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The Terms of “Compromise”

Details regarding the supposed compromise version of EFCA are sketchy, and a formal revised bill has not been released. Indeed, the story regarding a compromise may very well have been intended to guage political appetite for a compromise. Based on the information available, it appears the Democratic Senators in favor of a revised bill are proposing to shorten the campaign period during a union drive to five to ten days, which would make it much more difficult for employers to educate employees on the disadvantages of unionization and correct any misstatements of fact by the union and presumably increase union win rates during elections. (Support for unionization frequently drops considerably as employees become educated on what a union actually does and does not do.) In addition, it appears the Senators are proposing to require employers to grant unions access to their private property for the purpose of meeting with employees and generating support for unionization, while simultaneously prohibiting employers from requiring employees to attend meetings where the employer voices its view on unions. Finally, it appears the compromise Democrats are proposing to retain the arguably unconstitutional interest arbitration and enhanced penalty provisions found in the original draft of EFCA, which are discussed in detail below.

The Pending Employee Free Choice Act

On March 10, 2009, the EFCA was reintroduced in the Senate by Edward Kennedy (D-MA) as S. 560, with 39 cosponsors, and in the House by George Miller (D-CA) as H.R. 1409, with 223 cosponsors. President Obama and Vice President Biden have vowed to ensure EFCA is passed into law. The recent talk of compromise came as Democratic support for the highly controversial bill began to fracture, beginning with the March 24, 2009, reversal of position by Senator Arlen Specter (R-PA), who had previously supported EFCA. Specter’s change of position raised serious doubts about the ability of Senate Democrats to invoke cloture and force EFCA to a vote. Indeed, in the weeks following Specter’s change of position, several Democratic Senators decided to break ranks on EFCA, including Senator Diane Feinstein (D-CA) on March 28, 2009, Senator Blanche Lincoln (D-AK) on April 6, 2009, Senator Mark Warner (D-VA) on April 15, 2009, and Senator Jim Webb (D-VA) on April 20, 2009. 

The Miller Irony

At the same time, concerns began to emerge regarding the EFCA’s central “card check” provision and the motiviations of those Senators supporting it. For example, Representative Miller, one of EFCA’s sponsors, wrote the Mexican government on behalf of the United States Congress in 2001 to express his concern that Mexican labor law permitted but did not require secret ballot elections to determine union representation:

We understand that the secret ballot is allowed for, but not required, [sic] by Mexican labor law. However, we feel that the secret ballot is absolutely necessary in order to ensure that workers are not intimidated into voting for a union they might not otherwise choose.

We respect Mexico as an important neighbor and trading partner, and we feel that the increased use of the secret ballot in union recognition elections will help bring real democracy to the Mexican workplace.

Letter from George Miller, Representative of California, U.S Congress, to the Mexican Junta Local de Conciliacion y Arbitraje of the state of Puebla (Aug. 29, 2001) (available here).

Unions Seek To Eliminate Elections

Notwithstanding his 2001 statements to Mexico, Representative Miller then introduced the House version of EFCA and proposed to eliminate secret ballot elections for determining whether a union represents a bargaining unit of employees in the United States. Since its enactment in 1935, the NLRA has protected employees from both union and employer coercion by requiring that all union representation elections be conducted by secret ballot. As currently written, EFCA proposes to eliminate employees’ right to a secret ballot election and empower the National Labor Relations Board (“NLRB”) to force employees to submit to union representation based on a showing that the union was able to obtain “valid authorizations” from a majority of the employees in the bargaining unit through home visits, peer pressure, and any other means that cannot be proven to violate the law. Employees would no longer be entitled to hear the other side of the union story and would no longer be entitled to the fundamental protections afforded by a secret ballot election, in which they may vote their conscience free from pressure or coercion. This radical alteration of the law has prompted criticism from both sides of the aisle, including from such long-time union supporters as former Democratic Presidential Nominee George McGovern.

Federal Arbitrators To Dictate Terms And Conditions Of Employment

Equally controversial is the EFCA proposal to empower the federal government to dictate the terms and conditions of employment to those employers who fail to agree to union demands for a first contract. For decades, the policy of the NLRA has been to ensure that employers and unions bargain with one another in good faith but otherwise allow them to negotiate a collective bargaining agreement (“CBA”) at arms length. The EFCA would abandon this well-established policy with respect to the negotiation of the initial CBA, which is typically the most important contract in any employer-union collective bargaining relationship.

