Big Labor’s Grip on Financial Reform


There isn’t a bill coming out of the Senate nowadays that doesn’t contain a special interest provision aimed at empowering the labor union bosses.  The financial reform legislation is no exception.  Tucked inside the bill — which a handful of Republicans are considering supporting — is a provision that would give labor activists unprecedented power. takes a look at the provisions which includes:

Under the American Financial Stability Act of 2010 (S 3217), several provisions tucked away in the bill will give labor bosses unprecedented powers that, especially if abused, could threaten the very structure of our free market system.

  • Financial institutions and other covered businesses could be required by law to give labor unions “Proxy Access”, enabling union bosses to potentially abuse the system to force unrelated agenda items, like unionizing the firm’s employees, before the shareholders
  • New regulations will control how board of director elections are conducted – at private corporations!
    • The SEC would be granted the power to force the names of outside nominees onto the corporate ballot (as reported by Politico)
    • Directors running in an uncontested election would now be required to win a majority of votes cast, rather than only by the current plurality(as reported by Politico)
  • Similar rules will also determine whether an individual may serve as both the CEO and Chairman of the Board –  at a private corporation!
  • Government and labor unions will have “say on pay” for the annual salaries and bonus compensation of executives and other employees.  Essentially, like Obama himself, they can determine at what point “someone has made enough money”

I don’t think anyone’s against shareholders having their proper say and representation in the corporate management process.  But that’s not really what’s behind these pieces of the legislation.  We’ve seen how today’s labor bosses are abusing their powers and using the shareholder resolution as a hostage weapon to bully corporations into unionization and special union concessions. Just read my prior post, “SEIU’s Secret Weapon: If Obama’s Plan Fails, Brandish the Shareholder Resolution” for a taste of that tactic.

It’s been known for some time that labor bosses are now organizing on a  global scale, and as such, have taken to the Participative Management style common in European workplaces.  In the U.S., private corporations might typically achieve a similar democratic process of employee participatory management when the company enters into a direct employee ownership plan.  The difference here however is that we’re talking about companies that do not belong to the labor unions – these are companies in which the union might have a pension fund investment, or perhaps some of its workers unionized on premise.  These are private companies that the unions attempt to overtake through such smaller connections to earn a place on the board, and then change it from the inside out until a Participative Management environment is achieved.  If  that achievement were to occur, US corporations would quickly fold and restructure under a more socialist model.  Eventually, the free market system would erode away as labor unions take over the boards of once privately owned corporations.

For weeks now, Ive been searching for the resources to help me describe this threat in simple terms, and just as fate would have it, my friend Peter List over at LaborUnionReport and RedState pens the perfect post describing this with clarity and precision, in his post titled “Changing America Forever: Behind the AFL-CIO’s Push for Financial Reform.”