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Home > The “Employee Free Choice Act” and Your Business

The “Employee Free Choice Act” and Your Business

Years of effort by organized labor have culminated in the introduction of the “Employee Free Choice Act” (the “EFCA”) in both the House and the Senate on March 10, 2009. If the EFCA becomes law, it will result in some of the most substantial changes in decades to the laws regarding business/labor relations.

As introduced, the EFCA would make several significant changes to the National Labor Relations Act (“NLRA”), altering the current legal framework for the organization of labor unions. These union-friendly changes will make it easier for unions to organize and quickly secure a two-year contract, while increasing the penalties on employers for infractions of the NLRA.

If enacted, the EFCA will make three major changes in favor of organized labor, each of which is a significant departure from current laws.

The EFCA eliminates or limits private ballot elections. The EFCA would do so by authorizing the National Labor Relations Board (“NLRB”) to certify a union as the exclusive bargaining representative of a unit of employees solely by obtaining signed authorization cards from more than 50% of the employees in that unit. The determination of what constitutes a “unit” is a legal question, but even small employers need to be aware of the EFCA, since an appropriate bargaining unit could be comprised of a group as little as 3 employees. In this manner, the EFCA would supplant current law, which affords workers the opportunity to vote by private ballot about whether or not to recognize a union. The EFCA’s “card check” provision is significant because employees who sign authorization cards thinking that they are voting to hold an election, or because of pressure from union organizers or peers, will no longer have a chance to vote for or against union representation in the privacy of a secret ballot election.

Furthermore, since union organizers can seek signatures anywhere, including at workers’ homes, organizing efforts may take the form of stealth campaigns which are carried out without the knowledge of employers or employees who are known to be hostile to unionization. This card check process would make it possible for unions to organize before the employer or many of its employees could even know that a union was being considered, and without an election where all employees are afforded an opportunity to vote. Advocates of EFCA contend that the card check would facilitate employee “free choice,” although this is belied by the fact that the EFCA does not provide similar card check rights for employees who want to de-certify the union. The EFCA would, however, make it easier for unions to organize, since they can collect authorization cards from employees in a piecemeal fashion over a period of time, rather than having to win an election in which all employees can vote confidentially.

The EFCA could impose mandatory binding arbitration of the terms of initial contracts. The EFCA reduces the negotiation period to which the parties are currently entitled to negotiate an initial contract. Under the EFCA, upon recognition of the union, there would be a 90-day period for the parties to negotiate their first contract. After the 90-day period, either party could submit the dispute for mediation by the Federal Mediation and Conciliation Service (“FMCS”). If the FMCS mediation cannot bring the parties to agreement within 30 days, a party can request that the terms of the collective bargaining agreement be determined by mandatory arbitration, which will be binding upon the parties for two years. This mandatory arbitration provision of the EFCA would represent a significant shift in power, since it would give federal arbitrators the right to decide the wages and benefits that employers can afford to pay and provide, and what work rules will be imposed on employers? operations. Employees are not entitled to participate in a final vote on the contract and would be subject to union dues at the rates determined by the union.

The EFCA increases penalties and sanctions against employers. The EFCA subjects employers to additional penalties, including increased fines for violations of the NLRA during times when employees are attempting to organize, as well as damages equal to three times back pay for employees who are discharged or discriminated against for union organizing activity during those periods. While advocates of EFCA contend that these penalties are necessary to protect workers from intimidation during the organizing process, the EFCA itself does not impose any corresponding penalties for abuses or intimidation by unions during the organizing or bargaining process.

In addition to these major changes, the EFCA raises many other issues and leaves many unanswered questions. How can employers or employees contest the validity of the results of authorization cards and the card check process? How will the EFCA protect workers from intimidation by unions during the organizing process? Will workers be afforded the same right of free choice to de-certify their unions by card check as they would be to certify them? What options for appeal are there, if any, from an unreasonable arbitration award? Will there be penalties for union misconduct relating to organizing activity to correspond with the penalties to which the EFCA would subject employers? These questions make it apparent that the EFCA will likely lead to further regulation and litigation, since additional guidance will be necessary to fully comprehend the ramifications of the EFCA.

The main effect of the legislation is clear. The EFCA will make it far easier for unions to organize businesses, even those with relatively few employees. It will allow them to obtain a binding two-year contract more quickly and easily, and without the necessity of obtaining the employer’s agreement. It will also impose additional regulation on employer conduct regarding organizing activity, as well as subjecting employers to additional penalties for infractions.

Businesses need to ensure that they are ready for the possible passage of the EFCA. Doing so is a multifaceted undertaking, and may include educating employees of the legal effect of authorization cards, reviewing employment policies that relate to union organizing (such as solicitation and communication policies), training managers to ensure the implementation of best practices and to deal effectively with employee dissatisfaction, assessing a business? vulnerability to unionizing efforts, and developing a rapid response plan to address organizing activity, while complying with applicable law. Businesses may also want to contact their representatives in Congress to express their views about the EFCA.

The following article is informational only and not intended as legal advice. Speak with a licensed attorney about your own specific situation. © Copyright 2011 MacElree Harvey, Ltd. All rights reserved.