Jose Luis Magana / AP Photo

Showdown looming between White House and business over labor rules

Recent and upcoming decisions out of the executive branch have industry fighting back

With the White House taking a more aggressive role in setting labor standards, industry groups are beginning to fight back — lashing out at the executive branch for pursuing “a partisan agenda.”

A coalition of five national industry groups — including the U.S. Chamber of Commerce — filed a complaint in federal court earlier this week to block a change to the way the National Labor Relations Board (NLRB) administers unionization elections. The new regulatory framework, which the Chamber and other industry groups derisively refer to as the “ambush election” rule, makes it easier for workers to quickly call an ballot by allowing for electronic filing of documents and preventing employers from slowing the process through pre-election litigation.

In a statement announcing the complaint, the industry groups behind the challenge accused the NLRB of being a partisan, activist institution.

“The NLRB has thrown objectivity and fairness out the window in its single-minded pursuit of Big Labor’s union-organizing goals,” said David French, senior vice president of the National Retail Federation, one of the groups behind the suit.

Linda Kelly, general counsel and senior vice president for the National Association of Manufacturers, said that with the introduction of the new NLRB rule, the Obama administration “has made it clear that it plans to pursue a partisan agenda to overturn longstanding and effective labor policy."

The White House has made little effort to conceal its intentions in that regard. In recent weeks, the NLRB has come down on the side of organized labor in a number of other significant, precedent-setting decisions.

On Dec. 19, for example, the labor board’s general counsel determined that fast-food chain McDonald’s can be held responsible for labor law violations committed by owners of its franchised locations. McDonald’s has vowed to resist that decision in court.

The Labor Department has also been keeping busy. The department’s Wage and Hour division has stepped up its enforcement of wage and hour violations such as unpaid overtime or wage theft, and Labor Secretary Thomas Perez is expected to announce soon new rules expanding the number of workers who are legally entitled to overtime pay.

During a Wednesday speech to the National Summit on Raising Wages — a Washington, D.C. event sponsored by AFL-CIO, America’s biggest labor federation — Perez stressed what he said was the essential partnership between the labor movement and President Barack Obama.

“He is here in spirit,” he said. “He is here in his values."

Organized labor and the White House have not always gotten along so well. Early in his administration, Obama allowed a union-supported bill known as the Employee Free Choice Act (EFCA) to fall by the wayside as he spent his political capital getting the Affordable Care Act passed. EFCA was designed to make it easier to unionize workplaces, and its failure dismayed labor leaders.

They were further dismayed by the actions of Obama’s education secretary, Arne Duncan, who continues to antagonize teachers unions through his preference for evaluating teachers based on test scores. Other perceived slights include the Democratic Party’s decision to hold its 2012 convention in North Carolina, the state with the lowest union density in America.

Yet Obama has shown a growing willingness to use unilateral executive actions and cabinet-level rule making and regulation to benefit progressive constituencies since the beginning of his second term.

Now, with regard to labor policy, the blowback appears to be coming.

The International Franchise Association (IFA), a powerful industry group that represents fast food restaurants and other businesses that rely on the franchising business model, is among the business groups that have declared their opposition to the behavior of the current NLRB. On a Wednesday conference call with the press, IFA president and CEO Steve Caldeira said franchised businesses could expect strong growth in 2015 but added, “federal government overreach is threatening to deflate these projections."

The IFA and its allies won’t limit themselves to challenging the administration’s rulings in court. Asked if business groups would try to work through Congress in order to counter the NLRB’s McDonald’s decision, Caldeira said: “We’re going to look at and exhaust every single opportunity to keep this standard as it exists today in place."

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