Drastic Changes Needed in Federal Labor Law

Organized labor will note, but certainly not celebrate, the 50th anniversary of the National Labor Relations Act on July 5.

At the time of its passage, the law was seen as labor’s Magna Carta, giving workers the right to band together to combat the overwhelming power that management had over individual employees.

Many unions and companies are working cooperatively these days and don’t urgently need the law as a referee. However, as evidenced by bitter disputes such as those at United Airlines and Phelps-Dodge, there are cases where the law is not helping.

While there is no uniform pattern to labor relations in the United States these days, there is growing agreement on many fronts that drastic changes are needed in federal labor law.

AFL-CIO President Lane Kirkland said recently that, as the law is now administered, “I frankly would prefer no law. . . . It has become an instrument in the hands of employers to frustrate trade union organizations.”

After lengthy hearings last year, a Democratic-controlled House subcommittee on labor-management relations issued a report contending that the “labor law has failed.”

“Workers and unions who rely on the protections and promises of federal labor law are being badly betrayed, and, as a result, labor-management relations are facing a serious crisis,” the report said.

“Perhaps the most striking evidence of the law’s failure is that . . . virtually every labor union leader testifying (before the subcommittee) called for (its) repeal.”

Interestingly, management is almost as critical of the law, even though most decisions by the National Labor Relations Board under the Reagan Administration have been pro-management.

Joseph E. Herman, a prominent Los Angeles management attorney with Seyfarth, Shaw, Fairweather & Geraldson, one of the nation’s largest law firms representing management in labor cases, says that “the anniversary of the law provides the occasion for an urgently needed re-evaluation.”

Not unexpectedly, Herman says that, while the law declares that the nation’s policy is to encourage collective bargaining between management and unions, “this rationale is no longer viable.” Herman argues that the law assumes a “fundamental and ineradicable conflict of interest between employer and employee” when, in fact, “they have much more in common than they do dividing them.”

Unions are no longer needed to play the role of primary protector of workers, he said, and labor relations should be “deregulated” to, among other things, “remove the government from involvement in determining who should represent the interest of employees and what occurs after a labor contract has been negotiated.”

In other words, Herman sees little use for the section of the law requiring secret-ballot elections to determine which union, if any, a majority of a company’s workers want to represent them or the section requiring that both sides bargain “in good faith” to reach a contract. In sum, he would revise the law by further weakening unions and putting more responsibility on individual workers to deal with their employers.

This clearly conflicts with the stated purpose of the law, which says in its preamble that there is an “inequality of bargaining power between (individual) employees and employers” and that this inequality “tends to aggravate recurrent business depressions by depressing wage rates and the purchasing power of wage earners.”

Since 1935, the basic law, known as the Wagner Act, has been amended twice: first, in 1947 with passage of the Taft-Hartley Act, and then in 1959 by the Landrum-Griffin Act, both of which diminished the strength of unions.

Organized labor tried to make some gains in 1977 by lobbying Congress for reforms that, while relatively mild, would have made it easier for unions to organize workers and negotiate contracts and would have speeded the decision-making process of the National Labor Relations Board. The board in many cases takes three years or longer to make rulings, which are then subject to appeal in the courts.

That reform effort was killed by one vote after a five-week filibuster in the Senate by conservatives.

Today, many experts are proposing changes aimed at improving relations between workers and their employers by encouraging cooperation and providing incentives for management to share profits and decision making with workers.

Daniel J. B. Mitchell, director of the UCLA Institute of Industrial Relations, would revise the law to further encourage profit sharing and give workers and their unions more of a voice in decisions and more information about their companies’ financial situations. As it stands now, a union can legally demand to see a company’s financial records only if the company “pleads poverty” when the union seeks a raise.

Mitchell would, however, leave intact the part of the law’s preamble that says its objective is the equalization of bargaining power.

Instead of letting the historic Wagner Act continue to erode in effectiveness, Congress should put some teeth into it by accepting suggestions such as those made by UCLA’s Mitchell and others who would require employers to share corporate financial information and decision making, to give notice of plant closures and to put worker representatives on corporate boards. Such measures would make workers feel more of an integral part of the companies for which they work.

