Dan Pilcher

CACI Senior Vice President & Chief Operating Officer

Phone: 303.866.9600    E-Mail: dpilcher@cochamber.com

Friday, March 6, 2009

Business vs. Labor: House Committee Hears Testimony on Controversial UI Lock-Out Bill, Scheduled to Take Action Tuesday

On Wednesday, the House Business Affairs and Labor Committee held a long hearing on HB-1170, the controversial bill that pits business against organized labor, in the Old Supreme Court Chamber.  Legislative leaders send committees to the Chamber when they expect a large turnout for a hearing.

HB-1170 would allow workers to receive Unemployment Insurance (UI) benefits when the employer initiates the “lockout” of the workers.

Following lengthy testimony on the bill by many opponents and proponents, the Committee Chair, Representative Joe Rice (D-Littleton) laid the bill over until Tuesday, when the Committee meets in Room 112 after the House recesses the morning floor session.

CACI opposes the bill, which is sponsored by Representative Edward Casso (D-Thornton).  The primary advocate is the United Food and Commercial Workers (UFCW) Union Local Number Seven, backed by a number of other unions and pro-union organizations:

http://ufcw7.canvastoolbox.com/

Testifying on behalf of CACI at Wednesday’s hearing, Sybil Kisken, an attorney with Davis Graham and Stubbs, LLP, which is a CACI member, said that current law has a “very balanced approach” to treating unions and employers during a labor dispute.

If the UFCW Local Seven advocating this bill is seeking an advantage in upcoming negotiations in May with the grocery stores (King Soopers and Safeway) when the current contract expires, then the proposal is “not good public policymaking,” Kisken said.  (Kisken’s prepared testimony can be found on the CACI Web site in the Headlines section.)

Sybil Kisken, Davis Graham and Stubbs

Under current law, unionized workers locked-out by an employer in an “offensive” manner are eligible to collect UI benefits, but workers locked-out by an employer in a “defensive” manner are not.

An “offensive lock-out” occurs when an employer tries to force the union to accept its proposal for a collective bargaining agreement.  A “defensive lockout” happens when an employer bars its workers from the premises because it fears damage or vandalism of its property.  Both are defined in statute, which was enacted in 1999.

“There is no evidence that employers have been using the defensive lockout in a manner for which it was not intended—indeed, the Fiscal Note supporting this bill indicates that there has not been a lock out since 1996,” Siskin told the Committee.

Employers, such as Safeway and King Soopers, may band together in “multi-employer bargaining units” to negotiate agreements with a union or unions, who also must agree to this arrangement.  Such agreements bind the employers to accept the same contract with the unions.

If a union strikes one employer of the multi-employer bargaining unit ostensibly to force the employer to reach agreement with the union separate from the other employers, then current law allows the other employers to defensively lock-out their unionized workers.  Such locked-out workers are not entitled to receive UI benefits under current law.  This union strategy is called a “whipsaw strike.” 

Jim Hautzinger, a retired attorney from the law firm of Sherman & Howard LLC, who now consults with King Soopers and the Rocky Mountain Food Industry Association, told the Committee that HB-1170 provides an incentive (for an union) to initiate a labor dispute.  If an employer defensively locks-out the union workers, then the workers would receive UI benefits.  In effect, according to Hautzinger, the union would be using the UI Trust Fund to finance a “whipsaw strike.”

In 1996, the law reflected the language of HB-1170 and the result was a very contentious whipsaw strike involving the UFCW Local Seven, on one side, and King Soopers and Safeway, on the other, Hautzinger said.  Following reform of the law in 1999, the last decade has not seen any such labor disputes involving multi-employer bargaining units. 

HB-1170 defines “lockout” as “a refusal by an employer engaged in a dispute with a union to permit its employees to perform services on behalf of the employer.”  The bill also covers “multi-employment bargaining units,” which is defined as “any group of two or more employers bargaining with a union as a single unit with the consent of each employer and the union.”

The bill defines an employer-initiated lockout to “constitute a labor dispute” and thus make the locked-out workers eligible for UI benefits.  The exception to this proposed change is that workers may be ineligible for UI benefits if “the lockout results from the demands of employees as distinguished from an effort on the part of the employer to deprive the employees of some advantage that they already possess.” 

CACI has opposed similar bills in past sessions because CACI believes that UI benefits should be administered according to the purpose of the UI system, which is an employer-funded but government-administered system.  The purpose is clearly stated on the Web site of the Colorado Department of Labor and Employment (CDLE):

“Unemployment insurance is an income maintenance program that may be available to you if you are unemployed through no fault of your own. The monies you receive provide temporary help until you return to suitable work.”

Consequently, during a time of great economic distress, with rapidly growing numbers of unemployed Colorado workers applying for UI benefits, CACI and other members of the business community believe that the UI Trust Fund should not become a source of benefits for locked-out union workers under HB-1170. 

