State Financial Accountability in Labor Organizing

Billions of dollars from state treasuries are spent by state contractors and subcontractors to hire attorneys and consultants, train supervisors in campaign tactics, and produce materials to influence workers’ choices about unionization. State funds are also used to pay wages and salaries of employees who stop working to attend mandatory meetings during which the employer tries to influence their choices about unions. Such unintended use of state funds constitutes a misuse of taxpayer dollars and the misapplication of scarce public resources.

A campaign by a small- to medium-sized firm typically costs between $20,000 and $30,000 in legal fees alone, but full-scale campaign costs can exceed $100,000. Campaigns run by large firms may cost more than $1 million.1 Of course, companies have the right to spend whatever they want to communicate with their own employees. But there is no reason why the government should allow taxpayers’ money—appropriated to provide products or services—to be diverted to a different use.

A variety of programs prohibit contractors from using federal funds to influence unionization efforts, including the Workforce Investment Act, the National and Community Service Act, the Head Start Programs Act and Medicare. A regulation that would have applied this rule to all federal contracts was issued by the Clinton Administration, but was suspended by the Bush Administration.

In 2000, California became the first state to enact a state law to prohibit both public and private employers from using state money or property to influence their employees’ decisions about unionization. The law was vigorously challenged in court. The U.S. Court of Appeals for the 9th Circuit upheld the law, ruling en banc that it is not preempted by federal labor law.2

The model act:

Such legislation does not prohibit or deter employer campaigns. Employers remain free to hire expensive labor consultants and pay them to produce elaborate posters, leaflets, mailers, buttons, bumper stickers, and videos about unions—they simply cannot use state funds for these purposes. Employers remain free to address their employees about unionization in meetings and other gatherings, through mailings, and all other legal means—as long as state taxpayers are not footing the bill. In this way, the state ensures that it—the government of all the people—is not subsidizing such campaigns.