Patriot Action Network

The Sacramento Bee has another story on the too cozy relationship between government and unions with a story about California Public Employees’ Retirement System (CalPERS) pension investments. It seems that union donors got some awfully surprising deals while a union leader sat on the pension board.

At issue is the actions of Sean Harrigan, leader of the United Food and Commercial Workers union (UFCW), who was a board member of the public employee’s pension fund. Apparently he solicited $300,000 in “donations” to the union’s campaign fund from companies that the pension fund invested in, investments he had a vote on arranging.

Naturally, Harrigan claims no quid pro quo was going on, but it is certainly a “coincidence” to see the same companies getting favorable investments from the pension plan suddenly “donating” large sums to the union campaign fund, isn’t it?

So we have a self-interested union chief soliciting “donations” to his union while administering a government employees pension fund. Too cozy, indeed.

Go on over to the SacBee and take a look at this story. It’s pretty interesting.

 

Rush to Defend FedEx is Wrong

On June 14, 2009, in General News, by Warner Todd Huston

Folks claiming that talk-show host Rush Limbaugh speaks for conservatives are off the mark. Rush speaks to conservatives, not for them. And he speaks to them in their own language, which is why he has such a gigantic listening audience. And because he has such a gigantic listening audience of conservatives, it is especially important for other conservatives to step forward and set the record straight on those rare occasions when Rush gets one wrong.

So it is with Limbaugh’s recent criticism of a bill which would change the way FedEx Express receives special treatment under the nation’s labor laws. Claims by FedEx to the contrary, this bill isn’t a “bailout” for UPS so much as it’s an elimination of a corporate welfare subsidy for FedEx. But first, let me stipulate two points:

(1) FedEx is a great American success story. It brought innovation and technology into the marketplace and invented the overnight shipping industry long before Al Gore invented the Internet.

(2) Unions suck. Big Labor generally stands for paying every employee the same amount of money even if one worker does a great job and another one sleeps all day. I believe labor unions are a doorway to socialism in the United States and if I had my way, I’d outlaw all of them – especially government workers unions, and super-especially teachers unions. So I’m no union “symp.”

OK, with that out of the way, here’s a list of all the companies whose commercial truck drivers are covered under the National Labor Relations Act (NLRA):

UPS, Old Dominion Freight Line, Knight Transportation, DHL Ground, YRC Worldwide, JB Hunt, Schneider National, Con-way, Swift Transportation, Landstar System, Werner Enterprises, U.S. Express, Arkansas Best Corp., FFE Transportation, Greatwide Logistics, C.R. England, Saia, Averitt Express, Prime, CRST International, R+L Carriers, NFI Industries, Kenan Advantage Group, Covenant Transportation Group, Universal Truckload Services, Ruan Transportation, Southeastern Freight Lines, Allied Holdings, Quality Distribution, Anderson Trucking, Vitran, Heartland Express, Interstate Distributor, Celadon, Dart Transit, Western Express, Smithway Motor Express, Ryder System, Roadrunner Transportation, Comcar Industries, AAA Cooper Transportation, USA Truck, Marten Transport, Shevell Group, Central Transportation and Dynamex.

Now here’s the list of the all the companies whose commercial truck drivers are NOT covered under the National Labor Relations Act (NLRA):

FedEx Express.

I’m bettin’ you already know where I’m going with this without even knowing the specifics of the issue, don’t you?

Railways vs. Highways

Instead of being covered by the NLRA, FedEx Express drivers are covered under the Railway Labor Act. But why is this such a big deal?

As the Washington Times explained in a recent editorial, Congress long ago “recognized that certain sorts of transportation companies are the lifeblood of interstate commerce.” As such, it passed the Railway Labor Act (RLA) in 1926 to which it applied “special labor-relations rules to railroads.” Those special rules later were expanded to include airline-based businesses as well.

The RLA, the Times noted, “has provided successfully for means other than strikes to resolve labor disputes fairly and quickly, without favoring either side.” Which is another way of saying that the NLRA, by comparison, does NOT quickly and fairly resolve labor disputes without favoring one side over the other. No wonder American companies would rather not be covered under the NLRA.

