KnightShift: U.S. employers routinely break the law (Surprise!)

It’s not your imagination. Labor law enforcement is broken.

Whether flagrant Unfair Labor Practices or misclassification to bypass labor standards, employers routinely violate federal law, according to two new studies and even a ruling by the conservative-dominated U.S. Supreme Court.

Employers regularly use illegal tactics to suppress unions, reports the Economic Policy Institute, using National Labor Relations Board records from 2018-2022.

“An analysis of the latest government data on Unfair Labor Practice charges and union elections shows that employers were charged with violating federal labor law in nearly 40% of elections – everything from firing to retaliation to changing work terms.”

EPI defined a “violation” as having at least one ULP charge associated with a given election.

“Labor law in the U.S. fails to prevent private-sector employers from engaging in aggressive tactics that coerce and intimidate workers and prevent them from unionizing,” said the report’s authors.

In a climate of lax enforcement, NLRB Counsel Jennifer Abruzzo has tried to implement reforms to discourage companies from criminal behavior, but the agency can only go so far under the National Labor Relations Act. This leaves a labor code that blatantly favors employers, labor advocates say, with insignificant penalties for illegal anti-labor conduct and little incentive for employers to follow the law.

Further, as bad as the statistics are, “the data doesn’t show the extent of employer aggression because missing from the numbers are attempts by management to suppress unionization before workers even get a chance to hold an election,” EPI’s authors note.

A recent example is at billionaire Elon Musk’s Tesla plant in Buffalo, N.Y., where workers organizing as Tesla Workers United, an affiliate of the Service Employees International Union, are seeking better job stability, improved wages and less productivity demands at the RiverBend facility of some 1,900 workers.

However, the day after the group announced their effort, dozens of workers were fired “in retaliation for union activity and to discourage union activity,” organizers said in a charge filed with the NLRB.

Musk has expressed opposition to unions in the past, beating back a cooperative effort by the IBEW and Steelworkers at the Buffalo factory in 2018, and a year earlier attacking the UAW for trying to organize a Fremont, Calif., plant, where the NLRB ruled Musk had committed multiple ULPs. After taking over Twitter last year, Musk laid off thousands of employees, including union workers.

Frequently, companies also improperly classify workers as independent contractors instead of employees, or – sometimes absurdly – claim a worker is a manager to avoid paying overtime wages. Workers exempt from the Fair Labor Standards Act’s overtime rule typically must be paid a salary above a certain level and work as a “bona fide executive” in administrative or professional roles.

A report issued in January – “Too Many Managers: The Strategic Use of Titles to Avoid Overtime Payments” from the National Bureau of Economic Research – found companies titling regular workers “food cart manager,” “grooming manager,” and “carpet shampoo manager” – “jobs otherwise equivalent to non-managerial employees,” authors said. “We find widespread evidence of firms … exploiting a federal law that allows them to do so for employees termed as ‘managers’.”

The researchers elaborated on FLSA criteria, noting, “Managerial roles are traditionally thought to encompass increased responsibility and oversight scope. For example, managers are often in charge of budgets and

schedules, thus determining the workload and pay of others. In addition, they often interview potential

employees, along with decisions regarding promotion or firing… In line with this enhanced responsibility, compared to non-managerial employees, managers often receive higher salaries, other forms of pay (e.g., bonuses), and perquisites.”

Regardless of reality, “We document widespread and systematic evidence of firms exploiting the provision of the FLSA that allows them to be exempt from having to pay overtime wages if an employee has a ‘managerial title’,” the report says.

Meanwhile, on Feb. 22 the U.S. Supreme Court in a 6-3 decision ruled that a worker who worked about 80 hours a weeks at Helix Energy Solutions was qualified for overtime pay under the FLSA despite earning a six-figure income.

Elsewhere in Washington, the AFL-CIO urges Capitol Hill to pass the revived PRO Act, which in the previous Congress was approved in the House before it died in the Senate.

“The AFL-CIO calls on members of Congress to stand with working people by co-sponsoring the bipartisan Richard L. Trumka Protecting the Right to Organize (PRO) Act, to be introduced by Reps. Brian Fitzpatrick (R-Pa.) and Bobby Scott (D-Va.),” said AFL-CIO President Liz Shuler. “This bill would restore the original intent of the National Labor Relations Act, since eroded by corporate interests, to protect workers throughout the organizing process and beyond.”

Improving the law by adding serious consequences for law-breakers will lift up working Americans, she said.

“For too long, employers have been able to violate the law with impunity, routinely denying working people our basic right to join with co-workers for fairness on the job,” Shuler added. “Restoring our middle class is dependent on strengthening our collective power.”