From the desk of Stephen Cabot:

The Security and Exchange Commission (SEC) has done an enormous political favor for the country’s unions. In a 3 to 2 decision, the SEC has passed a rule known as “access to the proxy.” This rule gives special rights to the friends of unions and state pension plans to nominate their chosen candidates for corporate boards and offer injurious proxy measures.

The SEC’s ability to pass such a rule was granted to it by the recently passed Dodd-Frank Act.

Prior to “access to the proxy,” all shareholders holding a single class of securities had identical rights. Under the new rule, however, the SEC has increased the power of special interest groups, giving them rights that few others possess. Institutions holding 3% of a company’s stock for three years will now have special powers granted to them by the new rule.

Unions and state pension funds now have leverage to get what they want from corporate boards. All they need do is nominate an individual to a board who would be anathema to its officers and/or propose a proxy measure that would hurt earnings. They could then refuse to withdraw their proposals until their real demands are met. Talk about leverage!

“Access to proxy” is another example of a Democratic congress and a Democratic administration paying off their union supporters. “Access to proxy”, though touted as an investor friendly act, is really a wolf in sheep’s clothing, and that wolf is a voraciously predatory animal.

access to proxy · cabot institute · corporate america · Democratic congress · Democrats · Dodd · Dodd-Frank · Frank Act · Labor Relations · proxy · SEC · Securities and Exchange Commission · sheep · stephen cabot · Steve Cabot · Unions · wolf · workers

From the desk of Stephen Cabot:

According to an article in The Wall Street Journal (www.wsj.com) by Melanie Trottman, presidents of the AFL-CIO and SEIU (Richard Trumpka and Mary Kay Henry, respectively) have agreed to spend at least $88 million to elect pro-union representatives to the House and Senate this fall. That is an astounding amount of money which could certainly affect the outcomes in such states as Ohio, California, Pennsylvania, and Illinois. Though the money will be generously spent in closely contested races in those states, the two unions plan on spending members’ dollars in more than 20 other states as well.

Both unions are significantly increasing their budgets from previous years, for they believe that in order to effect pro-union legislation they must have pro-union majorities in both houses of congress. Most of the pro-union candidates are Democrats.

The unions’ aggressive campaign, targetting millions of union households, will employ an army of campaign workers, each of whom will call upon union members and their families. They will ring doorbells, send out e-mails, repeatedly telephone their constituencies, and send out millions of direct mail pieces. The success of their efforts will be measured and then tweaked following the revelations of weekly polling data. According to the Wall Street Journal, 23% of the electorate are union members. That’s a sufficiently large enough number to determine the outcomes of elections in the most hotly contested states.

It is essential for those who oppose the Democratic leadership’s pro-union agenda to organize their own campaigns to defeat those who will be injurious to the American economy. America is at a turning point, and it is essential that it point to a future of economic growth free of union restrictions.

$88 million · 88 million dollars · afl-cio · big labor · cabot institute · corporate america · democratic · Democrats · fall elections · Labor Relations · members · SEIU · stephen cabot · Steve Cabot · Unions · wall street journal · workers

From the desk of Stephen Cabot:

During the current recession when unemployment hovers near 10%, President Obama and his hand-picked ideologues on the National Labor Relations Board are using all their wiles and power to effect a pro-union business landscape. The combination of Executive Orders (which I have written about in previous blogs) and the decisions of NLRB member, Craig Becker, (a decidedly radical pro-union advocate and former SEIU official), have resulted in union friendly policies that are injurious to Corporate America and are driving up unemployment.
It has been a well-established fact that unions reduce the numbers of employed workers by mandating wages that move in an ever increasing upward spiral. (The average union wage is 28% higher than a non-union wage). In such situations, cash for hiring new workers diminishes as does cash for R&D and capital improvements.
Furthermore, those high union-mandated wages result in increased prices for manufactured goods. It has long been an established fact that as labor costs increase, demand for consumer goods diminishes and the pool of consumers shrinks.
Faced with such an economically unattractive scenario, corporations will choose to reduce their labor costs by outsourcing work, replacing workers with machines, and/or moving manufacturing facilities to low-labor-cost nations. One need only look at the iconic American manufacturer of motorcycles, Harley Davidson, which announced that it might have to leave its home town of Milwaukee, where it has been an essential manufacturing presence for more than 100 years. And why will it have to move? The simple answer is its union-mandated cost of labor.

