After a slow start, the Trump administration’s priorities with respect to workers and labor unions are beginning to shift into view. It probably won’t surprise readers of this blog that they are a long way from the populist rhetoric that led many union workers and even a handful of union leaders to praise or vote for Trump. Instead, the early signs suggest that the administration’s strategy is to weaken unions and deregulate employers.
This post focuses on two related policies concerning the Office of Labor-Management Standards (OLMS), the Department of Labor office that is responsible for enforcing certain union and employer disclosure requirements. Developments last week suggest that OLMS is likely to ratchet up its oversight of unions, while dialing back an Obama-era rule requiring more employer disclosure.
Expanding DOL Oversight Over Worker Centers?
Last Tuesday, Bloomberg BNA broke the news that Nathan Mehrens is awaiting final FBI approval to become the director of OLMS. (Bloomberg BNA reporter Ben Penn then added a caveat that should probably accompany any Trump Administration staffing story: “Source cautions that story changes every day and that Mehrens could now be in consideration for another DOL post.”) OLMS’s main functions are to ensure that unions file required financial disclosure forms, conduct audits of unions, and investigate potential violations of the Labor-Management Reporting and Disclosure Act of 1959, which both mandates union and employer disclosures and requires unions to adopt democratic governance structures.
Mehrens worked at OLMS under President George W. Bush. He then became the general counsel of the conservative advocacy group Americans for Limited Government (ALG), and the president of the Americans for Limited Government Foundation. While at ALG, Mehrens blogged about his views on labor policy, frequently criticizing both labor unions and the DOL under President Obama. Several of these posts concern legal requirements under OLMS’s purview, and they should give pro-worker groups reason for worry: among other reasons, they suggest that Mehrens could attempt to expand his oversight role to include organizations known as “worker centers” that do not engage in traditional collective bargaining with employers.
At the risk of stating the obvious, worker centers advocate for workers in a variety of ways, and they take many forms; some well-known examples include the Restaurant Opportunities Center, Arise Chicago, and Coalition of Immokalee Workers. In general, worker centers are voluntary associations that are not covered by the Labor-Management Reporting and Disclosure Act (LMRDA) or the National Labor Relations Act (NLRA). As a result, they have a constellation of legal advantages and disadvantages as compared to “labor organizations” that are covered by those statute. (The definition of “labor organizations” mainly includes labor unions, but also covers some groups that may not call themselves unions but nonetheless bargain with employers on workers’ behalves.)
The main disadvantage is the one mentioned above: worker centers are not elected as bargaining representatives of groups of employees, and they have no legal mechanism to compel employers to come to the bargaining table. Instead, they try to gain influence through traditional social movement tactics, such as by putting outside pressure on employers, representing employees in litigation, or lobbying elected officials. But the trade-off is that these groups have—at least so far—not been bound by key restrictions and obligations, including under the LMRDA.
Along with groups like the Heritage Foundation, Mehrens has argued that at least some worker centers should be assigned the obligations that come with “labor organization” status. For example, in an ALG blog post, Mehrens described worker centers as “big labor’s tax-deductible organizing scam.” That post focused on tax law, rather than on the LMRDA, but the inquiry—whether the group qualifies as a “labor organization” —is similar. (Yet another iteration of this question arises under the NLRA, because “labor organizations” are prohibited from engaging in certain strikes and boycotts; the NLRB, rather than DOL, administers that statute, and it is certainly possible that that body will also take up this question once Trump fills two empty seats on the five-member NLRB.)
In sum, Mehrens argues that worker centers are engaged in de facto representation of workers when they advocate for them—a capacious definition that could subject many pro-worker groups to the LMRDA’s requirements. Thus, if Mehrens becomes OLMS director, worker centers should expect to see the office not only undertake more union audits, but also to attempt to bring worker centers and “alt-labor” groups under its jurisdiction. And while disclosure requirements may seem like a relatively minor barrier to these groups’ operations, OLMS could be the thin end of the wedge; the NLRB and IRS under Trump could seek to follow suit.
Further, OLMS may see its budget increase, giving it the capacity to attempt to undertake this redefinition of worker centers as labor organizations. As Sharon Block, a former Obama DOL official and former NLRB member, has described, Trump’s proposed budget should raise a red flag for unions and workers: in addition to other cuts (including to job training programs that enjoy bipartisan support), the White House has proposed cutting funds from the National Labor Relations Board, but increasing funding for OLMS. Thus, as Block put it, the Trump budget would mean “a bump [in] resources for federal officials looking for union misbehavior,” but a cut to “investigators whose job it is to protect workers from employers who think nothing of firing them for exercising their right to unionize.”
The Persuader Rule
The LMRDA also contains some provisions that affect employers, including a requirement that employers file reports reflecting their spending on “persuaders”— consultants who assist employers in opposing union drives. The DOL had previously interpreted this rule to exempt employers’ use of consultants who did not communicate directly with employees, concluding that they fell under an exemption in the law for those who simply gave employers “advice.” However, in 2016, the Department of Labor issued a rule narrowing that loophole, and requiring employers to report on “indirect” persuader activities, such as when consultants draft anti-union speeches for employers to deliver to workers.
Like the issue of LMRDA union disclosures, whether employers must disclose their use of indirect persuaders may seem technical and abstract—after all, employers need not disclose the content of the advice they receive. But during organizing drives, employees often care about whether their employer is delivering canned anti-union talking points, rather than speaking from the heart about the unique context of their workplace. Moreover, employees might wonder why an employer would spend substantial amounts of money to fight a union drive—some might take that spending as a signal that the employer expects that it would have to improve pay and benefits during negotiations with a union, and that those costs are likely to exceed the cost of hiring a high-priced consultant or lawyer to help fight the union. Thus, employers’ persuader disclosures can ultimately influence workers’ decisions whether or not to vote for union representation.
The DOL’s persuader rule was enjoined nationwide by a Texas district court before it could take effect. And this week, the DOL took the first step to officially repeal the rule, issuing a notice of proposed rulemaking. (Comments on the proposal are due by August 11.) It is hardly a surprise that the DOL has taken this step; employer groups fought tooth and nail against the persuader rule, which was also heavily criticized by republicans.
The writing is on the wall: during Trump’s presidency, we are likely to see DOL demand more disclosure from unions and other worker-aligned groups, while giving employers a freer hand to fight union drives.