11/19/08

Progs herald end to Era of Prosperity

Related video: "Employee Forced Choice Act"
More EFCA stories: herecard-check: here

Barackonomics stokes capitalistic investors' fears

Was the financial panic aggravated by the likelihood of an Obama victory? Evidence from the stock market suggests investors may have become more pessimistic about the economy as Obama's chances of winning increased. Investors' pessimism was likely rooted in Obama's commitment to pursuing protectionist trade policies, lowering barriers to union organization, ending tax deferrals for multinational corporations, and increasing regulation.

According to the University of Iowa's presidential-futures market, John McCain's prospects peaked on March 22, 2008. By that day it was clear he'd be the nominee, though he had not yet been officially nominated. The market implied that his odds of winning the White House were 55 percent.

But then financial markets began their historic fall, which accelerated as the campaign wore on. When McCain's probability of winning was at its peak, the S&P 500 index stood at 1,329.54. By November 5, it had dropped 28.3 percent, to 952.77. The question: Did the tanking economy help Obama; did the economy tank as a reaction to the fact that Obama might become president; neither; or both?

Democratic partisans prefer the first explanation. Nobel Prize-winning economist Joseph Stiglitz, for example, recently wrote that "Barack Obama owes his victory in large measure to the prospect of the longest and deepest economic downturn in a quarter-century and perhaps since the Great Depression."

Given this list of bad policies, it's little wonder that investors have headed to the exits.

Stiglitz is right. The link between bad economic news and diminishing prospects for the presidential candidate who represents the incumbent party is older than sliced bread, and has been carefully documented by Yale economist Ray Fair. But Stiglitz is only half right, because the negative correlation between Obama's prospects and stock prices reflected an ominous feedback loop: As Obama's odds of winning rose, markets tanked; as they tanked, Obama's odds of winning rose.

Obama supporters will of course dispute this, but market movements after the election confirm that an "Obama Panic" took place in October and November. The day after the election, the S&P 500 dropped 5.2 percent, the worst reception ever for a winning candidate. It dropped another 5 percent the next day.

What explains the despair? A look at Obama's platform suggests that he plans four big changes that, if implemented, could have terrible economic consequences. Think of them as the Four Horsemen of Obamanomics.

The First Horseman is a bill, the "Fair Currency Act," that Obama co-sponsored last May. If this bill becomes law, it could ignite a trade war similar to the Smoot-Hawley catastrophe that contributed to the Great Depression.

The bill allows the United States to impose duties on imported Chinese products to offset China's purported currency manipulation. Michigan senator Debbie Stabenow has argued that the measure will "protect" Americans from China and other countries that artificially lower the cost of exports. Imposing new duties on these products, according to the bill's supporters, would "level the playing field" and would restore the competitive position of American manufacturers in the global marketplace.

But such "protection" is never the end of the story. If we impose duties, others will respond in kind, and trade will suffer. During the campaign, Democratic economists apologized for Obama's anti-trade rhetoric--they claimed he understood the benefits of free trade and was just scoring political points. We will soon find out whether such reassurances were justified.


The Second Horseman is "card check." Card check allows union organizers to form a bargaining unit once they receive signed authorization forms, or "cards," from a majority of employees. The National Labor Relations Act currently permits this, but also allows employers to challenge the results and require a secret-ballot election. The Employee Free Choice Act, which passed the House last year and was defeated only by Republican opposition in the Senate, would take away the right to challenge card-check petitions except when fraud or coercion is suspected. Arguments against card check often focus on fairness: By taking away the option of a secret-ballot election, card check would make it easier for union bosses to intimidate workers into acquiescence. But consider, also, the impact of further unionization on businesses: Costs would skyrocket, profits would tank, and bankruptcies and job destruction would follow.

Related video: "Employee Forced Choice Act"


The Third Horseman is tax policy. While much of the political debate centered on Obama's plan to increase marginal tax rates on the "wealthy," a little-known footnote to his plan was a call to end the deferral of tax on the profits of U.S. multinational corporations. This is the most alarming of his many proposals.

American firms currently compete in the world economy with an enormous disadvantage. The United States' nominal corporate tax rate, 35 percent, is the second-highest among OECD nations. The gap between our rate and our trading partners' has been growing sharply; the average corporate rate among non-U.S. OECD nations had fallen all the way to 25 percent by 2007.

A little-appreciated aspect of the tax code has proved the salvation of our multinationals during these high-tax times. If a company locates its profits in a subsidiary based in a low-tax country, it does not have to pay U.S. tax on those profits until the money is sent back to the United States. So a subsidiary operating in Ireland, where the 2007 corporate tax rate was 12.5 percent, can sell its product in France and let the profit pile up in an Irish bank account indefinitely. In this scenario, the disadvantage of the U.S. rate is reduced significantly. Democrats have raged against such deferral, arguing that it encourages firms to move their activity overseas. But deferral is necessary only because of the high tax, which is in and of itself a reason for businesses to go elsewhere.

If Obama successfully ends deferral, our multinationals will suddenly find that costs have dramatically shifted in their disfavor. They will lose business to competitors that operate in low-tax jurisdictions, and cut back employment both here and abroad.

The Fourth Horseman is regulation. As a candidate, Obama blamed deregulation for our economy's woes, and promised to crack down with new regulations if elected. One can bet that Obama's efforts will not focus solely on the financial sector, and that many new costs will be imposed on American businesses generally. This despite the fact that most deregulation has been achieved on a bipartisan basis, and widely hailed as successful. Trucking and air travel, for example, are two industries that deregulation has made more efficient.

Given this list of bad policies, it's little wonder that investors have headed to the exits. The collapse of housing prices and the financial calamity that ensued certainly started the process, but it's hard to imagine that the market would have plunged this far without the magnifying effect of Obama's policies--and the most chilling thought is that the market probably has not fully factored the Four Horsemen into current stock prices. It is an open question whether Obama will pursue all of his campaign promises, but the threat that he might has markets predicting apocalypse.

- Kevin A. Hassett is a senior fellow and the director of economic policy studies at AEI.

(aei.org)

Collectivist Congress terrifies U.S. employers

Related video: "Employee Forced Choice Act"
More EFCA stories: herecard-check: here

Local businessman and political activist Lane Grigsby sounded more than a little concerned in the days after the Democrats’ big victories on Nov. 4.

“It’s not frightening, it’s terrifying,” Grigsby says. “The [incoming] administration has no appreciation of small businesses in America. They have been elected by special-interest groups which are contrary to small businesses.”

Namely, unions.

Grigsby’s pet issue is the Employee Free Choice Act, also known as the “card check” bill. The measure would force employers to accept the majority card-check option for union recognition, rather than demanding an election by secret ballot.

Related video: "Employee Forced Choice Act"


By all accounts, the measure would make it easier for unions to organize a work place, and it’s just one previously stalled measure that may see new life in the next Congress. Grigsby worked to defeat U.S. Rep. Don Cazayoux, who lost to Act opponent Bill Cassidy, and Sen. Mary Landrieu, an Act co-sponsor who was re-elected.

