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Senate Democrats Vote to Preserve Union Loophole in Consumer Protection Law

Washington State’s Consumer Protection Act (CPA) “has been described as the strongest consumer protection efforts among the states,” according to prominent law firm Lane Powell. When it was passed in 1961, Washington became the second state to adopt a systematic consumer protection framework. 

The CPA, found in Chapter 19.86 RCW, primarily restricts businesses from engaging in monopolistic or anti-competitive behavior. It also prohibits commercial entities from engaging in “unfair or deceptive acts or practices.”

Under the law, both the Attorney General and persons harmed by such acts or practices may bring litigation against the offender. If successful, the court may require the offending party to pay the plaintiff(s) as much as three times the amount of the damages caused, which strongly discourages illegal behavior.

There’s just one problem. Labor unions are categorically exempted from the CPA’s requirements.

The exemption is defensible up to a point. In economic terms, unions function as “labor cartels” by attempting to control the supply of labor in a manner that drives up wages for their members at the expense of consumers forced to pay higher prices for goods and services. If the CPA’s provisions prohibiting monopolistic and anti-competitive behavior were applied to unions, then unions would be unable to exist in their current form.

However, there is no public policy reason for allowing unions to engage in “unfair or deceptive acts or practices.” Recent Freedom Foundation-supported legislation introduced by state Sen. Jan Angel (R-Port Orchard), sought to rectify this situation.

SB 5174 would have modified the CPA’s exemption for unions to make it clear that unions cannot engage in “unfair or deceptive acts or practices.” Unions would continue to be exempt from all other provisions of the CPA. Further, the bill would explicitly provide that unions may not “mislead or misinform employees about their statutory or constitutional rights regarding membership in, or the payment of dues or fees to, a labor organization.”

Sen. Angel described her legislation as “a very important bill that protects the public from any labor union that might mislead or misinform any of their employees about their rights regarding their union membership or paying their union dues,” noting that “consumer protection laws that are well-founded help deter bad behavior.”

At the hearing on the bill before the Commerce, Labor and Sports Committee in the state Senate on Feb. 6, unions defended their loophole in the law by painting the effort to close it as a violation of human rights.  

Lindsey Grad, a lobbyist for SEIU Healthcare 1199NW, claimed,

“This bill would not just overturn case law, state statute, federal law, but actually a fundamental human right, because the labor of a human being is not a commodity and that extends to the rights of labor unions.”

Grad is partially correct in that the CPA does state, “…the labor of a human being is not a commodity or article of commerce,” but that is a legal conclusion, not a statement of reality. In practical terms, any employer-employee relationship is a purchase of labor and, as long as the exchange is voluntary, it is not a violation of human rights for a person to “sell” his or her labor in exchange for wages. In being paid by SEIU to testify against the bill, Grad herself was selling her labor.

The only legal effect of this provision of the CPA is to prevent unions from being effectively banned by the law’s anti-competitive provisions, none of which SB 5174 would change.

Fundamentally, labor unions are commercial entities in the business of selling workplace representation services. Just as business’ interest in maximizing profits can sometimes lead them to take advantage of consumers, unions’ interest in maximizing membership and dues collection can sometimes lead them to engage in unsavory practices. Unlike most consumers, however, union-represented employees have very few legal protections against union exploitation.

Closing the loophole in the CPA which allows unions to engage in “unfair or deceptive acts or practices” is not a violation of human rights, as Grad claimed, but a step towards providing the same protections for purchasers of workplace representation services that consumers of other goods and services already benefit from.

Sen. Steve Conway (D-Tacoma) opposed the bill on the grounds it is unnecessary, arguing:

“The way you actually defend yourself against unfair labor practices by the unions is before the National Labor Relations Board or before the Public Employment Relations Commission. That is the model here for protecting individual rights, which we’re all concerned about, from undue pressure from unions.”

