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Punching In: Business-Backed Groups Call for Worker Center Probe

Aug. 3, 2020, 9:37 AM

Monday morning musings for workplace watchers

Working Washington Under Fire |Stimulus Swaps | DOL and Pandemic Spending

Scheduling Note: “Punching In” will be taking a two-week hiatus and won’t publish on Aug. 10 or Aug. 17. Our next installment will publish on Monday, Aug. 24.

Ian Kullgren: Two business-backed groups are mounting the latest challenge against worker centers, filing a complaint with the Labor Department asserting that Seattle-based Working Washington should be subject to the same federal disclosure requirements as unions.

The Freedom Foundation and the Center for Union Facts filed the complaint last week, urging DOL’s Office of Labor-Management Standards to investigate Working Washington, which has close ties to the Service Employees International Union. The 57-page complaint contends Working Washington meets the legal standard for being designated a “labor organization” under the Labor-Management Reporting and Disclosure Act, the federal law that requires private-sector unions to file annual reports disclosing their finances and membership numbers.

Working Washington meets the definition of a labor organization, the complaint argues, because it advocates for changes in workers’ wages, hours, and conditions of employment—making it little more than a “union front organization.” The complaint cites the nonprofit’s IRS disclosure forms, where Working Washington says part of its mission is to “dramatically improve wages and working conditions.” The complaint also points to a statement on the group’s website that it’s “guided by the vision of SEIU International’s leadership.”

The complaint cites $15.5 million in payments to Working Washington from various unions. Many of those payments, detailed in the unions’ financial disclosures with DOL, had the stated purpose of “organizing” workers, the complaint said. Working Washington declined to comment. OLMS didn’t respond to a request for comment.

The business-backed groups are playing a long game that in all likelihood depends on President Donald Trump winning a second term. If DOL were to launch a probe, it would take time to develop; and if regulators were to determine that Working Washington meets the law’s definition of a labor organization, the process would shift to a prolonged litigation phase.

OLMS career officials haven’t officially signed off on a conclusion that a worker center is in fact a labor organization subject to federal reporting requirements. However, preliminary findings last August from the agency’s investigation of Centro de Trabajadores Unidos en Lucha alarmed worker centers across the U.S., leading them to gird for a possible legal battle. The status of that probe isn’t clear.

Pro-business interests want to keep the pressure on. “Without accountability, you find yourself in those situations of abuse and labor leaders taking advantage of employees,” said Max Nelsen, Freedom Foundation’s labor policy director and the author of the complaint. “The LMRDA was passed to try and prevent and discourage that kind of activity and make sure that labor organizations are responsive and accountable to the workers that they claim to represent.”

Nelson is also a Trump appointee to the Federal Service Impasses Panel, which adjudicates disputes between federal-sector unions and management.

The Freedom Foundation and the Center for Union Facts are dark-money groups themselves. Both are 501(c)(3) nonprofits, meaning they don’t have to disclose their donors. (Working Washington is a 501(c)(4) nonprofit and, as such, can engage in more direct political activity.)

The Freedom Foundation reportedly has financial ties to a number of conservative funders, including the Sarah Scaife Foundation, the Richard and Helen DeVos Foundation, and the Koch-backed Donors Trust. After the Janus v. AFSCME ruling in 2018, the group launched a campaign to persuade public-sector workers to quit paying collective bargaining fees.

The Center for Union Facts is headed by lobbyist Rick Berman, who has advocated against unions, public health protections, and other regulations on behalf of anonymous corporate clients.

Ben Penn: You’re reading it here first, folks—Labor Secretary Gene Scalia and his Deputy Pat Pizzella Monday will install their longtime ally from the business community, Randy Johnson, as a late-term appointee to the DOL Administrative Review Board, a DOL official tells Punching In.

Johnson, a name many of our readers recognize from his decades of labor and immigration policy work at the U.S. Chamber of Commerce, now begins a two-year term as a member of the ARB, the department’s quasi-judicial legal-review panel that makes consequential decisions on behalf of the secretary. Scalia’s been taking a firmer grip on the panel’s business of late, so it makes sense for him to tap a comrade for this role. The move marks Randy’s return to the Perkins Building for the first time since the Reagan administration.