Democrats have so far picked up six seats in the U.S. Senate for a 57-40 edge, a number that includes two independents who usually vote Democratic. Three Senate races have not been decided. Incumbent Republican Saxby Chambliss is favored to hold off Democrat Jim Martin in a Dec. 2 runoff in Georgia. Minnesota Republican Norm Coleman is mobilizing for a recount to confirm what is currently a 206-vote victory over Democrat Al Franken. And Alaska Republican Ted Stevens leads Anchorage Mayor Mark Begich by 3,257 votes—but with more than 29% of the vote yet to be tallied.

Before the election, Democrats were hoping to control 60 seats, which would allow them to break any Republican filibusters and push through their most controversial measures, such as EFCA. A Democratic majority in the high 50s matched with a Democratic president and a bigger House majority could be almost as powerful, especially if they can sway a few moderate Republicans.

“We’re going to try to go to some of the centrist Democrats and explain to them that if they pass card check, they are doing away with the right to work in the United States of America,” Grigsby says.

Jason Engels, a former LSU football player and an official with the Louisiana Carpenters Regional Council, took exception to Grigsby’s election-season crusade, which went beyond specific candidates and issues to portray unions in general as violent and corrupt through a Web site and a series of fliers mailed to voters.

“Obviously, Mr. Grigsby is more concerned about self-interest and politics than he is his employees, or any employee for that matter,” Engels says. “It’s absurd, really, to portray us as thieves and mobsters, when all we’re trying to do is protect the workers.”

Engels says his 3,000-member union is bipartisan, but put its money and support behind Landrieu and Cazayoux in large part because of their support for the Employee Free Choice Act and greater labor protections in international trade agreements.

“We’ve lost about 7 million jobs over the last few decades; 50% of the American manufacturing capacity is now overseas. That affects laborers as a whole, not just the carpenters and millwrights,” he says.

Grigsby also threw some support behind independent Michael Jackson, who opposes EFCA. Jackson siphoned off votes from Cazayoux, arguably costing the incumbent the election. How much impact Grigsby actually had, if any, is debatable, but David Denholm, president of the anti-union Public Service Research Council, gave Grigsby partial credit for one of the few Republican bright spots of the election. Denholm says Grigsby’s harping on Cazayoux’s support for the EFCA might have made a difference. “This information may be useful in discussions with conservative Democrat members of Congress,” Denholm said in an e-mail to supporters.

“What conservative Democrats? Where have they gone?” asks Louisiana Republican Party Chairman Roger Villere. After a moment, he named Rep. Charlie Melancon as a relatively centrist Democrat who might be worth pressuring on some business issues. Melancon voted for EFCA.

Villere sounds every bit the alarmist, arguing Barack Obama is the most liberal candidate ever elected president. “Socialism, which hasn’t worked anywhere, is now going to be tried in the United States,” he says. “The next couple years for business people are going to be very tough.”

“If anything, [business owners] should be excited and optimistic about some of the changes they’re going to see in policy that are going to help them,” Louisiana Democratic Party spokesman Scott Jordan says. “Nobody’s going to get a tax increase who makes less than $250,000 a year, which covers the vast majority of small-business owners.”

Jordan also highlighted Obama’s plans to give a $3,000 new jobs tax credit for new hires in 2009 and 2010, exempt investments in small business startups from capital gains taxes and offer small business owners a tax credit for up to 50% of the premiums they pay for employee health benefits. And while national reports suggest Democrats will try to push for the EFCA early on as “payback” for union support, Jordan has his doubts.

“I just think there are lots of bigger fish to fry,” he says.

“There’s a lot of issues the business community sees as opportunities with the Obama administration, especially with the current state of the economy,” says J.P. Fielder, spokesman for the U.S. Chamber of Commerce. “But there is great concern here in the business community on the Employee Free Choice Act, and that’s certainly the issue where we would draw a line in the sand.”

The chamber has made a number of specific recommendations to stimulate the economy, including more rebate checks to taxpayers and a reduction of the corporate capital gains tax rate to 15%. With new leadership comes new opportunities to find common ground on issues like health care or climate change, Fielder says.

“A lot of people in the business community are very optimistic about this new administration,” he says. “Because the bottom line is we didn’t get a lot of issues dealt with in the last couple years.”

(businessreport.com)

'Card-check' elections exposed as defective farce

Related video: "Employee Forced Choice Act"
More EFCA stories: herecard-check: here

If the Employee Free Choice Act Applied to Presidential Elections ...

One of the arguments made by proponents of the Employee Free Choice Act ("EFCA") is that the present secret ballot union election process is broken; the National Labor Relations Board ("NLRB") process purportedly is weighted in favor of employers and, consequently, isn't the uncoerced, true and accurate reflection of voter preference that's found in, say, presidential elections.

This is nonsense. Sure, employers have certain advantages that flow from having control of the workplace. But these are offset by significant procedural advantages enjoyed by unions that any presidential candidate would love to have.

Related video: "Employee Forced Choice Act"


Consider: If the 2008 presidential election had been governed by current NLRB election rules and John McCain were in the position of the union (and while acknowledging the imperfections inherent in a union election/presidential election analogy):

* McCain would've been able to time the election to coincide with when he was leading Obama in the polls

* McCain could've decided which group of voters would be entitled to vote

* McCain's supporters could've visited voters at their homes. Not so Obama's. (Obama's supporters, however, would've had access to voters at their jobs)

* McCain could've promised voters more money in their pockets. Not Obama.

* McCain could've promised voters health care. Not Obama.

* McCain could've promised voters security. Not Obama.

McCain would've jumped on that deal. And that's under current law. But McCain's position would've been even more favorable under EFCA:

* McCain and his supporters could've asked voters to fill out cards/ballots in public authorizing McCain to be president

* McCain's staffers could've filled out the cards/ballots on behalf of the voter

* McCain's staffers would've retained custody of the cards/ballots until they were counted

* Obama wouldn't have known that there was a race for president going on until the votes had been counted

There are numerous reasons for declining union membership. A defective elections process isn't one of them.

- Peter Kirsanow

(corner.nationalreview.com)

Congressional specialty: False choice

Related video: "Employee Forced Choice Act"
More EFCA stories: herecard-check: here

Calling a revote after you've already won

The fate of the Employee Free Choice Act under a Barack Obama administration and a Democratic Congress is the hot-button issue among advocacy groups on both sides of the debate.

American Rights At Work, a coalition of labor advocates and progressive organizations like the Sierra Club and the AFL-CIO, started running an ad Sunday that urges Congress to pass the bill, which is designed to make it easier for workers to unionize. Critics contend that the bill's provision eliminating mandatory secret elections for unionization in the workplace would leave employees vulnerable to intimidation and coercion.

Related video: "Employee Forced Choice Act"


Josh Goldstein, a spokesman for American Rights At Work, maintains that the proposal doesn't eliminate the secret ballot option, it simply gives employees the option to recognize a union after a majority of the workers sign a petition, rather than automatically going into a secret ballot election at that point -- which is how the current law stands.

