During a hearing conducted by the House Subcommittee on Health, Employment, Labor, and Pensions, Littler Shareholder Stefan Marculewicz explained the role that worker centers, also referred to as union front organizations (UFOs), play in modern labor organizing. Such worker centers, Marculewicz testified, are typically non-profit organizations that “offer a variety of services to their members, including education, training, employment services and legal advice.” The problem with these rapidly growing organizations, however, is that they are:

directly engaging employers or groups of employers to effectuate change in the wages, hours and terms and conditions of workers they claim to represent. Indeed, when it comes to such direct engagement, these worker centers often act no differently than traditional labor organizations. Yet, few of these groups comply with the laws that regulate labor organizations. Statutes like the National Labor Relations Act (NLRA) and the Labor Management Reporting and Disclosure Act (LMRDA) contain significant protections with respect to representational democracy, organizational democracy, access to basic information and promotion of a duty of fair representation. These basic rights are an important part of the process governing the representation of employees in the workplace by third-party organizations.

Free of the restrictions and obligations imposed by NLRA and LMRDA, worker centers “can avoid accountability to the workers they claim to represent and avoid restraints that are imposed on traditional labor organizations.”

Rep. Brett Guthrie (R-KY) asked Mr. Marculewicz to explain secondary picketing, and how this concept applies to worker centers. In response, Marculewicz said that the NLRA prohibits this practice, which occurs when picketers target the customers or clients of a business involved in a labor dispute. The purpose of this prohibition is to protect neutrals in a dispute. Marculewicz testified that workers centers, however, “have not considered themselves to be limited by the NLRA restrictions on secondary picketing and protracted picketing for recognition, and such conduct is a common tool used by these groups to convey their message . . .”

According to Marculewicz, the analysis under the NLRA and LMRDA to determine whether an organization constitutes a “labor organization” focuses on the entity’s intent – that is, whether its goal is to effectuate change in the participants’ terms and conditions of employment through collective action. Marculewicz noted that a number of cases before the NLRB over the years have addressed whether employee work groups are in fact labor organizations. Using the aforementioned intent test, the Board has found that many of these work groups are indeed labor organizations governed by the NLRA.

When asked what types of filing requirements and restrictions labor unions are subject to that worker centers are not, Mr. Marculewicz discussed LM-1, LM-2, and LM-4 forms, which unions file with the Department of Labor to disclose certain operational and governance documents, as well as financial information “so members can understand where the money is coming from, and where it is going.” The LMRDA was enacted, in part, to respond to problems with union corruption, and ensure that workers who are members of the organization have a democratic right to participation.

In response to a question posed by Rep. Scott DesJarlais (RTN), Mr. Marculewicz explained that worker centers obtain their funding “from a variety of sources,” including private grants, foundation contributions, government grants, and direct funding from labor unions. The exact funding sources are unknown, Marculewicz said, because “the reality is, there is no disclosure,” adding “not all worker centers act like labor organizations, but many are starting to.”

Subcommittee Chairman Phil Roe (R-TN) noted that in July he and Rep. John Kline (R-MN) requested a formal determination by the DOL regarding the status of worker centers. According to Roe, the initial response from the DOL has been “incomplete and disappointing,” but he hopes for a more definitive response.

The hearing also touched upon federal agency policies that are facilitating union organizing. David R. Burton, General Counsel for the National Small Business Association, criticized the DOL’s impending “persuader rule,” which he claims will “dramatically expand the scope” of reportable activities under the LMRDA by narrowing the current “advice exemption.” Mr. Burton said that as a result of this rule, “even minor activities would have to be reported,” including multi-employer webinars and seminars, for instance. This rule, he argued, “is inconsistent with the basic rules of statutory construction,” is “contrary to Congressional intent,” and “lacks adequate evidentiary basis.” He pointed out that many small businesses are not familiar with the intricacies of labor law, nor do they have labor counsel on staff. Hiring outside help to assist with the LMRDA’s reporting requirements will create a huge compliance burden, he testified.

Burton also found fault with the June 2011 proposed expedited election rule, which has been put on hold for a number of reasons, but “will likely be revisited” by the new Board. A main problem with the proposed rule, he said, is that it would revise the election process so that most elections would occur within 10 and 21 days, rather than the typical 40 days.

Burton also took aim at the rise of micro bargaining units, which he says have resulted following the Board’s contentious decision in Specialty Healthcare, which was recently upheld by the U.S. Court of Appeals for the Sixth Circuit.

Former NLRB general counsel and board member Ronald Meisburg similarly railed against the proposed election rule changes. If the rule does, indeed, go forward, he called for a process that involves more stakeholder input. Meisburg further criticized recent Board activity, which he feels has expanded the scope of protected activity under the NLRA. He hoped that the newly-constituted Board approaches cases and regulatory activity “with a sense of balance.”

When asked what could be done to stave off union harassment at an entity whose employees clearly do not want to be unionized, Meisburg suggested that employers be able to call for an election themselves. If through a secret ballot election the employees, in fact, do not want to join the union, the union would be banned for a year. This proposal, Meisburg said, would have a “calming effect” on heated union campaigns.

A complete list of panelists and links to their testimony can be found here.