The NLRB's "Gift" Of Job Loss

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WASHINGTON-It's almost Labor Day. Unemployment hovers above 9 percent. President Obama plans to address Congress next week, and this time he's promising some real ideas about how to increase employment.

At the same time, the National Labor Relations Board is making sure that unemployment remains high in America. Just in time for the Labor Day holiday, the National Labor Relations Board is giving employers a "gift" of more labor-for them to perform.

As if employers weren't burdened with enough paperwork, the Board will now require employers to put up 11" by 17" posters informing workers of their right to unionize. Whether the Board has the authority in law to require employers to put up posters is in dispute. Sooner or later, this issue may be tested in the courts.

Requiring posters won't benefit the 14 million unemployed Americans, but it is yet another message to employers that the administration regards them with hostility and suspicion. Other countries do not require these posters and welcome American businesses to hire their workers.

In a notice in the Federal Register on August 30, to take effect November 14, the Board made final a rule it first proposed in December 2010.

The "poster rule" must be regarded as the swan song of Wilma B. Liebman, the former chairman, and a Board member since President Clinton appointed her in 19997. Her time expired on Sunday. She is 61 years old and has said she did not seek reappointment-perhaps because she knew that confirmation would be difficult.

Ms. Liebman is an ardent believer in unions and their ability to raise the incomes of workers who choose to join them. And so in this regulation, she seeks to require employers to apprise their employees that they have a right to organize.

In a lack of symmetry, the Board does not require employers with union shops to inform their workers that they have a right to ask for a decertification vote to kick out a union. Nor that workers have a right to a refund of the portion of their dues used for political contributions. These omissions appear to be symptomatic of a tilt towards union bosses and against workers under Mr. Obama.

The posters don't convey what workers may lose from unionizing, such as the ability to earn individual merit raises. They don't point out that collective bargaining can result in lower pay and job loss for some workers.

The required poster size, 11 X 17 inches, is larger than is required for notices for minimum wage, employee polygraph protection, family medical leave, equal employment opportunity and other employee rights guaranteed by Congress.

If 20 percent or more employees are most comfortable speaking a language other than English, an additional poster in translation must go up. That's two posters.

If the employer fails to display the poster, the Board can declare the employer guilty of an "unfair labor practice." There's no fine, but unfair labor practices can be held against an employer in the case of a dispute with the union or a drive to organize a workplace with no union relationship.

The requirement applies to all private workplaces, no matter how few employees. However, retailers with less than $500,000 in gross sales are exempt, as are nonretail businesses with less than $50,000 in out of state sales or purchases.

One of Mr. Obama's first executive orders, issued in January 2009, was to require federal contractors to post a version of the poster. That notice was composed by political appointees at the Labor Department.

Ms. Liebman defended the rule in a New York Times interview (August 30) by saying that collective bargaining puts more money in workers' pockets, increasing purchasing power and creating a stronger economy.

Workers don't seem to believe this, which may be why Ms. Liebman wants the poster. Every year, fewer American workers choose to belong to unions. The fraction of all private sector American workers belonging to unions is less than 7 percent, compared with 35 percent in the mid-1950s.

Workers are voting with their feet. They are migrating from unionized states to right-to-work states, where by law they cannot be required to join a union as a condition of work. As a result of population shifts in the 2010 Census, nine congressional seats will move to right-to-work states from forced unionization states in 2012. Winners include Texas, Florida, Arizona, Georgia, and South Carolina, while losers are New York, Ohio, Michigan, Illinois, and New Jersey.

Over the past 25 years, right-to-work states have created more than twice as many jobs as unionized states. Recall that it was unionized General Motors and Chrysler that needed federal bailouts in 2008 and 2009, not Toyota, Honda, Nissan, and BMW, located in right-to-work states in the South.

It is unclear that the National Labor Relations Board has the authority to require employers to display what one must regard as a union organizing poster.

According to John Raudabaugh, a Board member from 1990 to 1993 and now an attorney with Nixon Peabody, the Board lacks authority to require the poster under the 1935 National Labor Relations Act.

Mr. Raudabaugh explained that "every federal statute in the field of labor and employment law, such as the Fair Labor Standards Act, the Railway Labor Act, and the Equal Employment Opportunity Act, specifically mentions the right of the relevant agency to issue posting of notices to employees. The National Labor Relations Act is silent on the notice to post."

The Board lists ten other laws that require posting and concluded in its December 2010 Notice of Proposed Rulemaking that "The NLRA is almost unique among major Federal labor laws in not including an express statutory provision requiring employers routinely to post notices at their workplaces informing employees of their statutory rights." This, curiously, seems to be an admission by the Board that it lacks statutory authority.

The Railway Labor Act was amended in 1934, one year before NLRA passed, and included specific mention of a notice to employees. One must conclude that if Congress had wanted nonrailroad employers to post notices, it would have specified this in the 1935 Act.

On Thursday, the day after Republican presidential candidates debate at the Reagan Library, millions of unemployed Americans will be watching Mr. Obama's speech to Congress. They desperately want to hear the president explain how employers are going to offer them real jobs. Mr. Obama, tear down those posters.

Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is senior fellow and director of Economics21 at the Manhattan Institute. Follow her on Twitter: @FurchtgottRoth.   

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