Tim Miller, a spokesman for the Employee Freedom Action Committee, which opposes the law, countered that, in practice, there aren't really two options. Every union organizer would choose not to hold an election, Miller argued, since the employer would have to recognize the union at the 51 percent mark anyway. He compared a union organizer opting for a secret ballot election (under the proposed law) to a politician calling for a revote after he has already won.

Where this will fall on the incoming Congress' and president's agenda is unclear, considering the bigger-picture problems surrounding the financial crisis. Major labor groups, including the AFL-CIO and AFSCME, supported Obama throughout his campaign. This, Miller said, would be the only reason Obama would approve the law soon after taking office. "It would essentially be a payback to the special interest labor unions that funded his campaign down the line," he said.

Goldstein dismissed the notion that quick passage of the bill would be a payback. "I would characterize it as a long-overdue need for the middle class," he said.

(lostintransition.nationaljournal.com)

Massive strike costs will not be recovered

More strike stories: hereRelated story: "The 28 labor-states"

Typical capitalist complaints arise from labor-state work stoppage

An 11-day Centralia strike could cost the company $10-15 million, according to sources close to the deal. The strike officially ended Tuesday at 10 a.m., after 500 union members voted on, and approved the new three-year contract.

Workers for Hubbell Power Systems, formally AB Chance, walked out on Nov. 8 in protest of a contract that would have eliminated health insurance benefits for retirees. The new agreement delays that for a year, essentially giving older workers time to decide if they want to retire before the benefits go away.

"Everybody was very happy, very happy that this is all behind us now," said union representative Andrew Given. "Now we can go back to work, go on with our normal lives."

For the past 10 days, Given has been trying to hammer out a deal. But it wasn't until Monday when both sides were able to come to an agreement - after 16 straight hours of "intense" negotiating. Hubbell reps flew to Columbia from their Connecticut-based headquarters for the meeting.

Sources say the company didn't think the Centralia workers would go through with strike, given current economic conditions, and were taken by surprise when they did.

"It was unfortunate we had to go through the situation we did to reach an agreement," said Given. "But we're very thankful we were able to reach an agreement."

The union hall in Centralia was empty Tuesday evening, except for a few employees that were quietly celebrating. Union reps say everyone's looking forward to getting back to work Wednesday. Third-shift workers had the option of starting Tuesday night, but everyone will be back on the job by 6:30 a.m. Wednesday.

So was it worth it? "Yes," Given said without having to think. "We did make some gains in some areas where the membership felt we were losing."

The last time workers at AB Chance went on strike was in 2000 - that lasted just one weekend. Before that, the last time workers walked a picket line was in 1962. That strike lasted three and a half months.

Company officials haven't returned calls for comment.

Contract Details

The new three-year deal is all gains for the union, since nothing was taken away.

"There were other gains across the board," said Given. "Some of them small, some of them big."

While Givens wouldn't go into detail, he said the other gains "affect people on a wide spectrum."

Here is what we know about the new three-year contract:

* Employers can't strike for three years.
* Health benefits for retired workers won't be eliminated right away, but in one year. This gives older workers time to decide if they want to retire before the benefits go away.
* Each employee will get an $800 bonus for signing the new contract.

(krcg.com)

Union secret-ballot news - Nov. 19

Bookmark Secret-Ballot News posts: herecard-check: hereEFCA: here

Stories-of-the-day concerning Organized Labor's #1 priority.






Progs herald end to Era of Prosperity ... Arguments against card check often focus on fairness: By taking away the option of a secret-ballot election, card check would make it easier for union bosses to intimidate workers into acquiescence. But consider, also, the impact of further unionization on businesses: Costs would skyrocket, profits would tank, and bankruptcies and job destruction would follow. (aei.org)

Collectivist Congress terrifies U.S. employers ... “It’s not frightening, it’s terrifying,” Grigsby says. “The [incoming] administration has no appreciation of small businesses in America. They have been elected by special-interest groups which are contrary to small businesses.” Namely, unions. (businessreport.com)

Full Employment Act for union organizers ... This “card check” process leaves employees at the mercy of union organizers who, working singly and in groups, track down employees at work and in their homes. Experience shows they often subject employees to misrepresentations, which escalate to peer pressure and then to intimidation, until the employee finally relents and signs a union “authorization card.” So under EFCA the union (“candidate”) can solicit and collect the signatures (“votes”) by pretty much whatever means it deems necessary, and then declare itself the victor – exactly the type of “election” regime one would associate with a totalitarian state. (pbn.com)

'Card-check' elections exposed as defective farce ... Sure, employers have certain advantages that flow from having control of the workplace. But these are offset by significant procedural advantages enjoyed by unions that any presidential candidate would love to have. (corner.nationalreview.com)

Federal bailout for organized labor looms ... "It takes the government agency and the employer out of the equation, allows the union on its own time without knowledge of the employer to get cards from 50% plus one of the employees at which time then the union's in place," Carr says. He says it's like this. "If you look at the Presidential Election, it would be as if John McCain was invited to every debate alone. John McCain was allowed to put his website up and John McCain was allowed to speak to the American people and Barack Obama wasn't." (wvmetronews.com)

Congressional specialty: False choice ... Tim Miller, a spokesman for the Employee Freedom Action Committee, which opposes the law, countered that, in practice, there aren't really two options. Every union organizer would choose not to hold an election, Miller argued, since the employer would have to recognize the union at the 51 percent mark anyway. He compared a union organizer opting for a secret ballot election (under the proposed law) to a politician calling for a revote after he has already won. (lostintransition.nationaljournal.com)

Congress to set unionization surge ... Both sides agree that EFCA probably will pass in some form in 2009 now that Democrats have strengthened their majorities in Congress and won the White House. “What employers have to realize now is there will be a version of EFCA,” said Tim Davis, managing partner of the Kansas City office of employment law firm Constangy Brooks & Smith LLP. “If they are not prepared in advance, unionization is going to grow significantly in the United States.” (kansascity.bizjournals.com)

A Congressional agenda for joblessness ... There is substantial room for compromise with regard to EFCA's most controversial provisions. There may yet be a chance that a secret ballot will be preserved -- what democratic administration wants to be recalled as one that abolished a secret ballot election? -- if the lengthy time period between the filing of a petition and scheduling an election can be shortened. The onerous treble damages provisions of EFCA may well be a focus of compromise, as would likely be the provisions for binding "interest arbitration," which would be an extraordinary and troubling change to existing law. (law.com)

Congress to fix U.S. job market for union bigs ... In accepting the endorsement of the SEIU, President Obama vowed to pass the EFCA, stating: "We will pass the Employee Free Choice Act. We may have to wait for the next president to sign it, but we will get this thing done." Before rushing to abandon secret-ballot elections and impose collective-bargaining agreements through arbitration, the experience of our next-door neighbor, Canada, should be examined. EFCA-like legislation was present in nine of 10 Canadian provinces until the late 1980s. Since then, there has been a steady trend toward secret-ballot elections. (hreonline.com)

