Labor and Employment Law Advice Vigorously Sought by Employers

The Wall Street Journal has a story today about the boom in workplace legal advice spawned by recently enacted and pending legislation in the labor and employment law arena.  Of particular interest to employers is advice on legally preventing union organization due to the Employee Free Choice act looming in Congress currently.

The article points out that labor lawyers are using EFCA to their advantage:

Labor consultants and lawyers are looking to profit from interest in the Free Choice Act by briefing companies large and small on a range of matters such as complying with current and recently enacted legislation, and how to detect union organizing and prevent it without breaking the law. Another pressing issue is whether companies have opened themselves to union organizing drives because they have cut jobs, pay or benefits to weather the economic slump.

Now the question is: if the Free Choice Act falls apart like it seems it might, or gets negotiated into a watered-down shell of its former self, will the offshoot work dry up, too?  Or worse – will clients, having just spent precious money on EFCA training (or as the AFL-CIO calls it, “fear mongering ” to sell “products”), feel squeezed and back off?

To be sure, EFCA will mean across-the-board changes for most companies’ labor policies, and it should be given the weight it deserves.  But if the economy has taught us anything, it’s the need to balance consumers’ emotions with their actual needs.

99% of clients seeking L&E work out of fear probably do need help, many more than they realize.  It’s our job as their lawyers to get it to them without exploiting their fears.

EFCA Update: Senator Blanche Lincoln Announces Opposition While Senator Mark Warner Announces Support for Cloture

In yet another blow signaling a need for a compromise of the Employee Free Choice Act, Senator Blanche Lincoln (D-Ark.) announced this past Monday that she will not support the union-backed legislation–at least not in its current form.

Meanwhile, Senator Mark Warner (D-Vir.) seems to be wavering.  Warner announced that he backs a vote for cloture, but he said he will evaluate his stance on the measure after EFCA has reached the floor.

Workplace Prof Blog recently reported on a story floating around about the compromise operations that have already begun in an effort to get EFCA passed through Congress.

AIG, Allstate & the UAW: the Great Contract Debate

[Ed. Note:  I have been looking for a way to channel my vitriol over the news that AIG wants to pay the guys who could arguably be blamed for the entire global economic meltdown $225 million in structured bonuses, and I'm hoping to do it through this post.  That said, don't fault me if I start yelling. ]

I love David Greising.   The Chicago Tribune and NPR business contributor seems to understand everything business, especially the stuff I don’t.  This morning, he took on AIG’s bailout apologist CEO, Edward Liddy, for going soft on derivatives execs after canning 6000 Allstate employees a few years ago, employment contracts be damned.  

Why, Greising asks, after pushing Allstate into a handful of class action lawsuits (two by the EEOC, even – that takes work) because he ignored the axed employees’ contracts, has the man brought in by the Bush Administration to clean up AIG dropped the broom?

Given his own history, Liddy’s explanation that his “hands are tied” because of the derivative department’s executive agreements is sad.  Can you imagine the media tsunami that would follow a class-action lawsuit on behalf of AIG derivatives executives for their bonuses?  It’s not even their salaries, it’s their #%*$@* bonuses!  …  [cough] sorry. 

Honestly, it’s like Wall Street and K Street are having a “who can sound more hollow” contest. 

Greising also points out that other ailing corporations, including Motorola and Continental Airlines, have worked out deals with their executives for pay cuts, bonus paybacks and the like.

And then there’s the big wrench in Liddy’s explanation – the United Auto Workers.  They, too, had a contract.  A few, actually.  But nobody – not the government, the union or the automakers asking for tax money ever questioned whether it could be renegotiated.

And that’s as it should be.

So what’s different about AIG?  How is it that, in the face of a furious public, following one of the biggest collective renegotiations in history, and with a proven executioner at the helm, this company can’t get out of paying millions in bonuses?

Is there a double standard among contracts for workers and contracts for executives?  Probably.  But Greising’s article proves that that can’t answer the whole question.  Honestly, I think the real problem here is a denial of workplace realities. 

When the auto industry was getting bailed out, one of the biggest arguments against giving them the money was that it would create a false sense of stability.  The employees and executives of the Big 3 needed to understand the dire straits they were in, and government infusions would keep that from happening. 

The same is clearly true at AIG.  Employees and executives alike simply don’t understand how close to the edge they are.  They want to pay bonuses to “retain talent”?  Talent? 

The department created confusing securitized investments that didn’t work.  Now it’s months away from being wound down, and they’re still paying to retain talent?  This is a group of people who need to feel their livelihoods are in jeopardy.  That’s why the UAW renegotiated their deals.  That’s why Motorola execs adjusted theirs, too. 

Employment contracts are only as good as the companies that agree to them.  Perhaps if AIG were suddenly small enough to fail (potentially, at least), its employees would find it in their hearts to discuss their compensation structures.