Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
Organized labor has repeatedly and forcefully stated that it will push for the reintroduction of the Employee Free Choice Act (EFCA) as soon as possible. As previously discussed, EFCA could fundamentally alter the way employers do business in this country. To further expound upon EFCA’s likelihood of enactment and in what form, we invited resident labor expert Bob Battista, a Shareholder in Littler’s Washington, DC office, to answer some questions. In addition to serving as Chairman of the National Labor Relations Board for five years, Mr. Battista has practiced labor and employment law for nearly four decades.
Jay: Of the three most contentious provisions of EFCA – (1) “card check” union certification, (2) binding interest arbitration if first contract isn’t reached, and (3) increased employer penalties for unfair labor practices – which do you see as the most damaging to employers if implemented, and why?
Bob: All these provisions are problematic, but I believe binding interest arbitration has the potential to be the most damaging. Under EFCA, an employer has a duty to commence bargaining on a first contract within 10 days of a written request from a newly recognized or certified union. After 90 days either party can request mediation and, if no collective bargaining agreement is reached within 30 days of such request, the matter can be sent to binding interest arbitration. That means that in as little as 120 days, negotiations can be taken from the parties, and the terms and conditions of the collective bargaining agreement can be dictated by a federally appointed interest arbitrator. The provision is disturbing in two ways. First the 120 days for negotiations under EFCA is unnecessarily short. Indeed, it is not unusual for parties to take 6 to 12 months to negotiate a first agreement. With such a truncated period for bargaining, I fear there will be less good faith bargaining and more posturing by the parties for the interest arbitrator.
Secondly, until now the federal government had a limited role in the collective bargaining process. The NLRB determined whether the parties bargained in good faith and the FMCS assisted the parties when mediation was requested. The federal government never dictated the terms of the parties agreement – that responsibility was left to the parties. Under EFCA, however, determining the terms and conditions of a first collective bargaining agreement can be taken from the parties in as little as 120 days and imposed by a federally appointed arbitrator who may have little or no knowledge of the employer’s business or competitive situation nor the concerns the employees may have. It is the antithesis of free collective bargaining and is wrong for America.
Jay: Which provisions, if any, would have little impact on the way employers do business?
Bob: None. All of EFCA’s provisions would have a profound impact on the way employers do business.
Jay: Assuming EFCA is reintroduced in the same form it took in the 110th Congress, what is the likelihood it will pass without substantial modification?
Bob: It is difficult to say. In the House, EFCA will likely be introduced directly on the floor and passed without modification. The real fight over EFCA will take place in the Senate. The only weapon the opponents of EFCA have is the filibuster and it takes 60 votes on a cloture motion to end a filibuster. In 2007, a cloture motion failed by a 9 vote margin (51-48) and EFCA was tabled. Votes in the House and Senate were largely along party lines.
In the 2008 election, the Democrats gained 7 new seats. Currently Democrats hold 56 seats with Minnesota still outstanding. Al Franken’s 225 vote lead over incumbent Republican Norm Coleman has been challenged in the courts where a three judge panel is considering up to 4797 rejected absentee ballots, one ballot at a time. There are 2 independents (Joe Lieberman of Connecticut and Bernie Sanders of Vermont) who vote with the Democratic caucus.
If Senate Majority Leader Harry Reid can keep moderate “blue dog” Democrats from defecting, and induce some Republicans to support cloture (Possible candidates are Arlen Spector of Pennsylvania, Susan Collins and Olympia Snow of Maine), EFCA could pass in its present form. On the other hand, winning a cloture vote may be more difficult than one would think. Senator Blanche Lincoln of Arkansas has said she will not vote for cloture this time around. Her fellow senator from Arkansas, David Pryor, is wavering on EFCA, as are “blue dog” Democratic Senators Tim Johnson from South Dakota and Ben Nelson from Nebraska. Newly elected Democratic Senator from Virginia Mark Warner has not taken a public position on EFCA. There are other Democratic Senators who may be having “buyers remorse” and may re-think their position on cloture now that the threat of a Presidential veto has been removed. If cloture cannot be achieved, EFCA may be withdrawn for reintroduction at a later time, or substantially modified as a result of negotiations between the two sides.
Jay: Which provision(s) do you see as subject to the most revision, and why?
Bob: Whether or not any provision of EFCA will be revised will depend on the political climate when a vote is taken on cloture. If Senator Reid cannot prevail on a cloture motion, he may, rather than compromise, delay the bill until he believes he can obtain cloture.
If however, the parties show willingness to compromise I believe the card check and interest arbitration provisions are most likely to be revised. According to a poll recently taken by McLaughlin & Associates three out of four voters in union households oppose the card check provisions of EFCA, and 85% of those polled believe a federally supervised election is the best way to protect the individual rights of workers. America clearly believes the secret ballot election is the symbol of industrial democracy and should be left alone.
Similarly, under the NLRA, as amended, the Federal Government did not have a role in determining the substantive provisions of a collective bargaining agreement. That was left exclusively to the parties. The Act required good faith bargaining and those provisions were policed by the NLRB. With EFCA, the concept of lack of involvement of the Federal Government in the substantive provisions of an agreement is turned on its head. Now EFCA provides that in as little as 120 days the Federal Government can appoint an interest arbitrator who can determine the substantive provisions of the parties first collective bargaining agreement. To me, the concept is antithetical to free collective bargaining.