Obama zeroes in on secret-ballot ... If the bill is enacted, it will be the end of free choice about whether workers want to join unions. If the bill is approved in the Senate, it will mean the end of an important freedom - that of using the secret ballot on an issue of major importance to workers. (minotdailynews.com)

House Majority Leader on EFCA ... HOYER: The Employee Free Choice Act is high up on our agenda. We passed it early in the last session. It languished in the Senate. We believe very strongly that employees have not only the right to organize and bargain collectively for pay and benefits and working conditions, but that our economy is better off when that happens. We also believe that it’s been very difficult for employees to get elections. There have been great delays, not enforcement of -- by the NLRB of --- against unfair labor practices. So we -- that’s an agenda high up on our -- that is an item high up on our agenda. And we will be giving attention early on. Will we discuss with others their views, including Republicans and the administration, their views on that? The answer is yes; we will be discussing that. And there are obviously various different views on that issue, but we intend to pursue it. (cqpolitics.com)

Related video: "Employee Forced Choice Act"

Russian nukes in Venezuela

More collectivism stories: here

No comment from Obama Administration

Venezuelan President Hugo Chávez announced that his country had reached a tentative agreement with Russia to build a nuclear reactor.

"A nuclear reactor, to produce energy for peaceful purposes, will soon be built in Estado Zulia and named in honor of a 20th century Venezuelan scientist, Humberto Fernandez Moran," the Venezuelan Ministry for Communication and Information quoted him as saying. The media report that the construction contract may be signed on November 26, during President Dmitry Medvedev's visit to Venezuela.

Although Chávez's flamboyant style is nothing new, it is worth analyzing the possible goals of the project and assessing how viable it is.

The history of South America's nuclear industry is about 50 years old but only Argentina and Brazil have nuclear reactors. In both cases, this is the peaceful tip of the military nuclear iceberg. Both have suspended their nuclear programs under the pressure of the world community, at least officially. They have regular light-water reactors, and Canadian heavy-water CANDUs. The United States, Canada, and Germany have played the main role in Latin America's peaceful nuclear programs.

Latin America is a potential growing-point for the Third World's nuclear industry. Brazil and Argentina are going to continue developing their nuclear industries. Chile has also declared its intention to obtain nuclear technologies.

Venezuela claims to be Latin America's third major power, and in this context its intention to go nuclear looks primarily like an ambitious political move. The oil-producing Venezuela does not need to develop a nuclear industry, unlike India or China, major importers of hydrocarbons. Brazil is also an oil producer but it is sometimes short of energy because of its rapid economic growth.

In short, for Venezuela, a nuclear reactor may simply be a military-political project. It is not likely to cope with a military nuclear program for two reasons. First, the light-water VVER model, which is the only technical solution for the Venezuelan project, is not suitable for military uses. Second, Venezuela does not have enough engineers who are qualified for the task.

It would be premature to expect technical aid from Russia at this point.

The Russian nuclear engineering is obviously overstrained. Recently, the growing number of export contracts for the construction of nuclear power plants abroad has jeopardized Russia's federal target program for the development of the nuclear industry. Russia has only one company that specializes in building nuclear reactors, Izhorskiye Zavody, and it is loaded with contracts for years to come.

It is hard to overestimate the political importance of Russia's peaceful nuclear expansion to the Third World, but Moscow should not forego the interests of its own nuclear industry. Paralyzed by the Chernobyl syndrome in the late 1980s, and the general crisis of the Soviet economic system, it requires overall reconstruction and development.

This makes the Venezuelan-Russian project seem like a political fantasy rather than an economically substantiated move. In the final count, neither side needs it. However, it may be used as a bargaining chip in the big game between the United States, the European Union, China, and Russia, which is now unfolding in Latin America.

Latin America is freeing itself from U.S. control. Its growing military and political ambitions are turning it into what it was, to a certain extent, in the 19th century - the testing grounds of the great powers. But there is one unpleasant detail: They are increasingly testing more and more dangerous toys.

(en.rian.ru)

Raul Castro, Chávez snub Barack

More collectivism stories: here

Obamunists wanted Castro to visit U.S. first

Venezuelan President Hugo Chávez has said that Raul Castro is to make his first visit to Venezuela since assuming the Cuban presidency, regional media reported on Wednesday.

"Raul Castro told us that he intends to visit Brazil, China, Russia and other countries, but first of all he will visit Venezuela," the Venezuelan president said at a pre-election meeting of the United Socialist Party of Venezuela. The visit will occur "in the next few days," the Venezuelan leader added.

Chávez has long been a close ally of former Cuban president Fidel Castro, who stepped down earlier this year at the age of 82 in favor of his younger brother.

The Venezuelan president earlier said that his country planned to hold a summit dedicated to ways of tackling the ongoing financial crisis, an event he described as an alternative to the recent G20 summit in Washington.

The event is expected to take place in Caracas on November 26, and will involve the Bolivarian Alternative for the Americas (ALBA), an international cooperation organization in Latin America and the Caribbean, and Petrocaribe, a Caribbean oil alliance.

(en.rian.ru)

Full Employment Act for union organizers

Related video: "Employee Forced Choice Act"
More EFCA stories: herecard-check: here

'Bogus Choice Act' seems more likely to pass now

Rare indeed is the management that believes unionization will benefit the company or its employees. For the rest of us, now is a time for heightened vigilance, for under this new administration a radical change in federal labor law is poised for enactment, and it is a “game changer” that stacks the deck in favor of union organizers.

This new legislation is called the “Employee Free Choice Act.” Some have opined that the name is “Orwellian,” for EFCA quashes “free choice” by effectively eliminating secret ballot elections in union-organizing drives. It accomplishes this by mandating “card check” certification of unions. Under a “card check” regime, union organizers need only collect signatures from a simple majority of the targeted work force, upon which the union is “certified” and the entire work force is unionized.

Related video: "Employee Forced Choice Act"


This “card check” process leaves employees at the mercy of union organizers who, working singly and in groups, track down employees at work and in their homes. Experience shows they often subject employees to misrepresentations, which escalate to peer pressure and then to intimidation, until the employee finally relents and signs a union “authorization card.” So under EFCA the union (“candidate”) can solicit and collect the signatures (“votes”) by pretty much whatever means it deems necessary, and then declare itself the victor – exactly the type of “election” regime one would associate with a totalitarian state.

In addition, under EFCA, if the employer and the new union do not reach a first contract within 120 days, the matter can be referred to a federal “arbitration board” empowered to impose the terms of an initial two-year contract. The prospect of federal bureaucrats determining “wages, hours and working conditions” should send chills down every management spine.

Armed with this statutory club, the union will have every incentive to make inflated demands, knowing that the employer will be tempted to concede rather than risk whatever might be imposed by the arbitration board. In turn, this initial contract will become the template for the next round of negotiations. This gravitational pull toward above-market compensation, staffing levels and work rules will make it extremely difficult for the company to compete, domestically or internationally.

