Punching In: NLRB Braces for Budget Fight as Agency Tasks Multiply

Monday morning musings for workplace watchers.

NLRB Budget Showdown Pending|New Model Bills Target Unions, AI

Robert Iafolla: The National Labor Relations Board started September with a big win when the Senate confirmed Democratic member Gwynne Wilcox for a second term. Now the NLRB is waiting on Congress to provide the funding needed to keep its doors open and lights on once the month ends.

But even if lawmakers reach a deal by Sept. 30 to avert a government-wide shut down, it’s unclear whether they’ll give the NLRB enough money to avoid furloughs and closures, let alone function effectively.

The Senate proposed funding the NLRB at the same $299 million level as the last fiscal year, about $75 million less than what the Biden administration has sought. The House, meanwhile, called for slashing the agency’s budget by a third.

Practically speaking, flat funding represents a budget cut because of inflation, as well as an expanding payroll due to cost-of-living adjustments and merit raises, said Celine McNicholas, general counsel and director of policy and governmental affairs at the left-leaning Economic Policy Institute.

“But it’s not so much a question of just keeping the agency functioning and avoiding furloughs,” said McNicholas, who served as an NLRB official during the Obama administration. “If you want the agency to function the way the Biden administration wants—to be a bright spot for labor—then it absolutely needs a funding increase.”

Unlike other agencies, the NLRB’s caseload is mainly the product of workers and their representatives directly asking the agency for help to enforce legal protections and administer union elections, McNichols said. They have nowhere else to turn, so failing to meet that demand—which has skyrocketed—means failing those workers, she said.

For the NLRB to truly function effectively, it would need a $100 million budget boost, Jennifer Abruzzo said during an appearance at an American Bar Association conference earlier this year.

In addition to administrative expenses, the Biden board has handed down decisions that will spur more litigation, making cases more expensive for the agency to handle, said Michael Lotito, co-chair of the Workplace Policy Institute at the management-side firm Littler Mendelson PC.

For example, the board’s recent ruling in Cemex Construction Materials Pacific LLC, which calls for bargaining orders if employers commit certain unfair labor practices in the lead up to a union election, will make those cases far more difficult to settle, Lotito said.

Delays in resolving cases can increase their price tag for employers by expanding the amount they could owe in backpay and consequential damages, he added.

“On the one hand, you can say ‘starve the board,’” Lotito said. “But if you do that, do you starve justice? Do you starve quick decision-making?”

The next step for Congress to pass spending bills is for lawmakers from the House and Senate to hash out final figures. But with the fiscal deadline less than two weeks away, it’s likely that Congress will approve some sort of temporary funding measure to give them more time for negotiations.

But under the terms of the deal to raise the debt ceiling, failing to pass all 12 appropriations bills by the end of the calendar year will trigger a full-year spending measure with a 1% cut over current levels, including to defense. That could provide lawmakers with the incentive to reach an agreement.

— With assistance from Diego Areas Munhoz

Read More:

• Wilcox Wins Second Labor Board Term With Senate Confirmation
• Senate Panel Cuts DOL Budget Slightly, in Contrast to House
• Biden Seeks 11% Boost to Labor Agency Budget in Fiscal 2024
• Union Election, Charge Filings Surge Most Since ‘50s, NLRB Says

United Auto Workers members on a picket line outside the Ford Motor Co. Michigan Assembly plant in Wayne, Mich., on Sept. 15, 2023.

Photographer: Emily Elconin/Bloomberg

Chris Marr: A batch of new conservative-leaning model legislation could inspire state lawmakers to discourage businesses from being too union-friendly, while also encouraging a free-market approach toward regulation of artificial intelligence.

Among the recently finalized model bills from the American Legislative Exchange Council, one proposal would follow the lead of the Tennessee legislature on management-union relations. The model bill would peg state economic development incentives to a company’s insistence on labor organizers winning a secret-ballot election before the company will recognize a union.

Tennessee enacted such a measure earlier this year, effective July 1. Under that law, the state can rescind and recoup economic development incentives paid to expanding businesses if they recognize a new union based solely on signed union authorization cards—a process nicknamed “card check”—rather than requiring a secret-ballot election conducted by the National Labor Relations Board. Companies also could forfeit state incentives if they disclose employees’ contact information to union organizers without the workers’ written permission.

The Tennessee law is thought to be the first of its kind, and it runs counter to the various pro-union policy approaches commonly used in Democratic-majority state governments, such as promoting union acceptance via state contracts.

Employers covered by Tennessee’s policy, or a future state law imitating it, could find themselves in a tight spot compliance-wise if a recent NLRB decision holds up under court scrutiny. The labor board said in its Cemex decision last month that employers must recognize unions based on a majority of workers signing union cards if they fail to request a secret-ballot election within two weeks of union organizers requesting recognition.

ALEC is a membership group of mostly Republican state legislators who develop and share proposals across a broad range of policy areas. The council approved 23 new model bills at its annual meeting in late August.

Also among the new proposals, ALEC advanced a model resolution that state legislatures can use to discourage heavy government regulation of AI systems.

The resolution declares support for “a permissionless innovation approach to AI, recognizing that the free market is best equipped to advance innovation, mitigate potential harms, safeguard privacy, and ensure robust competition.”

While not explicitly opposing them, the resolution suggests new laws targeting potential workplace bias in AI decision-making tools aren’t necessary.

The resolution says it “supports efforts by state and federal functional regulators to enforce existing anti-discrimination and other laws against regulated entities that use AI.”

New York City became the first US jurisdiction to specifically regulate employers’ use of AI in hiring, with an ordinance that took effect in July requiring AI decision-making tools to undergo bias audits. Bills pending in the District of Columbia, Massachusetts, New Jersey, and New York state would similarly regulate businesses’ use of algorithms in hiring in an attempt to prevent automation of biased employment decisions, even as federal proposals begin to bubble up in Congress.

We’re punching out. Daily Labor Report subscribers, please check in for updates during the week, and feel free to reach out to us.