose of Congress not to preempt the field. That purpose was restated by the House Conference Report in explaining § 14(b) . . . There is thus conflict between state and federal law; but it is a conflict sanctioned by Congress with directions to give the right of way to state laws barring the execution and enforcement of union-security agreements.

When Congress expresses its intent to avoid preemption states may legislate as they choose.

As for Catherine’s points, we certainly have deep disagreements. Philosophically I am much less comfortable with a majority coercing an unwilling minority. Certainly I don’t see unions as sovereigns exercising government-like power over workers. I see the justification for unions resting on a natural right to free association—a right that includes the freedom not to join. Empirically, I also think unions could do more to compel recognition of members’ only unions than Catherine does. But these disagreements only pertain to the wisdom of adopting right-to-work laws—not their constitutionality. Whether or not right-to-work laws make good policy, they do not violate the 5th amendment.