Legislation along such lines would make the 50th anniversary of the nation’s first major labor law a real cause for celebration.

Teamsters Pension Dispute

After 30 years of relative harmony, union and management trustees of the $5.5-billion Western Conference of Teamsters pension fund find themselves embroiled in a serious fight that has gone into the courts. Unlike the Central States pension fund for Teamsters, which has been accused over the years of lending large sums of pension reserves to underworld figures, the Western states’ fund has never had a hint of scandal.

And no scandal is involved in the current feud. Rather, the dispute centers on how best to manage the fund and utilize its tremendous reserves. One issue is how to diminish the size of what is called the pension plan’s “unfunded liability,” which is the amount that would be needed to cover benefits for all workers should the pension fund collapse.

Early last month, management trustees of the huge pension fund, which covers about 300,000 workers in the West, filed suit in U.S. District Court in Seattle against the 14 union trustees.

The management trustees asked the court to, among other things, stop Teamsters officers, including President Jackie Presser, from “interfering with the union trustees’ responsibility to exercise their own independent judgment.”

The management trustees say that they had reached agreement with the union trustees on how to deal with a number of issues, including how best to use the fund’s increasing reserves, but that Teamsters officers then told the union trustees to back out of those agreements.

Teamsters Union trustees, such as Joe Bellew of Seattle, ridicule management’s accusations and say they would be foolish not to seek the advice of other union officials. They say management’s real goal is to minimize increases in worker retirement benefits and reduce the unfunded liability. Eliminating that liability would make it easier for unionized companies to sell out to non-union companies or to get out of their union contracts.

The fund’s reserves have been increasing at a faster-than-expected rate, and management and union trustees agree on one key point--that workers’ retirement benefits should be increased.

In dispute are the amount of the increase and the union’s proposal that the fund hire more attorneys and actuaries to get “second opinions” on how the fund’s reserves should be invested. The fund currently uses only one law firm, one actuarial firm and one investment firm, Prudential Insurance Co.

In the past two years the plan’s unfunded liability has been cut to about $650 million from $1.5 billion, and the management trustees want to reduce the rest much faster than do the union trustees, who would prefer those funds to go to workers.

In their suit, management trustees said top Teamsters officers overruled the union trustees to create a “major financial disincentive to any employer terminating its unionizing operations.”

Stephen Tallent, an attorney for management, said one reason for the dispute at the Western fund is management’s “fear of outsiders’ gaining greater union control of the Western states fund.” By “outsiders,” management was referring to top Teamsters officers.

And he insisted that there is no intent by management to encourage companies to try to break the union by reducing the pension program’s unfunded liability more quickly than the union wants to.

The reduction might make it easier for a company to eliminate its union, but it could also encourage other, non-union companies to accept unionization and join the plan because they would not be faced with the unfunded-liability burden, he contended.

The pending court battle could be resolved through negotiations, but, if one management motive is to encourage companies to break their unions, the battle could be a long one. In the meantime, retirees will suffer unless the trustees can agree to raise their benefits.

AFL-CIO Backs AT&T;

Under last week’s order by the Federal Communications Commission, millions of Americans will soon get ballots to select a long-distance telephone company in communities with so-called equal access service. Those who fail to make a choice will be allocated among competing long-distance carriers.

The Communications Workers of America, which is part of the AFL-CIO, hints strongly that it would, of course, like customers to select the unionized American Telephone & Telegraph instead of a non-union competitor such as MCI or GTE Sprint. Without mentioning AT&T; by name, the CWA has advertised its hope that customers will use “companies” that provide the most operated-assisted service.

The national AFL-CIO union label department’s latest newsletter is less restrained, urging readers to “make AT&T; your preference.” Oddly, the labor publication quotes only AT&T; officials, not those of the CWA, to stress the need for union members to use the services of a union company.

Unions frequently encourage customers to buy products made or sold by unionized firms. When asked why the CWA hasn’t promoted AT&T; by name, one ranking union official said that “it has to do with antitrust problems.” The union’s public relations director, Rozanne Weisman, would say only that “it is not our duty” to help advertise the product of any company, an explanation she repeated several times without elaboration.