The Obama administration's attack on successful businesses

The Obama administration, after having basically ignored its labor constituency for five years, is now in a position to implement some broader pro-union strategies.

While the administration is using a multi-pronged approach in its attack on business, I want to concentrate on the more controversial initiatives that are being pursued by the U.S. Department of Labor (DOL) and the National Labor Relations Board (NLRB).

Let's start with the DOL's increased focus on and investigation of “inequality of wages based on sex in the workplace” by the Office of Federal Contract Compliance Programs (OFCCP). While such alleged inequality bears investigation, it appears that the DOL has reached a predetermined conclusion, which, if successfully applied, will cost employers untold billions of dollars.

The second area of interest is the DOL's rulemaking as it relates to two timely issues.

On the one hand, the DOL has signaled its intention to implement the controversial “persuader” rule in March. If this draconian rule is implemented in its current form, it will significantly diminish the types of union resistance activities by employers that normally occur during NLRB- sponsored union elections. Any pro-employer activity by lawyers in a union representation campaign would trigger DOL reporting requirements, which lawyers and their clients are loathe to follow and would amount to a “game changer” during union resistance campaigns.

Similarly, the DOL is refusing to issue any guidance regarding union-sponsored “work centers,” finding that they are not governed under current applicable National Labor Relations Act guidelines since a work center does not constitute a labor union because it is not “the employees' bargaining representative and does not negotiate employment terms with employers.” 

Finally, the third leg of the administration's attack on business is found at the NLRB, which has recently taken a number of strongly pro-labor, anti-business actions. A case in point is its recent complaint against Wal-Mart for disciplining employees who are members of work centers for engaging in “partial” strike activity. 

The case of national homebuilder D.R. Horton is another great example, as the NLRB is trying to come to grips with the rights of companies to enforce non-union employee arbitration agreements. Generally, the courts of appeal believe such activity by non-union companies is permitted but the NLRB believes that such clauses act to inhibit permitted union activity. The Fifth Circuit Court found against the NLRB's position regarding its stand on non-union arbitration agreements. Nevertheless, the court granted the NLRB an additional time to decide if it wants to pursue this matter further. It seems likely that the current NLRB will try to get the Horton decision in front of the Supreme Court.

These efforts are on top of what the NLRB did last year when it determined that a smaller bargaining unit may be “carved out” from a larger overall employee unit in some instances. For example, employees in a cosmetic department of a large department store may, in fact, be considered a bargaining unit in and of itself to help facilitate organizing efforts.

In an additional move to support the languishing efforts of unions to organize, the NLRB also is expected to re-introduce its “ambush election rule." The action, which met with resistance in 2013, will likely be resurrected in 2014 to expedite union elections in a manner that will arguably increase union victories by not giving employers sufficient time to present their side of the issue.

The nexus of all these matters is that the Obama administration, through its various departments and agencies, has taken it upon itself to go after some of the most successful companies in the country for purely philosophical reasons — i.e. success brings about inequality, whereas mediocrity does not. This argument, although not as bluntly stated, appeals to the media and the small group of uneducated employees that, for a variety of reasons, has not been able to participate in the tech revolution. 

Consequently, it is clear that employers are in for a rough several years, unless the make-up of the Senate and the House changes, in which case there will be some pushback on a congressional level. With a gridlocked Congress unlikely to make much progress, however, it is obvious that the Obama Administration is seeking to accomplish its pro-labor agenda through the various government agencies that will be operating with a clear anti-employer bias.