The Scott Heard Round the World
Brown'sElection in Massachusetts May Reset Legislative Agenda

Scott Brown's election to fill the seat of the late Ted Kennedy was remarkable. He was the first Republican elected to the Senate in Massachusetts since 1972; the entire ten-member House delegation from Massachusetts has been comprised of only Democrats for the past 10 years. President Obama carried Massachusetts by a margin of 26% over John McCain just 14 months ago. We think Brown's election places the health care legislation at risk, but also throws the Administration's entire legislative agenda into a tailspin.

While reports of EFCA's demise have been greatly exaggerated, the conventional wisdom has been that at least some form of labor reform legislation would become law before the 2010 mid-term elections. Certainly that has been our opinion. But Brown's election and the paradigm shift in voter sentiment that it represents are sure to reset legislative priorities, even if they don't reset the Administration's priorities (early comments from the White House suggest a full speed ahead approach). We expect moderates in Congress to withdraw their support from controversial legislation such as health care reform, cap and trade, and the Employee Free Choice Act, while others will, at the very least hunker down. Republican lawmakers are likely to be emboldened in their opposition. As one pundit commented last night, gridlock may have been the real winner yesterday.

We think the outcome in Massachusetts was more of a reaction to Harry Reid and Nancy Pelosi than President Obama. Early Rasmussen exit poll numbers showed that 53% of the Massachusetts voters yesterday (about the same percentage that voted for Brown) still approve of President Obama. Reid and Pelosi appear to be the focus of voter frustration, particularly their push for health care legislation at whatever price it takes to get the votes (including sweetheart deals for the labor unions) and regardless of the cost to taxpayers. Rarely in American politics has one legislative issue so significantly changed the outcome of a major election.

What does this mean for the issues of labor reform, EFCA and employment legislation on the minds of our clients? First, we think it's clear now; labor's strongest push for EFCA peaked too early without securing its passage. Just this past week, AFL-CIO president Richard Trumka boasted that EFCA would follow health care, and labor unions would be the machinery that gets both bills passed. After last night's election, he may need to have his foot surgically removed from his mouth. After the election, we think moderate legislators in both houses of Congress will look at EFCA and other labor reform or employment legislation with this question: Why is this bill necessary? Will this bill address our 10% unemployment and 19% underemployment rates? Does this bill help create jobs? How do I explain this vote to my constituents? How do I distance myself from Reid, Pelosi and the President?

We'll jump in the second-guessing game and suggest that if labor unions had pushed EFCA immediately after the passage of the stimulus package, labor surely would have achieved some form of labor legislation, such as quick elections and restrictions on captive audience meetings. Now, labor's "wish list" legislative and regulatory agenda is vulnerable. As the saying goes regarding investing--bulls make money, bears make money, but hogs get slaughtered. Labor's "hog" arrogance may result in at best, modest results from Congress.

Though yesterday's outcome is encouraging news for employers concerned about pro-labor legislation, labor unions still have significant momentum with the workforce in 2010. We can't overlook the fact that in 2009 unions won approximately 65% of all elections and membership in unions rose for the second consecutive year after a 30-year decline. Unions continue to be creative and aggressive in their organizing strategies nationally and internationally, spotlighting safety, job security, job opportunities and environmental integrity. And labor unions still have a close friend and ally in the White House, as well as nearly every federal public office with regulatory or enforcement authority in the workplace.