To oppose the bill, CACI is working with other business organizations, including the following CACI members: Colorado Retail Council, Rocky Mountain Food Industry Association, Associated General Contractors and Associated Builders and Contractors.

CACI Opposes HB-1273 that Would Create the “Colorado Health Care Authority” to Develop a State-Run, Single-Payer Health-Care System 

The bill is set for its first hearing on Wednesday, March 18th, when the House Business Affairs and Labor Committee convenes at 1:30 p.m. in the Old Supreme Court Chamber.

The bill is sponsored by Senator John Kefalas (D-Fort Collins) and co-sponsored by 15 fellow House Democrats.  HB-1273 would create the “Colorado Health Care Authority” with the power to develop a state-government, health-care system and administer and pay for health-care services.  The bill is called “The Colorado Guaranteed Health Care Act” and seeks “to establish the principle of universal health care coverage.”

In effect, this bill would be the first building-block in creating a government-run “single-pay” health-care system, the most well-known to Americans being the Canadian system.

The Authority’s mission would be to create a health-care system that will pay for and administer health-care services, including comprehensive medical benefits, to all Coloradan who are eligible participants in the program.  The bill also contains very specific provisions as to what benefit coverage—from primary and preventive care, for example, to dental services and substance abuse treatment--the plan should include. 

The Authority’s Board of Directors would have until July 1, 2011, to raise private-sector funds for its activities to plan and develop the system.  The bill prohibits use of state general funds by the Authority.  If the Board cannot raise funds in the specified time-period, then the single-payer system would not be developed.  If the Authority can raise the private-sector funds to function and design the system, then the legislature would be required to act to actually implement the system. 

The 23 members of the Board would be selected by the governor, the House speaker, the House minority leader, the Senate President and the Senate minority leader.

CACI has long opposed a single-payer system, believing that employers and workers prefer to have choices about health-insurance plans instead of being forced by government into a “one-size-fits-all” plan. 

CACI also believes that the bill’s requirements, if included in the Authority’s plan and approved by the legislature, would conflict with the federal ERISA, which sets the health-care rules and guidelines for businesses operating in multiple states.  Under ERISA, businesses with operations in multiple states are required to follow uniform and consistent rules when providing health-care insurance coverage to their employees.  If the Authority’s plan were approved by the legislature, it’s very likely that one or more of the companies protected by ERISA would file lawsuits to prevent the company or companies from having to follow the mandates of the Authority’s plan.

CACI’s also is concerned that the bill could potentially cause job losses by forcing out health-insurance companies that are large employers, thus deepening the pain of the economic recession in Colorado.

For news media coverage of this bill, click on:

http://www.rockymountainnews.com/news/2009/feb/05/dems-bill-shoots-universal-health-care-colorado/

Bill to Force Employers to Provide Paid Sick Leave Dies at Sponsor’s Request

 Opposed by CACI, the bill, HB-1210, was killed at the request of its sponsor Tuesday by the House Business Affairs and Labor Committee.  The bill was sponsored by Representative Anne McGihon (D-Denver).  A sponsor often will ask a committee to kill his or her bill when it’s clear that the bill lacks enough support to be approved by the committee.

Among other things, the bill would have required that companies provide the leave according to the following schedule based on the size of firms:

• For companies with more than 15 workers, on hour of sick leave for every 30 hours worked up to a total of 72 hours paid sick leave in a twelve-month period;
• For employers with at least six workers and up to 15, one hour of sick leave for every 60 hours worked up to a total of 40 hours in a 12-month period.

CACI Cautions Governor on “Son of SB-212,” the Vendor-Fee Allowance Bill, Rising in this Session

On Wednesday, CACI President Chuck Berry sent a letter to Governor Bill Ritter expressing CACI’s concerns about SB-212, and following is an excerpt from the letter: 

On behalf of the Colorado Association of Commerce & Industry (CACI), I want to express our serious concerns about the significant reductions in the retail vendor allowance imposed through the enactment of SB-212, which you recently signed into law.

CACI recognizes that the sharp revenue reductions caused by the recession have caused serious budget challenges for Colorado, and that the decision to reduce the retail vendors allowance to help balance the budget was not an easy choice. 

We are, however, very concerned that there may be additional legislative efforts this session to further reduce, or even repeal, the retail vendors allowance.  Any such legislative efforts will be strongly opposed by CACI and the broad business community.

The letter can be found on the CACI Web site in the Headlines section.

HB-1193, the So-Called Truckers’ Bill, is Opposed by CACI

HB-1193 would ostensibly prohibit “the shifting of financial responsibility for negligence in motor carrier agreements,” according to the bill’s title.  The bill is advocated by the Colorado Motor Carrier Association (CMCA), which last year unsuccessfully pushed a similar bill.

The bill is sponsored by Representative Buffie McFadyen (D-Pueblo West), who chairs the House Transportation and Energy Committee. 