Organized labor tacitly acknowledges this. Having watched as unionized manufacturers have slipped their grasp by moving operations overseas, or gone out of business entirely, unions are now targeting service sectors that can’t readily escape: health care, nursing homes, building services, leisure and hospitality are now among the targets of choice. Should those industries become more unionized under EFCA, companies within them will come to resemble the domestic airline industry, which is notorious both for periodic forays into Chapter 11 and for high mortality rates (when did you last fly Eastern, PanAm or TWA)? Ironically for organized labor, under EFCA the benefits of remaining union-free will greatly increase, and so provide additional motivation for the informed employers and employees alike to resist unionization.

Without secret ballot elections, the run-up “campaign” is also eliminated. This greatly reduces the unions’ costs for organizing drives. In addition, the targeted work forces would be subjected to the “persuasion” of professional union organizers without the benefit of hearing the counterbalancing factual information from their employer that comes during a traditional campaign.

And because the union organizers know who has or has not signed, they can focus pressure on hesitant employees until they get to that magic “50 percent plus one.” A swarm of union organizers could, within a matter of days (if not hours) obtain the requisite number of signatures. The remainder of the work force needn’t even be approached for a signature, and may not become aware that they are unionized and obligated to pay union dues until after the fact.

The coming administration elevates the enactment of EFCA from “possibility” to “likelihood,” though uncertainty as to enactment remains. What is certain is that employers wishing to preserve their union-free advantage should not wait for enactment before responding to this threat. Employee signatures are valid for one year – so even now organizers could be quietly collecting inventories of signatures, readying themselves to pounce on unsuspecting companies immediately after enactment, announcing that their workplace is “now union.”

So what’s an employer to do? Adapt. The tried and true elements of a union avoidance are still effective, but now should be integrated within an ongoing, preventative process. Since many of these same elements are good management practice in their own right, there’s no reason not to implement now. Such elements include vulnerability assessments, progressive discipline and open door policies, workplace communication, and supervisor training regarding unions and organizing.

Finally, educating rank-and-file employees regarding the legal and monetary ramifications of signing a “card” will become part of the standard repertoire (such as during orientation), so that they will be less likely to inadvertently provide a signature to a union organizer, and more likely to resist pressure and to alert management should union organizers begin stalking them. •

- Thomas C. Wigand is author, along with Jeffrey L. Hirsch of Boston, of the new edition of “Labor and Employment in Rhode Island,” from LexisNexis Publishing.

(pbn.com)

Congress to set unionization surge

Related video: "Employee Forced Choice Act"
More EFCA stories: herecard-check: here

Jack Figg said he doesn’t see the need for the proposed Employee Free Choice Act, which would make it dramatically easier for workers to unionize.

“If you’re in a sweatshop of the Boss Tweed days ... all that makes a lot of sense,” said Figg, spokesman for ATK Alliant Tech Systems, whose employees run the Lake City Army Ammunition Plant in Independence, which has rejected employee unionization efforts three times. “That’s not where we are as a society.”

Related video: "Employee Forced Choice Act"


Labor organizers and advocates, however, said they see an opportunity to more easily form unions and avoid management tactics that dissuade unionization.

“The imbalance in the (current) law is terrific, and the Employee Free Choice Act is just the tip of the iceberg,” said Judy Ancel, director of the University of Missouri-Kansas City’s Institute for Labor Studies.

EFCA, as it is written, would allow labor unions to form in a workplace without an employer knowing about it until the union is already formed and certified. It also would alter the manner in which union contract negotiations take place and increase fines against employers that engage in forbidden union-busting tactics.

Both sides agree that EFCA probably will pass in some form in 2009 now that Democrats have strengthened their majorities in Congress and won the White House.

“What employers have to realize now is there will be a version of EFCA,” said Tim Davis, managing partner of the Kansas City office of employment law firm Constangy Brooks & Smith LLP. “If they are not prepared in advance, unionization is going to grow significantly in the United States.”

U.S. Department of Labor statistics show that 12.5 percent of private-sector employees belong to unions. The average in Missouri was 11.9 percent last year, and 7 percent of private-sector employees in Kansas were union members.

Those figures could increase with the passage of EFCA.

The legislation would allow union representation of workers if a simple majority of employees in a workplace sign a union card. Presently, employers are notified that a secret ballot election will take place once a union organizer collects signed union cards from 30 percent of the work force.

Critics say the new provision effectively eliminates the secret ballot vote and opens the door for union organizers to intimidate fence-sitters into opting for the union.

What’s more, they say, employers would not be notified when a unionization process was under way and thus would not have an opportunity to respond.

“Once the cards are signed under a card check, it won’t make a difference,” Davis said. “Because it is too late.”

EFCA proponents counter that card checks allow workers to outmaneuver employers that may try to suppress unionization.

“It should be that if a majority of workers want a union, you should be able to get a union,” Ancel said.

Supporters also hail a provision that would send union and employer negotiators to arbitration if contract negotiations stall. Such a move would eliminate protracted negotiations that can take years to resolve, they say.

Opponents say that putting matters in the hands of arbitrators, who may not understand the intricacies of a particular business, may beset a company with wage and benefit expectations that make it uncompetitive.

“The thing that’s really atrocious is you have to bring in an arbitrator, and he doesn’t have to understand your business or anyone else’s business,” said Tom Holden, director of the Hotel and Lodging Association of Greater Kansas City.

Unionization efforts in the Kansas City area have yielded mixed results in recent years.

In late 2007, Nurses United Local 5126 successfully unionized the nursing staff at Centerpoint Hospital in Independence.

Months later, an effort by United Auto Workers Local 710 to form a union among card dealers at Argosy Casino failed.

Rick Klingenberg, union organizer for UAW Local 710, said he thought the effort to unionize those workers would have been successful had EFCA been in place at the time.

“Yeah, it would have been,” Klingenberg said. “(Casino management) pounded on the fears, and a lot of young people don’t understand labor unions.”

Lawyers representing company management are ramping up efforts not only to educate clients about EFCA but also to offer advice on how to prevent their employees from organizing.

Brian Christensen, of counsel with Bryan Cave LLP, said that in general, competitive wage and benefits packages and a management that is attuned to employee needs go far in diffusing an atmosphere that leads to unionization.

“The first thing I would encourage employers to do is to think about and listen to their employees. ... When employees go to a union, it’s usually because they feel powerless and are looking for help, and a good employer can take that away,” Christensen said.

Employee Free Choice Act

The main provisions of EFCA, as currently written, include:

• Allowing union representation of a workplace once a simple majority of employees sign union cards. Current law requires notification of a secret ballot election once 30 percent of employees sign a union card.

• If a union and an employer cannot reach a contract on their own once a union is certified, the negotiations go to arbitration.

• Increased penalties for employers found to improperly disrupt unionization efforts. Unions face no increased penalties for illegal tactics.

(kansascity.bizjournals.com)

A Congressional agenda for joblessness

Related video: "Employee Forced Choice Act"
More EFCA stories: herecard-check: here

Workers, employers urged to prep for Barackonomics

What does Barack Obama's victory auger for employers, and for their counsel? What are the likely legislative changes that will result? And, does this signal a time of new cooperation, or confrontation, between management and labor?

