When is a union not a “union”? When it is a “worker center.”
ROC adamantly claims that it is not a labor union. Its flyers, websites, and other materials carry the disclaimer that ROC “is not a labor organization and does not seek to represent the workers or be recognized as a collective bargaining agent of the workers at this restaurant.” Despite this, as the Village Voice reports, “bargaining and union-style brinkmanship are exactly what it does.”
ROC vehemently denies its status as a labor union because its appearance of independence from labor unions is critical to its legal existence. While labor union activities are highly regulated under the National Labor Relations Act (NLRA) and other labor laws, the activities of so-called “worker centers” remain largely unregulated. By operating as a worker center, ROC can claim 501(c)(3) charitable organization status, which allows ROC to pay no taxes and to raise tax deductible contributions from foundations. But more importantly, this also allows ROC to flagrantly skirt federal labor laws and union disclosure requirements (see below).
Regulations ROC Avoids as a “worker center”
If ROC’s worker center labor law loophole was closed, it would be forced to comply with the following regulations under the National Labor Relations Act (NLRA) and the Labor-Management Reporting and Disclosure Act (LMRDA).
|NLRA Restrictions||LMRDA Restrictions|
|Cannot picket an employer for a period over thirty days with a “recognitional” or “organizational” goal unless the organization files a petition for representation.||Must file detailed annual financial reports with Department of Labor as well as constitution and bylaws.|
|Cannot picket or otherwise pressure a third-party group about working conditions that are not under its legal control (e.g. picketing a building owner for the working conditions of its subcontractor).||Must guarantee certain rights of members, including the ability to run for office and participate in internal affairs, to obtain certain information about the labor organization, and to receive due process before any kind of discipline by the labor organization.|
|Cannot favor members in certain kinds of hiring halls.||Officers have fiduciary duty to members over organization’s money and property.|
|Organization owes a duty to fairly represent any workers in bargaining unit (members or not) if the organization becomes the exclusive bargaining representative.||Bonding insurance requirements for organization employees.|
|Cannot receive funds or loans from employers.||Must hold elections on a regular schedule.|
Union attorney Eli Naduris-Weissman writes in his “worker center Strategy Guide,” that “the threat that a worker center may be classified as a ‘labor organization’… is not an idle one.” He further explains:
Under the NLRA, if an organization qualifies as a “labor organization,” the law places several restrictions on its activity, for example, the organization cannot engage in secondary boycotts or certain kinds of picketing. In addition, the Labor Management Relations and Disclosure Act (LMRDA) imposes a series of burdensome annual financial disclosure requirements as well as certain rules on how labor organizations conduct their internal affairs, which are enforced by the Department of Labor (DOL)…
Yet, as the restrictions above illustrate, being classified as a ‘labor organization’ could severely hamper worker center activity, and in some cases lead to significant liability. For example, an employer may sue a ‘labor organization’ in federal court for damages for any business losses attributable to a secondary boycott. (emphasis added)
ROC appears to be fully aware of the worker center labor law loophole. Writing in The New Urban Immigrant Workforce: Innovative Models for Labor Organizing, which was edited by ROC’s Jayaraman, Alex Julca explains:
Since they are not constrained by the same restrictions that unions face, these worker centers have been able to find creative models for organizing extremely marginal, contingent workers, in their own language and often outside the [alleged] intimidation of their workplace.
ROC’s Jayaraman goes on to write:
Union-based worker centers vary in form and structure, but their primary objective is to provide political and ideological support for unionization among immigrants and workers in new sectors of the economy.
One of ROC’s “innovative models” was the creation of unofficial “minority unions.” Dollars & Sense explained:
The approach could be called “minority unionism”: ROC-NY gets workers to act like a union even where the workers have not been legally recognized as a collective bargaining unit. “One difference between us and a union is that in a union you have to get a majority of a shop,” Jayaraman explains. “In our case we just get a group of workers, but not necessarily the majority. The other difference,” she adds dryly, “is that there’s no health insurance.”
The trouble is that until recently minority unions were illegal under the National Labor Relations Act, and even today their status remains in question. By maintaining all of the trappings of a labor union without actually conducting an election for representation, ROC is able to exert internal and external pressure against restaurants in the same way a labor union does.
In denying its status as a union, ROC’s Jayaraman told the New York Post:
“While a union has to go in and organize the majority of a shop to get some kind of collective bargaining agreement, in our case we’ll have a group of workers come in … a small number from a restaurant, and we will ‘organize’ them to create a demand letter, eventually file litigation, protest in front of the restaurant and get press.”
ROC has been described as a “subsidiary” of HERE Local 100, acting as a “Trojan horse” that coerces non-unionized companies into signing out-of-court settlements with ROC while the union prepares to unionize their employees. Former New York Attorney General Dennis Vacco described ROC-NY as “a nonprofit organization sanctioned by traditional labor while clearly operating on the fringes of traditional labor laws. It … set out to aggressively attempt to remake the labor landscape by using the protections afforded to a nonprofit organization, publicly funded law firms, and old fashioned intimidation to shake down its targets.”
The IRS initially responded to ROC’s application for 501(c)(3) tax exempt status by asserting that it would be more appropriate to classify the organization as a 501(c)(5) labor organization. ROC vigorously contested the IRS’s initial viewpoint and, after some delay, ultimately obtained 501(c)(3) status. Additionally, a number of cases have been filed against ROC with the National Labor Relations Board primarily pertaining to complaints that ROC should be classified as labor organization. In a separate case, the Department of Labor rejected an employer’s complaint that ROC-NY was a labor organization subject to the Labor Management and Reporting Disclosure Act.
In 2006, New York restaurant owner Shelly Fireman filed an IRS complaint against ROC, accusing the group of using tax exempt funds designated for “charitable” purposes for non-tax exempt activity, including “Operating a competing restaurant while protesting and hurting the business operations of other restaurants; Conducting advocacy campaigns which by law should be conducted with non-tax exempt funding; Acting as a front for a local union.”