‘Worker Center or Union’ Probe May be Sign of Things to Come

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By Ben Penn and Jacquie Lee

The Labor Department is said to be investigating whether a Minneapolis worker center is actually a union, a case that could test the Trump administration’s commitment to cracking down on advocacy groups that conservatives claim are fronts for organized labor.

Centro de Trabajadores Unidos en Lucha—or Center of Workers United in Struggle—has successfully pressured Target, Best Buy, Macy’s, and other major retail brands to use unionized contract janitorial services. Although neither the DOL Office of Labor-Management Standards nor CTUL would confirm it, sources with knowledge of the matter told Bloomberg Law that OLMS began an investigation into the group’s status in 2017.

Investigators haven’t contacted CTUL in at least seven months and the department hasn’t told CTUL if it has decided whether the group meets the legal definition of “labor organization,” the sources said. The Labor Department appears to have been responding to a complaint from Target or a Minneapolis business that directly employs CTUL members, and not carrying out a Trump administration initiative.

If CTUL were reclassified as a labor organization, which is what critics of the groups have called for, it would have to start filing detailed financial disclosures and could be restricted in its advocacy activities. Reclassification for one center wouldn’t spell disaster for all similar organizations. It would put worker centers in a precarious legal situation,however, and embolden business-minded conservatives who have been campaigning against worker centers for years.

The investigation also offers a possible window into how the Trump administration will approach the groups. The strength of CTUL and other centers like Fight for $15 and Restaurant Opportunities Center United lies in their ability to take actions that unions can’t.

Merle Payne, CTUL’s co-director, told Bloomberg Law that “threats of a Department of Labor inquiry into worker centers are part of a larger concerted attack by powerful interest groups like the U.S. Chamber of Commerce.” Payne in a prepared statement didn’t comment specifically on the CTUL audit.

“Based upon long-standing policy, OLMS cannot reveal whether or not this agency has opened an investigation regarding this entity, nor can we provide any information regarding investigations, even as to whether an investigation is taking place,” a DOL spokesman told Bloomberg Law.

Unions work directly with employers to negotiate working conditions for dues-paying members, and must abide by stringent federal laws and regulations about actions like strikes or boycotts.

Worker centers, on the other hand, don’t typically bargain with employers directly, but may exert pressure on affiliated corporations. They’re often funded through charitable donations, and in some instances, union dollars. Some groups charge membership fees, but most don’t.

Whatever They Are, They’re Growing

The investigation comes amid questions about how the administration should handle an amorphous, increasingly successful form of labor advocacy. Labor Secretary Alexander Acosta has already ordered a review of worker centers, but it’s not clear if this will be a top priority.

Worker centers have sprung up all over the country in the past decade amid continually plummeting union membership. In 2005, there were about 140 organizations broadly defined as “worker centers” in the US. Now, there are over 260, according to research compiled by Janice Fine, a Rutgers University professor who specializes in worker centers.

The centers have led strikes, helped organize union drives, filed unpaid wage claims, and trained low-income and immigrant workers on their rights in the workplace.

As the prominence of the groups has grown, so has pushback from GOP lawmakers and the U.S. Chamber of Commerce. Both are pressing Acosta to tag certain worker centers as unions in disguise. That reclassification would take a major toll on the nonprofit groups.

Worker centers are often one step removed from dealing directly with their members’ employers. Some of the groups go to the top of the employment food chain and create agreements with the corporations that hire subcontractors. Those contractors employ the worker center members. That adds another layer of legal complexity, making it more difficult to determine if a worker center is actually acting as a union.

CTUL staged a series of walkouts that culminated in Target adopting a responsible contractor policy in 2014. That paved the way for hundreds of janitors to unionize at subcontractors that provide services at Target and other big box brands throughout the Twin Cities. The workers are represented by Service Employees International Union Local 26, CTUL’s close ally.

The momentum CTUL used to land the Target agreement is an example of what Fine cited as one of the most effective strategies worker centers have at their disposal. A large portion of their power comes from their ability to impose “secondary boycotts,” which labor unions are barred from doing under federal law.

