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Labor pains: The perils of the Employee Free Choice Act

by on
in Employment Law,Human Resources

As the 2008 election cycle intensifies, organized labor is devoting substantial resources to support candidates who will advance its ambitious legislative agenda in 2009. That agenda includes passage of the Employee Free Choice Act (EFCA).

If the EFCA becomes law, it will mark the most significant change in American labor law in decades. Employers must understand what EFCA passage would mean and what they can do now to ensure that union organizers do not target their employees.

Under the National Labor Relations Act (NLRA), unions organize workers through a private election system and then bargain collectively with employers. With elections, employees can decide in the privacy of a voting booth whether they want to be represented by a union.

The EFCA would change all that, significantly undermining elections as the way to bring a union on board. The EFCA would also force employers to negotiate their first contracts in a hostile mediation and arbitration environment.

Specifically, the EFCA would allow a card check campaign as one way for employees to choose union representation. The National Labor Relations Board (NLRB) could certify a union as an employee unit’s exclusive bargaining representative after a union convinces enough employees to sign union authorization cards—bypassing private balloting.

What’s more, the EFCA would allow a union to demand that the employer participate in mandatory arbitration for the first contract. That could precipitate disastrous economic consequences.

EFCA would encourage coercive card check campaigns

If the EFCA becomes law, authorization cards will become much more important for union organizers than election certification. Now, employees who sign authorization cards to demonstrate their tentative union support can still vote against unionization when they cast their ballots in an election. That would change under the EFCA. An employee who signs such a card will, in essence, cast a public vote for the union that cannot be changed.

Employees who don’t want a union to represent their interests may face subtle or even explicit union intimidation since they won’t make their decisions in secret.

EFCA would impose mandatory arbitration

The EFCA would make wholesale revisions to the ways companies and unions negotiate their first contracts. As proposed, it would require the employer to meet and begin collective bargaining with the union within 10 days of receiving an appropriate bargaining demand.

The employer and union then have just 90 days to agree on a first contract. If they can’t, either party can request mediation with the Federal Mediation and Conciliation Service (FMCS). Once a union or employer seeks mediation, the FMCS has 30 days to resolve all the parties’ contract negotiation disputes. Simply put, that is an unrealistic amount of time to resolve all outstanding first-contract issues.

The next step is arbitration. An arbitration panel has an unspecified period of time to make a decision. Once it has made that decision, however, the parties are bound for two years.

Mandatory arbitration of first-contract disputes marks a radical departure from current law. Currently, the NLRA leaves to the union and employer the difficult work of negotiating and arriving at key terms and conditions of their collective bargaining agreement, without government imposition of specific contract provisions. If adopted, the EFCA would reflect the government’s clear support of the union in first-contract negotiations, rather than merely providing a neutral bargaining framework for both parties. It would give arbitrators unprecedented power to impose economic restrictions on individual employers.

Additional penalties on employers

The EFCA would impose additional penalties on employers that commit certain unfair labor practices. For instance, if an employer commits an unfair labor practice during the time between union certification and agreement on a contract, the NLRB could award triple back-pay damages to affected employees and assess a civil penalty of up to $20,000 for each violation.

The practical effect on employers would be to force them to choose between bargaining with a union and a possible punitive penalty.

What employers should do

Because the EFCA poses a significant threat to union-free employers, companies should mobilize to fight efforts to make it the law of the land. Otherwise, they may well find themselves being forced to bargain with a union even though no election was ever held.

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