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Standing Guard for 40 Years

September 8, 2015

By: Stephen Waguespack

The Louisiana Association of Business and Industry (LABI) turned 40 years old on Friday, Sept. 4.

LABI was created in 1975 by the merging of the Louisiana Manufacturers Association, the Louisiana State Chamber of Commerce and the Louisiana Political Education Council. This alignment of horsepower ensured the organization was ready to take on a huge political challenge, a successful fight that would turn out to be one of the most important victories for the Louisiana economy in modern history.

This victory was LABI’s aggressive push to pass a Right-to-Work law, which it accomplished on its first attempt in the 1976 legislative session.

Enactment of Louisiana’s Right-to-Work law guarantees workers the freedom to take a job without being forced to join a union. The law is the cornerstone of the foundation underpinning Louisiana’s economic development. It is the first consideration for businesses deciding on where to locate their new facilities and plant sites.

Since the 1970s, union membership has steadily declined across the U.S. This is largely because the union message is not resonating with workers anymore. It is also likely to be, in part, because unions use their members’ dues to support political causes and candidates that their members do not support.

A recent example is the big money donated by national unions to Planned Parenthood. In fact, unions such as the American Federation of Teachers (AFT), the National Education Association (NEA), American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), United Autoworkers Union (UAW), Service Employees International Union (SEIU), and the United Food and Commercial Union (UFCW) have all made donations to Planned Parenthood using membership dues. Many of these dues paying members likely do not even know their donations are used in this manner.

According to the U.S. Bureau of Labor Statistics, union membership in Louisiana represents only 5.2 percent of the state’s total workforce. The vast majority of this small segment of Louisiana’s workforce is made up of state and local government employees, from whose paychecks union dues are automatically deducted and remitted to unions thanks to a state law that authorizes this collection. Efforts to repeal this state law that puts government as the middleman between members and the unions that donate to Planned Parenthood were not successful this session, but this “Paycheck Protection” legislation will undoubtedly return every year until the Legislature stops this outrageous practice.

While this state law that requires the government to collect union dues is a top problem to address here closer to home, in Washington, D.C., there is a larger issue brewing.

During his six years in office, President Barack Obama has carried the water for the national unions, working through his office and executive agencies to tip the scales in their favor against workers and their employers. The star player in his agenda has been the National Labor Relations Board (NLRB).

The NLRB has time and again overstepped its executive branch role and imposed what amounts to new law, the function reserved to Congress. These actions are disrupting the labor/management balance and impeding the nation’s economic recovery.

Last April, the NLRB reduced the time between notice of a union representation election and when it must occur. This reduces the amount of time workers have to learn about a union in order to determine whether or not they want it to represent them. It is purely intended to prevent them from making an informed decision.

In August, the NLRB redefined the “joint employer” relationship. The implicit purpose of this action is to make it easier for unions to organize workers. By establishing a link between or among separate employers, particularly contract workers and those employed by franchisees, the NLRB enables unions to infiltrate businesses from the ground up or the top down, whichever is easiest for them.

For decades, the franchisor or “user” company had to exert “direct and immediate” control over working conditions of the employees of its franchisees or contractors before it would be considered a joint employer. However, under the new test, an employer may be considered to have exercised sufficient control when it does so indirectly, through an intermediary (i.e., a subcontractor or franchisee), or even if it has merely reserved to itself the authority to do so.

Under the NLRB’s ruling, a union in a fast food restaurant operated by a franchisee is now empowered to negotiate not only with the franchisee but also with the franchisor. The franchisor would face the practical hurdles of being forced to negotiate over wages and benefits that it does not actually set, with respect to employees it does not actually employ, for a restaurant it does not actually own.

During its 40-year tenure, LABI has remained engaged on the labor/management front, working to ensure that workers and employers can enjoy the benefit of a free and competitive market. Anticipating that the NLRB would take this action, LABI drafted and successfully passed legislation this past session to provide Louisiana franchises a measure of protection against such union aggression. Furthermore, LABI recognizes that redefining the joint-employer standard would comprehensively restructure many business relationships, resulting in higher costs, fewer new jobs and businesses, and less economic growth for Louisiana.

This new law, Act 404, affirms the longstanding definition of “joint employer.” It states that “an employee of a franchisee may be deemed to be an employee of the franchisor only where the two entities share or co-determine those matters governing the essential terms and conditions of employment and directly and immediately control matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction.”

From day one, LABI has been focused on defending free enterprise and helping promote policies that create opportunities for all employers and employees in Louisiana. Whether it is passing Right-to-Work in 1975 or legislation to protect employers from an overreaching NLRB in 2015, we remain committed to the same mission that has guided our efforts for 40 years.