Reading Tea Leaves

It would be no surprise to see more active union oversight during a Republican administration, as GOP officials have traditionally been more skeptical of organized labor groups. The Obama-era OLMS reviewed the status of worker centers, although it’s not known to have ever labeled one a labor organization.

In response to a question at a recent House appropriations hearing about whether worker centers have been skirting the Labor-Management Relations Act, Acosta said he has “directed OLMS to consider those allegations and to determine if they are in fact true.”

Last year, Acosta tapped Nathan Mehrens, who advocated for OLMS to investigate the status of worker centers when he was president of Americans for Limited Government, as the DOL acting assistant secretary for policy.

“If worker centers are dealing directly with employers, then they are very much at risk to be found to be a labor organization in this administration,” Michael Hayes, who ran OLMS during the Obama administration, told Bloomberg Law.

The exact focus of the inquiry isn’t clear, but CTUL’s relationship with both SEIU and Target are likely areas the investigators would consider.

Hayes, now a Univerity of Baltimore law professor, said he’ll be “watching” the probe “to see how the department defines labor organizations.”

Jenna Reck, a Target spokeswoman, told Bloomberg Law, “We don’t have information to provide for your story at this time.”

Chamber Hails News of Probe

An official with the Chamber of Commerce, which has tracked CTUL activity in the past, said he wasn’t aware of this inquiry but was encouraged to hear the news.

“There are hundreds of these groups—most of them are engaged in legitimate practices and aren’t trying to skirt the law. But for those that have crossed the line into being an actual labor organization,” a CTUL investigation “would show that the department is taking a serious look at this,” Glenn Spencer, vice president of the Chamber of Commerce Workforce Freedom Initiative, told Bloomberg Law. “Of course, all of these investigations are very fact-specific.”

Payne said CTUL, a 501(c)(3) nonprofit, focuses on “leadership development with the most marginalized populations, equipping them with the knowledge and experience to be leaders in their workplaces and communities.”

Sources, who spoke on condition of anonymity to discuss an ongoing Labor Department probe, said CTUL was also investigated in 2013. The department concluded then that CTUL isn’t a labor organization, according to the sources.

OLMS enforces the 1959 Labor-Management Reporting and Disclosure Act, which generally requires labor organizations to provide information on their constitution, bylaws, filing annual publicly accessible reports detailing expenses, assets, and officer salaries. It does not enforce the National Labor Relations Act, a separate federal law banning secondary boycotts by unions.

The LMRDA defines a labor organization as a group engaged in a “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 may expose CTUL to a labor organization determination.

Target uses four janitorial subcontractors that employ CTUL members who are unionized with SEIU. None of the four companies responded to requests for comment.

Several former department officials said career civil servants may be holding the investigation open, waiting for a policy directive from above. The Trump administration has yet to appoint an OLMS director.

“Sometimes processes within the Department of Labor take this long on sensitive issues,” Hayes said.

Both sides of the aisle generally agree that because worker centers take on various strategies and structures, it would be improbable for OLMS to adopt a sweeping, one-size-fits-all initiative in this area.

Supply Chain Model

One group that will likely be monitoring the results of DOL investigation closely is the Coalition of Immokelee Workers, which has employed similar tactics to CTUL.

The CIW’s model, called the Fair Food Program, has brought companies like McDonald’s and Walmart to the table to sign contracts paying a premium for Florida-grown tomatoes to ensure larger paychecks for those Florida-based farmers.

CIW’s general counsel said the group was “of course concerned about this issue” but added it was unlikely the group would be reclassified under the current interpretation of the law. Other groups, like OUR Walmart, Fight for $15, ROC United, and the Workers Defense Project either declined to comment or didn’t reply to questions.

Some of the largest worker centers get funding directly from unions, but generally speaking the groups are run on shoestring budgets. In 2015, the latest year data was available, CTUL’s revenue was about $686,000, according to its 990 form. Hiring attorneys, tax consultants, or more administrative workers to help with paperwork could stretch already tight quotas.

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