Labor & Collective Bargaining : Unions Lawyer & Attorney : Jackson Lewis Law Firm : Employee Free Choice Act, Collective Bargaining

Author: Tom Walsh

One of the functions of experienced collective bargaining agreement negotiators and human resources professionals in unionized and union-free companies is to keep abreast of the labor market conditions locally and within his or her client’s industry. In unionized companies, having this information will assist these individuals in recommending a considered course of action at the bargaining table. In a union-free organization, the information will help in developing strategy to pay its employees competitively. There are numerous sources of information available for review, including the U.S. and state departments of labor. Another source is Bloomberg BNA, which publishes detailed analyses of collective bargaining agreement settlements. Recently, Bloomberg BNA published findings regarding wage increases in labor contracts negotiated in the first quarter of 2013.

The survey found the current first-year median wage increase to be 2%. This reflects a rebound from the last few years in which the first-year increases were 1.6% (2010), 1.4% (2011), and 1.9% (2012). For several years prior to 2010, the median first-year increase was a consistent 3%. The significant decrease in 2010 followed the downturn in the national economy. The slow rise likewise follows the slow recovery since then.

The rise in median wage increases isn’t the whole story. Often, parties negotiate lump sum bonuses in place of wage increases (in whole or in part). The Bloomberg BNA survey factored those in as well. When these bonuses are considered, the “weighted average” increases show an overall first-year increase of only 1.6%.

These numbers reflect the national trend. There are significant differences between regions and among the various industries. Of course, private-sector collective bargaining agreements are not required to be published; surveys rely on contracts made available to the researchers by the parties. Nonetheless, these surveys provide a window on trends affecting employers and the unions with which they negotiate. Clearly, employers are reluctant to return to higher increases.

There are many factors affecting an employer’s wage determinations. Currently, anecdotal evidence suggests concerns over the cost of health insurance, and those arising from the Affordable Care Act in particular, continue to depress wages. Whether an employer is bargaining collectively over wages or not, it is important for it to obtain as much information as possible in order to make an educated decision over the wage increase, if any, it intends to give.

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Attorneys from the Labor Practice of Jackson Lewis LLP will discuss the significant labor relations implications of the 2012 election on the labor landscape in a one-hour webinar available beginning November 20 at www.jacksonlewis.com.  The webinar is free of charge, no registration is required.  Jackson Lewis e-subscribers will receive a special alert on the webinar.

Jackson Lewis attorneys will discuss and suggest steps for employer consideration on the following questions:

• Based on the results, is new legislation likely?  
• Will there be additional Presidential Executive Orders?   
• What will be the composition of the NLRB for the next four years – and what impact will it have on your organization?  
• What about the Department of Labor?  
• What will happen to the NLRB’s rulemaking initiatives such as those on notice posting and accelerated elections?  
• Will the NLRB’s focus on protected concerted activity mean changes to employers’ policies on social media, class action waivers, confidentiality of investigations and other workplace programs?  
• What about “Obamacare”?  
• What should employers consider as possible post-election priorities? 
   

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Additional contributors:  Philip Rosen and Richard Greenberg, partners in our New York City office.

Wrestling with some dismal data on the waning strength of America’s organized labor, Secretary of Labor Hilda L. Solis tried to make the best of it.  She said in her January 21st press release that the data showed the need for workers to unionize. 

The Bureau of Labor Statistics reported on January 21 that the unionization rate of employed wage and salary workers dropped noticeably last year.  For 2010, the agency announced, the rate nationwide fell to 11.9 percent overall, from 12.3 percent in 2009.  In the private sector, the news was no better.  The rate there dropped to 6.9 percent, from 7.2 the year before.  There are 16.9 million workers in jobs covered by collective bargaining agreements, BLS reported, but 1.6 million of them indicated no union membership.  Half of the 14.7 million union members lived in just six states: California, New York, Illinois, Pennsylvania, Ohio and New Jersey.  The highest unionization rates were in education, training and library occupations.  It is hard to imagine that half a century ago unions represented a third or more of America’s workforce.

But citing weekly wage differentials between union workers and non-union workers, the Administration’s chief (organized) labor advocate said that union jobs, with better benefits and pay, were central to restoring the middle class.  Thus, the Secretary said, protecting the right to organize and bargain collectively was especially important to our economic recovery.

