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Newsletter | Revolving Door Project Newsletter | September 6, 2023

Cracking Down on Judicial Corruption & Celebrating Pro-Labor Rulemaking

2024 ElectionEthics in GovernmentIndependent AgenciesJudiciaryLabor
Cracking Down on Judicial Corruption & Celebrating Pro-Labor Rulemaking

This newsletter was originally published on our Substack. Read and subscribe here.

With Labor Day now behind us, Hot Labor Summer has come to a scorching end, but the labor movement is alive and well with several heavyweight bouts looming on the horizon. This transition time is the perfect moment to take stock of the Biden administration’s labor allyship — applauding recent rulemaking efforts, highlighting some shortcomings, and previewing some potential labor strikes coming this fall.

But First, A Victory Lap

Before getting into this week’s newsletter, we have some Revolving Door Project housekeeping to attend to. Please allow us to… 

  1. Pat ourselves on the back; and 
  2. Humbly ask for money to fund the work that leads to back pats.

Last week, our intern Will Royce and research assistant Ananya Kalahasti produced some illuminating research: The presiding Judge in a Chamber of Commerce lawsuit seeking to block Medicare drug price negotiations owned significant amounts of stock in Johnson & Johnson and AstraZeneca — two companies with drugs whose prices will be negotiated this year.

On Friday, in light of this clear conflict of interest, we sent a letter to Judge Rose calling on him to recuse himself from the case. Just a few hours later, CNBC reported that he withdrew from the case! This is a massive victory for judicial ethics oversight, not to mention the thousands of people who stand to benefit should the government win the case and lower drug prices.

As we’ve long argued, in an ideal world, there would be more stringent ethics oversight within the government, with government officials only owning broad investment funds to avoid these conflicts in the first place. Unfortunately, we are far from that utopia, necessitating continued research from the Revolving Door Project and others to ensure that these conflicts come to light. We want to add this type of research to our regular workload, but we currently don’t have any funding dedicated to judicial oversight.

To support more judicial ethics oversight work, and the kind of concrete wins we saw this week, please consider becoming a paid subscriber to our substack (which will remain free) or funding us directly.

Using Executive Rulemaking To Protect Workers

We’re not the only ones with recent victories to celebrate. This week, we’d also like to give credit to the Biden administration for two recent measures to support labor. 

First, the National Labor Relations Board announced a ruling that will prove critical in protecting the right to unionize. In its case against Cemex Construction, the Board ruled that if, in the interim period between workers joining or forming a union and the NLRB election, an employer commits an unfair labor practice, then the union will be immediately recognized without the final election and the employer will have to begin bargaining a contract. This ruling will neutralize many (though not all) of the union busting tactics that have decimated union density and preempted countless unionization efforts for decades. 

In addition last week, the Department of Labor proposed a rule to extend overtime protections for salaried workers. The rule would apply to salaried workers earning less than $55,000/year, estimated by DoL to be 3.6 million people or the 35th percentile of salaried workers. This would alleviate a clear gap in overtime protections by which employers can avoid paying fair wages by overworking salaried workers, effectively paying them less than hourly workers who do the same work. Importantly, this rule accounts for inflation by updating the salary threshold every three years.

This rulemaking capacity underscores the importance of executive appointments, especially with a split Congress. With Jennifer Abruzzo heading the NLRB, and the unconfirmed-but-still-acting Secretary Julie Su at the Department of Labor, the executive branch has leadership that is willing to flex its muscles to improve the law even when Congress is at a standstill. These recent actions are encouraging, but there’s still plenty of room for improvement. With the 2024 election and high-profile labor fights in the automaking and airline industries quickly approaching, the administration would be wise to utilize every executive tool at its disposal to support working people and be effusive in its backing of specific labor actions.

Room For Improvement: Extend Union Protections and Make Rules Expansive (While We Still Can)

While it’s important to celebrate wins when they happen, there’s certainly more the Biden administration could be doing to support labor. 

We and our friends at The American Prospect have long been calling for the Biden administration to make the most of its executive power to protect workers. We’ve outlined several ways that Biden could make overdue and highly impactful reforms to the federal contracting system, including unilaterally ordering that government contracts go exclusively to unionized workplaces, ending contracts with monopolies that are fined billions of dollars each year by other agencies for labor (and other) abuses, and cracking down on corporations who violate existing contracting regulations that are currently underenforced. We’re still waiting for all of these versions of contracting reform, and our suggestions don’t stop there. 

