Labor Dept. Probes Worker Centers but Plans No ‘Blanket Rule’ (1)

From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...

By Ben Penn

The Labor Department is investigating several worker organizing centers to determine if they are labor organizations, according to a letter from the agency to GOP lawmakers obtained by Bloomberg Law.

But rather than create a new legal test for classifying worker groups as the House members requested, the DOL said its Office of Labor-Management Standards will review the facts on a case-by-case basis.

The Trump administration’s approach to the amorphous category of nonprofits that advocate for and educate low-income and vulnerable workers has been mostly kept under wraps. If the DOL begins regulating some worker centers as labor organizations, it would require them to begin filing detailed financial reports and may divert their attention from targeting such corporations as McDonald’s and Walmart.

The letter, which was sent last month but never publicized, details the department’s next steps on a contentious issue that could alienate Labor Secretary Alexander Acosta from some of the DOL’s key labor movement constituencies. The approach outlined thus far suggests the DOL is more willing to prioritize this matter than the prior administration, but it leaves unsettled whether the department will reinterpret federal law to police a significant number of worker centers.

“Because worker centers vary in their activities and their structure, OLMS cannot provide a blanket rule on whether worker centers constitute labor organizations,” Katherine McGuire, the agency’s chief congressional liaison, wrote to Reps. Virginia Foxx (R-N.C.) and Tim Walberg (R-Mich.).

“When OLMS receives a complaint or some other credible indication that an organization is acting as a labor organization but has failed to adhere to the reporting requirements and other provisions of the LMRDA, OLMS will open an investigation or an inquiry,” McGuire added, referring to the Labor-Management Reporting and Disclosure Act.

Even though the DOL letter states it will not create a “blanket rule,” that wouldn’t preclude the agency from adopting a broader reading of the labor disclosure law to cover the subset of worker centers that engage directly with specific businesses.

“It’s no surprise that this administration will take a closer look, given the politics on this issue,” Christopher Wilkinson, a former DOL associate solicitor who provided counsel to OLMS, told Bloomberg Law via email. “However, signaling that no blanket rule will apply is a savvy way to manage expectations for those advocating all-out war on worker centers.” Wilkinson is now a partner with management-side firm Orrick, Herrington & Sutcliffe in Washington.

Response to Worker Center Success

Worker centers including ROC United and Coalition of Immokalee Workers have gained influence as a substitute for traditional unions by advocating for workers, educating them on their rights, and helping them exert pressure on their employers or affiliated corporations. Their structures vary widely, but the growing list of centers have avoided a “labor organization” tag by not engaging in collective bargaining.

In response to their traction, conservatives and business groups have been urging the DOL to investigate and regulate these organizations by classifying them as “labor organizations” under federal disclosure law. The U.S. Chamber of Commerce has been leading this charge.

Such determinations would require the nonprofits to begin filing onerous annual financial reports, potentially diverting their resources away from advocating for worker-friendly legislation or facilitating workplace demonstrations.

The agency declined to detail which worker centers it is investigating, but Bloomberg Law reported in March that the department began a probe last year into Centro de Trabajadores Unidos en Lucha—or Center of Workers United in Struggle.

Less Aggressive Steps

The letter details actions that are less aggressive than what Foxx and Walberg had requested. In January, the GOP members wrote to Acosta, asking him to “establish an updated and modernized test to determine if a worker center is considered a labor organization under the LMRDA.”

Foxx is chairwoman of the House Education and the Workforce Committee, and Walberg heads the subcommittee with jurisdiction over the LMRDA. Their letter to Acosta also stated that they had sent a similar set of requests to then-Labor Secretary Thomas Perez in 2016 but never received a reply.

“We appreciate Secretary Acosta’s commitment to accurately and consistently apply the ‘labor organization’ definition under the LMRDA,” Charlotte Noss, who directs the worker center support program at the National Employment Law Project, told Bloomberg Law. “Despite the Chamber’s latest push on this issue, we trust that this DOL will find the same thing that both Republican and Democratic administrations have said for decades—that worker centers are not labor unions.”

The 1960 law enforced by the OLMS defines a labor organization as a group engaged in “dealing with employers” concerning workplace conditions such as wages, labor disputes, or grievances.

If the department were to broaden its interpretation of the term “dealing with,” this could expose some worker centers to a labor organization determination.

The DOL’s ongoing review of several worker centers comes as the Chamber of Commerce last week released a report recommending that the OLMS update the legal guidance on how it determines if a worker center is a labor organization.

Request Labor & Employment on Bloomberg Law