Another benefit of being covered by the RLA as opposed to the NLRA, notes Business Week, is that it “carries a difficult path to unionization that requires a national vote by every worker at a company and doesn’t allow for organizing at a local terminal-by-terminal level.” That would be like trying to unionize Wal-Mart in one huge national vote rather than going store by store, one at a time.

FedEx was originally started as an airline, which is why it’s covered under the RLA rather than the NLRA. It’s also currently non-union and wants to stay that way. And who can blame them? As Whole Foods CEO John Mackey once put it, “The union is like having herpes. It doesn’t kill you, but it’s unpleasant and inconvenient.”

In any event, this is what the issue is all about, boiled down to a level that even a member of Congress should be able to understand:

Let’s say you want to ship a package overnight from New York to Los Angeles to your sister. And let’s say you call UPS to handle the transaction. A UPS driver will come to your home, pick up your package, drive it to the airport, put it on a UPS plane and fly it to Los Angeles where it will be picked up by a UPS driver and delivered to your sister.

But let’s say you call FedEx instead. Here’s how the transaction will be handled: A FedEx driver will come to your home, pick up your package, drive it to the airport, put it on a FedEx plane and fly it to Los Angeles where it will be picked up by a FedEx driver and delivered to your sister.

In other words, both companies provide the exact same, identical service in the exact same, identical manner. And yet FedEx Express’s drivers are covered under the Railway Labor Act instead of the National Labor Relations Act. It makes no sense.

Eliminating an Unfair Advantage

In an effort to eliminate this “corporate welfare” benefit which only FedEx Express currently enjoys for its package delivery drivers, Rep. James Oberstar, Minnesota Democrat, has proposed an amendment to the Federal Aviation Administration reauthorization bill – the Express Carrier Employee Fairness Amendment – to close this loophole in the law and put FedEx Express on a level playing field with its competitors. The amendment would move non-airline related FedEx Express drivers from under the Railway Labor Act to under the National Labor Relations Act where they belong.

And here’s where conservatives such as Rush Limbaugh have inadvertently gotten themselves on the wrong side of this issue.

Let’s face it: Conservatives don’t like unions….or herpes either. So a move by a Democrat congressman in a Democrat Congress being led by a Democrat president which might make it easier for Big Labor to take over a non-union company like FedEx – and do to it what Big Labor has done to the American auto industry – would understandably result in a reflexive response by conservatives to oppose the bill.

However, this isn’t about Big Labor. It’s about treating similar workers in different companies equally under the same law. As it stands, FedEx enjoys an unfair competitive advantage over its rivals because FedEx Express drivers are covered under a more protective law which doesn’t cover a single one of its competitors.

And the company, great American success story that it is, isn’t as pure as the driven snow here. FedEx hasn’t exactly been shy about using this competitive advantage to poach customers from rivals in the marketplace. For example, whenever UPS and its union drivers approach contract negation time, here’s the general sales pitch FedEx delivers to UPS’ customers:

“You know, UPS drivers could go out on strike again soon. And if they do, we might not be able to handle all the additional deliveries from UPS customers. However, if you switch your account from UPS to FedEx today, you’ll become one of our existing customers and won’t be affected by the UPS strike. We’ll continue to deliver your packages on time and you won’t have to worry about a thing. Just sign here.”

Frightened customers who can’t afford to have their deliveries adversely impacted by a union strike at UPS are often scared into switching over to FedEx. That’s an unfair advantage not enjoyed because FedEx has been successful in discouraging its drivers from wanting to join the union, but because the law artificially does this for them.

FedExcess: A History of Law-Bending

And abusing legal loopholes in labor laws such as this isn’t something new to FedEx. The company for years has been trying to exempt many of its drivers from other employment laws which everyone else are subjected to, as well.

For example, even though their drivers drive FedEx trucks, wear FedEx uniforms and identify themselves as FedEx representatives, FedEx maintains these folks are “independent contractors” and not employees. The IRS and the Second Court of Appeals in California disagree.

According to an Appeals court ruling last year, the FedEx drivers “look like FedEx employees, act like FedEx employees, are paid like FedEx employees and receive many employee benefits.” As such, the Appeals court ruled that FedEx drivers are employees, not independent contractors, concluding that “if it looks like a duck, walks like a duck, swims like a duck, and quacks like a duck, it is a duck.”