For one thing, the Biden administration could build on the NLRB’s pro-union ruling by celebrating its win, highlighting the importance of unions, and making Cemex a household name. Our Corporate Crackdown agenda has called for Biden to capitalize on popular anger towards corporations and elite executives by making those figures his enemies, signaling to the public that he is on the side of normal people, while Republicans are the party of corporate lawbreakers. In this case, there is a dual benefit — making an enemy of Cemex, who had 20 instances of “objectionable or unlawful misconduct” in the lead up to the election, and simultaneously spreading the word to workers that they now can form unions without the weighty threats of workplace retribution or termination.  

Next, the NLRB can go even further by fully reviving the Joy Silk doctrine, which allowed card check elections from 1949 until its dismantling in 1969. Card check simply requires a majority of workers to sign union cards to be recognized, rather than the current two-step process in which an employer can refuse to recognize that initial majority and demand an NLRB election. To be clear, the Cemex rule is a massive step forward, but a full card check revival would preempt any union busting shenanigans that may still occur in the run up to an election. 

Furthermore, as Harold Meyerson at The Prospect pointed out on Labor Day, the NLRB can also take steps to provide a remedy to workers who win an election, but whose employer refuses to bargain in good faith to reach a contract. The lack of such recourse has been a major hurdle in unionization efforts at Amazon and Starbucks. While the NLRB does not currently have the legal authority to impose a contract, it could produce a rule to designate a lack of good faith bargaining as an unfair labor practice, therefore allowing the NLRB to impose a remedy that brings working conditions up to union standards. Abruzzo has expressed support for both of these actions, so we urge the rest of the board to work with haste to implement the rule making process.

At the Department of Labor, it’s quite clear that this Senate will not confirm Julie Su as Labor Secretary, and the administration is content to leave her in the acting role where her appointment is not subjected to federal term limits. The administration should take advantage of this dynamic. As acting Secretary, Su can serve for the duration of Biden’s administration, so every act of rulemaking should aim as high as possible. For example, the overtime rule, while a big improvement, did not go as far as it could have. Last year, the Progressive Caucus called on the DoL to raise the salary threshold to $82,000 per year, rather than the $55,000 that the DoL ultimately implemented. As the caucus noted, that threshold would be a restoration to its historic high at the 55th percentile of salaried workers. It’s only reasonable, how can you be deemed “management” when you make less money than nearly half of all Americans?

The DoL’s next big rule is expected to come in October and concerns worker classification. Under current regulations, workers in the are often misclassified as independent contractors rather than employees, allowing corporations to skirt federal labor protections regarding minimum wage, overtime rates, and social safety net programs. Research from the Economic Policy Institute has estimated that construction workers, for example, lose as much as $16,729 per year when misclassified as an independent contractor. The so-called gig economy has relied on this misclassification as the basis of its business model, allowing tech giants like Uber, Lyft, and DoorDash to avoid paying fair wages. We can’t make an assessment until the finalized rule is released, but we urge the administration to go as far as possible in giving the DoL authority to crack down on misclassification and the wage theft it entails.

Looming Strikes

Union organizers aren’t sitting back and celebrating, even as the administration takes useful steps to support labor. In fact, two major strikes with massive implications may be just around the corner. On August 25th, the United Auto Workers voted to authorize a strike following their contract’s expiration on September 14th. Meanwhile, flight attendants at American Airlines passed a strike authorization last week with an overwhelming 99% majority. 

As we saw in the run-up to the potential UPS strike and the throttled railroad strike, business media and corporate talking heads will undoubtedly make a fuss about the economic ramifications of a strike. These ramifications are precisely why strikes can be successful, and the Biden administration need not cower to hysteria, as I wrote in July. We’ll be keeping a close eye to see how Union Joe handles his administration’s posture towards these strikes should they go forward, particularly in the American Airlines fight. 

As with labor disputes in the railroad industry, the President and Congress have the authority to stop a strike and impose a contract on the airlines and their employees. Biden cannot make that mistake again. Despite the laudable rulemaking efforts we highlighted here, Biden needs to keep up the pro-labor momentum. If unapologetic support for unions and pro-labor administrative actions are the centerpiece of his campaign, Biden can galvanize the working and middle classes to back him in the polls next fall.

Image Credit: “President Biden economic development event (52692358106)” by Maryland GovPics is licensed under CC BY 2.0.

2024 ElectionEthics in GovernmentIndependent AgenciesJudiciaryLabor

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