WASHINGTON, D.C. – As he continues seeking feedback from Montana and around the country, Montana’s Congressman, Denny Rehberg, today thanked the Retail Industry Leaders Association for their support of provisions in the bill that help to maintain an appropriate balance between employer and employee rights under the National Labor Relations Act.

Their letter of support is below.

Dear Chairmen Rogers and Rehberg and Ranking Members Dicks and DeLauro:

On behalf of the Retail Industry Leaders Association (RILA), I write to express our gratitude for releasing the draft fiscal year 2012 Labor, Health and Human Services (LHHS) funding bill.  Policy provisions included in the legislation are needed to prevent severe burdens on employers imposed by the National Labor Relations Board (NLRB or Board) and efforts by Department of Labor (DOL) to interfere with employers’ access to legal counsel and other advice. We urge you to move forward with these critical policy provisions in this bill or any other available legislative vehicle.

By way of background, RILA is the trade association of the world’s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers  domestically and abroad.

Just this summer, the Board issued two major decisions, one proposed rule and a final rule, while the DOL issued a proposed rule of its own.  If implemented, they would impose severe burdens on employers; be detrimental to employee interests; and, for retailers, ultimately hinder the ability to provide notable customer service and create jobs.  The policy provisions in the draft bill address each of these damaging agency actions.

The Notice of Proposed Rulemaking on “ambush elections” would bring a vast number of changes to an election system that not only has worked well for decades, but already results in union wins in nearly seventy percent of elections. The NLRB’s own statistics reveal that in 2010, the average time to an election was 31 days, with over 95 percent of elections occurring within 56 days.  The rushed time frames under the proposal also would interfere with employers’ free speech and due process rights, and deny employees access to critical information and time to consider the issues at hand prior to entering the voting booth.  The current election time frames are not only reasonable, but permit employees time to hear from both the union and the employer and make an informed decision, which would not be possible under the proposed rule’s timetables.

In June, the Department of Labor (DOL) released its “gag rule” proposal that would reverse 50 years of established law.  RILA and its members are deeply concerned that the NPRM would deprive employers of their right to counsel; interfere with their ability to communicate with employees; deprive employees of their right to receive balanced information; and encourage inadvertent violations of the law due to employers’ inability to obtain advice.  The DOL proposal also could trigger burdensome, costly reporting and disclosure requirements for almost any use of third-parties by employers in establishing or revising employment policies; educating management through seminars and training; and conducting routine employee satisfaction surveys.  Further, the unnecessary, vague, and extremely broad expansion of what constitutes persuasion (through the virtual elimination of the advice exemption), with company presidents and treasurers required to sign reports under threat of criminal prosecution, will do immense harm to the economy by distracting job creators from what they really need to be doing:  growing the economy and putting people to work.

Most notably, the August decision coming out of the Board on Specialty Healthcare and Rehabilitation Center of Mobile is of grave concern to the retail industry.  Specialty Healthcare dealt with a nursing home and a union’s petition to represent certified nursing assistants as a discrete group, versus a larger unit proposed by the employer that would have included other non-professional employees.  Under the decision announced in the case, a party seeking to expand a proposed unit only has to demonstrate that the additional employees have an “overwhelming community of interest” with the employees in the proposed unit. The most alarming aspect of the decision is that the even though Specialty Healthcare involved a nursing home, the impact of the case is much broader applying to almost all industries and the 6 million employers under NLRB jurisdiction.  Since the decision reaches out across multiple industries, there is no doubt that there will be an exceedingly unfavorable impact on the retail industry.

The most striking negative effect of Specialty Healthcare is the extent to which it allows for what many have termed as “micro unions,” or bargaining units composed of small groups of employees from one department or shift.   For example, in a retail store greeters, cashiers and floor associates could now each form a separate unit or gardening and paint departments in a hardware store could be in separate bargaining units. Formerly, these employees throughout the store most likely would have consisted of one unit as the employees in an individual department or shift would not have been found to be “sufficiently distinct from those of other employees to warrant the establishment of a separate unit.”   The Board articulated this standard as recently as August 27, 2010 in its decision in Wheeling Island Gaming.

Opening the door to multiple contracts increases confusion and contention as similarly situated employees may have different wages, benefits and work rules.  Multiple contracts add substantial administrative burdens as well, with employers facing multiple contract negotiations, grievances and administration of different wage, benefits and work rules.  Micro-unions also vastly increase the chances that small groups of employees can cause work stoppages that negatively affect the entire workforce and costumers. 

Most importantly, union rules generally prevent one unit from performing another unit’s work.  Thus, in the example above greeters would be unable to work the register when a lined formed if they were in a separate unit from cashiers or gardening center employees in one unit could not work in the paint department when it was raining if paint was a separate unit.

In contrast, when all workers in a retail establishment are in the same unit, covered by the same contract, there are mechanisms for cross-training, for covering absences between departments or in nearby stores—in other words, a larger unit is necessary in most cases for employees to able to move from department to department, expand their horizons, earn extra money by picking up additional shifts—and for continuity of operations and enhanced customer service. 

These issues are particularly important in retail.  Retailers encourage employees to learn about their business by working in multiple departments.  They recognize the importance of cross-training employees and employees also value the variety in their day-to-day work activities.   It is especially important in the current economy, when many are looking for additional shifts, which are more available when free movement between departments can take place.

Among the executive ranks of RILA’s members, and across the retail industry, are many who started their careers working on the floor of a store.  Micro-unions would have a greater chance of preventing employees from developing this knowledge base and advancing their careers.  Not only does internal growth benefit the employee, but employers find that it provides for better employee retention and a healthier connection between senior management and the employees in their stores.

Another important emphasis is not just the impact this decision will have on the employer and the employee, but for the retail industry’s customer.  Retail prides itself on customer service and has built up the industry on attending to its base.  It is an added benefit to the customer when a customer can ask almost any store employee for help, and can effectively obtain assistance throughout the store.  If micro-units were to exist, a customer would not receive the same type of support they receive in today’s store environment.

Furthermore, at a time of universal discussion about the need to grow our economy, we look for expansion by our successful businesses, and opportunities to help companies that are struggling.  Specialty Healthcare is a clear disincentive to both.  At a minimum, healthy companies will wait to see what effects develop in their existing operations before investing in expansion—given the limited avenues of appeal for the Specialty Healthcare ruling this could take years. Struggling companies will not fare well with small groups of employees being organized, making them less likely to succeed. The end result will be fewer jobs.

RILA members are leaders in the workforce arena and we offer our support to help maintain an appropriate balance between employer and employee rights under the National Labor Relations Act. We thank you for releasing the draft fiscal year 2012 Labor, Health and Human Services funding bill.  Absent Congressional action, the actions of the NLRB will increase economic uncertainty that will have negative ramifications for the retail industry, its millions of employees, and consumers.

Sincerely,

Bill Hughes
Senior Vice President, Government Affairs