Union membership is at historical lows, down to about 7.5 percent of the private-sector work force, one-third the rate in 1983. Unions are understandably eager for Congress to pass legislation that will reverse this continual slide. They are particularly eager, as a first order of business, to seek passage of the Employee Free Choice Act ("EFCA"), which would make it significantly easier for unions to gain representation in a particular company. Obama has committed to signing such legislation.

Related video: "Employee Forced Choice Act"


'ARMAGEDDON'? NOT LIKELY

What is the expectation of employers in advance of a union- and employee-friendly Obama Administration? Surely, it lies somewhere short of the answer provided recently by one spokesman for the United States Chamber of Commerce: "This will be Armageddon."[FOOTNOTE 1]

With the economy in turmoil, the unemployment rate rising precipitously, and corporate layoffs unfortunately becoming more and more prevalent, Obama's victory comes at a challenging time both for companies and employees. Nevertheless, despite these problems, the atmosphere between employers and employees is relatively positive.

Litigation is down. Fewer discrimination lawsuits, whether class-wide or individual, are filed today, and employers are eager to resolve disputes through mediation or in other non-contentious ways.

Even with the economic downturn, most employers want to attract and keep good employees. The move toward corporate social responsibility, diversity, transparency in business decisions, and compliance with EEO and other employment laws all reflect an effort on behalf of employers to maintain good relations with employees.

Similarly, companies' efforts to help employees strike a "work-life balance" have become more important than ever, and they indicate a new era of cooperation between employers and employees.

Most of these positive developments, of course, have taken place in the absence of labor unions, and at a time, again, when they are historically at a period of low influence.

Nevertheless, with Obama's victory, more than 20 years after the Reagan administration's aggressive stance in favor of management, the pendulum away from union representation may be ready to swing in favor of labor.

Obama's victory is, to be sure, a historic event. Even if it was widely anticipated in the polls, the enormity of the victory, the repudiation of the current administration, and the tectonic shift in U.S. politics it signifies are striking. No matter how much advance notice we had that he would likely win, most voters expected a closer election, and few would have been terribly surprised if the normal "red state/ blue state" divisions had prevailed and the Republicans had once again walked away with the presidency.

Obama's training as a lawyer, and his performance in the presidential debates, were key to his victory. He stayed on message, and his level of preparation and knowledge of the issues. His clear, articulate arguments, permitted all but the most skeptical of observers to become comfortable with the idea of this senator, unknown until recently to the vast majority of Americans, becoming president.

How will the Obama presidency affect employment law and policy? Obama's pronouncements during his campaign, and his record as senator, provide ample evidence that he will seek to pass legislation which will substantially shift the ground toward a more union-friendly environment. He will also likely seek to expand the protection of numerous existing employment laws.

THE RECESSION'S IMPACT

Until recently, most management employment lawyers have focused on the likelihood that major Democratic legislative initiatives -- most notably, EFCA -- will become law, and that these pro-employee developments will translate to a difficult and challenging time for employers in an Obama administration.

But with the economy in free-fall, the new president is less likely to focus on issues that upset years of labor-management balance, or ground-breaking legislation designed to rewrite the rules of the game. At least in the short term, these will likely take second or third place behind initiatives designed to help employers hold on to jobs and maintain economic stability. Conversely, this may result in one or more employment law changes being slipped into a financial crisis response bill with little or no debate.

For example, the financial crisis has stirred populist anger over executive compensation and golden parachutes on Wall Street. The recently enacted bailout package contains some new provisions to regulate in this area, and it seems inevitable that still more attempts at regulation on these issues will follow. (When a senator, Obama introduced the "Shareholder Vote on Executive Compensation Act" in 2007 to permit shareholders to hold nonbinding votes on executive compensation.)

Of course, Obama may well have the opportunity to appoint two or three U.S. Supreme Court justices. Given the closely divided nature of the current court, even one new appointment could make a significant difference.

LIKELY LEGISLATIVE INITIATIVES

Throughout his campaign, Obama openly expressed his intent to work with labor organizations to revamp current labor laws. Twenty-five percent of delegates at the Democratic National Convention either were union members or lived in the same household as a union member. (By comparison, 7.5 percent of private sector employees are members of a union). With endorsements from the AFL-CIO and AFSCME, labor leaders made it clear that they expect Obama to push new labor legislation forward. Changes may occur in some or all of the following areas.

EFCA

EFCA would amend the National Labor Relations Act (NLRA) to eliminate the need for employees to decide by secret ballot vote whether to be represented by a union. EFCA would instead establish a "card check" procedure, under which a union could be certified if a majority of employees signed union authorization cards. A union could demand an employer begin bargaining 10 days after the union is certified as the exclusive bargaining representative by the National Labor Relations Board. EFCA would also impose more stringent penalties for unfair labor practices committed by employers during an organizing campaign or during bargaining over a first contract.

Unions may see EFCA as the most important legislation that has been before Congress in years. They see enactment of the bill as the single most important step toward reversing their loss of membership and power.

There is substantial room for compromise with regard to EFCA's most controversial provisions. There may yet be a chance that a secret ballot will be preserved -- what democratic administration wants to be recalled as one that abolished a secret ballot election? -- if the lengthy time period between the filing of a petition and scheduling an election can be shortened.

The onerous treble damages provisions of EFCA may well be a focus of compromise, as would likely be the provisions for binding "interest arbitration," which would be an extraordinary and troubling change to existing law.

Family and Medical Leave Act

When Senator, Obama proposed that the FMLA be expanded to include businesses employing 25 to 49 people (as opposed to the current minimum of 50 employees). An expanded FMLA under an Obama presidency also would: (1) provide leave for elder care and domestic violence and (2) provide parents up to 24 hours of leave each year to attend school activities for their children. Obama also supports granting 7 days of paid sick leave per year to each employee.

RESPECT Act

Obama supports the Re-Empowerment of Skilled and Professional Employees and Construction Tradesworkers (RESPECT) Act, which would narrow the definition of "supervisor" under the NLRA. This change would enable more employees to become members of unions. It would amend the NLRA's definition of "supervisor" to provide that individuals could only be excluded from a bargaining unit as supervisors if they: (1) have authority over employees for a majority of their work time and (2) have the power to assign that authority to other employees and to responsibly direct employees.

Expansion of WARN

Obama supports amending the Worker Adjustment and Retraining Notification Act ("WARN") to expand the statute's protections. The Forewarn Act of 2007 would: (1) require a 90-day written notice of plant closures or layoffs, instead of the current 60-day notice; (2) double the penalties for employers who violate the law; and (3) apply to employers of 50 or more employees instead of 100 employees, as under the current act.

Anti-Discrimination

The Employment Non-Discrimination Act of 2007 (ENDA), which Obama would likely support, would prohibit employment discrimination on the basis of sexual orientation. The Equal Remedies Act of 2007, cosponsored by Senator Obama, would remove the limits on the dollar amount of punitive damages, as well as damages for pecuniary and non-pecuniary losses, in cases brought pursuant to the Title VII of the Civil Rights Act of 1964 ("Title VII").

