Workplace discrimination on the basis of an employee’s support for, or opposition to, a labor organization has been unlawful since 1935, when the National Labor Relations Act (NLRA) was passed.  One exception to this principle of non-discrimination:  In non-right-to-work states, such as Massachusetts and California, an employee can be required to pay union dues under a union security clause in a collective bargaining agreement.

A second exception, however, apparently has been agreed to by labor union leaders and the White House in the guise of “health care reform.”  A deal involving the taxation of “Cadillac” benefit plans will exempt from coverage until 2018 those plans found in collective bargaining agreements (“excise tax deal”).  If enacted, union-free employees will be discriminated against – legally – in favor of unionized employees. 

What motivated this disturbing development?  Political expediency?

Some now believe “health care reform” must be enacted at any cost.  Labor union support is necessary to achieve this. Unions therefore need to be rewarded for their past political support and to ensure their continued loyalty.  Would the SEIU have given $685,000 to the unsuccessful Massachusetts Democratic candidate for Senator if the excise tax deal was not reached?  Will organized labor campaign as passionately in 2010 as in 2008 for political allies if taxation of health plans was to be imposed on a non-discriminatory basis?  Ask labor leaders Richard Trumka and Andy Stern.

There is also a practical reason why unions insisted on the excise tax deal.  Labor has had a difficult time organizing new members because, today at least, unions cannot guarantee their promises of benefit improvements will be realized after good faith negotiations.  The NLRA affords the parties the freedom to bargain and make contracts without pre-determined mandates.  This applies to health insurance.

If the excise tax deal becomes law, this freedom will likely go by the boards, and with it, employee options for health insurance.  Workers desiring good health insurance, but burdened by the excise tax for plans in union-free settings, may have difficulty resisting union organizing and bargaining demands for union-sponsored plans.  Look for unions to argue that union-free employees can remove the cause of their costly workplace discrimination by…well…joining the union which created the discrimination in the first place!

Careful observers of the “labor reform” movement are not surprised by this crass political blackmail.  EFCA, pending in Congress, also would restrict freedom of contract through government-mandated arbitration of initial collective bargaining agreements.  Further, EFCA eliminates secret ballot elections in favor of union card recognition.  From Big Labor’s perspective, the excise tax “compromise” is a welcome sign of those statutory changes.  From an employee, employer and American citizen’s perspective, however, it is an ominous precursor.

A vote in favor of a health care bill with its excise tax compromise is a vote for workplace discrimination.  Do not expect to hear that from Washington.