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Labor Report


16,000 Steelworkers Authorize Strike as USS Negotiations Continue

More than 16,000 unionized U.S. Steel employees, including several thousand who work at plants in Allegheny and Bucks counties, have authorized a nationwide strike as United Steelworkers and the company have yet to agree on terms of a new labor contract.

USW members in eight states have been working under the terms of a contract extension since Sept. 1, when their most recent negotiated contract expired. They voted overwhelmingly last week to allow union leaders to terminate the extension by providing at least 48 hours advance notice. A strike would be the first work stoppage at the company since early 1987 following a six-month lockout.

Union leaders say that members deserve to benefit from the higher profits realized by the company due to the Trump administration’s protectionist tariffs on foreign steel. The price of steel has risen by more than 30 percent this year as the tariffs have taken effect according to the Wall Street Journal.

Initially, USS offered workers a six-year contract with a combined 13 percent wage increase largely offset by higher medical benefits costs. On Sept. 12, the company announced a revised offer of 14 percent wage hike over six years and lower medical premiums.

But USW officials were dissatisfied with the updated proposal. Members received no raises in their previous three-year contract. The union prefers fewer years on a new contract and better raises while holding the line on medical benefits and resolving “pension issues.”

The union is also engaged in separate contract negotiations involving 15,000 employees of Luxembourg-based ArcelorMittal, the world’s largest steel producer.

Labor Board Proposes to Reverse Joint-Employer Standard

The National Labor Relations Board proposed a new joint-employer rule on Sept. 13 to roll back an Obama-era decision that made large corporations accountable for labor violations committed by individual franchisees and contractors.

The proposed rule would effectively reverse the board’s 2015 Browning-Ferris decision and reapply the 2017 Hy-Brand ruling that was later overturned due to an alleged conflict of interest involving one of the board members who voted on the decision.

At stake is whether large franchisors like McDonald’s will be subject to enforcement and sanctions when their franchisees engage in labor violations such as wage theft or harassment. Similarly, the joint-employer standards affect companies that use outside contractors to meet their staffing needs. The rules also impact the ability of workers to bargain collectively with the franchisors or corporations that dictate or influence job conditions, even without “direct or immediate” control of the employee.

The public has 60 days to submit comments on the proposed rule.

Documents Show McDonald’s Directed Franchise Response to Worker Protests

A worker advocacy organization has submitted evidence to the National Labor Relations Board documenting how McDonald’s LLC allegedly orchestrated a systematic campaign against efforts by restaurant workers to organize in support of raising the minimum wage.

Fight for $15 submitted internal memoranda, emails and other documents to the board as McDonald’s defends complaints that it wields enough control over its franchisees that it should be jointly liable for labor violations by those franchisees. According to Bloomberg Law, the papers show that McDonald’s hired two prominent employer-side law firms to assist franchisees in countering worker action.

One law firm was hired to implement a national training program to instruct franchisees and managers how to respond when workers organize for better pay and conditions. Another law firm set up a hotline for owner-operators to call for legal advice.

McDonald’s allegedly structured the arrangements with the two firms to shield itself from direct control over franchisee’s actions. Two board members, Chairman John Ring and member William Emanuel previously worked for either of the law firms.
The underlying NLRB case involves complaints that McDonald’s and its franchisees retaliated against workers who took part in demonstrations for higher wages and better conditions.

Treasury Department Allows Two More Pension Benefits Reductions

The Congressional Budget Office has reduced its cost estimate for a proposed loan program to help struggling multiemployer pension programs.

The CBO reported to members of a Congressional select committee that the Butch Lewis Act would cost taxpayers $34 billion over a decade, rather than its initial projection of $101 billion. The latest estimate is also less than half of the estimated $78 billion it would cost to prop up the insolvent Pension Benefit Guarantee Corporation, according to select committee co-chairman Sen. Sherrod Brown.

The new estimate comes two weeks after two multiemployer pension funds received Treasury Department approval to cut benefits to retirees. Facing a funded level of 64 percent on $525 million liabilities, Western States Office and Professional Employees Pension Fund will reduce benefits by 30 percent to active and terminated vested participants and retirees under age 80. Iron Workers Local 16 Pension Fund will reduce benefits by 20 percent on average. It’s funded at 64.2 percent of $121.5 million in liabilities.

Treasury officials have approved seven multiemployer benefits reductions and rejected five applications since the Multiemployer Pension Reform Act of 2014, with 10 more applications pending.


Investigation Prompts Restaurant Chains to Drop “No Poaching” Policies

Eight more restaurant chains have agreed to abandon their “no poaching” policies in response to allegations by the Washington State attorney general that the companies were using the tactic to block employee mobility and keep wages artificially low.

Applebee’s, Church’s Chicken, Five Guys, IHOP, Jamba Juice, Little Caesars, Panera Bread and Sonic joined seven other chains that previously pledged to end the practice, according to The New York Times. The companies had been using language in their franchise agreements to prevent one franchise from hiring someone who previously worked at another franchise within the chain.

“Such restrictions are not unique to the restaurant industry, but until recently they were ubiquitous, particularly among fast-food chains. That began to change last year, after two prominent economists at Princeton produced a report that focused on how no-poach clauses could lock workers into low-wage jobs,” the Times wrote.

The eight franchisors have a combined 15,000 restaurant locations across the nation.