As written, the EFCA requires the employer and union to begin bargaining within 10-days of the union being certified (i.e., winning the election). If the parties have not successfully negotiated an initial CBA within the first 90 days of bargaining, either party may notify the Federal Mediation and Conciliation Service (“FMCS”) and request mediation. If mediation through the FMCS is not successful after 30 days, the FMCS must refer the dispute to an “arbitration board,” which will dictate the terms of an initial contract to be binding on the parties for 2 years.

The bargaining and mediation deadlines may be extended by agreement of the parties, but experience suggests that few unions will agree to any such extensions, particularly given that the arbitration board is likely to be filled with union-friendly arbitrators appointed by a Democratic President. As a result, unions will be able to take unusually strong positions during initial contract negotiations, knowing that they can force employers to arbitration before the “arbitration board,” if the employers do not agree to their demands. This aspect of the EFCA amounts to nothing less than the forced setting of the terms and conditions of employment by the federal government and has received surprisingly little attention in the popular media.

Enhanced Enforcement

The EFCA also makes significant changes in the enforcement of the NLRA with respect to unfair labor practices committed while employees of the employer were seeking representation by a labor organization or during the period between the certification of the union and the initial collective bargaining agreement (the “organization and bargaining period”): 

• Mandatory Injunctions. After a charge is filed, if the NLRB regional director has reasonable cause to believe that an employer has violated section 8(a)(1) (interference with employee NLRA rights) or 8(a)(3) (discrimination on the basis of union affiliation) during the organization and bargaining period, the regional director must seek federal injunctive relief under Section 10(l) of the NLRA. Under the current NLRA, such extraordinary relief is available only to address certain unfair labor practices that were deemed by Congress to be “inherently disruptive,” and include secondary boycotts, hot cargo agreements, and organizational or recognitional picketing. 
• Triple Backpay and Penalties. An employer who is found to have violated sections 8(a)(1) or (3) during the organization and bargaining period will be liable not only for backpay, but also for “2 times that amount in liquidated damages.” In addition, an employer who “willfully or repeatedly” commits such unfair labor practices could incur a civil penalty of up to $20,000 for each violation. Under the current NLRA, only reinstatement and back pay are available as remedies for such violations.

Rumors

On June 26, 2007, the EFCA stalled in the Senate when supporters of the bill were unable to obtain the 60 votes needed to invoke cloture and force a vote on the bill. (The final vote was 51-48 in favor of cloture.) It appears the re-introduced EFCA is now facing the same fate. Indeed, the recent spate of Democratic defections and talk of compromise lend weight to earlier rumors that the sponsors of the EFCA know that the lack of a secret ballot election is likely to be fatal to the EFCA even with the recent Democratic gains in Congress. Significantly, elimination of EFCA’s “card-check” provision would remove the salient, wide-spread, and easily understood objection to the the elimination of secret ballot elections while still tilting the process in favor of the union by providing for a very short campaign period. (The union knows it is going to seek an election long before the employer does and is thus better able to prepare for same prior to the direction of election.) 

However, it should be remembered that compromise legislation previously suggested by Starbucks, Whole Foods, and Costco was met with extreme hostility by unions. Of course, the union reaction may have been nothing more than posturing designed to enhance the union’s bargaining position with respect to the final terms of compromise EFCA legislation. Alternatively, it may be that at least some unions want EFCA as written or not at all.

Implications

Whether the EFCA is passed as written, amended and passed, or stalled completely, it is apparent that pro-union policies and legislation are likely to become a hallmark of at least the next two to four years. Employers who have not already done so should develop a clear understanding of unions, what they would mean for their employees and operations, and the specific steps they will take in immediate response to a union campaign. Employers should also ensure that their managers and senior leadership are trained to to identify the early signs of union activity and the proper means for escalating and responding to same. In this connection, it is important for non-union employers to understand the rights the NLRA gives to all employees, regardless of whether they are part of a union. Finally, employers should take time to ensure that they understand the critical importance of maintaining open lines of communication with their employees and paying attention to employee issues before a union arrives on the scene.

Questions

The foregoing is not intended as legal advice. If you have specific questions regarding the Employee Free Choice Act, the National Labor Relations Act, unfair labor practices, or any other aspect of traditional labor law, please contact one of our attorneys.