Third-party warehousing is one of the few industries to create jobs as the rest of the U.S. economy struggles to regain its footing. Yet, job-destroying policies embedded in the labor union agenda threaten to undermine even this promising area of growth. 

In the last Congress, the warehouse industry and its supply chain partners successfully fought the Card Check legislation—a bill that would have denied employees the right to a secret ballot in the union election process. We knew at the time that our success might be fleeting and the unions would refocus their efforts on the administration to accomplish by regulation what could not be done by legislation. 

The National Labor Relations Board (NLRB) has not been shy in using its authority to dictate where employers can operate or when, where and how an employer can create jobs. Case in point is the recent NLRB complaint against Boeing seeking to force the company to assemble certain aircraft in its unionized Washington state production plant rather than its non-unionized South Carolina plant. 

On the heels of the Boeing action, in June 2011, the NLRB and the Department of Labor (DOL) published two proposed regulations—one, to rewrite the rules for union elections and, the other, to expand the onerous requirements of the so-called “persuader” disclosure rules. At first glance, the rules appear to be harmless enough. The NLRB says it wants to update and streamline election procedures. The changes themselves seem mostly technical. Look closer, however, and suddenly you can see these changes are deadly serious. 

Take the “persuader” rulemaking from the DOL. Under current law, if a company hires a consultant for the purpose of “persuading” employees to exercise or not exercise their right to bargain collectively, the employer must report details about payments to the consultant. In addition, the third-party consultant must also disclose all receipts and disbursements of its labor relations services. This reporting includes details for all of its clients, not just the employer in question. 

Importantly, the current law exempts anyone who gives “advice” to the employer. Unless a consultant directly meets with bargaining unit employees to convince them not to accept union representation, the consultation is considered exempt “advice.”

Now, under the new proposed DOL rule, the “advice” exemption has been drastically narrowed to the point that it will be almost meaningless. For example, if the company asks its lawyer to review a draft letter to employees or to discuss strategy, this would no longer be considered “advice.” And this does not just apply to legal counsel. A trade association that provides videos or training materials to its members on labor law may trigger the “persuader” disclosure requirements.

The practical result is scary. A small business owner does not generally possess the in-house resources to understand the intricacies of labor law. Yet, with his own legal counsel and trade association significantly constrained by these new rules, how can he respond appropriately when union organizers arrive at his facility? One misstep and he can unknowingly commit an unfair labor practice. A cautious owner may find it is better to say nothing.

And that is what the persuader rule ultimately achieves: It silences employers. It doesn’t just tilt the playing field in the direction of the union organizers, it benches the employer and turns the entire field over to the union. 

But that’s not all. There is another rulemaking. The “quickie” election proposal from the NLRB shrinks the time available to employers to tell their side of the story to their employees. Currently, most union elections are conducted four to six weeks after the union organizers file their petition. Under the proposed fast-track rules, that timeline would be cut in half.

In a spirited dissent to the proposed rule, NLRB member Brian Hayes said: “Make no mistake, the principal purpose for this radical manipulation of our election process is…to effectively eviscerate an employer’s legitimate opportunity to express its views about collective bargaining.”

This is a huge challenge for business, but nowhere is it a bigger challenge than for the third-party warehouse industry. Labor has not been coy about targeting the warehouse industry, as evidenced by its efforts in Southern California. The warehouse industry must make certain that the NLRB and the administration do not have the final word on this matter—Congress and the courts need to have their say, as well. For warehousing, the message to lawmakers must be strong and clear: The pro-labor agenda will thwart the job-creating engine that is the warehouse industry.  wt