The House had scheduled the bill for Second Reading today but laid it over until Monday.  The House Judiciary Committee approved the bill Tuesday, having heard testimony on the bill on February 19th.

Loren Furman, CACI Vice President of Governmental Affairs, spoke against the bill, saying that CACI opposed HB-1193 because the bill would dictate how businesses should contract with each other, thus creating a precedent for other contracts and indemnity agreements to be nullified.

Opponents, besides CACI, include the Colorado Retail Council and the Colorado Petroleum Association, both of which are CACI members, and other business organizations. 

Senate Committee Set to Hear HB-1001, the Governor’s Bill to Create a Tax Incentive to Encourage Job Growth

The Senate Business, Labor and Technology Committee is scheduled to hear HB-1001 on Wednesday when it convenes in Senate Committee Room 354 at 1:30 p.m.  To participate in the bill’s program, a business would have to meet certain criteria and apply to the Colorado Economic Development Commission.  The firm would be eligible for a corporate income-tax credit of up to half of its annual FICA taxes on new workers.  The tax credit would be calculated on a year-to-year basis for five years according to the number of FTEs on the payroll of the business at the end of the year.  In order for the tax credit to be granted, a company has to prove that if it wasn’t for this program that the company would not move or expand its operations in Colorado.  CACI supports the bill.

Mandated Parental-Leave Bill Calendared for First Senate Hearing

Having been passed by the House, the mandated parental-leave bill, HB-1057, is scheduled for its first hearing in the Senate on Thursday, March 12th when the Senate Education Committee meets at 1:30 p.m. in Senate Committee Room 354.  The Senate sponsor is Senator Bob Bacon (D-Fort Collins).

CACI opposes the bill and in the House lobbied hard to have the bill amended to lessen its impact on businesses.

HB-1057 would require companies that employ 50 or more workers provide up to 18 hours of unpaid leave in an academic year in three-hour blocks to workers who want to attend parent-teacher conferences or other academic activities related to the educational achievement of the employee’s child.  The worker could take no more than six hours in one month.  The worker also could elect to take paid sick or vacation leave instead of the unpaid leave.  The leave could be used for parent-teacher conferences and for meetings for a special-education student, to prevent a student from dropping out, or for disciplinary matters.

New Study Shows Card-Check Legislation Would Eliminate 600,000 Jobs in 2010

According to a new study released yesterday by economist Dr. Anne Layne-Farrar, the Employee Free Choice Act (EFCA)—also known as card-check legislation—would negatively affect the U.S. economy by increasing unemployment and stifling job growth.

“Unions claim they are the ticket to the middle class, but this study confirms that passing EFCA would have a damaging effect on an already weakened economy,” said Randel Johnson, Vice President of Labor, Immigration, and Employee Benefits at the U.S. Chamber of Commerce. 

“This legislation is a bad idea any time, but is particularly irresponsible at a time when policy makers should be focusing on creating, not destroying, jobs,” Randel said.

According to the study, “An Empirical Assessment of the Employee Free Choice Act: The Economic Implications,” an increase in 1.5 million union members in one year would lead to the loss of 600,000 jobs by the following year.  Jobs losses directly attributed to the passage of card-check legislation would be equal to the entire population of Boston or 75 percent of San Francisco.

Dr. Layne-Farrar also found that, although workers organized under card check will typically receive higher pay than their unrepresented counterparts, the review of the economic literature reveals that these increased costs must be offset by decreases in other areas that go beyond wages and benefits.

“An Empirical Assessment of the Employee Free Choice Act: The Economic Implications,” was funded by the Alliance to Save Main Street Jobs, which is a coalition of numerous business groups including the U.S. Chamber of Commerce. The author, Dr. Anne Layne-Farrar, is an economist from the non-partisan firm LECG Consulting.  To view the full report, visit:

http://ssrn.com/abstract=1353305

This study complements a recent report authored by renowned legal scholar Richard A. Epstein titled “The Case Against the Employee Free Choice Act,” which can be found at:

https://www.law.uchicago.edu/files/452.pdf

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region in the U.S.  CACI is affiliated with the U.S. Chamber of Commerce.

http://www.uschamber.com

Upcoming CACI Council Meeting 

On Tuesday, the Governmental Affairs Council will meet, and we thank Scott Ingvoldstad of CH2M Hill for sponsoring this meeting by providing lunch.

NOTE:  CACI councils meet at 12 Noon in the Conference Room at the CACI Office.  Information about council meetings and agendas can be accessed on the CACI Web site.  If you, as a CACI member, are not yet a member of these councils and want to join, please e-mail Misty Fox at mfox@COchamber.com

For More Information on Legislation . . .

CACI members with questions about legislation that CACI opposes or supports should contact Chuck Berry, CACI President, at 303.866.9652 or e-mail him at cberry@COchamber.com

Questions pertaining to health-care bills should be directed to Ralph Pollock, Chair of the CACI HealthCare Council, at 303.866.9657 or via e-mail at ralph@apaccess.com