Will Trump’s DOL Classify Worker Centers as Unions?

I first covered the budding Worker Center movement here. The takeaway from that blog post was:

But worker centers are not “labor organizations” – they are 501(c)(3) charities – so they are not regulated as heavily as unions nor do they pay taxes. Worker centers cannot engage in unfair labor practices and do not have to report income/expenses. They do, however, exert tremendous pressure on companies to yield to union demands during bargaining or foregoing secret ballot elections during a union organizing drive. For example, KIWA executed a corporate campaign against Koreatown store owners complete with picketing, parades, and social disobedience – and won.

Since that 2013 blog post, workers centers have become larger, richer, and more powerful. One of them is the machine behind Fight for $15. Another has been a thorn in Walmart’s side for years. Others have been causing havoc in other industries.

Pro-business groups hope that the Trump administration will scrutinize whether worker centers are labor unions or charities. If labor unions, then they need to play by the same rules as unions. Their ability to skirt certain rules, like financial disclosure reporting requirements, and most National Labor Relations Act laws, have aided the growth of worker centers.

The role of worker centers has grown over the past few years while traditional union membership continues to plummet. Worker centers are filling a void created by the steady decline in union membership, including by advocating for higher minimum wages, exposing alleged worker abuses, and giving employees more voice of at work. For example, while unionization rates dropped to an all-time low again last year, ROC United, a worker center focused on the restaurant industry, saw its revenue more than double in a single year. In 2008, ROC’s revenue was $250,000. By 2013, it had grown to $2.9 million. Last year it took in over $7 million.

Critics have tried in vain to get the Obama Department of Labor to force worker centers to file the same financial disclosures required of unions, like LM-2 reports which track dues and fees collected, detail where unions spend and receive money, and provides information about loans and investments. According to the U.S. Chamber of Commerce, these disclosures would be “useful to try and refute this concept that these union front organizations are amorphous swarms of workers coming together because they’re fed up with abuse from their employers.” Likewise, the International Franchise Association says: “If it looks like a union, acts like a union, and harasses like a union, it should be treated like a union.” In my opinion, dues-paying union members may want to know, and have a right to know, and should know, where their money is going and how much of it is going to finance worker center activities designed largely to help non-union workers.

But I caution pro-business groups against thinking that just because Donald Trump is in the White House that worker centers will be classified as labor unions. George W. Bush’s administration twice ruled that that ROC was not a union. With this precedent, I’m not sure how much of a priority the Trump administration will place on this issue.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

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