A Backlash Looms for the Federal Labor Board

In the 1950s about one-third of American workers carried a union card. Today barely 12 percent do. In the private sector the rate is 6.9 percent and falling. The U.S. labor movement for years sought to arrest the decline with legislation allowing workers to organize once a majority of employees signed a card authorizing a union. Companies successfully fought so-called card-check measures, arguing that bypassing secret ballots was un-American.

These days unions are pinning their hopes on the National Labor Relations Board, one of Washington's more obscure federal agencies—and among the most politicized. Under President Barack Obama, the board has become a pro-labor bastion, turning out recent rulings that have angered the business community. "They couldn't be more antibusiness," says Geoffrey Burr, vice-president of federal affairs for the Associated Builders and Contractors, which represents more than 23,000 companies. Lynn Rhinehart, the AFL-CIO's general counsel, disagrees. "The business community is making noise and trying to create an issue where there really isn't one," she says.

The NLRB is about to come under intense scrutiny from the Republican-controlled House. The House Education & the Workforce Committee planned a Feb. 11 hearing on what U.S. Chamber of Commerce President Thomas J. Donohue, in a January speech, called "unprecedented" case law changes. Donohue was referring to a series of NLRB moves over the last six months, including a rule it floated in December that would require companies, for the first time, to inform employees of their right to unionize.

In September the board said unions could display banners outside the offices of a company's suppliers and customers. That decision allowed an Arizona carpenters union to display 16-foot banners reading "shame" to protest construction work being done for what the union claimed was substandard wages. In October the NLRB told American Medical Response of Connecticut, which provides private ambulance service, that it couldn't fire an employee for criticizing the company in Facebook posts from her home computer. On Feb. 7 the company settled the case—the first by the agency to assert that employers break the law when disciplining workers for comments on social media sites—and agreed to change its rules. The NLRB spokeswoman, Nancy Cleeland, declined to comment.

Created in 1935 to police relations between unions and management, the board helped the labor movement overcome vehement and sometimes violent management resistance. The Supreme Court upheld the board's landmark 1940 ruling that mining company Phelps Dodge could not discriminate against job applicants because they were union supporters, a ruling that stands today.

Over the past few decades, "the NLRB has become more politicized," says Charles I. Cohen, who served on the board during the Clinton Administration and is now at law firm Morgan, Lewis & Bockius. Favorable NLRB rulings have swung between labor and management—depending on who's in the White House. In 2007, under President George W. Bush, union members marched outside the Marble Palace (as its ornate headquarters is called) with signs saying "Shut the NLRB Down!" Their beef: The board had allowed employers to restrict the rights of temporary workers and graduate students to form unions. That year the NLRB also let dissenting workers undo a successful card-check campaign at auto parts maker Dana Holding (DAN).

Now, under Obama, business groups are braced for a card-check-like ruling that would skirt Congress and make it easier for workers to organize. Criticism from Republicans has dogged the board's most prominent member, Craig Becker, who spent 20 years as a lawyer at the AFL-CIO and the Service Employees International Union. His nomination languished for 11 months in the Senate, leading Obama to give him a so-called recess appointment that bypassed confirmation. The appointment only lasts to the end of this year. Obama on Jan. 26 renominated him for a three-year term, but it will be even easier for Republicans, having picked up six seats in the midterms, to block him now.

Still, the move pleased the unions and is in stark contrast to the White House's recent pro-business pivot. With the terms of Becker and the board's Democratic chairman, Wilma B. Liebman, expiring this year, some say the NLRB is in a hurry to leave an impression. "Their view is that, during the Bush years, enforcement has not been as vigorous as it should be," says Marshall B. Babson, who served on the board from 1985 to 1988. "They want to put as much teeth into it as they can now."

The bottom line: Business groups are pushing back against National Labor Relations Board rulings that would make it easier to organize.

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