Regulations Will Be Central To Fall’s Economic Debate

Fred Wszolek
August 23, 2011

As recent economic news has demonstrated, the road to recovery for our nation will be long and precarious. With extended debate on measures to eliminate debt as foreign governments deal with solvency issues, the markets have been extremely volatile, all of which has greatly impacted our economy. American businesses are watching their investments with great concern as they have no idea what to expect. This reaps one result: uncertainty. And as anyone operating the in the financial sector will attest to, indecision is bad for business.

All of this would lead one to surmise that the role of government is pretty clear, to inject stability and reliability to the extent possible so that employers making decisions can make plans for hiring and purchasing, which will only help stabilize the greater economy leading to a boost in confidence across every sector.

And while everyone is on the same page with regard to the final objective (i.e. jobs), there is a high degree of variance on how to get there. The While House recently stated it believed a strong recovery begins with small business. No one – not Republicans nor Democrats – would argue with this point as small businesses are the country’s top employer. Yet, the actions of regulatory agencies within the Obama Administration represent a point of view that is completely divergent from this basic and critical goal.

More than at any time in recent memory, Americans have heard from labor boards and about their controversial decisions, which employers have universally decried. All of this has unfolded, as Congress commits to tackling the high unemployment rate and stagnant economic growth with measures targeting overly burdensome and restrictive regulations, which inhibit productivity and cause hesitancy among job creators.

So, it appears that this Fall there will be a serious debate between the executive and legislative branches on the role of regulations in getting the economy back on track. Therefore, one would assume that the Obama Administration’s labor agencies, namely, the National Labor Relations Board (NLRB), National Mediation Board (NMB) and Department of Labor (DoL), along with their job-killing policies, will receive even more attention.

The NLRB, for example, on August 22nd closed public comment on a proposed rule change which would drastically alter the time period between when a petition is filed to form a collective bargaining unit and when the actual election takes place. “Quickie” or “ambush” elections would shorten the period of time for union elections from a median of 38 days to as little as 10. This would greatly benefit President Obama’s top political contributor, Big Labor, while punishing small employers and instilling a great deal of concern into the marketplace. Thus far, in just over two months, the rulemaking process has generated tens of thousands of public comments, most of which have been opposed to any change in a process that has worked well and been in place for decades.

What’s more, according to news reports, the NLRB is pushing to issue a decision in a case known as Specialty Healthcare, which deals with the formation of micro-units. If Obama’s regulatory agency decides in favor of union bosses, it would open the floodgates for the formation of small collective bargaining units within workplaces, which threaten dramatically increased costs and complications for employers. It is extremely likely that micro-units would cripple businesses as they would be forced to deal with numerous union elections, and negotiate and apply multiple collective bargaining agreements, which would have a devastating impact on their profitability and put at risk the solvency of many employers.

The NMB, another obscure Federal administrative agency, recently ruled that unions could be formed in the airline and railroad industries with only a majority of those voting as opposed to a majority of those in the workplace. This change in policy undoes nearly a century of precedent that has been in place under both Republican and Democratic Administrations. The end result of this bailout for labor bosses is that more companies will be unionized without the support of a majority of their employees, once again, resulting in more hand wringing and less hiring.

And lastly, the President’s own Department of Labor should have a front row seat as job-killing regulations are discussed this Fall. DoL is threatening to limit the ability of employers to receive legal advice concerning union organizing activities, which some are correctly referring to as a “gag” rule. Overly burdensome and bureaucratic reporting requirements would require employers to report costs, including wages paid, for any internal matter that has the potential to persuade employees regarding union representation. In addition, lawyers and law firms representing businesses would be required to disclose privileged information, ranging from financials to client lists, clearly limiting their availability to employers during union organizing campaigns. This would have a deleterious affect on smaller employers that already have limited access to lawyers. It would leave them exposed to union pressure tactics and, without legal guidance, the possibility of committing labor law violations unintentionally.

As Congress meets to discuss actions that can be undertaken to spur growth and increase productivity, reining in President Obama’s regulatory agencies should be the first item on the agenda. Stopping quickie or ambush elections, preventing micro-units from being formed and prohibiting reporting requirements that effectively shutdown workplace dialogue on unionization would send the message that the Federal government is serious about job creation and the role of small businesses in leading the recovery. There is little hope the Obama Administration will step forward to address their agencies’ job-killing policies as it has repeatedly passed on the opportunity to do so, which means it will fall to the legislative branch to help job creators and put an end to our nation’s economic malaise.

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