Tuesday, January 18, 2011

Bodie on Requiring Disclosures Prior to Representation Elections

Mbodie Matt Bodie (St. Louis U.) has just posted on SSRN his article (forthcoming FIU L. Rev. symposium issue) Mandatory Disclosure in the Market for Union Representation.  Here's the abstract:

For over sixty years, the National Labor Relations Board has followed the “laboratory conditions” doctrine in its regulation of representation elections. According to the doctrine, the Board must provide workers with an electoral “laboratory” in order to determine the “uninhibited desires” of the employees. Elections are vacated and conducted anew if the winning party violated the laboratory conditions. The laboratory conditions doctrine suggests an active and vigorous role for the Board in providing employees with the proper election environment. However, the Board’s regulation has largely focused on keeping out electoral impurities and has done little to make sure employees have enough information to make the most efficient decision.

In this contribution to the symposium “Whither the Board? The National Labor Relations Board at 75,” I examine how the Board could use a mandatory disclosure regime to provide information to employees when making their representation decision. The essay first examines the extent to which critical information is already disclosed through the NLRA as well as the Labor-Management Reporting and Disclosure Act (LMRDA or Landrum-Griffin Act) and federal securities laws. The essay then outlines how the Board could pair this information with a limited scheme of information disclosure to provide a base level of election-related information to employees. The base level of disclosure will provide an informational foundation for employees in making their representation decisions.

This is a terrific article -- one that calls on Matt's unique expertise in both labor and corporate law. Matt's mandatory disclosure proposal works both ways -- he suggests, for example, that unions be required to disclose dues and fees, and the union's organization structure; he suggests that employers be required to disclose conflicts of interest with the union, financial information, and the like.



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In terms of union disclosures, this is a solution in search of a problem. Only rarely does information contained in a union's required disclosures (union dues, officers' salaries, bylaws, etc.) not come into employees' hands during a unionization campaign. Either employees find the information, employers supply it, or unions provide the documents themselves. Given the extremely broad range of information already publicly available about unions, the more interesting question is why employers are not required to disclose parallel information to the public. The information employers are presently required to disclose publicly, such as that to the SEC, does not create nearly the same level of transparency that is required of unions. But wouldn't information about employers tell workers far more of what they need to know in determining whether to unionize? Indeed, such parallel employer disclosure would be exceedingly meaningful before a union even begins meeting with workers, to help workers determine, for example, whether they are receiving fair wages and benefits given the company's economic standing and the compensation paid to management. If the purpose is to inform workers so that they make a meaningful choice, this is the necessary direction to explore.

Posted by: James A.W. Shaw | Jan 18, 2011 7:11:00 AM

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