The dangerous thing here is that FedEx’s attempts to abuse and circumvent the law regarding independent contractors puts all legitimate independent contractor relationships in jeopardy with Congress and the IRS. In this regard, FedEx is a rogue company whose efforts to use the law to gain an unfair advantage over its competitors put all American businesses in jeopardy. So while the conservative inclination to rush to FedEx’s defense is understandable, it is, at least in this case, misplaced.

Of course, a better field-leveling solution to all of this would be to repeal all non-life threatening labor laws completely and eliminate unions altogether. But we all know that ain’t gonna happen. So in the interest of fairness, it only makes sense that drivers who provide the exact same service be covered under the exact same labor relations law.

Pulling Out all the Stops to Stop Fairness

FedEx is fighting this field-leveling proposal tooth-and-nail, spending a FedEx jumbo jet full of cash on K Street lobbyists and a misleading advertising campaign which – at least as far as some conservatives are concerned – has been successful. FedEx founder and CEO Fred Smith is “chicken littling” Congress, conservatives and FedEx customers into believing that if the law is changed it will automatically raise his company’s operating costs and chase away customers.

Of course, many of those customers are probably former customers of competitors whom his company scared into joining the FedEx family in the first place, but whatever.

“FedEx is preparing to spend millions of dollars trying to convince Congress that a FedEx driver delivering a package is somehow different than a UPS driver delivering a package,” explains UPS spokesman Malcolm Berkeley. “Their packages aren’t delivered by airplanes and we don’t believe FedEx can fool Congress about that.”

Don’t be so sure. After all, we ARE talking about Congress here. Some of those people ain’t exactly the brightest bulbs on the Christmas tree.

Taking no chances, FedEx’s Smith has also resorted to what can only be characterized as economic blackmail, recently threatening to cancel a $10 billion purchase of several dozen Boeing 777 airplanes if Congress moves his drivers from the Railway Labor Act to the National Labor Relations Act.

But here’s the thing: Rightfully moving FedEx Express drivers from the RLA to the NRLA doesn’t mean the unions will automatically take over FedEx. As UPS notes, FedEx currently has 100,000 other employees who are already covered under the NRLA and they haven’t unionized.

Indeed, as long as FedEx treats its drivers well and makes a compelling case to its employees that unionizing the company would put the company at risk – you know, like Chrysler and GM – then there’s every reason to believe it could remain non-union, as it should be, even though it would now be governed by the same set of rules as everyone else.

Conservatives such as Rush Limbaugh who are jumping in bed with FedEx in opposition to this much deserved labor law change should be careful and look beyond the surface of this issue. Otherwise they could end up like the young man who thought he married a virgin only to find out after the fact that his lovely new bride, so virtuous-looking on the outside, had been ridden more times than Secretariat. Caveat emptor.

 

-By Larry Seale

The once mighty, 50,000 member strong, Indiana State Teachers Association (ISTA) has been brought to its knees, seemingly humbled not by “criminal” activity but by the avarice and incompetence of its officers and “wildly speculative” investments by the directors of the ISTA Insurance Trust.

ISTA’s parent union, the National Education Association (NEA), placed the local in trusteeship less than a month ago and trustee Ed Sullivan is now running the show, replacing ISTA president Nate Schnellenberger after he had notified the NEA that the ISTA insurance trust had liabilities of $86 million and assets of only $19 million. The trust had provided disability payments to 650 disabled Indiana Teachers and provided health care coverage for half the states teachers.

It is reported the union was already having financial difficulties and there were “warning” signs as early as 2006, which must have been ignored with a typical gambler mentality – “One big win and and I’ll be rolling in clover”. As all gamblers must eventually realize, doubling up to catch up only results in larger losses and the mentality of the the ISTA officials running the trust has to be questioned. The FBI and state of Indiana have announced investigations into the ISTA financial affairs.

(former) ISTA president Schnellenberger has stated that “No one receiving a check has missed a payment and because of this partnership, no one ever will”. We hope he’s correct but trustee Sullivan paints a different picture, as reported by journalgazette.net, in a June 2nd memo where he wrote that the trust would not have enough money to make disability payments after July. Schnellenberger didn’t bother to mention that ISTA is going to lay-off at least 35 of the union’s 150 employees and that a ISTA due’s increase is likely in an attempt to refund ISTA.

