For a printer-friendly copy of this Executive Labor Summary, click here. 

Employee Free Choice Act, Paid Sick Leave & Increased Minimum Wage Are Top Priorities for New Democratic Majority
The new Democratic majority in Congress will be more beholden than ever to organized labor after the 2006 mid-term elections. John Sweeney, President of the AFL-CIO, characterized the elections as organized labor’s “biggest, most energetic grassroots program” in history. Sweeney’s organization alone spent $40 million and committed 187,000 volunteers to help get out the vote during the last four days before election day, and the effort paid off. According to election night polling, union members accounted for four-fifths of the Democratic victory margin, and union households reportedly accounted for roughly 25 percent of the voters. Organized labor will not let politicians who received their support forget these statistics.

Employee Free Choice Act
As a result of labor’s clout, passage of a bill similar to the Employee Free Choice Act, a bill proposed during the last session of Congress that would have required employers to recognize a union after a majority of bargaining unit employees sign authorization cards, is more likely than ever. Why is this important to American business, and could it really happen?

Within the last several years, unions have initiated approximately 50 “corporate campaigns” against highly visible companies, such as Wal-Mart, in an effort to force union recognition. In December 2005, the U.S. Chamber of Commerce began circulating a briefing book to Republican members of Congress in an effort to increase support for the proposed Secret Ballot Protection Act (S. 1173 and H.R. 874).  This bill would have made it illegal for employers to recognize and bargain with unions that had not been selected by a majority of employees through a secret ballot election. The Chamber’s efforts were aimed at increasing co-sponsorship of the Act by moderate Republicans. By the end of the last session of Congress, the bill had only 108 of the 218 co-sponsors required to force the bill to the House floor and only nine co-sponsors in the Senate. In comparison, the Democrats were only three votes short of forcing the Employee Free Choice Act (S. 842 and H.R. 1696), to the House floor and had 44 co-sponsors in the Senate.

Neither the Employee Free Choice Act nor the Secret Ballot Protection Act became law during the last Congress. As a result, action on similar legislation must begin anew in the 110th Congress. The enactment of any legislation like the Free Choice Act – which would abolish secret ballot elections as the preferred method for resolving representation issues – would have a dramatic impact on workplaces in the United States; perhaps one of the most dramatic in the history of U.S. labor relations. The substantial shift in power for the Democrats, coupled with the high-energy support of organized labor, make passage of such legislation more likely than ever. Whether any such legislation would be veto-proof remains to be seen. Therefore, business leaders need to make their voices heard when this legislation reappears.

Paid Sick Leave
Federally mandated paid sick leave has returned to the legislative agenda.  The Healthy Families Act may be reintroduced for Congressional consideration soon after Democrats take over Congress.  The Center for Law and Social Policy is expected to push for passage of legislation that would require employers with 15 or more employees to provide a minimum of seven paid sick days a year to employees who work at least 30 hours a week.

Minimum Wage
Support for increasing the federal minimum wage to $7.25 an hour is now nearly unanimous in Congress, and business leaders have been surprisingly quiet. As a result, Rep. George Miller (D-Ca.), Chairman of the House Education and Workforce Committee, and Sen. Edward M. Kennedy (D-Mass.), Chairman of the Senate’s Health, Education, Labor and Pensions Committee, will probably face little opposition, even from the President, as they seek to honor their pledge to make this legislation a top priority in 2007. President Bush has announced support for an increase in the minimum wage, but he wants such an increase to be phased in over a two-year period and continues to urge that any increase be tied to business tax credits.

Swift Plays by the Rules but Pays the Price
Like many employers nationwide, Swift and Company has long been a participant in the federal government’s Basic Pilot Employment Eligibility Verification system. As many of our clients have, Swift assumed that by using the verification system and by requiring all employees to complete the I-9 forms, Swift would ensure its compliance with immigration laws. Although that may be true, it’s small comfort when your employees engage in identity theft and your operations are effectively shut down anyway.

On December 12, 2006, agents from the Immigration and Customs Enforcement Division of the U.S. Department of Homeland Security, working with other law enforcement agencies, executed civil search warrants at Swift facilities in Colorado, Nebraska, Texas, Utah, Iowa and Minnesota, and arrested 1,282 employees who ICE alleged were illegal aliens. Sixty-five of the employees were charged with crimes related to identity theft or other violations, such as re-entry after deportation.

No civil or criminal charges have been filed against Swift or any current employees; however, the magnitude of the raid brought to a halt Swift’s operations at the affected facilities.

ICE uncovered the widespread violations during an investigation that began in February 2006. Hundreds of the aliens may have assumed the identities of U.S. citizens and used their Social Security numbers and other identity documents to obtain employment. ICE also found criminal organizations and made arrests in Minnesota, Texas, Utah, and Puerto Rico, of individuals who trafficked in genuine birth certificates and Social Security cards. These organizations obtain legitimate documents through theft and by purchasing the documents from individuals willing to sell the records.

As ICE becomes aware of identity theft, it will notify victims. However, employers and employees should be aware of this serious development and become familiar with the variety of methods for reporting suspected identity theft. Such reports can be made via the Federal Trade Commission’s website at http://www.ftc.gov/idtheft, by calling the FTC’s hotline at 1-877-438-4338, or by writing to the Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.

NLRB Approves Neutrality/Card-Check Agreement
By a 2-1 majority vote, the NLRB recently decided that Heartland Industrial Partners, LLC, a private equity firm, and the United Steelworkers did not violate federal labor law when the company and the union entered into an agreement that requires companies in which Heartland acquires majority ownership, voting power or otherwise controls management and policies of the enterprise to sign a neutrality/card-check agreement with the union. Under the agreement, Heartland-controlled entities would be required upon the union’s request to announce its neutral stance regarding union organizing, to grant the Steelworkers access to the worksite to distribute information and meet with employees, to provide employee names and addresses to the union, and to recognize the union if a majority of employees signs union authorization cards.

To read the decision click here.

Hoffa Wins Re-Election as Teamsters President
James P. Hoffa easily won re-election in November 2006 as General President of the International Brotherhood of Teamsters. Hoffa received approximately 60 percent of the vote, defeating Tom Leedham. Hoffa’s slate won all other union offices, including secretary-general, numerous vice presidential positions, and three trustee posts. Only about 21 percent of Teamsters voted.

Average Wage Increases for First-Year Collective Bargaining Agreements
The average increase for 2006 in wage settlements in collective bargaining agreements was 3.8 percent, according to data complied by the Bureau of National Affairs. The BNA data consisted of all settlements reached in 2006, including lump-sum payments, but excluding construction, and state and local government contracts. The corresponding percentage for 2005 was 3.7 percent.

Manufacturing agreements with lump sums posted an average increase of 3.4 percent, compared with 3.6 percent in 2005.  The non-manufacturing average increase, excluding construction, was 3.9 percent, compared with 3.7 percent in 2005.  State and local government contracts provided an average increase of 3.1 percent, compared with 3.4 percent last year.  Construction contracts provided an average increase of 4.2 percent, compared with 3.4 percent in 2005.

NLRB Chair to Speak
On January 9, 2007, the Chairman of the National Labor Relations Board, Robert Battista, will headline a panel in Atlanta focusing on labor and employment law topics.  The event, sponsored by the Georgia Chamber of Commerce and Georgia Employers' Association, will also feature  Constangy lawyers.  For more information, contact Candace Langston at clangston@constangy.com.

Back to Page