Aug 29, 2016 - 10:30am

Union Admits ‘Blacklist’ Rule Gives Them New ‘Leverage’ Against Companies


Executive Director Of Labor Law Policy

When President Barack Obama signed the Fair Pay and Safe Workplaces Executive Order it was couched as promoting “safe, healthy, fair, and effective workplaces.”

Under the order, and the new final regulations and guidance issued August 25, federal contractors must disclose mere allegations of federal labor violations, potentially locking them out of federal contracts without giving them a chance to challenge the charges.

But improving workplace safety or insuring compliance with the 14 laws and executive orders wasn’t the real motivation for the E.O.

If you pull back the curtain it is clear the order has nothing to do with improving federal contracting and everything to do with giving unions more tools for them to use against employers.

One of the key objections the U.S. Chamber has made all along about the president’s Executive Order is that it would hand the administration’s friends in the organized labor movement a powerful new tool for harassing and pressuring employers into rolling over to their demands. 

We made this point at a hearing in February 2015, in the comments we submitted to the record, and in press releases we issued when the final regulations were issued.

Now, we have confirmation from unions themselves that we were right all along. 

Just before the final regulations were issued, the Teamsters Democratic Union (an offshoot of the main Teamsters union that promotes itself as not being tarred by the tawdry history of the Teamsters) published a blog post that explains how unions could take advantage of the blacklisting regulations for their own needs. 

Ironically, the blog post starts off suggesting the order has not received sufficient attention from unions, then lays out this scenario:

Using the Order

The Executive Order gives unions unprecedented new leverage against companies and institutions that contract with the federal government. Unless the Order or its implementing regulations are overturned by the courts (employers have promised lawsuits) or revoked by a future president (wonder who), unions should be able to significantly increase their bargaining power by the simple expedient of filing meritorious charges with the NLRB, OSHA, the EEOC, or the DOL.

Consider a union that strikes an auto plant for a new contract. Soon after workers hit the bricks, the union president has the following conversation with the general manager:

Morris, we are two weeks into this goddam strike and the company shows no sign of accepting a fair labor agreement. That is your prerogative, but I think you need to take a fresh look. For one thing, we have filed six ULP charges over the company’s failure to provide information, illegal surveillance, and intimidation on the picket line – and are getting ready to file three more. The NLRB investigator has indicated that he will be recommending complaints on at least four of our charges.

You say that the NLRB is toothless but you are apparently unaware that the rules of the game have drastically changed. Under a new Order issued by the President, a federal contractor that incurs NLRB or other labor law complaints must report them to federal contracting agencies and face the prospect of losing existing and future contracts. Putting it plainly: unless you settle this strike within the next few days, and the union withdraws its charges, you are likely to be marked as a “repeat labor law offender,” one of the highest categories of wrongdoing under the President’s Order. Check this out with your hotshot legal team.

Counting all of its divisions, this corporation has federal contracts in the hundreds of millions. Do you really want to jeopardize this pot of gold to save a few hundred thousand dollars in the union contact?

We couldn’t explain it better. 

Outside the sanitized world of labor relations, this kind of tactic is known as extortion, and is generally frowned upon. 

Note that the scenario laid out revolves around a contract negotiation which means already unionized employers will be just as vulnerable, if not more so, to the unions taking advantage of the E.O. as non-union employers worried about an organizing campaign.

The Teamsters Democratic Union post provides a valuable public service in confirming why the unions have called for this executive order and had it on the wish list they submitted to the Obama transition team back in 2008, and why the administration was willing to give it to them. 

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About the Author

About the Author

Marc Freedman headshot
Executive Director Of Labor Law Policy

Marc Freedman is executive director of labor law policy at the U.S. Chamber of Commerce. He is responsible for developing and advocating the Chamber’s response to OSHA matters, the Employee Free Choice Act, the Family and Medical Leave Act and mandated leave issues, and other labor and workplace issues.