Indiana Insurance Commissioner Jim Atterholt is quoted as saying:

“How are these 650 teachers from across the state who are currently on disability supposed to feed their families until the lawyers sort everything out years from now?” Atterholt asked. “The honorable thing for the NEA and ISTA to do is to continue to pay claims until they recover the money from the bad actors.”

Recovery is an interesting thought but I doubt the “bad actors”, Schnellenberger and other ISTA officers and trust board members, have $70 million or so laying around. Perhaps it’s Morgan Stanley’s David Karandos, the trust’s broker, who deserves to wear the black hat. It’s reported that he made some 4000 rapid fire trades, of the trust’s assets, in a volatile nine month period.

The story is on-going and it will be months, perhaps years before the investigations are complete and the total damage is reveled. I can’t help but wonder why there is so little outrage and coverage of the debacle; my local newspaper, the Denver Post, has not even mentioned the crisis that affects literally thousands of teachers in Indiana. A Google search of “Indiana State Teachers Association Trust” turns up fairly extensive local cover but little reporting at the national level and seemingly little or no interest on the part of the Obama administration, Labor Secretary Solis, the Congress or the NEA.

Perhaps all the named parties are too busy trying to revive the horribly misnamed Employee Free Choice Act (EFCA) and just can’t be bothered when a few thousand Indiana teachers get the rug yanked out from under their feet.

Given the ISTA crisis, the Department of Labor Multi-employeer Critical and Endangered Pension list (which doesn’t mention the ISTA Insurance Trust) and the perhaps total depletion of union coffers to elect President Obama and pass the EFCA, it’s evident that unions need more oversight and not less as Obama as promised as payback for massive election contributions.

Where is the public outrage?

Larry Seale is semi-retired and a former dues paying member of Amalgamated Transit Union Local 1001 located in Westminster, Colorado. He maintains First Transit Employee Rights Blog, his personal “rant” and Union Disclosure Blog listing required union disclosure filings.

 

The Evergreen Freedom Foundation Blog

On June 12, 2009, in Corruption, Unions Revealed, by Warner Todd Huston

We here at the Union Label Blog like to keep everyone informed of groups out there that support the cause. The Evergreen Freedom Foundation is one of those that we use as a constant resource for our own work here.

One of EFF’s great resources is its horribly titled The Official Blog of the Evergreen Freedom Foundation blog. Seriously, guys. We need to help you with that name. How ’bout Unionslammajamma blog er something!?

Anyway, the TOBOTEFF is a great place where you can see some great info on the world of workplace freedom. Here, for instance is one of the latest posts over there:

Union Bailouts?

In case you missed it, the Wall Street Journal yesterday opined on financial problems with organized labor. According to the paper, by June 2008 the AFL-CIO had $90.6 million in liabilities and only $88.3 million in assets. SEIU’s liabilities are now 80 percent of its $189 million in assets.

The Journal’s conclusions:

  • Labor organizations “have been spending so much on politics that they’re going deeply into debt.”
  • Unions want card check to help them unionize more workers, get more in dues, and get out of debt faster.
  • We need more union financial transparency. “Unions have a long history of corruption in part because they mix large amounts of cash from dues with political purposes and little oversight. Yet the same union leaders who denounce failures of corporate governance bitterly resisted the Bush Administration’s expanded disclosure, and now they want the Obama Administration to water down those rules. The news about rising union debt shows why that transparency is more necessary than ever.”

In short, unions have been spending too much money on politics, don’t want anyone to know about it, and want to change the rules to get more money. Apparently it’s not just banks and auto companies wanting federal assistance these days.

Good points from the WSJ and thanks to Evergreen for reiterating the points.

After your daily visit to theUnionLabelBlog.com, be sure and go to the TOBOTEFF for some great content. And drop them an email with your suggestions for a snappier name for the blog. Don’t tell ‘em I told you to do it, though. I got enough people mad at me! (Ha, ha)

**UPDATE**

You know how you can get an idea in your head and you move forward then blinded to anything else until someone points it out to you? Then you sit there and wonder how you could have been so blind? Well, mark this up as one of those instances for yours truly. All this time I’ve been going to LIBERTY LIVE which just happens to the the official blog of the Evergreen Freedom Foundation and I never realized the darn thing was CALLED LIBERTY LIVE! I got it in my head that the blog was called TOBOTEFF, and that was that.

