May 2, 2013 Updated: May 2, 2013 at 1:55 pm
As the legislature continues its assault on Colorado's economy, another anti-business bill began quietly slinking its way through the process in April.
House Bill 1304, and an identical version expected to pass the Senate on Thursday, creates an incentive for unions to strike and gives them an enormous advantage over employers. It may cause another increase in unemployment taxes paid by employers, meaning they will have less money with which to hire employees.
Colorado's deputy treasurer ran the numbers and estimates the bill threatens to cost the state's unemployment fund up to $80 million in the event of a 3-month grocery worker strike.
The proposed law would allow any employees shut out of their jobs by a 'defensive lockout ' to collect unemployment insurance from the state. As former Gazette reporter Ed Sealover wrote for the Denver Business Journal, the state already has problems with the unemployment fund. He reminds us: 'The state had to borrow money from the federal government and raise unemployment taxes on all employers - sometimes by 300 percent or more - after the fund went broke in early 2010 because of the effects of the Great Recession. '
A defensive lockout is one in which an employer locks out members of a union that is already striking against another company in the same industry. Coloradans saw one in 1996, when United Food and Commercial Workers struck against King Soopers. In response to the strike, Safeway locked out all workers belonging to the same union because their dues were helping fund the strike. Management came to the rational conclusion that union members would want something for helping fund the strike and would therefore demand identical strike concessions from Safeway.
If a union decides to strike, causing members to stop working, the workers are not entitled to unemployment benefits. That's because they're out of work by choice. When they joined the union, they agreed to abide by decisions of the organization's leadership. It typically poses no big hardship, as they are paid by a union's internal strike funds - an insurance pool funded by union dues.
State law treats union workers locked out by a defensive lockout the same as those actively striking against another company in the same industry. That's because their union initiated the strike and employers who will be affected have a right to defend themselves. A strike effects every company with union members who work under identical or similar labor contracts.
The proposed law would make it much easier to favor of a strike because the state would be forced to help fund it. The state, by paying unemployment, would effectively side with the union and increase its leverage against employers.
The law would take effect in August and some opponents say it is almost a direct gift to the United Food and Commercial Workers. The union's contracts are up in Colorado in 2015.
'Why are we running this bill? ... We have one specific industry that is up for contracts in 2015, ' said Rep. Jared Write, R-Fruita, as quoted by Sealover. 'I don't think it gets much more special-interest than this. '
Labor strikes are rare in Colorado, and that fact benefits employers, employees, consumers and the economy. If House Bill 1304 passes, we will see a lot less cooperation in labor negotiations and more picket lines outside of stores, warehouses, factories, office buildings and other places of employment. Prospective employers will have one more reason to avoid Colorado and employees will become more of a liability and less of an asset to those who create jobs.
We have a sensible Democratic governor who tries to govern in favor of Colorado businesses and workers. Alas, he works beside legislative Democrats who seem more interested in forcing radical special-interest agendas - while they have the power - than in doing what's in the best interest of most Coloradans. It's as if they are trying to put their highest-ranking state official on the spot, testing his loyalty to the left.
The last time Democrats attempted this anti-business legislation, in 2009, Democratic Gov. Bill Ritter vetoed it. By some miracle, this bill may never reach Gov. Hickenlooper's desk. If it does - which seems likely - we hope he goes for the pen. Doing so will only help the long-term interests of his party and his state, saving each from the fallout of an anti-business law.