« I hate "Scandals" | Main | Tale of Two Court Reviews »

October 06, 2003

One Plus from Union Disclosure Rules

Reading through the detailed summary of how the DOL is implementing its union finance disclosure rules, there is one ideological gain from the decision-- that it will reinforce the idea that organizing is all part of representing existing members.

Implementing Beck: Aside from screwing unions with heavy reporting costs, the other big goal of this proposal is to enforce the anti-union Beck Supreme Court decision. That decision stated that union members can demand refunds for any portion of their dues spent on activities that are "non-representational", ie. not relevant to negotiating a union contract. (In "right to work" states, members can opt-out completely from paying any dues, so this rule is relevant only in states which haven't banned "union security" clauses which require everyone benefitting from a contract to pay dues.)

Now, everything from political organizing to organizing new workplaces is relevant to getting a strong contract in any particular firm, so the line between "representational" activites ends and "political" activities for which people can get a refund is highlight controversial.

Court battles: Money spent on political lobbying is generally considered refundable under the Beck rules, but the really important debate has been on whether money spent on organizing new workers into the union was refundable under Beck. Last year in a 9th Circuit decision, a full en banc panel held that organizing costs are "representational" and not refundable. As I wrote last year about the decision:

Citing extensive economic evidence developed by the National Labor Relations Board, the Court emphasized that organizing competing companies is crucial to winning good contracts for union workers. As the Court noted, "management is far more willing to negotiate higher wage rates when its competitors are subject to the same union costs."

Organizing as Representation: Essentially, the Department of Labor de facto endorsed that argument in its rule-making on financial disclosure. See pages 90 to 98 of the explanation.

Initially, it planned to require unions to categorize expenses into multiple categories, with "Contract Negotiation and Administration" and "Organizing" expenses as separate categories. This would have been administratively hard since the whole movement of unions is to combine organizing with contract negotiation, enlisting existing members in new organizing drives. Worse, it would have made it far easier for other courts to look over union financial statements and say that members could get a refund for everything not listed under "Contract Negotiation and Administration."

Under a lot of pressure, the DOL agreed to combine the two categories into a single category labelled "Representational Activities." This will be good precedent for other courts in supporting the idea that organizing costs are for the benefit of all members of the union. The DOL did not quite endorse this legal point but they did note the arguments that "Some union commenters asserted that it is inconsistent with NLRB practice and precedent to separate organizing from the category for collective bargaining/contract administration. The NLRB, they stated, recognizes that the two activities are sometimes tightly intertwined." (p. 90)

Amidst a horendously anti-union set of proposals (which I'll add some more commentary on later), this is one small concession that may actually help unions in some of their legal arguments in Beck-related cases.

Posted by Nathan at October 6, 2003 11:40 AM