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.
 

Becker Appointed To NLRB

The President filled two of the three vacant seats on the NLRB with Democratic nominees Craig Becker and Mark Pearce.  The President cited the need to promote "the basic functioning of government" as the reason for issuing the appointments.  However, he chose not to appoint Republican Brian Hayes, whose uncontroversial nomination has been pending along with those of Becker and Pearce, to fill the remaining vacancy.  As a result, the NLRB is still not fully constituted.
 
By statute the NLRB is to have five members.  Traditionally, three of the members come from the sitting president's political party and the other two are from the other party.  However, the Board has been functioning for more than two years with only two members--its Chairperson Wilma Liebman (Democrat) and member Peter Schaumber (Republican).  The two have decided more than 500 cases.  The authority of the NLRB to decide cases with only two members was the subject of an argument before the U.S. Supreme Court just last week.  All parties to the case agreed that the Board had the statutory authority to act if it had three or more sitting members.

Before leaving Washington for a two-week, post-healthcare debate recess, 41 Senators, all Republicans, wrote the President requesting that he not issue a recess appointment to Mr. Becker.  Twenty business groups, including the U.S. Chamber of Commerce, echoed the sentiments of the Senate Republicans.

Becker's nomination has been hotly contested since it was announced last fall, as a result of what some call his "extreme" views about the union selection process.  Because of that controversy, just before the Christmas 2009 recess, Senator McCain exercised his Senatorial privilege to put Becker's nomination on hold, although Republicans and Democrats indicated that the nominations of both Pearce and Hayes would be approved without significant debate.  However, the President did not seek a vote on Pearce or Hayes at that time.

Mr. Becker will leave his post as counsel for the Service Employees International Union (“SEIU”) to take his seat on the NLRB; he will remain a Board member until his recess appointment runs out at the end of 2011. With a 3-to-1 pro-labor majority and with no particular timetable for action on Mr. Hayes' nomination, the NLRB is poised to reverse numerous decisions made by the Bush appointed Board on a number of controversial issues.

As we have written in this column on several occasions, Mr. Becker's views are of grave concern to many in the business community.  For example, Mr. Becker opposes participation by employers in the process by which employees decide whether to choose union representation.  Becker does not believe that employers should be allowed to express an opinion, provide any relevant information to their employees, or otherwise participate in the process in any way.

It is difficult to tell whether Becker's appointment signals the President's intent to defer action on the so-called Employee Free Choice Act (“EFCA”).  Some will speculate that the appointment indicates a compromise between the President and Andy Stern, who runs the SEIU and has visited the White House more than anyone else in the last year.  Stern is a staunch supporter of both EFCA and his employee, Mr. Becker.  The President and Secretary of Labor Hilda Solis have repeated their support for passage of EFCA.  However, the proposed law, which would eliminate the right of employees to vote on the question of union representation, has been mired in controversy since the President took office.  Like health care reform legislation, it may require the President to muster all forces at his command to get it passed.

Becker has made clear his view that the NLRB can engage in both rule making and rule changing, which could accomplish much of what EFCA is designed to do without Congressional action.  By failing to appoint Hayes, the NLRB now has a decidedly pro-labor majority which could enact sufficient changes to the union selection process to allow the President to avoid the firestorm which would accompany the debate over EFCA. 

Feldblum Appointed To EEOC

The President also announced that he would use recess appointments to fill slots on the EEOC with controversial Georgetown University law professor Chai Feldblum, Jacqueline A. Berrien, Victoria A. Lipnic, and David Lopez. 

The appointment of Feldblum drew immediate criticism from conservative Republicans.  Feldblum, who will be the first openly gay member of the EEOC, is best known for her support of the rights movement for lesbian, gay, bisexual, and transgender (“LGBT”) persons.  She helped craft the Employment Non-Discrimination Act (“ENDA”), which would prohibit discrimination against employees on the basis of sexual orientation or gender identity by civilian non-religious employers with 15 or more employees. 

The EEOC nominees were approved by a Senate committee in early December, but their confirmation vote was put on indefinite hold by Senate Republicans who viewed Feldblum and other Obama nominees as too extreme.  Supporters of the President’s move to exercise the recess appointment option cite the EEOC’s backlog of discrimination claims and the current absence of a quorum needed to effectively address claims.  In a statement issued with the recess appointments, President Obama said, “The United States Senate has the responsibility to approve or disapprove of my nominees.  But if, in the interest of scoring political points, Republicans in the Senate refuse to exercise that responsibility, I must act in the interest of the American people and exercise my authority to fill these positions on an interim basis.”

Recess appointments last until the end of the next session of Congress.  The White House announced, however, that the nominees will remain in the Senate for confirmation by regular procedures. 

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.