The Lilly Ledbetter Fair Pay Act would reverse the Supreme Court's 2007 decision in Ledbetter v. Goodyear Tire & Rubber Co.,[FOOTNOTE 2] which imposed severe time limits on the ability of plaintiffs to challenge longstanding, allegedly discriminatory compensation decisions. The act would amend Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and the Rehabilitation Act of 1973 to reverse that ruling.

President-elect Obama does not support same-sex marriage, but he supports full civil unions that "give same-sex couples equal legal rights and privileges as married couples, including the right to assist their loved ones in times of emergency as well as equal health insurance, other employee benefits, and property and adoption rights."

Independent Contractors

The Independent Contractor Proper Classification Act, proposed by Sen. Obama in 2007, would, among other things, require employers to treat workers misclassified as independent contractors as employees for employment tax purposes upon a determination of misclassification by the Secretary of the Treasury. It would also eliminate the defense of "industry practice" as a justification for misclassifying workers as independent contractors.

And, the law would require the Secretary of Labor to establish a procedure for workers to petition for a determination of their status as employees or independent contractors.

CONCLUSION

The view that an Obama administration will lead to "Armageddon" in terms of labor relations, as expressed by the U.S. Chamber of Commerce, is a bit extreme. But it will undoubtedly mean significant changes for employers and expansion of the current scope of labor and employment law. It is to be hoped that the amendments to existing laws, and expected new ones, will work in favor of both employers and employees, and will not reverse the positive gains of recent years.

- Philip M. Berkowitz is a partner at Nixon Peabody, where he heads the international labor and employment law practice team.

(law.com)

Congress to fix U.S. job market for union bigs

Related video: "Employee Forced Choice Act"
More EFCA stories: herecard-check: here

Employment Law: The Shifting Legal Landscape

The wage-and-hour epidemic, Employee Free Choice Act and downsizing repercussions top the areas of legal concern in the coming year.

HR professionals are about to experience great changes and challenges as we enter 2009. Global HR compliance, downsizing, a new president and Congress, family-responsibility challenges, the rise of "workplace bullying" claims, the need for more aggressive wellness programs and the threat of employment-law class-actions are merely a sampling of what awaits.

While each of these topics warrant review, three mega-trends mandate attention: taming the wage-and-hour class-action epidemic, preparing for the greatest labor-law changes in 70 years and avoiding downsizing legal landmines.

Wading through Wage-And-Hour

No employment-law trend is more certain, universal or important than the total wage-and-hour compliance initiative and stopping the epidemic of wage-and-hour class-actions. It is predicted that manager and employee wage-and-hour training, especially online, will become as common by 2010 as harassment-prevention training.

A crisis exists in workplaces that is as dramatic as the collapse of the housing market and out-of-control gas prices. The Department of Labor reports that seven of 10 employers are still out of compliance with wage-and-hour laws.

Between 2003 and 2006, Fair Labor Standards Act complaints filed in federal court doubled, reaching 4,203. In 2007 alone, complaints increased nearly 60 percent to 7,310. State court wage-and-hour lawsuits also reached epidemic proportions; California and Florida led with more than 1,000 each annually. Average class-action settlements have reached $23.5 million under the FLSA and $24.4 million under state wage-and-hour laws.

The class-action umbrella includes claims regarding overtime, employee misclassification, meal and rest breaks, off-the-clock work, donning and doffing and travel time, expenses reimbursements and tip pools. In Congress, the mood is for greater enforcement of what has been labeled "wage theft."

This is a call the Barack Obama administration will surely embrace. In 2009, the No. 1 mandate for HR professionals will be to end the "wage-and-hour war."

Employers must awaken to the crisis and attack. Legislative reform, revised regulations, new case law, and advanced litigation and settlement strategies are all part of finding solutions. However, at the center of this "war" comes an ear-shattering call to recognize that the best immediate answer is within the employer's control -- dramatic emergency wage-and-hour compliance procedures.

When litigation commences, the "war" is lost every time. No matter how successful the judgment or settlement, the loss of management time and the cost of attorneys' fees injure an organization's bottom line. Litigation weakens employer trust and polarizes people who must work together.

Most employers are committed to doing the right thing and complying with legal requirements. This core value and common-sense reality demands a new age of total wage-and-hour compliance. This is the clear and strong trend that will sweep the nation in 2009.

The goal of a total wage-and-hour compliance initiative is not merely to "win" or do better in the conflicts, as that presumes continuing litigation. The objective is to reach a level of compliance that greatly reduces the likelihood of litigation. With thousands of plaintiffs' attorneys examining every aspect of the payroll process, employers must expect maximum scrutiny. Every employee who is terminated or demoted, or who experiences an unpleasant workplace event, is encouraged by Internet and television advertising to seek the advice of counsel. In almost every intake interview, the attorney's questioning turns to wage-and-hour issues in an attempt to find additional claims. Inspired by the prospect of turning a small individual claim into a multimillion-dollar class-action, the organization's wage-and-hour compliance goes under the microscope.

If the goal is to end the wage wars, a total wage-and-hour compliance initiative is mandatory.

This initiative has seven key elements:

* Audit existing wage-and-hour policies and practices. Decide whether to attempt to make this audit attorney-client privileged. Many good checklists exist, including one published by the Open Compliance and Ethics Group.

* Establish state-of-the art policies and procedures. Create policies that are not only compliant, but easily followed and litigation-ready.

* Carefully plan needed changes. Determine whether your changes will improve compliance without admitting any past wrong and consider new compliance programs from the DOL and corresponding state agencies that make employees whole without penalties.

* Adopt wage-and-hour-complaint procedures. Encourage employee reporting of perceived problems, investigate and make needed corrections; this helps create new affirmative defenses for litigation.

* Train HR, managers and employees. The vast majority of employers fail to do adequate training. Training is essential for compliance and to defend class-actions.

* Use new technology. From audit software and compliance Web sites, to GPS-based time-management systems and e-learning, technology tools are essential for total compliance.

* Verify compliance practices. After implementing the system, periodic verification is essential; many employers with good policies have found that they are not being followed in practice.

Obama's Labor Promise

The elections of Obama and Democratic majorities in Congress herald a new era for organized labor. Strongly supported by organized labor, the newly elected government is expected to enact the Employee Free Choice Act. Indeed, President Obama was a co-sponsor of the bill while a senator. In accepting the endorsement of the SEIU, President Obama vowed to pass the EFCA, stating: "We will pass the Employee Free Choice Act. We may have to wait for the next president to sign it, but we will get this thing done."

Related video: "Employee Forced Choice Act"


EFCA would result in the most sweeping changes to the National Labor Relations Act since the original 1935 Wagner Act.