However, particularly in the public sector, the types of unfair labor practice charges (ULPs) that an employee can bring against a union are quite limited. For instance, Chapter 41.56 RCW, one of the primary collective bargaining laws for public employees in Washington lists only four activities that qualify as ULPs by a union:

“(1) To interfere with, restrain, or coerce public employees in the exercise of their rights guaranteed by this chapter;
(2) To induce the public employer to commit an unfair labor practice;
(3) To discriminate against a public employee who has filed an unfair labor practice charge;
(4) To refuse to engage in collective bargaining.”

The problem with number one is that state collective bargaining laws specifically protect very few rights of public employees and generally relate only to their right to form a union. Number two is nearly meaningless, number three only applies if an employee can find another valid ULP to file in the first place, and employees may not initiate ULPs relating to number four.

In a recent letter to Sen. John Braun (R-Centralia), the executive director of the Public Employment Relations Commission (PERC), Mike Sellars, acknowledged that “PERC does not have authority to adjudicate disputes over union membership or the payment of dues.”

This lack of accountability for unions leads to significant abuse. Most recently, the Freedom Foundation has received numerous complaints from SEIU 775-represented home care aides who have been lied to about their rights or pressured into formally joining the union.

SEIU representatives have been caught on tape falsely telling caregivers at state-required trainings they had to join the union, even though the U.S. Supreme Court has ruled caregivers have a constitutionally protected right to make their own decisions about union membership.

In emails obtained by the Freedom Foundation via a public records request, Department of Health and Human Services (DSHS) employees discuss how SEIU 775 representatives pressure caregivers into signing up for membership, and how the union files grievances against the state when DSHS staff attempt to intervene.  

Here are just a few of the comments the Freedom Foundation has received from caregivers regarding their experience with SEIU 775:

  • “I attended a training where Union Representatives spoke and told our entire class that joining was mandatory… They would not address any of our questions on why this was so or if we could do anything about it… Shortly after that I received information from the Freedom Foundation that explained Harris v. Quinn and that I did not have to join or pay dues. I submitted the form to withdraw my membership and requested they stop deducting dues… I believe I was misinformed and misled – I was lied to.”

    – Sandra, an SEIU 775 represented home care worker.

  • “We sent out the opt-out form we received from the Freedom Foundation and they ceased taking dues. But then my wife got a phone call about a free life insurance policy and told the union over the phone that she wanted it. They started taking dues again and told us that by accepting the life insurance policy that we agreed to rejoin the union. We never signed anything, they tricked us! We had no idea about our rights.”

    – Murhaf, married to an SEIU 775 represented home care worker.

  • “Since December of 2015, the Individual Providers (caregivers) in our family have all been made to believe that our support of SEIU 775 union was mandatory, regardless of whether we felt our interests were represented by them or not… We received no clear information from SEIU 775 that we had a choice as to our union membership. We personally feel that we have been deliberately kept in the dark and lied to regarding our wages being taken for union dues and how that money is spent.”

    – Jennifer, an SEIU 775 represented home care worker.

Caregivers aren’t the only ones mistreated by unions. A group of Thurston County employees turned to the Freedom Foundation for help in 2014 after their attempt to exercise their constitutional right to cease supporting their union’s explicitly political activity was rejected by union leadership. 

Despite all this, when it came time to vote on the bill, all four of the Democrats on the committee voted to permit unions to continue to engage in unfair or deceptive acts and practices. It’s worth mentioning that each of the four has a background working for labor unions — Sen. Karen Keiser for the WSLC, Sen. Bob Hasegawa for the Teamsters, Sen. Rebecca Saldaña for the SEIU, and Sen. Steve Conway for the UFCW.

The only comments against the bill came from Sen. Conway, who stated simply, “I just think this is an attack on labor unions, folks.”

The bill passed out of committee with the support of the five Republicans, but unfortunately did not receive a vote in the full Senate and won’t be advancing this year.

Hearing on SB 5174 before the Senate Commerce, Labor and Sports Committee on February 6, 2017:

 

Vote on SB 5174 in the Senate Commerce, Labor and Sports Committee on February 15, 2017: