National Labor Relations Board Hurts Job Creation

Jobs are still being created far too slowly because there is too much small business uncertainty.

By SHARE
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Fran Tarkenton is founder and CEO of SmallBizClub.com, a NFL Hall of Fame quarterback, and a member of the Job Creators Alliance.

Friday we learned the unemployment rate decreased slightly in February and champagne corks popped in a White House eager for good economic news. The drop from 7.9 percent to 7.7 percent is encouraging, but there is still much work to be done. A good place to start: The federal government must stop being so antagonistic toward job creators.

In a recent nationwide poll, Job Creators Alliance found 70 percent of small business owners believe Washington has grown more hostile toward their efforts to create jobs. The National Labor Relations Board, a quasi-independent federal labor dispute panel, is key among those hostile agencies. Fortunately, a recent court decision may have ended the the board's antics.

[See a collection of political cartoons on the economy.]

It has been alarming for business leaders across the nation to watch the National Labor Relations Board take actions that limit job creation, limit the right to work, and ultimately limit robust economic growth. Instead of maintaining independence, under President Obama it appears the agency has become an arm of Big Labor. Take the case of HealthBridge Management in Connecticut. For over a year and a half, the nursing home was locked in a bitter contract dispute with one of the largest unions in the country. Because the union refused to agree to their contract and instead demanded 17 percent raises, HealthBridge did what most businesses would do: They implemented their last, best offer.

In response, the union workers decided to go on strike—and then some. Workers allegedly removed patient identification from room doors, wheelchairs, and made it impossible for staff to know which patients had dietary restrictions. This reckless behavior put nursing home residents' lives in danger. And how did the National Labor Relations Board respond? They ordered HealthBridge to rehire these employees and give in to the union's demands.

[Read the U.S. News Debate: Are 'Right-to-Work' Laws Good for States?]

The saga took a dramatic turn when the D.C. Circuit of the U.S. Court of Appeals found that President Obama's three recess appointments to the agency were unconstitutional. According to the court, without a quorum the panel had no authority to operate. This has raised questions about hundreds of the panel's rulings and the status of the the agency going forward. For businesses struggling to comply with many of the the agency's unreasonable rulings, this may seem like welcome news. Still, the situation is by no means settled. For now, the National Labor Relations Board is shrugging off the court ruling and will rule on a hundred more cases.

After enduring the economic uncertainty of the fiscal cliff and sequestration, today many businesses are mired in legal and regulatory uncertainty as well. For many job creators, the combination is paralyzing. Some are even deciding not to comply with questionable National Labor Relations Board rulings.

[See a collection of political cartoons on sequestration and the fiscal cliff.]

In this struggling economy, Americans are crying out for jobs. Research has shown that companies with unions create fewer new jobs than non-union companies. More and more companies like Whole Foods are widely considered to be "beyond unions." Still, the National Labor Relations Board makes reliably strident pro-union rulings and creates job-killing uncertainty. Underneath the dip in the unemployment rate, fewer Americans are working full time than were a year ago; more are working part time. The dismal workforce participation rate remained virtually unchanged in February because too many are still dropping out of the workforce. Jobs are still being created far too slowly because there is too much small business uncertainty.

Washington must move quickly to clarify hundreds of damaging rules already passed down by the mooted National Labor Relations Board. Politicians must also assure business leaders that the rights of both employers and employees will both be respected. Without this, many job creators will remain in the sidelines, awaiting better days.

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