So, thanks to a note from the kind folks at LIBERTY LIVE, I am corrected, chastened, and happy that they weren’t as ridiculous as I thought in naming the blog.

Anyway, all this time I’ve been going there and I missed that salient fact!

Maybe my wife is right. I don’t listen. But, I thought I was just not listening to her! Ha, ha. Crazy.

 

Card Check Debate to Start in July?

On June 11, 2009, in Card Check, Corruption, Unions Revealed, by Warner Todd Huston

Roll Call is reporting that Senator Tom Harkin (D, Iowa) is saying a compromise on the Employee Free Choice Act (EFCA) — or the card check bill — will be introduced in July.

Sen. Tom Harkin (D-Iowa) indicated Wednesday that he will be ready to bring up the long-stalled Employee Free Choice Act next month, following weeks of negotiations with key stakeholders.

“We’re in meetings right now. I’m still hopeful that we can get something done,” Harkin said.

The Iowa Democrat has regularly huddled with Democratic Sens. Mark Pryor (Ark.), Charles Schumer (N.Y.) and Arlen Specter (Pa.) to try to hatch a compromise on the measure, known as “card check.” On Tuesday, Harkin included AFL-CIO legislative director Bill Samuel in the talks—an indication that progress is being made.

Excluded from the closed-door talks have been Democratic naysayers to the bill such as Sens. Ben Nelson (Neb.) and Dianne Feinstein (Calif.), whose support Harkin will need to avoid a filibuster…

Specter is seen as key to any agreement. Before he defected to the Democratic Party in late April, he took to the floor to oppose the legislation in its current form. Since then, he has softened his tone, but he has repeatedly said he will oppose any proposal that includes the open-ballot rule.

When asked if the labor industry would agree to any measure that does not include that provision, Harkin seemed uncertain, saying it’s one “of about three problems I have right now.”

Harkin said he hopes to push the legislation to the floor next month, but that he won’t take any action unless and until Minnesota Democrat Al Franken is sworn in as a Senator. Franken would give Democrats 60 votes, enough to avert a filibuster.

Specter cannot be relied on to uphold his earlier criticism of the card check bill back when he was still a Republican. He is under a lot of pressure from labor lobbyists back home, especially since his switch to the Democratic Party.

Also, as Brian Faughnan of RedState says:

I’m also surprised to see Mark Pryor apparently emerging as a key voice for Card Check. One of the biggest opponents of the measure is WalMart – which is based in Pryor’s home state. If Pryor is an advocate for Card Check, it might come back to haunt Blanche Lincoln – who is up for re-election next year. If Card Check passes thanks to Pryor, it could make WalMart executives more willing to push back against the Democrats who passed it.

There is quite a coalition of Republican and Democrat Senators against this bill, however. It will likely be difficult to get this thing passed even if they end up seating Al Franken. For now, anyone opposing this bill should be ready for the coming battle.

 

The Hill has news of a new report will show that Democratic Politicians will make out like fatcats if they are successful in passing the Employee Free Choice Act (EFCA) this Congressional session.

It is being estimated that unions would gain an additional $320 million to spend on political campaigns and much of this money would go right in the campaign accounts of Democratic politicians in D.C. and elsewhere.

“EFCA’s passage into law could generate billions of additional dollars for unions to spend on political activity to advance their agenda,” a WFI memo says. “And for those union leaders whose pension funds have been mismanaged, EFCA’s passage would also amount to a massive government-engineered bailout of their financial mismanagement.”

The report cites a claim made by Service Employees International Union President Andy Stern who estimates that the EFCA could enlarge union membership by as many as 1.5 million members.

Whatever the effect the EFCA will have on union membership, if unions are more easily able to organize it is certain that union membership will grow exponentially. The consequent increase in dues paid by these members would certainly make unions more powerful in political circles. So, it is no wonder that Democrats are excited about this bill. It will very naturally put more money into the pockets of their friends who will most certainly be grateful to the politicians that passed a bill favorable to them.