The inescapable rise in supply chain costs is top of mind for material handling and logistics professionals these days. Much of it is attributed to such factors as congestion, lack of sufficient infrastructure investment, capacity constraints and shortages of trained professionals like truck drivers and air freight pilots. Another frequently cited culprit is the explosive growth in government regulations in recent years, much of which directly targets employers.

Regulation is nothing new for the material handling and logistics industry, of course. The first federal regulatory agency, the Interstate Commerce Commission, was created in the late 19th Century to regulate freight railroads. Since President Obama took office, however, labor and employment regulation burgeoned in a way never seen before.

Why did this happen? It can be traced directly back to the 2008 national elections, when unions poured more than $200 million into Democratic Party and Obama campaign coffers. In 2009, when Democrats controlled both houses of Congress and the White House, unions believed it would be a slam dunk to achieve the top item on their agenda: card check legislation.

Card check—where employees sign authorization cards stating they want a union instead of participating in a secret ballot vote—allows pro-union employees and union organizers to pressure individual workers into publicly signing the cards. Even some Democrat legislators balked at violating the principle of the secret ballot and card check failed to pass in Congress. As you can well imagine, that made unhappy the very union leaders whose support Democrats needed in future elections.

The Obama Administration sought to solve this problem by securing every advantage possible for the unions by using administrative actions to give them everything else on their agenda. The result was a raft of highly-partisan appointments to regulatory agencies, which then began rolling out policies and rules designed to favor unions.

How well did it work? With the exception of government employees, union membership in this country had been in decline prior to 2013. Then in the following year private sector union membership began to rise. In the first six months of 2014 unions participated in more representation elections and won a larger percentage of those elections than in the same period in 2013. (However, overall union membership remains near the historic 97-year low it hit in 2012, measuring a total of 11.3% of the workforce, down dramatically from its high point of 34.8% in 1954). 

NLRB Approves Ambush Union Elections

Taking the lead in helping improve unions' prospects was the National Labor Relations Board, previously viewed as a neutral referee between union and management but now an unabashed advocate for organized labor. The board also used its mandate to protect employees' concerted activities involving wages and working conditions as a springboard for extending its reach to regulating nonunion employers' social media and employee arbitration policies, as well as telling companies how to write their employee manuals.

The NLRB has pressed this agenda through policy statements and rulemaking by the five-member board, policy guidances issued by its general counsel in Washington, and decisions made by its regional directors throughout the country. 

One of the most important of these to employers is the recent final rule allowing "ambush" or "quickie" union organizing elections. Previously, disputes over issues such as whether certain employees should or should not be included in a union representation unit would be considered by the NLRB before the employees voted. Now these issues will be considered only after the vote occurs, and the board's decision about whether it will hear employer challenges is now considered discretionary instead of being mandatory, which it was previously.

Most importantly, the new rule ends the previous 25-day gap that began when an organizing election was scheduled and extended to when the vote occurred, shrinking it to as little as few as 10 days. This gives employers next to no time to put together a campaign for persuading employees to vote against the union. Typically, employers require expert advice at every turn of an organizing campaign—a few wrong words here and there and the board could order another election even if the union loses the vote. 

At the same time, the NLRB also issued a decision that grants unions unfettered access to the employers' lists of employee e-mail addresses and phone numbers for organizing purposes, and for individual employees to use in voicing complaints about wages and working conditions.

A New Definition for Micro Unions

Related to these NLRB actions is the Department of Labor's "persuader" proposal, which is slated to be released as a final rule in March. Under current law, employers must report to the DOL each time they engage a consultant, who then tries to persuade employees directly or indirectly about organizing or collectively bargaining.

The exception to this, written into the law, is advice given to employers by lawyers or others who have no direct contact with the employees. The Labor Department proposes eliminating this exception, but the American Bar Association and the Association of Corporate Counsel have cried foul, asserting this would violate attorney-client confidentiality.

Also, look for further refinements in how the NLRB chooses to define "micro unions." In 2011 the board decided that subsets of employees called micro units can organize within a single operation. In a warehouse, for example, this could be just the forklift drivers or maintenance personnel in a particular location. 

So far only three such micro union organizing cases have reached the board, all involving salespeople at large retail stores. It allowed the micro units to be recognized in two cases but not in the third, a thin record that makes it difficult for employers to fully ascertain the board's thinking about what it regards as a legitimate micro union.

NLRB actions also could impact your local fast food outlet. Last July NLRB general counsel Richard F. Griffin, Jr., a former NLRB board member and ex-general counsel for the International Union of Operating Engineers, announced that McDonald's could be treated as a joint employer of its franchisees' workers and shares liability regarding wage and other labor violations. McDonald's is contesting that determination, which has drawn widespread opposition because it could destroy the franchise model—an outcome much desired by unions and trial lawyers seeking additional corporate deep pockets for sexual harassment and other claims.

In the future, look for Griffin to continue pressing for findings of joint employer status in other franchise operations when those cases reach his desk.