Nov 05, 2008

There’s Nothing Free About the Employee Free Choice Act

With a Senate vote looming, many employers are asking about a bill entitled the “Employee Free Choice Act” (“EFCA” or “the Act”) and wondering what effect it will have on them. The short answer is that this Act will significantly damage an employer’s ability to stay union-free, and it will impose more severe consequences on employers accused of interfering with unionization efforts.

Although the National Labor Relations Act theoretically governs employer and union conduct, the language of the EFCA carries an unstated presumption that, if left unchecked, employers will suppress the rights of its employees. Therefore, the Act seeks “to enable employees to form, join, or assist labor organizations,” and to increase penalties against employers – but not unions – that are accused of wrongdoing.

The centerpiece of the EFCA is its drive to replace secret ballot elections with mandatory card checks. Traditionally, unions begin an organizational drive by soliciting “authorization cards” from a company’s employees. These cards represent an employee’s initial “showing of interest” in the union. Unions are generally uninhibited in their method of soliciting them, whether by calling the employee day and night, or by showing up uninvited at his or her home. If a union receives authorization cards from at least thirty percent of the employees in an appropriate voting unit, the case then proceeds to a secret ballot election. If a majority of the voting employees vote “yes” to the union, the union wins.

The EFCA will render secret ballot elections a thing of the past, and any union that obtains authorization cards from a majority of the employees in an appropriate unit “wins.” In other words, instead of privately voting on a union, an employee would be required to disclose his or her choice to the very person who is soliciting that vote – the union rep. Despite the obvious danger of abuse, the Act does not provide any specific restrictions on the manner in which a union may fight for those authorization cards.

In addition to the card check provision, the EFCA contains the following additional provisions:

  • Binding Arbitration: Currently, when a union is certified, the employer and union enter into good faith negotiations to create a contract that balances workers’ interests with the employer’s need to remain a viable business. Under the Act, however, if the parties are unable to agree on a contract within 90 days, the issue will be referred to mediation, and if an agreement is not then reached in the next 30 days, a government-appointed arbitration board will unilaterally set the wages, benefits, work rules and other provisions of the Collective Bargaining Agreement.

  • Severe Penalties Against the Employer: Under the Act, if a union alleges that the employer has committed an unfair labor practice during a union organizing drive or while negotiating a first contract, the NLRB must seek injunctive relief unless it immediately determines that the charge is invalid. In addition, where the Board determines that the employer has discriminated against an employee during an organizational drive or during the negotiation of a first contract, then the Board must award the employee triple backpay. Finally, if an employer is found to “willfully or repeatedly commit” unfair labor practices during an organizational drive or while negotiating a first contract, the employer would be subject to fines of $20,000 per violation, on top of the traditional remedies.

Although the Employee Free Choice Act purports to benefit employees, its only obvious benefit is to the unions. By effectively eliminating the secret ballot election and pressuring the employer to hastily negotiate contracts, the Act actually undermines employee free choice and frustrates the employer’s ability to run an effective business.

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