Employee Free Choice Act: Employee Choice or Union Empowerment?

In the current Congress, the House passed the Employee Free Choice Act (“EFCA”). Although current economic difficulties suggest that passing this legislation will not be an immediate priority for the President and Congress in early 2009, organized labor support was very important in the 2008 Democratic Party electoral success, and the EFCA has long been at the top of labor’s wish list. It is, therefore, expected to be reintroduced and to enjoy substantial Congressional and Presidential support.

The Two Most Significant and Troublesome EFCA Provisions

The EFCA contains two provisions designed to tilt the balance of power in union organizing and collective bargaining quite dramatically towards labor.

In achieving this objective, the first provision also deprives employees subject to union-organizing efforts of a right of privacy that is fundamental to democratic principles — the right to a secret ballot.

The second provision inserts a third-party decision-maker into some labor-management negotiations, depriving employers, employees, and unions of autonomy in establishing terms and conditions of employment.

1. Majority Sign-Up

The first troublesome EFCA provision involves certification on the basis of majority sign-up. This means that a union may be certified as a bargaining representative if the NLRB finds that a majority of employees in an appropriate unit has signed authorizations designating the union as its bargaining representative. (Once a union has been certified, the employer must bargain with it in a good-faith effort to agree on a collective bargaining contract.)

The key difference from current law is that presently, although an employer may voluntarily recognize a union under such circumstances, it need not do so.

Instead, an employer may insist on a secret-ballot election. This way, an employee may sign a union authorization under pressure from fellow employees or aggressive union representatives, yet still vote against the union in the privacy of the election booth.

Under present law, an employer also has an opportunity to campaign to change the minds of employees between the time they sign cards and the election. The frequent success of such campaigns, and claims of unlawful coercion of employees during them, are the main factors leading unions to support this dramatic change in the law.

Granted, there have been abuses under the present election system — by unions as well as employers. But in our opinion, and that of most of the business community, depriving employees of the right to a secret-ballot vote is no solution.

2. First-Contract Mediation and Arbitration

The second troublesome EFCA provision applies if an employer and a union who are engaged in bargaining a first contract are unable to reach agreement within 90 days after starting to bargain. Under the EFCA, either party may refer the dispute to the Federal Mediation and Conciliation Service (“FMCS”) for mediation.

If mediation then fails to result in an agreement after 30 days, the EFCA provides for the dispute to be referred to arbitration, with the arbitrator decreeing contract terms to be binding for two years.

The concern behind this aspect of the EFCA is that often the bargaining of a first contract proves so difficult that unions and/or the employees they represent get frustrated and give up.

Sometimes this occurs because employers abuse the system and do not bargain in good faith as required. But often unions are at least equally at fault. For example, unions may develop unrealistic expectations among employees when organizing them and/or may place their insistence on certain controversial contract terms above the employees’ interest in rapid approval of an agreement containing basic protections and competitive wages and benefits.

Here again, the proposed cure under the EFCA does not fit the disease. Giving a third-party arbitrator unbridled authority to determine contract terms for two years achieves the objective of rapid production of a contract, but at the expense of the fundamental principles of collective bargaining that have been at the heart of American labor policy for over seventy years.

Other EFCA Provisions

As proposed, the EFCA also includes stronger enforcement and penalties addressing employer unfair labor practices that occur during organizing activity and bargaining, including:

  • Investigational priority
  • Civil fines of up to $20,000 per violation
  • Treble back pay

There are no concomitant enhanced penalties for intimidation and coercion of employees by unions.

Conclusion

The EFCA’s proposed changes to the National Labor Relations Act do not enhance employee free choice. To the contrary, under the EFCA, employees would lose substantial control over their employment — without a secret ballot, they would lose an important aspect of control over whether they belong to a union in the first place; and mandatory binding arbitration would potentially remove their right to decide whether to accept or reject a collective bargaining agreement.

We will continue to update you on the progress of the EFCA legislation. We anticipate that at least some portions of it will be enacted by a Democratic Congress and signed by a Democratic President.

However, there remains considerable, well-organized opposition from business groups. With sufficient pressure, even with Democrats in firm control in Washington, the contours of a final law may be less onerous to business.

For example, some knowledgeable sources suggest a possible compromise would be to preserve the secret ballot, but create an expedited election procedure to reduce employers’ opportunity to influence employee votes.

Your involvement in the political process concerning this matter of great interest to all employers can make a difference by helping to forge a reasonable compromise.

Additionally, since some form of pro-labor change is virtually a given, it is not too early to take a good hard look at your vulnerability to unionization and how to reduce it.

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