It Depends on What the Meaning of "Advice" Is

Bush Should Overturn Clinton's Executive Order for Section 203(c) of the LMRDA

After the November 2000 election then-President Clinton worked overtime to issue executive orders imposing regulations by presidential fiat that he was unable to persuade Congress to adopt. From the creation of national monuments that place millions of acres of land out of bounds to everyone except those approved by the environmentalist establishment, to workplace safety regulations designed to harass employers out of favor with the AFL-CIO and to give OSHA bureaucrats useless work to do, Clinton imposed extremist, costly interventionist policies supported by a wide variety of Democratic special-interest groups. President Bush has undertaken a review of these last-minute political payoffs to see how many of them he can reverse by executive order.

Here is a less well-known, last-minute Clinton policy imposition that President Bush ought to reverse. On January 10, only ten days before Bush’s inauguration, the Office of Labor-Management Standards in the Department of Labor, at Clinton’s behest, issued a new interpretation of Section 203(c) of the Labor-Management Reporting and Disclosure Act (LMRDA) of 1959. The Act was adopted by Congress principally to address widespread corruption and racketeering infesting labor unions during the 1950s that was uncovered by the McClellan Anti-Racketeering Committee. Title I of LMRDA is a bill of rights for rank-and-file workers to protect them against rapacious union bosses. It has been only moderately successful in that regard.

Title II imposes various reporting requirements on people and organizations involved in labor relations. Section 202(a) requires unions to file annual reports on their expenditures with the secretary of labor. Section 203(a) imposes similar reporting requirements on employers regarding their expenditures related to labor relations. Section 203(b) imposes reporting requirements on “Every person who pursuant to any agreement or arrangement with an employer undertakes activities [emphasis added] where an object thereof is directly or indirectly to persuade employees” regarding whether or not to unionize. Section 203(c) says, “Nothing in this section shall be construed to require an employer or other person to file a report covering the services of such person by reason of his giving or agreeing to give advice [emphasis added] to such employer.” The “other person” refers to consultants hired by employers to help them avoid unionization of their employees.

Since 1962 the Department of Labor had interpreted Sections 203(b) and (c) to mean that if a union-avoidance consultant prepares written or other material that he then presents directly to employees, this constitutes 203(b) “activities” and triggers the reporting requirements. However, if the consultant’s materials are presented to employers, who then, on the advice of the consultants, present them to employees, this constitutes section 203(c) “advice” and does not trigger the reporting requirements.

The reporting requirements are onerous. If union-avoidance consultants are forced to comply with them they will do less consulting and/or raise the prices they charge significantly. This means that employers will get less professional help with their union-avoidance efforts, making the unions’ organization efforts much easier. Clinton’s Department of Labor unilaterally changed the meaning of “advice” in Section 203(c) to exclude the preparation of union-avoidance materials for employers to use. Only “recommendations regarding a decision or course of conduct” will henceforth be regarded as advice. Preparation, or help in preparation, of union-avoidance materials such as speeches, notices, and videos will henceforth be called Section 203(b) “activities.”

Sweeney’s Bidding

Congress has hitherto never quarreled with the 1962 interpretation of “advice.” Clinton never even asked Congress to consider the issue. In the waning days of his presidency he without warning or notification instructed his Department of Labor to do the bidding of John Sweeney, president of the AFL-CIO. Sweeney’s problem is that fewer and fewer workers are voting to unionize. In 2000, union membership in private-sector employment fell to 9 percent, lower than it was before the Wagner Act became law in 1935. Employers’ informed union-avoidance strategies are part of the reason why unions seem less and less attractive to workers. The biggest reason is that workers are coming to realize that in the face of global competition, union-impaired firms do not provide as much job security as firms that are union-free. Sweeney wants to muzzle employers during union-organizing campaigns. He wants free speech for himself and his organizers but not for employers or anyone else who tells workers of the advantages of remaining union-free.

Actually, he already has a court-imposed speech advantage over employers in organizing campaigns. Section 8(c) of the National Labor Relations Act (NLRA) ostensibly protects the free-speech rights of union organizers and employers alike. It says, “The expressing of any views, argument, or opinion , or the dissemination thereof . . . shall not be evidence of an unfair labor practice under any of the provisions of this Act, if such expression contains no threat of reprisal or force or promise of benefit” [emphasis added]. In two cases the Supreme Court interpreted this section in a way that favors unions over employers. Because of its 1964 Exchange Parts Co. decision, union organizers can promise workers all sorts of benefits if they unionize, but employers are forbidden to promise benefits for remaining union-free. Because of its 1969 Gissel Packing Co. decision, unions can regale workers with all the bad things they imagine will happen (such as employer exploitation) if workers vote against unionization, but employers are strictly limited in what they can claim about the bad things that might happen (such as a plant closure) if workers vote to unionize.

Suppose in congressional and presidential elections that Republicans were permitted to promise all sorts of benefits to voters for voting Republican, but Democrats were forbidden to do the same for voting Democratic. Suppose Republicans were permitted to predict dire results of Democratic victories, but Democrats were severely restricted in predicting the same for Republican victories. I bet John Sweeney would protest. Yet he thinks similar rules in union representation elections are not only fair but essential for workplace democracy.

President Bush cannot, without the concurrence of Congress, overturn Supreme Court interpretations of statutory law. But he can and should overturn Clinton’s last in a long list of presidential favors granted to John Sweeney. That’s my advice.