If the Employee Free Choice Act (EFCA) becomes law, it would change the landscape of labor law as we know it. Some also say that it could hinder the ability of employers to remain competitive.
Generally speaking, the bill has been favored by Democrats and opposed by Republicans. On March 1, 2007, the U.S. House of Representatives passed the bill. On June 26, 2007, the highly contested legislation stalled in the U.S. Senate after failing to reach the 60 votes needed to cut off debate. But the November 2008 elections provided Democrats with a larger majority in the Senate. This year, should the bill get through the upper house during the 111th Congress, President Barack Obama has promised his support.
“The impact on employers would be great,” says Mike Stief, a partner with a specialty in labor and employment law at Jackson Lewis LLP. “If passed, EFCA will dictate a recently unionized employer’s ability to compete in the marketplace.”
Smart Business talked to Stief about how employers should cope with EFCA, should it pass.
What are the provisions of EFCA?
One, it does away with the secret ballot election process. Right now, employees vote in secret ballot elections to determine if they want a union. Under EFCA, once a majority of employees sign verifiable union authorization cards, then the union is recognized without that secret ballot election.
The second provision requires mandatory arbitration if a company and a new union do not reach an agreement on a contract within 120 days of negotiation and mediation. The final component of the act is the creation of increased penalties for employer violations.
Which of the provisions has the biggest impact on employers?
The one that’s getting all the publicity is doing away with the secret ballot election. Employees normally are subjected to peer pressure to sign union authorization cards, but under current law, they can change their minds and secretly vote against the union, if so inclined. Clearly, however, the arbitration clause has bigger potential impact on employers.
Under the current law, if a union represents a private sector company’s employees, the employer has the obligation to bargain in good faith. There’s no arbitration and no specific time lines to reach an agreement. Under EFCA, you would be forced to get a contract done in the 90 days or you go to nonbinding mediation with the Federal Mediation & Conciliation Service (FMCS). The problem is that virtually no first contracts are negotiated in 90 days, because every single word needs to be agreed upon by both parties. Then, if the FMCS is unable to mediate a solution within 30 days, you are forced into binding arbitration to set terms and conditions of employment. This third-party arbitrator, unfortunately, may not know anything about your business and the economic realities of the situation.
But isn’t EFCA good for employees?
There has never been a bill more mis-named in the history of the country. It should be called the Employee Forced Choice Act. Unions claim they need it because the current process is unfair [under NLRB provisions], yet unions won more than 60 percent of elections held last year.
In reality, this bill is bad for employees. If you have a union vote at a plant now, every eligible employee gets the opportunity to vote, and the majority wins. But if a union were going to organize under EFCA, it might focus on the 50-percent-plus-one of the employees who were most likely to unionize. That kind of approach would have the effect of disenfranchising the rest of the workers.
This bill has more to do with unions rebuilding their membership ranks than employee free choice. Union membership is down to 7.5 percent of the private sector work force. If EFCA becomes law, the only groups that benefit are the unions.
Should EFCA become law this year, what can employers do?
Your hands are not tied. But you cannot be reactive to union organizing. Rather, you must be proactive and rethink your whole approach to employee relations, attempting to work one on one with employees rather than being forced to work through a third party — a union. To create an issue-free work environment is to take away that union threat.
Many employers think that they’re planting a seed if they discuss the topic of unions with employees. On the contrary, you need to proactively discuss the issue of unions with your people, if EFCA passes.
Finally, conduct a vulnerability assessment. Find out what issues your employees might have, and clean them up before any type of union actually starts. You can conduct the assessment internally or hire consultants or lawyers to help you.
There’s a lot you can do, but if you wait to address some of these issues until a push for unionization begins, it will be too late.
MIKE STIEF is a partner with a specialty in labor and employment law with Jackson Lewis LLP. Reach him at (412) 232-0138 or firstname.lastname@example.org.