Hunton Employment & Labor Law Perspectives : Employment Lawyers & Attorneys : Hunton & Williams Law Firm : Labor Law Legislative Updates

Becker, former associate general counsel for the SEIU and the AFL-CIO, two of the largest unions in the U.S., drew a flood of criticism for his labor ties when President Obama first nominated him.  In their February 1 letter, the Senators express their disappointment in Mr. Obama’s recess appointment of Becker and explain that during his ten month tenure, Becker has not alleviated their concerns about his record of supporting an expanded role for the Board without Congressional authorization and his numerous conflicts of interest. 

The Senators allege that the Board has adopted a clearly pro-union stance since Becker’s recess appointment, and that Becker has led the Board to “re-open and reverse settled decisions.”  The Senators also point out that under Becker’s leadership, the Board has threatened four states (Arizona, South Carolina, South Dakota and Utah) with lawsuits over constitutional provisions protecting secret ballot union elections that were adopted by the voters of those states, but has ignored provisions in other states that conflict with federal law but benefit unions over employers. 

The Senators also express their dismay that, although Becker promised during his confirmation hearing to recuse himself for at least two years from any Board matter in which his previous union employers were a party, he has refused to recuse himself in twelve of thirteen such cases over the past ten months.  The Senators opined that the Board’s actions under Becker’s leadership will ensure conflict with Congress, entangle the Board in legal challenges for many years, and result in an even more polarized and unworkable Board.  The Senators conclude their letter by expressing their willingness to work with President Obama to identify a replacement nominee. 

The Board currently has a 3-1 Democratic majority, which includes Becker, but on January 5, President Obama nominated Board lawyer Terence Flynn (R) to fill the fifth spot on the Board.  According to Mike Enzi (R-Wyo.), Senate Republicans are not planning to back down from their opposition to Becker, and with forty-seven seats in the Senate, they have the votes to filibuster his confirmation vote.  Stay tuned for what is likely to be an interesting showdown.
 

The final rule was issued by the NMB after several months of discussion.  It will take effect 30 days from its publication in the Federal Register on May 11 and its impact will likely be felt immediately in the airline industry.  The Association of Flight Attendants (“AFA”) has already indicated that it will file for an election at Delta Air Lines once the rule becomes effective.  Unions had previously failed to obtain a majority vote at Delta, but Delta’s composition of union and non-union workers has shifted since 2008 when it merged with a heavily unionized NorthWest Airlines.  The Air Transport Association (“ATA”), which represents most airlines, has also responded to the new rule arguing that the NMB does not have authority to implement the rule.  The ATA is expected to file a lawsuit challenging the validity of rule. 

Although the NMB’s action is specific to the airline and railroad industries, it is notable because it continues the trend of recent pro labor actions.  The rule was proposed by the AFL-CIO after President Obama named Linda Puchala to the NMB.  Puchala was the former head of a flight attendant union and as with the recent appointments to the National Labor Relations Board, her appointment shifted the balance of the NMB in a pro labor direction.  The rule was approved by a 2-1 vote with a dissent by Elizabeth Dougherty who explained that the new rule is “an unprecedented departure for the NMB and represents the most dramatic policy shift in the history of the agency.”

AFL-CIO boss Richard Trumka claims that the campaign will send a message to the banks:  “Stop refusing to pay your fair share to restore the jobs you destroyed, stop fighting financial reform and start lending to your communities, small businesses and others starved for credit.”   Demonstrations kicked off last week and may reach 200 locations.  Flyers will urge observers to "Tell the banks to PAY UP!"

The campaign is not limited to painting financial institutions in a negative light.  Through the participation of advocacy group Americans for Financial Reform (AFR), the campaign will push Congress to pass a set of "financial speculation taxes" which would place a tax on certain securities transactions.  The campaign speculates that this tax would raise over $100 billion per year.

The AFL-CIO claims that its partnership with AFR is not about labor organizing but instead is about “holding banks accountable” and pushing for financial reform.  However, a look below the surface reveals AFR’s extensive ties to organized labor and other anti-business groups.  Stephen Abrecht, the current director of the Service Employees International Union's (SEIU) pension funds, is a member of AFR's Executive Committee.  AFR's Steering Committee includes representatives from MoveOn, AFL-CIO, and USAction--a group that was instrumental in the formation of Health Care for America Now (HCAN).

HCAN was a central participant along with SEIU in a major demonstration recently against the insurance industry in Washington.  HCAN and SEIU also were heavily involved in the effort to disrupt citizen protests at Congressional town hall meetings last summer.  (HCAN circulated instructions on how to confront and disrupt those who tried to speak out at town hall meetings.  The group’s memo was circulated just two days before Missouri Democrat Russ Carnahan's town hall meeting, during which protestor Kenneth Gladney was assaulted by SEIU members.)  In addition, Khalid Pitts, one of USAction's board members, is SEIU's director for political accountability.  Tax records reveal that SEIU has contributed hundreds of thousands of dollars to USAction in recent years.

We observed in this space several months ago that the current economic climate provided organized labor with ideal cover to begin organizing America's largest banks, a view shared by others who are monitoring the unions' progress.  Whether the AFL-CIO's campaign is an indication that big labor is taking this effort to the next level, or simply trying to portray itself as a relevant player in the national debate around issues like “corporate accountability,” remains to be seen.  But the participation and assistance of grassroots NGO's and other anti-corporate organizations suggests that campaign events may become more aggressive in nature.  By escalating hostilities and more aggressively lobbying for financial reforms adverse to the business interests of private financial institutions, unions may be hoping to increase outside pressures on the banks and render them less resistant to  attempts to organize their employees. 

In this regard, SEIU announced plans to pressure the Maryland state legislature to move the state’s money out of “big Wall Street banks.”  The union has already had some success with this pressure strategy, as it claimed credit for convincing the Los Angeles City Council to adopt a similar resolution last month.  
 
Whether the AFL-CIO is acting in league with SEIU, or competing against it -- both for national attention and for new union members -- most financial services institutions should be aware by now that they are directly in the crosshairs of several major union corporate campaigns.  We recommended in December that the banking industry prepare for these attacks by addressing workplace concerns and potentially controversial business practices, and by preparing a strategic public relations response.  The AFL-CIO's new push suggests that time may be running out to take these steps effectively.

An employer that waits until a union organizing campaign has commenced to make major workplace changes risks violating federal labor laws.  Likewise, waiting until a corporate campaign has fully materialized before taking strategic action could place the employer in a disadvantageous, reactionary posture.  As union attacks on the financial services industry build toward a crescendo, banks that have not formed a comprehensive strategy for addressing these new challenges should wait no longer.