While President Obama and his designated pro-union advocate, Craig Becker, would like to do all that they can to help unions, Harley Davidson and other manufacturers will have no choice but to move the states or countries where unions will have no influence. And if that happens, one will see a rise in unemployment greater than 10%, a further diminishment of consumer spending, and a worsening economy.

cabot institute · corporate america · corporations · craig becker · economy · employees · employment · Executive Orders · Harley Davidson · Labor Relations · Milwaukee · National Labor Reltions Board · nlrb · organized labor · outsourcing · President Obama · seui · stephen cabot · Steve Cabot · unemployment · unionization · Unions · workers

From the desk of Stephen Cabot:
Among the many parks in the state of Washington, there are two handsome parks, Dawson and Gonyea that local residents want to keep clean and useful. Through a 16-year-old program called “Adopt-a-Park,” volunteers have stepped forward to keep the grass cut and raked, to pick up garbage and even to clean toilets. Who would complain against such civic minded virtues?
The Teamsters!
Apparently Teamsters Local Union 117 filed a complaint with the state demanding that the county not permit volunteers to maintain the two parks. Of course, volunteers do not pay union dues, so their very presence deprives the union of funds. And as everyone knows, unions are profitable, thriving businesses. Curtail their funding and they howl about unfair practices. But if financially strapped communities save money and maintain local parks by utilizing the services of civic-minded volunteers, well, that’s unfair to the unions. After all, volunteers don’t pay dues, do not require collective bargaining, and will not go out on strike demanding raises that the community cannot afford. In other words, volunteers at the two parks have made the Teamsters superfluous, and no union wants to be thought of as powerless.
This is just another example of unions imposing roadblocks that hurt communities. And when such roadblocks are imposed against local, regional, and national businesses, the unions wind up hurting the economy, hurting workers, and hurting Corporate America.

cabot institute · civic · communities · corporate america · Labor Relations · local · parks · stephen cabot · Steve Cabot · teamsters · union · Unions · volunteers · Washington · workers

From the desk of Stephen Cabot:

President Barack Obama, in an effort to shore up support from organized labor, said that he will push for stronger organizing rights for unions. One can assume, based upon such a promise as well as his appointment of Craig Becker to the National Labor Relations Board, that while the Employee Free Choice might be lifeless, it will soon rise from the dead. (The EFCA is beginning to resemble a vampire that cannot be slain).
The president had made his revivifying remarks on August 4 to the executive council of the AFL-CIO. While the president received numerous standing ovations, he was warned that unions will only support those politicians who back organized labor’s multi-faceted agenda, which includes the passage of the EFCA. And the president stressed that his administration will, indeed, work to seek passage of the ACT, which – of course – he will proudly sign into law. (At that point, one can imagine another round of thunderous applause).
However, knowing that he cannot get congress to pass many of labor’s pro-union initiatives, the president not only stated that “We are going to keep on fighting to pass the Employee Free Choice Act,” but that he would use his executive powers to implement changes, ones that do not require legislative approval (e.g. the appointment of Craig Becker).
It is apparent that Mr. Obama is siding with big labor and against Corporate America. That is not only bad for American businesses, but it is also bad for the entire economy, which affects all Americans, including union members.

afl-cio · business · cabot institute · congress · corporate america · EFCA · Employee Free Choice Act · Labor Relations · National Labor Relations Board · nlrb · organized labor · President Obama · stephen cabot · Steve Cabot · Unions · workers

From the desk of Stephen Cabot:

There are few instances when we agree with statements emanating from the Obama White House; however, one recent statement was absolutely on the mark.

An unnamed White House official reportedly stated to a reporter that “Organized labor just flushed $10-million of their member’s money down the toilet.” He was referring, of course, to organized labor’s efforts to defeat Senator Blanche Lincoln in the Arkansas Democratic primary. Her running mate, Lt. Governor Bill Halter, had been backed unstintingly by the AFL-CIO, SEIU, and AFSCME as well as lesser unions.

As if that event was not enough to put a smile on the face of managers across the county, an AFL-CIO spokesman named Eddie Vale without a wit of irony reportedly stated that “labor isn’t an arm of the Democratic Party.” At that, the smiles of Corporate America turned to grins.

afl-cio · AFSCME · Arkansas · cabot institute · corporate america · Labor Relations · managers · Obama · organized labor · SEIU · Senator Blanche Lincoln · stephen cabot · unionization · Unions · White House

From the desk of Stephen Cabot:

Without having to get congressional approval, President Obama is determined to give union leaders everything they want. It is apparent that unions will soon have many new opportunities to organize formerly unaffiliated workers, and governmental agencies will provide all possible assistance.

To begin, the National Mediation Board (NMB) has made a major alteration to its 75-year old rules so that workers at railroads and airlines can easily be organized. For three-quarters of a century, workers who did not vote in organizing elections had their non-votes counted as negative votes; now, under a new ruling, if the majority of votes are pro-union, the union will have won the right to represent workers. This would not have happened if President Obama had not appointed a pro-union advocate to the NMB

Next, all companies that do business with the federal government will have to be union friendly companies. That means that they have to pay union wages, and that rule applies to all federal agencies. If a company received stimulus funds for construction projects, that company must pay standard union wages to its workers. Such a ruling will, no doubt, drive up governmental costs, thus adding to an already burgeoning deficit.

Perhaps the most dangerous element of the new government paradigm is the recent appointment of Craig Becker to the National Labor Relations Board. Mr. Becker had been the legal counsel to the highly aggressive Service Employees International Union (SEIU). Since he claims that the NLRB can re-write rules, one can expect him to find a way to make “card checks” legal, thus obviating the requirement for secret ballot elections.

The president of the AFL-CIO, Richard Trumka, is optimistic that “card checks” will eventually become law, perhaps by attaching it to an innocuous piece of legislation, or having his ideological comrade in arms, Craig Becker, change the rules.

