The United States Senate will soon render its advice and consent
to the nomination of Representative Hilda Solis (D-CA) as the new
secretary of the United States Department of Labor (DOL). Solis is
the daughter of a union organizer, a past union demonstrator, and a
member of the House Progressive Caucus, a group of the most liberal
members of the House.
Unions spent an estimated $16.5 million of members' dues to
elect Barack Obama and another $85 million for the Democratic
Congress and have made it clear that they expect the new
Administration to follow through on their priorities. Union
leadership unanimously applauded Solis's nomination.
However, union leadership wants the next labor secretary to
implement reforms that benefit unions at the expense of their
members. The AFL-CIO has published a guide to the policies it wants
the Obama Administration to implement. Many of their recommendations
are the very types of special-interest policies that
President-elect Obama campaigned against.
The AFL-CIO wants the Department of Labor to reduce transparency
and disclosure requirements and reduce investigation of union
corruption while stripping workers of their right to a secret
ballot and facilitating the misuse of their pension funds. Unions
want the next secretary of labor to give them more power over their
members while holding them less accountable for how they spend
their members' dues.
These policies would hurt the very workers the Department of
Labor exists to protect. Before confirming Solis as labor
secretary, Senators should consider the following questions.
Question #1: Secret Ballots Protect
Organized labor's highest legislative priority is the misnamed
Employee Free Choice Act, which effectively replaces traditional
secret ballot organizing elections with publicly signed cards.
Workers would have to voice their choice in public, in front of
union organizers, exposing workers who do not want a union to
pressure, threats, and harassment from union organizers. This
legislation is popular with union bosses but opposed by large
majorities of workers. You support this legislation. Could you
explain how taking away private ballots would protect
Answer: The right answer is that it would not. Replacing
organizing elections with public card checks is a move in the wrong
direction. Card checks expose workers to threats and intimidation
from unions and employers. Even when organizers obey the law,
taking away secret ballots still leaves workers vulnerable to peer
pressure and harassment. Organizers know who has and has not
signed, so they repeatedly return to pressure holdouts to change
their minds. They give workers a high-pressure sales pitch that
presents only the union side and press them to commit immediately
without time for reflection. Cards signed under these circumstances
do not accurately reflect an employee's true intentions-a fact that
unions privately acknowledge.
In contrast, secret ballot elections balance the rights of both
employers and unions and ensure that workers have the chance to
hear both sides and reflect on their decision before voting.
Contrary to union rhetoric, most companies obey the law during
organizing elections, and the NLRB promptly remedies illegal
discrimination against workers who want to organize.
Question 2: Misuse of Pension
The AFL-CIO wants the Department of Labor to "rescind all 2008
guidance regarding the legal standards imposed on pension plan
fiduciaries when considering investments in "economically targeted
investments" and "the exercise of shareholder rights." These
guidelines provide important protections for workers, preventing
union officials from misusing workers' pension funds for their
benefit while imperiling workers' retirement. Will you continue
to require unions to manage pension plans in the sole interest of
workers and maintaining strict fiduciary responsibilities on union
Answer: The right answer is that the Department of Labor
should keep strict fiduciary requirements on union pension plans.
Despite the declining popularity of defined benefit pension plans,
unions still manage workers' pension plans worth hundreds of
billions of dollars. The government requires unions to manage those
pension plans for the sole benefit of workers. Under current
regulations, unions may not direct workers' pension funds to
favored firms but must maximize the retirement earnings of their
members. In the past, unions have invested pension funds in
projects operated by well-connected individuals in the union
movement that subsequently lost millions of dollars, hurting
workers' retirements. They have also spent pension resources to
pressure companies to support their political goals-money that came
out of workers' retirement funds. Pension funds belong to workers;
they are not the unions' funds to distribute to well-connected
insiders or use to pressure corporations.
Question 3: Union Financial
The Department of Labor revamped union financial disclosure
forms so that they will now provide meaningful information to union
members about how their dues are spent. Now union lobbyists want
the Department of Labor to rescind those regulations. Do workers
have a right to know how their dues are spent? How would
reducing financial transparency benefit workers? Will you commit to
keeping the existing financial disclosure requirements in
Answer: The right answer is that union members are well
served by knowing how their dues are spent. Previous forms provided
no meaningful insight into how unions spent their members' dues.
The revised LM-2 form now requires unions to itemize all expenses
over $5,000. The LM-30 forms require unions to report potential
conflicts of interests. The newly promulgated T-1 requires
financial disclosure from union trusts, such as worker training or
strike benefit funds. These provide workers with valuable
transparency into how their dues are spent, so they can hold their
union representatives accountable.
They also expose corruption. The SEIU scandal in California was
uncovered by journalists examining discrepancies in the new LM-2
forms. Financial transparency holds unions accountable.
Question 4: Union Accountability
Over the past eight years, the Department of Labor has increased
the amount of money spent to audit union books to ensure they are
accurately reporting their finances. As with businesses, audits
hold unions accountable and discourage fraud and corruption.
However the AFL-CIO wants the Department of Labor to conduct fewer
audits and is lobbying to have the amount of money spent auditing
union books cut. What do you believe would happen to compliance
if the Department of Labor announced it intended to sharply cut the
amount of money spent auditing books? Do you believe audits protect
Answer: The right answer is that audits are necessary to
protect union members and ensure compliance with the laws. Congress
would laugh at any business that lobbied to have less money spent
auditing its books. But that is what the AFL-CIO is requesting.
Unions free of corruption have nothing to fear from audits, while
they deter wrongdoing in the union movement. Cutting audits would
hold unions less accountable and permit corruption.
Will Solis Stand Up to Unions?
Unions are supposed to represent their members, but much of what
union leadership wants the next labor secretary to do would
undermine workers' rights. Unions want the labor secretary to
repeal financial disclosure requirements that increase transparency
and enable workers to hold unions accountable. They want fewer
audits of their books. They want the freedom to use pension funds
on political goals instead of ensuring workers have a secure
retirement. Moreover, they want to effectively eliminate workers'
right to a secret ballot on joining a union. Organized labor is
lobbying for measures that will benefit union bosses at the expense
of union members. Senators should carefully consider this agenda
when questioning Solis.
James Sherk is Bradley
Fellow in Labor Policy in the Center for Data Analysis at The
Obama-Biden Transition Project, "Turn Around