Employee Free Choice Act (EFCA) - Employers Survival Kit, Newsletter Article Spring 2009

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(Breaking News: As the EFCA has lost some steam, substitute bills are being introduced so stay tuned.)

Most pundits and commentators are calling the Employee Free Choice Act (EFCA) "the most significant piece of labor legislation since the National Labor Relations Act of 1935".

The EFCA will affect how unions are certified in the workplace. It will affect what happens after a union is formed on the jobsite, and how employers who do not follow its rules will be punished.

One source said "This law would probably change Americans' lives more than any legislation since the New Deal brought us Social Security".

The language surrounding this bill is often dramatic, and highly partisan. Arguments for or against this bill are usually filled with emotional pleas and hyperbole.

This article will attempt to avoid any partisan or emotional language and set out the situation based on facts and common sense.

We will discuss some of the main points that employers will need to know about the Employee Free Choice Act. The EFCA will affect many jobsites in very significant ways, and we will describe here what employers can prepare for and what they can expect to see in the near future.

So, setting aside the rancor and division you will find in most articles on this topic, we present to you the latest information you need to know to be ready to face this new climate in labor relations.

With the recent election of Barack Obama for President of the United States we can expect to see the passage of the Employee Free Choice Act (EFCA) sometime in the relatively near future.

With the economic crisis at the forefront now the timeline for this issue may have shifted somewhat, but there is no doubt that it will happen.

As an Illinois senator, Obama was a co-sponsor of the legislation, and during a 2007 motion to proceed he said this:

"I support this bill because in order to restore a sense of shared prosperity and security, we need to help working Americans exercise their right to organize under a fair and free process and bargain for their fair share of the wealth our country creates. The current process for organizing a workplace denies too many workers the ability to do so. The Employee Free Choice Act offers to make binding an alternative process under which a majority of employees can sign up to join a union. Currently, employers can choose to accept - but are not bound by law to accept - the signed decision of a majority of workers. That choice should be left up to workers and workers alone." (Employee Free Choice Act of 2007 - Motion to Proceed, Congressional Record, GPO 2007-06-26, pp. S8378-S8398.)

He has also said: "I've fought to pass the Employee Free Choice Act in the Senate. And I will make it the law of the land when I'm President of the United States of America." (Philadelphia, 4/2/08).

As for the AFL-CIO, their Secretary-Treasurer Richard Trumka recently said at a press briefing: "Our prospects have improved dramatically since the election." Commenting on the prospect of Republicans blocking passage of the bill again he noted that: "There are an infinite number of strategies to get that passed rather than a straight-up vote - and they will get our full attention."

Passing EFCA is a priority for the AFL-CIO, and it has the support of Obama and many Democrats in Congress. Newly elected Senators Jeanne Shaheen, Kay Hagen, Mary Landrieu, Mark Udall, and Jeff Merkley have all voiced their strong support for the bill.

In addition there is also significant popular support for this bill among the public, according to a widely quoted poll by Peter Hart Research Associates (commissioned by American Rights at Work).

This poll claims that 60 percent of voters believe even in these tough economic times, it is important to pass the Employee Free Choice Act, and that nearly one-third (31 percent) of voters strongly believe it should be a priority for Congress.

Therefore, it is reasonable to assume that it is only a matter of time before it passes and is signed into law, probably sometime in 2009.

As an amendment to the National Labor Relations Act, The Employee Free Choice Act will apply only to retail businesses with over $500,000 a year in sales or non-retail businesses with over $50,000 a year in sales.

Union organizers will likely begin organizing in larger businesses, but smaller businesses will be targets as well. It is more cost effective for organizers to work down to smaller businesses as time goes on, but passage of the EFCA is expected to reduce the costs of organizing and thus make it worth it for unions to look at smaller employers.

The easier certification process under EFCA would allow unions to be formed at businesses where they could not before.

Under current law, in order for a union to be recognized at a business, 30 percent of the workers of the business must express support for joining a union by signing a card. This is then followed by a secret ballot election where half of the workers must vote in favor of joining.

Under the Employee Free Choice Act this majority election will be unnecessary because a majority of workers simply need to sign cards expressing their intent to join the union and it will be certified.

Part of the controversy and emotions around the EFCA is that this "card signing" process doesn't need to be secret. The current situation which consists of a first card signing(30%) and then secret ballot (50%) will be replaced by a simple, out in the open, card signing of a majority of workers.

After EFCA an employer with 30 employees could face union certification if only 16 people have signed authorizations designating the union as its bargaining representative.

If a union is certified by the NLRB in a workplace an agreement on a contract must be reached within 90 days after that date. If not, either party may refer the dispute to the Federal Mediation and Conciliation Service (FMCS) for mediation.

