Business Groups Say Labor Board Actions Jeopardize Job Creation

The National Labor Relations Board, in two decisions backed by unions, overturned a Bush-era ruling on organizing and supported efforts to form smaller bargaining units in the health-care industry

U.S. business groups. led by retailers and manufacturers. and a Republican U.S. House member said the decisions released yesterday are a reward to labor groups for political support that will derail economic growth and stifle job creation.

“The NLRB is pursuing an agenda that undermines the very job growth our economy sorely needs,” Katherine Lugar, executive vice president of the Retail Industry Leaders Association that includes Sears Holdings Corp. (SHLD) and Target Corp. (TGT) among members, said yesterday in a statement.

The panel overturned a ruling under President George W. Bush that made it easier for employers to challenge union organizing. The board also backed efforts to create smaller units in health-care companies. The rulings were issued four days after Wilma Liebman, President Barack Obama’s chairman, ended her term.

“We certainly advocated for this,” Nancy Schiffer, associate general counsel for the AFL-CIO, the largest U.S. labor federation, said of the two decisions in an interview.

The NLRB actions “have the high likelihood to be severely disruptive to the workplace, will hinder job creation and put jobs at risk,” Joe Trauger, vice president of human-resource policy at the Washington-based manufacturers’ group, said today in an e-mail.

U.S. employers’ ability to challenge union organizing efforts will be stifled while employees lose their right to choose joining a union, Representative John Kline, a Minnesota Republican and chairman of the House Education and the Workforce Committee, said in an e-mailed statement.

‘Wreaks Havoc’

“In one fell blow, the NLRB has overruled years of labor policy in an underhanded scheme designed to please its powerful Big Labor allies,” Kline said. “President Obama can no longer stand idle as his labor board wreaks havoc on the nation’s workforce.”

The board in a 3-1 decision agreed to let certified nursing assistants at a property owned by a unit of Kindred Healthcare Inc. (KND) make up a bargaining group without including all other non- professional workers.

The decision, aimed at health-care facilities, will permit unions to create bargaining units with fewer members, such as poker dealers among casino workers and chicken-wrappers at a meatpacking plant, the Chamber said. Republican board member Brian Hayes dissented from the ruling released yesterday.

‘Easy Access’

“This change in the law allows easy access by organized labor into an employer,” Peter Schaumber, former Republican chairman under Bush, said yesterday in an e-mail. “It increases union power enormously because the union can pick a tiny group of employees who if they went out on strike could bring the employer’s operations to a halt.”

The board overturned a 2007 ruling that had made it easier to throw out a union. The prior decision, in a case involving auto-parts maker Dana Corp., allowed an immediate challenge to a union’s status as a bargaining agent by 30 percent of a company’s employees or by a rival union. The decision created a 45-day window to contest the union.

The ruling yesterday in a case involving Houston-based Lamons Gasket Co. “restores 40 years of precedent only recently struck down by the notoriously anti-worker Bush board,” Kimberly Freeman Brown, executive director of American Rights at Work, a pro-union group based in Washington, said in an e-mailed statement. The decision “is nothing more than a return to a process for voluntary recognition that for years worked just fine for employers and employees alike.”

Time, Money

Ronald Meisburg, the NLRB general counsel until he departed in 2010, said in an e-mail that reversing the Dana rule is a “backward step on the principle of employee free choice,” because the 2007 decision allowed for a secret-ballot vote when an employer voluntarily recognized a union. The decision in organizing in the health-care industry will require employers to spend more time and money dealing with a multiplicity of bargaining unions and unions.

“It will promote labor unrest instead of labor peace,” he said.

Liebman’s departure leaves the board with two Democrats, Mark Pearce, who is designated as chairman, and Craig Becker, along with Hayes. The term of Becker, a former lawyer for the AFL-CIO and Service Employees International Union, will expire in December, leaving too few board members to make decisions.

One seat is vacant because the Senate hasn’t acted on confirming Obama’s nominee to that slot. The U.S. Supreme Court ruled last year that a two-member board can’t issue rulings.

To contact the reporter on this story: Stephanie Armour in Washington at sarmour@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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