Jay: Do you see any constitutional impediments to EFCA?
Bob: EFCA has engendered a number of constitutional concerns. Some believe that the Congressional mandate in EFCA to the Federal Mediation & Conciliation Services (FMCS) to establish arbitration panels “in accordance with such regulations as may be prescribed by the Service” (FMCS), without any procedural or substantive guidelines, is an unconstitutional delegation of legislative power. Others have: raised first amendment concerns with regard to the card check certification procedure; argued that the interest arbitration provision is an unconstitutional taking under the fifth amendment; and raised due process concerns regarding the enhanced penalties.
Jay: What factors do you think will most influence EFCA’s passage?
Bob: Six months ago I would have said the elections. Today? I think the economy will have a significant effect. President Obama has been a vocal EFCA supporter since day one and campaigned on the promise of EFCA passage during his first 100 days in office. He gained the support of the Country’s labor unions by doing so, and they are unlikely to forget his promises to them. On the other hand, business groups that have historically opposed EFCA are doing so with renewed vigor in today’s economic climate. They argue that EFCA will stifle, not spur, business growth. Their argument that EFCA will deprive employees of a secret ballot election has resonated with the public and some of the more moderate Democratic Senators. There have been signs from the Administration that EFCA may be too controversial to address immediately and its consideration may be delayed.
Jay: What factors could delay EFCA’s introduction and/or passage?
Bob: External factors, number one, such as the economy and foreign policy issues will have an effect on introduction. President Obama and the new Congress have a lot on their plates. Passage could be delayed by amendments to the bill, and not just those that might address the constitutionality problems I identified earlier. Amendments such as requiring a union to announce its intent to campaign, and extending the period during which the parties can negotiate a first contract could all slow the processing of the bill. Alternatively, I could envision an attempt at a compromise bill that would keep in place the current system of secret ballot elections with changes to the National Labor Relations Act to address the complaints of unions regarding the speed of the election process, and enhanced penalties for employer misconduct.
Jay: What would be EFCA’s immediate impact on employers?
Bob: If EFCA passes in its present form, it will change the kind of union organizational campaign an employer will experience. Currently, unions run covert campaigns to get authorization cards signed for showing of interest purposes. Then the union files a petition for an election, the campaign comes out into the open and a vigorous debate takes place between the employer and the union on the merits of unionization, between the date the petition was filed and the date of the election,. When the employee votes, having heard the arguments from both sides, he is able to make an informed decision on whether or not to be represented.
If EFCA passes, however, the entire union organizing campaign will be covert. Employee’s will hear only one side of the issue – the union’s. When a petition is filed under EFCA it will likely be for a card check and there will be no post petition to election period for the employer to tell his “side of the story.” Informed decision making, a hallmark of the secret ballot election, will be lost.
Jay: Is there anything an employer can or should do now in anticipation of EFCA’s reintroduction?
Bob: Under the National Labor Relations Act, it is the employees who determine whether or not an employer’s work force will be organized. If the employees are satisfied in their working relationship with their employer, the company will probably remain unorganized. Where there is dissatisfaction, unionization could result.
What should an employer do? A proactive strategy, before EFCA and before the hint of an organizational effort, is to determine your vulnerability. Such a strategy combines many factors from auditing, to planning, and to training. Do a comprehensive human resources audit. Look at your communications forums with employees. Do they keep employees up to date on what is happening? Do they encourage two way communications? Review your polices and practices – do you have good hiring practices, clear and understandable policies, and an effective performance appraisal system. Assess your supervisors – are they fair and evenhanded in their dealings with employees? Are they people oriented or are they inconsistent and arbitrary? Are you wage rates and fringe benefits competitive with your industry and geographic area? Are working conditions desirable? How is employee morale? The planning stage involves analyzing the results of your audit, and making the changes to minimize your vulnerability.
Last of all, train all managers on: the reasons employees unionize; the effect of signing an authorization card in a post EFCA world; the importance of good communication and the need for fair and consistent treatment of employees; and how to talk to employees about unions and unionization lawfully.
Positive employee relations make for satisfied employees, and satisfied employees dramatically reduce your vulnerability to organizational efforts in a post EFCA world.
Jay: Assuming EFCA is eventually enacted in some form, what is an employer’s best course of action?
Bob: An employer who does not focus on its employees—their morale, their relationships with supervisors (and the competency of those supervisors), their compensation and benefits structure as compared with the relevant industry and geographic area—is essentially encouraging its employees to look outside of the company for solutions to their problems...and this is so, whether EFCA is enacted or not.
For more information on EFCA and its implications, see Littler's ASAPs: Obama Presidential Election Victory Could Lead To Dramatic Increase in Unionization of Employers in the U.S. by Gavin S. Appleby, John M. Skonberg, and James M. L. Ferber, and
The Employee Free Choice Act: It’s More than Just a Misleading Name by Gavin S. Appleby. See also the Littler Report: The Employee Free Choice Act: A Critical Analysis.