President Obama campaigned on “change we can believe in.” The changes he is making are ones that reality forces us to believe, but they are changes that will do significant damage to Corporate America and to the American economy.

afl-cio · cabot institute · congress · corporate america · craig becker · Labor Relations · National Labor Relations Board · national mediation board · nlrb · nmb · organizers · organizing · President Obama · richard trumka · Service Employees International Union · seui · stephen cabot · unionization · Unions

From the desk of Stephen Cabot:

The Service Employees International Union, one of the most powerful in the United States, has elected a new president, Mary Kay Henry, who appears to be even more aggressive and determined than was her predecessor, Andy Stern, though he, too, was a force to be reckoned with.

The SEIU has 1.8 million members and a considerable fortune at its disposal for organizing efforts and political campaigns. In particular, Ms. Kay intends to use that money to organize workers in the biotech, banking, public sector, and health care industries to a much greater degree than was undertaken in the past.

Ms. Kay also plans on utilizing $4 million for a so-called “innovation fund” to locate new organizing targets. In addition, she intends to spend an equal amount, plus an already allocated $10 million, to elect union friendly governors in such states as Ohio, Florida, New York, Connecticut, California, Arizona, Ohio, and Illinois.

Those funds, though impressive, pale when compared to the $250 million that the SEIU spends annually on organizing campaigns. Just since the beginning of April, the union has organized 22,000 workers!

It is apparent that the SEIU poses an enormous threat to Corporate America and the nation’s nascent economic recovery. With an enemy poised and so well-funded to commence an enormous attack, it is essential that Corporate America prepare itself with the necessary strategic action plans. If properly prepared, non-union companies can remain union free. Unionized companies can negotiate from positions of strength. And others can successfully decertify unions already in place. If strategic action plans are not put in place now, Corporate America can expect to experience countless deleterious effects to profitability and productivity.

andy stern · cabot institute · corporate america · Labor Relations · mary kay henry · organizing · productivity · profits · SEIU · Service Employees International Union · stephen cabot · unionization · Unions

From the desk of Stephen Cabot:
It is no secret that a Democratic majority on the National Labor Relations Board would favor unions. If one of those is a former union lawyer who believes that the Employee Free Choice Act should become law, the putative impartiality of the NLRB could be abrogated with the stroke of a pen.

Craig Becker, who was appointed to the Board by President Obama during the spring recess of Congress (an action known as a presidential recess appointment), will decidedly and perhaps aggressively tilt the Board to an unfair and dangerous pro-union position.

Mr. Becker, who was a top lawyer for the Service Employees International Union (SEIU), and Democrat Mark Pearce, will give the Board a three-vote Democratic majority. There had been just one Democrat and one Republican on the Board prior to the appointments of Becker and Pearce. The Board should have five members.

Many in Corporate America as well as students of labor relations and pro-management attorneys believe that the newly composed Board will act to affirm a pending petition that would require employers to bargain with unions that represent less than a majority number of any employer’s workers. In addition, it is also believed that the Board will vote to shorten the period of time from when an organizing petition is accepted by the Board and when a vote is held. While the Employee Free Choice Act may be doomed in Congress, the acts of the NLRB could now advance the mission of unions so that more and more workers become unionized and labor costs skyrocket. It is essential, therefore, that Corporate America invests in strategic action plans for union avoidance as well as plans to achieve decertification of unions already in place.

A dark cloud is hanging over Corporate America, and only if it implements a pro-active battle plan will the sun shine again on our traditional free enterprise system.

cabot institute · corporate america · craig becker · Employee Free Choice Act · employees · employers · Labor Relations · National Labor Relations Board · nlrb · President Obama · SEIU · Service Employees International Union · stephen cabot · Unions · workers

The National Labor Relations Board needs a quorum of three. If President Obama hopes to enact his pro-union agenda, he will need to have another pro-union advocate on the NLRB. He won’t say who is the pro-union advocate; he won’t even say that there is a pro-union advocate.

But as the names are flipped from hand to hand, one name keeps turning up. And if you guessed Craig Becker, you would be right.

According to The Wall Street Journal (www.wsj.com) “In a 1993 Minnesota Law Review article [Becker] said that the ‘core defect in union election law…is the employer’s status as a party to labor representation proceedings’ and that ‘employers should be stripped of any legally cognizable interest in their employees’ election of representatives.’”

If an NLRB member believes that employers should not be permitted to educate their employees about he disadvantages of unionization, he can hardly be considered a fair minded adjudicator of labor issues.

Yet, according to Senator Tom Harkin, President Obama will appoint Craig Becker to the NLRB during the Easter recess. It’s called a recess appointment, and it’s an end run around the Senate. No votes are required.

With his pro-union advocates on the NLRB, President Obama will have won his three card Monte game, for no matter which member Corporate America appeals to, the results will always favor the union.

This article was originally published here

cabot institute · corporate america · craig becker · Labor Relations · national labor relations act · nlrb · stephen cabot · unionization · Unions · wall street journal