Attorney-client privilege is a basic protection of liberty. Yet this Friday, people may begin to find out how little the Obama administration thinks of it. That’s when a Labor Department rule, issued in March and launched in April, fully kicks in, forcing employers to divulge the identities of outside legal help on how to avoid unionization. This "persuader rule," as it is called, also requires such consultants to reveal their own client rosters. Union officials laud the rule as a blow for transparency and a corrective to “union-busting.” In reality, it is a power play designed to minimize the opportunities for nonunion workers to hear an employer’s side of the story during a union organizing drive. Conveniently, the regulation doesn’t apply either to unions or their consultants. As employers gear up to comply, they've gotten unexpected help from federal judges.
The Obama administration sees it as the middle class getting a raise. The details suggest it's a demotion. On May 18, the Department of Labor published a final rule hiking the annual income ceiling for overtime pay eligibility of salaried employees from $23,660 to $47,476. Set to go into effect December 1, the regulation would benefit an estimated 4.2 million workers. However, it also may produce unintended consequences such as: loss of scheduling flexibility; pay cuts; benefit cuts; fewer work hours per week; higher employer compliance costs; and needless litigation. A group of lawmakers, led by Sen. Tim Scott, R-S.C., and Rep. Tim Walberg, R-Mich., have responded with bills to nullify the rule and make it difficult for the DOL to offer a substitute.
When Bruce Dow resigned under pressure as longtime head of the Screen Actors Guild’s pension and health plans in April 2012 amid allegations of extensive self-dealing, a good deal of unfinished business remained. Now the workload has gotten smaller. On November 12, former plan chief information officer Nader Karimi pleaded guilty in Los Angeles federal court to omitting more than $700,000 in income on his tax returns for the years 2005 through 2008. Karimi had changed his “not guilty” plea to “guilty” before U.S. District Judge Fernando Olguin. Sentencing, originally set for March 11, has been reset for April 14. He faces up to three years in prison. The plea follows a probe by the FBI, the IRS, and the Labor Department’s Office of Inspector General and Employee Benefits Security Administration.
If the year 2014 had a main theme, it was, as in 2013, the unions' pursuit of legal advantage. The results were mixed. Unions scored victories at the National Labor Relations Board, but they tasted defeat in the courts, most notably in their effort to unionize private home care providers in Illinois and overturn a Wisconsin law reining in public-sector costs. In another bitter pill, the United Auto Workers last February lost a representation election at the Volkswagen plant in Chattanooga. As for dipping their hands in tills, national union leaders generally behaved themselves, but many local bosses, office employees and business agents did not.
Department of Labor officials these past several years haven't been shy about conveying their political preferences to their own labor force. An ongoing Capitol Hill probe has found out as much. Late last month the House Committee on Oversight and Government Reform released a report concluding that the Obama-era department has spent at least $725,000 on elevator posters, publicity contests and other forms of advocacy intended to boost employee morale. Most, if not all, of this motivational agitprop was the doing of first-term Secretary Hilda Solis. Chairman Darrell Issa, R-Calif., a longtime critic, noted: "This questionable activity has been going on for some time. As my staff has learned, in 2009 DOL began producing weekly elevator posters for the 23 passenger elevators at DOL's headquarters in Washington, D.C." Tax-funded ideology marches on.
If sunshine is the best antidote to corruption, then Senator John Thune, R-S.D. (in photo), must be opening a lot of windows. Last Wednesday, July 30, Sen. Thune unveiled the Union Transparency and Accountability Act (S. 2688), a measure that would require greater transparency in the information labor organizations report to the Department of Labor. The bill would improve detection of misuse of funds, especially by union officials and benefit fund trustees. Thune explained his discontent over President Obama's approach: "I hope my colleagues join me in supporting my bill to put an end to the administration's political favoritism and restore transparency to union finances. Union members deserve to know how their dues are being spent." The legislation effectively would restore three finalized rules shelved by the DOL in 2009.
Workers represented by Cement Masons Local 600 have helped put up a good many buildings in Southern California. But right now its members have a more immediate project on their hands: making sure they receive all promised benefits. And the U.S. Department of Labor wants to make that happen. Last Wednesday, the DOL filed a civil suit against various officers of the local trust funds to seek the reinstatement of a recently-fired union auditor and remove certain board members who administer the funds. Assistant Labor Secretary Phyllis Borzi explained the motive behind the action: "Workers must be free to participate in Department of Labor inquiries without fear of retaliation. By law, they have a right to report suspected violations to the department and must be allowed to cooperate with investigators."
Is paying someone an annual salary, as opposed to an hourly wage, a form of exploitation even if the work is identical? President Obama thinks it can be. On March 13, Obama issued an Executive Order directing the Department of Labor to draft a regulation to expand the eligibility of salaried workers to receive overtime pay. The threshold would rise from the current $455 a week to an estimated $970 a week; employees making less effectively would be converted to hourly status and paid at an overtime rate for work done beyond 40 hours in a given week. The president insists the issue is fairness. "Overtime is a pretty simple idea," he said at the White House ceremony. "If you have to work more, you should get paid more." Yet the issue isn't so simple.
Former Secretary of Labor Hilda Solis readily admits it: She's a union woman. But her affinity with organized labor is more than just a matter of shared views. On February 10, the Cerritos, Calif.-based Hews Media Group revealed that Solis, now campaigning for a seat on the Los Angeles County Board of Supervisors, had accepted thousands of dollars worth of free private jet travel more than five years ago, while still serving in Congress, from International Union of Operating Engineers Local 12, but without disclosing these trips, as required by federal law. This finding is cited as a material fact in a federal civil racketeering suit filed in January by four members of the Pasadena-based local against some two dozen people.
Thomas Perez is the nation's newest Secretary of Labor. And given his track record of political radicalism, this ought to be more than a little troubling. Perez insists he will be even-handed in his enforcement of the law. That commitment is getting an early test. On July 23, the day of Perez's swearing-in ceremony, two key House Republicans, John Kline (Minn.) and Phil Roe (Tenn.), wrote Perez a letter asking him to clarify the legal status of nonprofit 'worker centers' that are proliferating throughout the country. Because these nonunion organizations mimic the behavior of unions, the letter stated, they ought to be subject to laws that govern unions, especially with respect to financial disclosure.