January 15, 1998
Salt Without Savour
by
Charles W. Baird
Suppose that Microsoft hired people to pose as ordinary job applicants at Netscape. When hired by Netscape their job would be to disrupt and sabotage production, file as many complaints as possible against Netscape alleging noncompliance with workplace regulations imposed by the Occupational Safety and Health Act (OSHA), the National Labor Relations Act (NLRA), the Family and Medical Leave Act (FMLA), the Fair Labor Standards Act (FLSA) and any other regulations of which they could think . Their goal would be to drive Netscape out of business, or, failing that, to cripple the ability of Netscape to compete with Microsoft. If the antitrust people at the Department of Justice think that Microsoft should pay a $1 million per day penalty for merely integrating its Explorer web browser with its Windows software, they, or the people in the criminal division at Justice, would probably try to send Bill Gates to jail.
Again, suppose that the Nissan Motor Company plant in Tennessee hired people to infiltrate the United Auto Workers (UAW) union local. Their job would be to spy on all union activity and try to foment dissension and strife throughout the rank-and-file union members. Their goal would be to shut the union local down, or, failing that, to make it impossible for the union to gain representation privileges at Nissan. The National Labor Relations Board (NLRB) would be outraged. It would move swiftly to convict Nissan of unfair labor practices and impose the most severe sanctions the law permits.
Finally, suppose that the UAW hired people to pose as regular job applicants at Nissan (which the union has been unsuccessfully trying to unionize for years). Their job would be identical to that of the hypothetical Microsoft agents. They would try to damage the firm as much as possible through disruptions and acts of sabotage. They would try to impose as many legal costs on the firm as possible by alleging OSHA, NLRA, FMLA, and FLSA violations. Their goal would be to force Nissan to capitulate to unionization, or, failing that, to drive Nissan out of business in the United States. The NLRB and the US Supreme Court would ... approve! When it comes to unions, there is no equality of application of legal principles. Rather, different legal principles are applied to unions than are applied to firms. Unions have special privileges and immunities not available to most other economic organizations. The 14th Amendment to the Constitution insists on "equal protection of the laws." Congress and the Supreme Court have said, "except for unions."
In 1995, in the Town & Country Electric case, the Supreme Court ruled that people - in the jargon of labor relations they are called "salts" - who are paid by labor unions to become employees in target firms in order to subvert those firms must be considered "employees" under the NLRA. That means that a firm cannot discriminate against salts in hiring and firing decisions. The employing firm must ignore the fact that salts are paid by unions and intend to act solely in the interests of unions to the detriment of the firms. Since salts are hired by unions and act as agents of unions, in effect the Town & Country Electric decision gives unions status as employees under the NLRA. The original understanding of the NLRA was that unions could organize, and represent the interests of, employees who were employed by firms to act in the interest of those firms.
If a firm refuses to hire a person because he is a salt, or fires a person because he is a salt, or even fails to promote a person because he is a salt, it is guilty of an unfair labor practice. Defending against unfair labor practice charges is very expensive. For example, from 1994 through 1997 Corey Delta Constructors, in Benecia, California had to pay in excess of $200,000 per year to defend itself against charges connected with a salting campaign directed against the firm by the AFL-CIO's Construction Organizing Membership Education Training (COMET) program. In the end, Corey Delta was driven off of a major construction project in the San Francisco Bay Area merely because it was, and remains, a union-free firm.
The COMET program was undertaken by the AFL-CIO in 1993 in response to the declining market share of unionized labor in the construction industry. In 1983 the unions' market share was 30 percent. In 1993 it was 20 percent, and by 1996 it was 19 percent.
Union organizing in the construction industry is a special case. Most workers in that industry are employed by different employers from project to project rather than by one employer over several years. In 1959 the NLRA was amended to permit employers to enter "prehire" agreements with unions by which the contracting firms would agree to hire only unionized labor. Workers in other industries are at least permitted to vote on union representation, but construction workers were unionized from the top down. Under the prehire agreements workers were told if they didn't accept union representation, without a vote, they couldn't work. In 1987, the NLRB ruled in the Deklewa case that when a prehire agreement expires the contractor returns to a union-free status unless a majority of continuing workers vote to be represented by the union. (The NLRB was not as union-friendly then as it is now.) Under Deklewa, construction unions no longer had the advantage of top-down organizing. Instead, they had to recruit workers to vote in favor of unionization just as unions in most industries must do.
In 1992 the US Supreme Court, in the Lechmere case, complicated the organizing efforts of all unions by ruling that employers did not have to give job-site access to union organizers who are not employees. This is particularly burdensome to construction unions because, unlike most jobs, the job sites are constantly changing.
In an act of political entrepreneurship, the construction unions reverted to salting. The Lechmere decision restricts only union organizers who are not employees. The obvious way around the decision is to make union-paid organizers into employees. The principle of equal protection of the law would not countenance such subversion, but in The Town & Country Electric decision the Supreme Court allowed unions to subvert union-free employers with impunity.
Since Town & Country Electric was decided as a matter of statutory interpretation, not constitutional law, Congress can overrule the Court by amending the NLRA. The Truth in Employment Act, under consideration in both houses of Congress in 1997 and 1998, would do just that. However, there is little chance that it could survive a filibuster in the Senate and no chance that it could survive a presidential veto. Rectification of this injustice will have to wait until the 21st Century.