Since becoming President in 2009 Obama has done what he could to repay his political debt towards the unions. For example:

  • In February 2009 he issued an executive order on “project labor agreements” (such PLAs mandate union labor on large federal contracts)
  • The stimulus bill contained $ 188 billion in federal construction projects requiring union labor
  • The bailout of Chrysler and GM cost tens of billions of dollars and primarily benefited the United Auto Workers union which had spent millions of dollars to elect Obama. Thanks to the bailout the UAW now owns 17.5% of GM and 55% of Chrysler
  • Union transparency requirements that had been imposed by the Labor Department during the Bush Administration were abolished

But for union bosses such repayments are just starters. The SEIU alone spent $ 60 million on presidential candidate Barack Obama. Unions poured hundreds of millions of dollars into Obama’s campaign coffers with their eyes fixed on the crown jewel: passage of the “Employee Free Choice Act” better known as card check.

Card check is nothing less than a brazen assault on liberty by restricting the freedom of workers to not join a union since it eliminates the secret ballot in union elections. If a majority of workers sign a union authorization card the election does not take place – even if a majority of workers wanted one – and the union is established. Signing the card is a public event: it becomes public knowledge who signs and who does not.

But even more importantly, card check is an outright attack of the free market system. Why? Because after a union has been certified through card check, the business and union have only 120 days to reach an agreement. If they are unable to do so within the given time frame a panel of government arbitrators will decide the terms of the contract for them.

Does a company really still own its means of production if it can no longer have any influence on the terms of the contract of its employees? In name it does but in reality government agents would run an essential part of its business and could therefore decide its fate. Consequently, card check boils down to nothing less than expropriation via forced arbitration.

Little wonder then that card check did not pass Congress in 2005 or in 2007. But to the great shock and grave disappointment of Big Labor not even Barack Obama and a Democratic Congress could deliver it. Card Check did not pass Congress on March 10, 2009.

The crown jewel was once again out of reach. The window closed. Or did it? What Congress could not achieve perhaps the National Labor Relations Board could?

The NLRB was established in 1935 under the National Labor Relations Act (Wagner Act). Its primary tasks are to supervise union elections, investigate labor practices and interpret the National Labor Relations Act. The NLRB is an “independent agency of the United States federal government.” What exactly does that mean? It is an agency that lies outside the structure of federal executive departments like the Department of State or the Treasury whose secretaries form the Cabinet of the President. Nonetheless independent agencies are constitutionally part of the executive branch. They are created through statutes passed by Congress in which authority of rulemaking is granted to the agency within the framework of a defined set of goals. The rules or regulations that the independent agency will establish have the power of federal law.

In the case of the National Labor Relations Board it is the President who appoints its five board members and the General Counsel with the consent of the Senate – or, if need be, without its consent. Board members serve for five years and the General Counsel for four years. This arrangement makes it easy to transform the NLRB into a political tool of the President. A tool that empowers the executive branch to make federal laws.

Since 2009, President Obama appointed three new board members to the NLRB: Mark Gaston Pearce, Craig Becker and Brian Hayes. Wilma Liebman, appointed by President Clinton, was promoted to Chair of the Board by President Obama in January of 2009. The fifth seat on the NLRB is currently vacant.

Mark Gaston Pearce is a former union lawyer and was appointed to the Board in a recess appointment that was later confirmed by the Senate.

Craig Becker is a former lawyer to the AFL-CIO and SEIU. He too was appointed to the NLRB in a recess appointment but his nomination was rejected in the Senate. As a recess appointee without Senate confirmation his membership in the NLRB expires at the end of 2011. In January of 2011 Obama re-nominated Becker for a term that would end in December 2014.

Wilma Liebman worked as an attorney representing the International Brotherhood of Teamsters from 1980 until 1989; she then became General Counsel for the International Union of Bricklayers and Allied Craftworkers until 1993. President Clinton appointed her to the NLRB in 1997 and she was re-appointed twice during the Bush Administration.

Brian Hayes, appointed by Obama in 2009 as the showpiece Republican of the NLRB, worked as a lawyer representing management clients for more than twenty-five years.

Craig Becker’s appointment is the most noteworthy since he is known for his radical anti-business views. In 1993, when he was a professor at UCLA he published a long article in the Minnesota Law Review in which he makes clear that in his opinion the employer should not have any say in the unionization process:

… employers should have no right to be heard in either a representation case or an unfair labor practice case, even though Board rulings might indirectly affect their duty to bargain …. employers should have no right to raise questions concerning voter eligibility or campaign conduct … they should not be entitled to charge that unions disobeyed the rules governing voter eligibility or campaign conduct. On the questions of unit determination, voter eligibility, and campaign conduct, only the employee constituency and their potential union representatives should be heard …

Nor does Becker believe that the worker should be given the choice between union representation and self-representation. He draws a false analogy between political and union elections: the voter can only choose among various political candidates. He cannot choose not to be represented. Neither should employees, Becker concludes, have the right not to be represented by a union.