It would amend the NLRA to: require the National Labor Relations Board to certify a labor union as the exclusive bargaining representative through authorization cards signed by employees, without the benefit of a government-supervised, secret-ballot election; require arbitration if an employer and a newly certified union are unable to reach a first contract in a timely fashion; and expand the NLRB's powers for remedying employer unfair labor practices during union-organizing campaigns and during initial bargaining, including granting it the authority to impose penalties.

Before rushing to abandon secret-ballot elections and impose collective-bargaining agreements through arbitration, the experience of our next-door neighbor, Canada, should be examined. EFCA-like legislation was present in nine of 10 Canadian provinces until the late 1980s. Since then, there has been a steady trend toward secret-ballot elections.

Currently, six Canadian provinces -- British Columbia, Alberta, Ontario, Nova Scotia, Newfoundland and Labrador, and Saskatchewan -- use secret-ballot elections to certify unions, although Ontario and Nova Scotia allow majority-card certification in construction industries. Even many provinces that use card checks require super-majorities for certification.

The reasons for rejecting the card-check process are many, including card falsification, intense pressure to sign and lack of time for an informed decision.

The 2009 agenda for HR professionals must assume EFCA in some form will become law. In anticipation, employers should consider auditing conditions to determine whether they would support an organizing drive; monitoring union-organizing activities within the industry or geographical location; training management about rules associated with union organizing, potentially providing employees with information and arguments about union representation when organizing activity is anticipated and -- in some highly targeted industries -- even before receiving evidence of organizing activity; and, most of all, reviewing overall employment conditions to ensure they are competitive and the needs of employees are being addressed.

Facing Reductions in Force

A third mega-trend is managing the size and composition of the workforce in a time of economic challenges. It is projected a million jobs will have been lost in 2008, with unemployment rates increasing and more reductions in force expected in 2009. What differs from the past is these economic adjustments are happening in smaller groupings, are heavily impacting older workers and are partially hidden within restructurings. To avoid legal landmines, HR procedures need a makeover.

In 2008, many reductions impacted contingent workers. These were less complicated and more expected, and created less legal risk than direct-hire layoffs. In 2009, the downsizings will heavily impact direct-hire employees. To provide the appearance of stability, many of these layoffs are planned as restructurings. Products and services will be eliminated or consolidated, resulting in job eliminations.

Often, these are announced by department or product and appear small. When the numbers are aggregated, however, hundreds of thousands of laid-off employees will be released into a difficult economy.

In dusting off RIF plans, HR professionals properly review the classic issues: justification for the RIF, voluntary exit incentives, position identification, decision-maker identification, ensuring proper selection criteria, reviewing current policies and procedures for compliance, managerial training, adverse impact analysis of protected categories, updating severance and release agreements, checking for Worker Adjustment and Retraining Notification Act implications and controlling hiring during the RIF. These remain important, but are joined by four new legal landmines requiring new approaches:

* The wage-and-hour surprise. Terminated employees will use the Internet to learn about their rights and find a plaintiffs' attorney, even if only to review a severance agreement. In sharp contrast to prior periods of economic contraction, the plaintiffs' attorneys have become part of the wage-and-hour gold rush. An employer's wage-and-hour practices are guaranteed to receive close examination by the courts, although irrelevant to the downsizing.

Many lead plaintiffs in 2008 class-actions were recently laid off. The highest risk of such litigation is now occurring during layoffs and restructurings. This mandates full activation of the wage-and-hour compliance initiative previously presented as part of preparing for an RIF. Moreover, review the language of severance-package releases. Employees usually cannot waive wage claims, but can affirm they have been fully paid.

* WARN Act surprises. Special attention is needed regarding federal and state WARN statutes. Because the reductions are somewhat hidden and in smaller groups, HR professionals must maintain flowcharts showing the number impacted during rolling 90-day periods. Also, check for any new state law requirements (e.g., in February 2009, New York's law becomes effective, requiring 90 days' notice).

* Heightened age-discrimination standards. The demographics of the workplace will increase the number of older workers impacted, and their rights have expanded. In 2008, the U.S. Supreme Court raised the bar on what is needed for employers to defend against Age Discrimination in Employment Act claims.

In Meacham vs. Knolls Atomic Power Laboratory, the court held that if older workers are adversely impacted, the employer must not only show that the selection was based on a "reasonable factor" other than age, but also must persuade the jury or other trier of fact that it was reasonable to rely on this factor. This can be difficult if the criterion was subjective, such as a supervisor's ranking without objective criteria.

The court recognized that placing the burden of persuasion on employers "will sometimes affect the way employers do business with their employees." This is a mandate in 2009 for more objective standards, better documentation and more management oversight, as well as working with a statistician and/or legal counsel to conduct impact analyses.

If an RIF would adversely impact any protected group, work with counsel to ensure such decisions are defensible. If necessary, modify the RIF factors and/or revise the weight assigned to each factor.

* New-release landmines. Release requirements have become more difficult under the Older Worker Benefit Protection Act and other statutes. For group releases, special statistical information is required about the job titles and ages of those in the decisional unit.

Also, some courts have interpreted the OWBPA to require a listing of the "decisional factors." Slight errors could invalidate the entire release. HR professionals must carefully review releases under the new standards -- they must be updated.

- Garry Mathiason is a shareholder, partner and vice chair of Littler Mendelson in San Francisco, and widely recognized as a leading authority on employment-law trends in the United States.

(hreonline.com)

Federal bailout for organized labor looms

Related video: "Employee Forced Choice Act"
More EFCA stories: herecard-check: here

Union bigs lick their chops at forced-dues windfall

If the Employee Free Choice Act is approved, a Charleston labor attorney says the result will be a lot of litigation.

"I don't think it's the best thing to keep labor lawyers like me employed fully at the expense of workers and companies," Attorney Kevin Carr said on Tuesday's MetroNews Talkline. He works for the law firm of Spilman Thomas and Battle and represents employers in labor disputes.

Right now, if workers at a specific business want to form a union, a petition is circulated among those employees. If 30% of the workers sign that petition, it triggers an election on possible unionization which the National Labor Relations Board oversees.

Related video: "Employee Forced Choice Act"


The proposed Employee Free Choice Act or card check system, as it is sometimes called, would allow a union to be formed without the NLRB's involvement. All it would take to form a union is for 50% of the workers plus one to check yes on cards the union would circulate.

"It takes the government agency and the employer out of the equation, allows the union on its own time without knowledge of the employer to get cards from 50% plus one of the employees at which time then the union's in place," Carr says.

He says it's like this. "If you look at the Presidential Election, it would be as if John McCain was invited to every debate alone. John McCain was allowed to put his website up and John McCain was allowed to speak to the American people and Barack Obama wasn't."

Supporters of the Employee Free Choice Act say it would allow working people to bargain for better wages, benefits and working conditions by restoring the freedom of those workers to choose for themselves whether or not to join the union. It also provides for mediation and arbitration for first contract disputes.

Carr was on Tuesday's MetroNews Talkline as part of the ongoing debate on the issue. Those who favor the Act will be guests on future shows.

Congress is expected to again take up the Employee Free Choice Act at some point.

(wvmetronews.com)
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