LABOR’S VERY BIG BLUNDER (The AFL-ABA-CIO)

Organized labor has been shrinking in numbers and influence for over 60 years. There are a lot of reasons: well-funded enemies, relentless lawlessness by many employers, a toothless labor law, foreign competition for jobs, automation, some public image disasters, poor business practices, etc. But at least as harmful as any of them was labor’s own decision to give away it most valuable asset, namely its right to exclusively represent employees in all employment-related matters, not just contract matters.

Beginning early in the last century, unions lobbied for and passed over two dozen statutes that established the modern employment law rules for this country. From the Fair Labor Standards Act, through the Social Security Act, Equal Pact Act, Pregnancy Anti-Discrimination Act, Civil Rights Acts, Employee Retirement Income Security Act, Occupational Safety and Health Act, Family Medical Leave Act, and most recently the Affordable Care Act, among others, unions have delivered a constant stream of rights, protections and benefits that likely would not exist without them. Yet, every time unions passed a statute giving employees enforceable rights, union leaders failed to see the enormous damage done to unions from ceding the work to others.

Today, according to Martindale-Hubbell, there are over 21,000 lawyers making a living enforcing those laws labor passed. Aside from the attorney fee income that diverted from unions and to their law firms, this blunder also helped Americans realize that they had options for getting what they deserved at the workplace. That fateful, but hopefully not fatal, decision put the following question on the lips of every American worker: “Why should I pay dues or even elect a union if I can go to a government agency or hire an attorney to enforce my rights without paying union dues?”

Compounding the damage of creating alternatives to themselves was the post-WW II obsession by Americans with professionalism. Suddenly college and graduate school degrees were seen as indisputable proof of superior competence over those without them. People expected “professional help” not only in court rooms and hospital rooms, but also in classrooms, fitness centers, banks, real estate offices, plumbers and even lawn maintenance. (Google has 335,000 listings under “professional plumber,” 2 million for “professional lawn service,” and 3.3 million for “professional travel agent.”) Local union officers and stewards were no match in comparison to the perceived skills of attorneys. It was a PR slaughter for labor.

While unions had plenty to do focusing on the critical issues of seniority, just cause, salary and fringes, those rights were only enforceable at bargaining tables and through strikes. When strikes lost their clout, unions lost bargaining power, their powerful image, and much of their traditional value to the average employee. What happened to unions reminds us of the beating IBM stock took when it created the personal computer market and then chose not to compete in it. As a result, Apple Computer had twice the market value of IBM at the end of 2012 while Google and Microsoft combined also had nearly double the value of IBM.

But imagine what would have happened if labor leaders had made the following decisions? As these laws were passed, unions could have hired lawyers as permanent union staffers to not only represent employees on contract matters but also on regulatory and statutory matters. While they might have taken business agent jobs that otherwise have generally gone to loyal local union leaders, the attorneys would not have replaced local, job-site stewards and officers. In fact, they would have boosted the local leaders’ power. Unions could have lobbied for and/or gone to bargaining tables to insist on the right to have arbitrators decide alleged statutory violations in lieu of courts. That likely would have made them the employees’ exclusive representatives on these two dozen or so laws that today generate hundreds of thousands of employee requests for representational help a year. Finally, unions could have set up neighborhood legal assistance centers, providing help to any non-supervisory worker who came in with an employment-related problem, e.g., an employee at a non-union McDonalds or Walmart.

If unions had made these choices, they likely would have enjoyed at least the following benefits:

• More to offer prospective members,
• Fewer options for employees needing representational help,
• Greater income from the attorney fees that often flow from statutory victories,
• Additional power at bargaining tables from the threat of suing an employer if problems could not be fixed through bargaining,
• Better legal protection from employer retaliation, coercion, etc.,
• More lucrative remedies for harmed employees,
• Less need to rely on the political leaders of the NLRB, EEOC, DOL, and other agencies rendered nearly useless by ideologues and filibuster battles,
• Discovery rights that exceed their labor law right to the employer’s information, and
• Unobstructed access to an employer’s entire workforce when class action suits were filed

Here is a small example of how more job-site legal representation could change things. A common jobs site problem today is that one employee gets passed over for promotion in favor of someone they believe is not as good as they are. Assume the contract says, “Where the candidates are equally qualified the more senior will be selected for promotion.” Most union reps would file a grievance alleging a contract violation for the complaining employee. However, if they had readily available legal counsel, they might also realize there is also a potential civil rights violation if the grievant and selectee are in different protected classes, e.g., the selectee was a man and the grievant a woman. Most union reps would also know that if management punished the employee for filing a grievance, they could file a ULP. However, if they had an attorney and had claimed a civil rights act violation in their grievance, they could also file an EEO retaliation claim and get up to $300,000 in damages, plus attorney fees. Put yourself in the place of the employer. Are you more afraid of a contract grievance and perhaps a ULP notice being posted for 60 days or of a potential public finding that you discriminated against women and might have to pay upwards of $300,000 as a result? Factual situations like this only get developed to their full potential if local union leaders have access to near-instant legal expertise.

Fortunately, it is not too late for unions to adopt this more legalistic approach to representing employees. In fact, the right-wing Supreme Court has made it much easier for them to do so. How is that for irony? Since 1991 the Court has issued a number of decisions affirming the legality of employers (and unions) requiring their employees to waive their right to go to court to enforce just about any labor law if they are offered a fair arbitration process in lieu of the court. According to the court, the 1925 Federal Arbitration Act gave employers that right. Consequently, unions not only can enforce virtually every employee statutory right through low cost arbitration, but they agree to arbitration on behalf of employees, jointly fund the arbitration process, and make the employer almost immune from charges that its arbitration system is legally inadequate. (Employers need arbitration to get away from juries that tend to impose astronomical amounts of damages, such as the one that recently gave 32 men $7.2 million dollars each as victims of disability discrimination.)

Making this shift to more professional representation easier is the current glut of law school graduates on the market and the abundance of firms that would be willing to enter a joint venture with a union to get exclusive access to their members for employment law violations. Unions could contribute further momentum by providing on-site and on-line training of employees in their employment rights. Finally, it is about time that labor started lobbying for all high school students to be provided a year-long class in their employment rights. Students graduating today will likely spend 50 or more years in the labor market, yet high schools put them on the street ignorant of their most basic civil and employment rights. Americans love their rights and it is time labor stopped creating them without being prepared to enforce them. (EEOC has nearly 100,000 file charges with it in each of the last three years.)

Harold Meyerson of the Washington Post recently wrote about the AFL-CIO’s plans to reinvigorate unions and collective bargaining. There are some interesting ideas, but it was sad to see that labor leaders are still missing a major opportunity. Labor needs to stop blaming everyone else for its problems and take the steps it can to modernize what they have to offer Americans. While we do not see the AFL-CIO merging with the American Bar Association any time soon to form the AFL-ABA-CIO, thousands of labor staffers should be bar members if organized labor wants to reinvigorate itself.