Moving on to the issue that keeps growing in urgency, millions of unemployed workers this week begin receiving significantly downsized aid checks. The political pressure that comes with that reality three months shy of Election Day suggests we may have reached a boiling point that could help stimulus negotiators forge a sudden compromise. But there’s also growing fear that talks could drag on deep into August, though circumstances could change at any point.

House Speaker Nancy Pelosi surely feels confident in her leverage to extend the unemployment boost at $600 per week through January 2021. After the White House’s lead negotiators late last week reportedly offered a several-month extension of the $600 payments as a potential standalone bill, Democrats have no reason to take anything less as part of a larger package, a Republican business lobbyist who’s been talking to senators on both sides of the aisle told me.

The same could be said for Democrats’ approach to a liability shield now that the White House seemingly weakened its negotiating stance by telling the Washington Post that they’d be willing to ink a deal without one.

Some business advocates hope to secure at least a stripped-down version of the Republican bill’s sweeping safe-harbor language by offering Democrats a trade in return for inclusion of a provision to direct OSHA to issue an emergency temporary standard covering virus transmission in the workplace. Sure, a small group of GOP lawmakers already has endorsed an OSHA emergency standard—but, again, why would Pelosi cave on liability protections at this point?

Democrats are “holding VERY firm on this. They know that whatever OSHA puts out would be toothless,” a Democratic lobbyist for worker issues said. Both lobbyists requested anonymity to discuss the talks candidly.

Yet the management bar is holding fast to protections from worker litigation. “Leader McConnell has said liability shields must be in the final package as his red line. He is not color blind, so there will be shields in the legislation,” Littler Mendelson’s Michael Lotito said.

Jaclyn Diaz: Emergency funding for agencies in the next stimulus bill hasn’t gotten as much attention as the marquee issues, but it could prove critical with Congress seemingly headed for another stopgap spending measure this fall.

The House on Friday signed off on a spending package (H.R. 7617) that would give the Labor Department $12.7 billion for Fiscal 2021, up from $10.9 billion in total funding for the current fiscal year. But the House-passed spending bills almost certainly will languish. Senate Republicans have yet to introduce their own appropriations proposals, and the fiscal year ends in two months.

There’s a high likelihood of a year-long continuing resolution, according to Democratic and Republican congressional staffers, two former DOL officials, and a leading budget expert. And that could create unique challenges for DOL as leadership responds to a recession and historic unemployment. Congressional oversight of DOL’s response also could be affected.

The Senate GOP’s $1 trillion HEALS Act includes 2.5 billion in emergency aid for DOL under a component bill (S. 4320) from Senate Appropriations Chairman Richard Shelby (R-Ala.). Democrats’ $3.5 trillion HEROES Act (H.R. 6800) proposed $3.1 billion in funding to help DOL meet the public health crisis.

But agencies must be able to plan for the long-term, said Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget. She said it’s not enough to backstop agencies with emergency aid if the best Congress can do in the appropriations process is to hit replay.

“It prevents certainty going forward and it precludes the focus of oversight of individual programs and figuring out where our resources are needed,” she said. “The country and the world is massively different than a few years ago. That demonstrates the need to go through the budget line by line and to use resources to the best of our ability.”

DOL has become accustomed to operating under a continuing resolution in recent years. The department said a stopgap won’t impact how it “carries out its enforcement and oversight responsibilities as funding is provided to continue activities through the CR period.”

We’re punching out. Daily Labor Report subscribers can check in during the week for updates. In the meantime, feel free to reach out to us. See you back here on Monday, Aug. 24.

To contact the reporters on this story: Ian Kullgren in Washington at ikullgren@bloombergindustry.com; Ben Penn in Washington at bpenn@bloomberglaw.com; Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com

To contact the editor responsible for this story: John Lauinger at jlauinger@bloomberglaw.com

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