Corporate Angst on Capitol Hill

By Gordon Bock

For most of the past six years, being a business lobbyist in Washington has been a cushy assignment. In the laissez-faire atmosphere created by the Reagan Administration, Congress seemed unusually reluctant to put new legislative shackles on America's corporations. But now that the Democrats have regained control of the Senate and the White House's power has been weakened by Iranscam, business finds itself on the defensive. Corporate lobbyists are fighting a bevy of labor-supported bills that might be beneficial to workers but would impose new costs and burdens on corporations. Says Dirk Van Dongen, president of the National Association of Wholesaler-Distributors (N.A.W.): "It is real warfare."

A passel of pending legislation would affect almost every aspect of the relationship between management and workers. If some leading congressional Democrats and their labor-union allies are successful, companies will have to pay a higher minimum wage, provide a Government-mandated menu of health-care benefits for all workers and offer unpaid leave and guaranteed job security to employees who leave work temporarily when they become parents. Other bills would set up new rules governing unionization, plant closings and on-the-job safety.

The flurry of proposals dramatizes the renewed clout of organized labor in the corridors of Congress. Senate Majority Leader Robert Byrd, a West Virginia Democrat, is more receptive when labor buzzes in his ear than was his predecessor, Republican Robert Dole of Kansas. Massachusetts Democrat Edward Kennedy, an avid defender of workers, has replaced the decidedly less sympathetic Utah Republican Orrin Hatch as chairman of the Senate Labor and Human Resources Committee. Democrats who are friendly to or received campaign money from the labor movement are in positions to help along the bulk of the business-related legislation. Boasts AFL-CIO Executive Howard Samuel: "We control the committees and the agenda on the floor."

Recognizing the challenge they face, business groups have mounted a full- court defense. Van Dongen's N.A.W. can delve into a computer bank that lists 10,000 members who have ranked how well they know legislators on a scale from "slightly" to "very well." The U.S. Chamber of Commerce, meanwhile, is organizing a mammoth letter-writing campaign to Congress. Its message: the raft of legislation would drive up business costs while American companies are already losing markets to foreign competitors.

One of the most hotly debated proposals is a Senate bill introduced by Ohio Democrat Howard Metzenbaum. It would force companies to notify unions up to six months in advance of plant closings and substantial layoffs. A version that passed the House Labor Committee last week goes even further, requiring employers to consult with unions before making such decisions. "With advance notice, workers can begin to look for new jobs," says AFL-CIO Secretary- Treasurer Thomas Donahue. But critics charge that the bills would sharply limit management's flexibility. In an editorial, the Detroit News called the legislation "Metzen-bomb." Executives at Pittsburgh-based USX, which has , been in the throes of restructuring its steelmaking operations, contend that such a law would have forced them to consult with employee groups 28 times in the first half of 1986, leading to divisive confrontations that would have sapped management's time and cost the company millions of dollars.

Equally controversial is a bill that would prohibit the widespread construction-industry practice known as "double-breasting," in which companies operate two subsidiaries, one unionized and the other nonunion. Critics charge that this practice is merely a way for firms to circumvent collective-bargaining agreements. If the proposed bill passes, these companies would have to choose to be either exclusively union or nonunion. Labor leaders believe the law would produce more unionized shops, but some companies indicate they might try to shut out their unions. Such is the case at Phelps Inc., a 2,000-employee construction firm based in Greeley, Colo., that engages in double-breasting. Insists Co-Owner Robert Ruyle: "The unions are shooting themselves in the foot."

Nearly 3.5 million Americans could be directly affected by a bill that would raise the minimum wage nearly 40%, to $4.65 an hour, by 1990. Supporters note that the minimum has been $3.35 since 1981. Opponents argue that such a law would discourage firms from hiring unskilled young workers.

Another costly bill that makes businesses queasy is Kennedy's plan to require them to pay at least 80% of employees' insurance premiums for hospital care, physicians' fees and diagnostic tests. Says John Sweeney, president of the 850,000-member Service Employees International Union of the AFL-CIO: "The bill promises relief for low-wage earners, part-time workers and taxpayers who have had to pick up the tab" for medical costs. But the bill would lay a new $20 billion-a-year burden on businesses, which currently are not required to offer health-care benefits.

Another pro-labor bill would require the Government to notify employees when they have been exposed to hazardous substances in the workplace. Even though the legislation has won the endorsement of the Chemical Manufacturers Association and major employers like IBM, most business leaders oppose it. Their fear: the law would lead to a blizzard of lawsuits.

Among all the pro-labor bills, the measures that stand the best chance of passing Congress this year are the ones involving plant closings, minimum wages and high-risk notification. This week the House is expected to vote on, and is likely to approve, the double-breasting legislation. The issues of mandated health care and parental leave will probably languish until next year. Labor does not expect to win every battle and realizes that some laws may have to be passed by overriding a presidential veto. But the pro-worker lobby is pushing to get as much as it can as fast as it can. After all, 1988 is an election year, and the political climate can be as fickle as the weather.

With reporting by Gisela Bolte and Michael Duffy/Washington