If no agreement has been reached after 30 days of mediation, the dispute is referred to binding arbitration and the results of the arbitration shall be binding for two years. All time limits mentioned here can be extended by mutual agreement.

In other words, once the wheels start turning on an organizing campaign, employers would do well to be prepared to act quickly, or they could conceivably face binding arbitration that may not be to their liking.

And finally, new provisions will be applicable to "violations" committed by employers against employees during any period while employees are attempting to organize a union or negotiate a first contract with the employer. These provisions are mandatory applications for injunctions, treble back pay, and civil penalties of up to $20,000 per violation.

When organizers begin on the jobsite, employers will be expected to respond quickly. If they don't they may find themselves in an increasingly difficult situation with time working against them.

There are three main areas where this bill would amend the National Labor Relations Act:

1. Certification of Unions on the Basis of Signed Authorizations, or Majority Sign-up.

This bill would mean that the union would become a bargaining representative of the employees if the NLRB "finds" that a majority of those employees signed authorization cards designating that union as its bargaining representative. The bill also requires the board to develop authorization language and procedures for establishing the validity of signed authorizations.

The bill provides that if an employer and a union are engaged in bargaining for their first contract and are unable to reach agreement within 90 days, either party may refer the dispute to the Federal Mediation and Conciliation Service (FMCS) for mediation.

If no agreement has been reached after 30 days of mediation, the dispute will be referred to arbitration and the results of the arbitration shall be binding on the parties for two years. All time limits can be extended by mutual agreement.

3. Stronger Penalties for Violations While Employees are Attempting to Organize or Obtain a First Contract.

Violations of the National Labor Relations Act under the proposed bill would face the following punishments:

There are some questions about the proposed bill that are currently unanswered. Some of those questions hint at potential problems and some grey areas that need to be resolved.

Here are a couple of key questions which have yet to be fully answered which may lead to unintended consequences or problems for employers.

The Supreme Court affirmed in NLRB v. Gissel Packing Co. (1969), that publicly signed cards are "inherently unreliable." And in a study of organizing campaigns, the AFL-CIO admitted that "it is not until the union obtains signatures from 75% or more of the unit that the union has more than a 50% likelihood of winning the election." (AFL-CIO Organizing Survey - Washington, D.C. 1989).

There are many questions about the timing and procedure that will govern and regulate this card signing process. Remember, a simple majority of cards signed on a jobsite qualifies to certify a union.

Currently, employers are not allowed to inspect cards. Nor are employers permitted to litigate at a representation hearing issues such as fraud, forgery, or coercion in the union's obtaining of cards.

How new does a card have to be to represent the current feelings of an employee? What if the card is weeks or months old, does that still represent the employee?

How closely will the NLRB regulate cards and card-signing?
What is the "laboratory conditions" period for purposes of a card campaign?
What would the process be for a de certification campaign?
Would employers have a right to appeal unfavorable interest arbitration decisions?
Do employees have the right to strike during interest arbitration proceedings?

These questions point to some inherent problems in the proposed bill that need to be ironed out and clarified.

No one knows how all of this will play out, but it is advisable to be aware of these developments and how they may potentially affect the job site. Having a plan in place to face the situation when it happens is a good goal to have.

Both John F. and Robert Kennedy served as Members or as Lead Attorney for the select Commission where substantial abuses by so called "union bosses" were uncovered and established resulting in the regulation of unions.

The LMRDA now serves as an important component of our national labor policy in the United States . The LMRDA, also known as the Landrum-Griffin Act, resulted in part, from congressional investigations conducted in the 1950's by the Senate's Select Committee on Improper Activities in the Labor or Management Field, which became known as the McClellan Committee.

The McClellan Committee was formed to explore corruption, criminal infiltration, and illegal activities in several prominent labor unions in the United States.

Predominately, the committee focused on the exploration of improper activities in the labor unions; however, the committee also examined the labor relations practices of several employers and labor-relations consultants affiliated with these labor unions.

The committee ultimately found numerous instances of breach of trust, corruption, the disregard of the rights of individual union members, and other failures to observe high standards of responsibility and ethical conduct on behalf of labor unions, their officers and representatives, employers, and labor-relations consultants.

The conclusions reached by the committee served to encourage the passage by Congress of the LMRDA in order to ensure union democracy and financial integrity within labor unions. The LMRDA created requirements concerning union reporting, reporting by union officers and others, elections of union officers, financial safeguards, record keeping, and other aspects of union operations.

What our leaders today must answer to the American public is this question as they look to expand the rights of unions: "What has changed in unions such that they are exempt from a secret ballot election?"

If we forget the lessons of John F and Robert Kennedy along with the rest of the Select Committee we will most likely relive those same excesses and abuses - a horrible chapter in our Labor History.

The Contents of this News Letter are intended for general information
and should not be construed as legal advise or opinion.
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