What is Becker’s goal? He describes it as “industrial democracy” in which unions take on business control over the company: “Only by gaining a share of employers’ economic authority can unions gain any coercive power in the workplace.” To achieve this end he proposes “to eliminate the formal role of employers in union elections.” And he continues: “… the proposal is to rewrite the law to deny employers any unique avenue for using their authority to influence union elections.”

Labor law should be reformed in order to “buttress  the legal  apparatus  that is  indispensable  to  labor’s  ability  to  organize  collectively  and  gain  some  voice  in workplace  governance.” And he concludes the article by stating:

One thing therefore is certain.  So  long as the law construes  employers  and  unions  as equals  in  union  elections,  industrial  democracy  will  remain  as much  a legal  fiction as  liberty  of contract.

What are the origins of “industrial democracy”? According to Wikipedia they go back to the end of the nineteenth century:

In late nineteenth century, and at the beginning of the twentieth century, industrial democracy, along with anarcho-syndicalism and new unionism, represented one of the dominant themes in revolutionary socialism and played a prominent role in international labor movements.

The goal of industrial democracy is the creation of a post-capitalist order in which unions have replaced employers as the dominant economic force. In this regard industrial democracy is close to syndicalism. Ludwig von Mises defined syndicalism in his book Socialism as “a movement whose object is to bring about a state of society in which the workers are the owners of the means of production.” And he remarks: “… the attempt to realize Syndicalism as an end can be carried on by methods other than those of violence…”

Becker wrote the article in the Minnesota Law Review many years ago – in 1993. Now, as a member of the NLRB, he is in a position to attempt the realization of his dreams of “industrial democracy” with the help of Pearce and Liebman. Two recent events affirm the aspirations of the Board’s Democratic majority:

  • The union – and not the employer – makes business decisions, e.g. decides where new factories are built:

In April of 2011 the International Association of Machinists and Aerospace Workers, IAM, sent a complaint to the NLRB in which Boeing is accused of engaging in unfair labor practices by opening a new line of 787 Dreamliner aircraft assembly production in the Right-To-Work-State South Carolina. The IAM holds that the factory was built in South Carolina, and not in the State of Washington, to retaliate against strikes that the IAM carried out in Boeing’s Washington State production sites in 2005 and 2008.

The complaint is laughable. Boeing did not retaliate against the strikers and it did not violate paragraphs 7 and 8 of the National Labor Relations Act.  It kept its production unit in Washington State and even added thousands of jobs to it. Boeing only drew a conclusion from the previous strikes: it could not afford building the second line of 787 Dreamliner assembly production in Washington State – as it had originally intended to do. The decision to build the assembly unit in South Carolina was made in order to “mitigate the harmful economic effects of an anticipated future strike” as Boeing put it in its reply to the complaint by the IAM.

Nonetheless, on April 20 NLRB Acting General Counsel Lafe Solomon issued an Unfair Labor Practice complaint against Boeing. On June 17, Solomon said in a statement when he appeared before the House Committee on Oversight and Government Reform: “Boeing has every right to manufacture planes in South Carolina, or anywhere else, for that matter, as long as those decisions are based on legitimate business considerations.” The NLRB seems to agree with the union that for business considerations to be legitimate they have to be regarded as such by the IAM and not by Boeing.

  • Unions take over the unionization process:

Earlier this month the NLRB proposed new rules with regard to the time frames within which union elections have to take place. The Wall Street Journal described these changes as “the most sweeping changes to the federal rules governing union organizing elections since 1947, giving a boost to unions that have long called for the agency to give employers less time to fight representation votes.”

The new rules would doubtlessly reduce the influence of employers during the unionization process. This curtailment of employers’ rights is indispensable in order to force significant increases in union membership. Such increases are crucial given that union membership in the private sector has been continuously decreasing in the last decades. Today only 6.9 % of private sector workers belong to unions.

The lead time between a union filing a petition for an election and the election itself will be diminished substantially if the changes are adopted. The median time now is 38 days. Under the new proposal it might only be between 19 and 23 days – not giving the employers much time to react to the unionization petition. It’s a far cry from card check but for unions it’s a step in the right direction.

For Big Labor and its political allies the beauty – never mind the irony – of all this is that “industrial democracy” can be introduced by fiat without a single vote in Congress. Presidential appointees of the NLRB are reshaping labor laws with the intention of eroding the free market system to create a society where unions are in command of politics and business.