We wouldn’t count on a resurgence of union representation to fuel the engine of America’s recovery and job growth.   If unions were so attractive, why are the BLS numbers so bleak?  The recession took its toll on union jobs, as well as others.  Unions could not prevent sizable layoffs in their members’ ranks and have not led the way back from high unemployment.  They stand little chance of doing so, we think. 

Despite the Secretary’s opinion, and the tinkering of a pro-union National Labor Relations Board trying to tilt the legal playing field in organized labor’s favor, America’s workers generally have shown little interest in casting their lot with the “fraternally yours” crowd.  Perhaps a better educated, mobile, electronically oriented, and diverse workforce no longer sees as much value in traditional union representation — at least not enough to offset the cost in dollars and individual opportunity.  And perhaps the Secretary’s generalizations on union workers’ compensation are too much influenced by the large contingent of public-sector union workers in the total mix and the shrinking clusters of union-dominated private-sector jobs.  Employee free choice on union representation must be defended.  Saddling America’s workers with unions they do not want to fulfill the Administration’s vision for economic reengineering, however, is ill-conceived.

Jobs with good wages and benefits are worth achieving.  No one denies it.  But unless these jobs are competitive, productive, and efficiently performed, and unless they reward individual achievement, they cannot last in today’s global economy.  The President may have come to that realization as he seeks to reassure small business and corporate executives that he intends to rein in government regulation in order to create a climate conducive to growth and job creation.  Unions have yet to show America’s workers they understand that need, too.

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As if proliferating collective actions, class actions and Department of Labor investigations and enforcement actions for wage-hour and Family and Medical Leave Act violations weren’t enough, American businesses may now face even more legal challenges from employees.  The 400,000-member American Bar Association has agreed to partner with the U.S. Department of Labor to establish an attorney-referral service to facilitate workers’ complaints under the Fair Labor Standards Act and FMLA.
 
Vice President Joe Biden, Attorney General Eric Holder, and Secretary of Labor Hilda Solis were among the dignitaries at the White House ceremony on November 19 announcing the new alliance.  They were joined by ABA President-elect Wm. T. (Bill) Robinson III and current ABA President Stephen Zack, who said, “A significant number of Americans lack meaningful access to our justice system.  Even for moderate-income working people, this barrier to access is primarily financial in nature.  Too many simply cannot afford the cost of counsel to help them resolve their legal problems.”  According to the partners, the new arrangement will give more employees access to the justice system.
 
And what of employers – the prospective defendants in all this?  The prospect of more claims and lawsuits means an even greater emphasis must be placed on self-analysis and corrective action.  Employers must audit their wage and hour practices, looking at such issues as purported independent contractor status, the proper classification of employees (exempt or non-exempt), overtime calculations, breaks, payroll procedures, donning and doffing, and recordkeeping, among others.  In the FMLA context, proper notifications to employees, determinations of eligibility for and duration of leaves, handling of intermittent leave issues, coordination of worker’s compensation leave, leave relating to military service, and refining policies and procedures to address abuse of leave, are among the concerns to be considered.  State law issues also must be considered, even if technically ancillary to the federal-ABA initiative.  (A number of states are cracking down on supposed misclassification of employees; several boast their own leave statutes.) 

Once a self-analysis is completed, management must decide what deficiencies, if any, are present.  It must then undertake steps to bring the business into compliance with these laws and related DOL regulations.  Correction is essential, but may give rise to new difficulties as employees gain increased awareness of their rights.  Expect questions.  Be prepared with answers.  Where significant numbers are involved, budgeting may have to be adjusted to reflect additional, unanticipated wage costs.  Staffing may have to be modified.  These dislocations, in turn, may prompt employers to look at ways in which cost savings may be effected, such as by outsourcing, subcontracting, or introducing labor-saving equipment.  There could be a downside for employees from a surfeit of wage-hour and FMLA lawsuits.

The ABA leadership may have been motivated by the most exalted of reasons.  But we wonder if it consulted its member-corporate counsel, and their clients who face legal attacks all too often, before signing on as the employers’ adversary at the government’s behest.

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