The First 100 Days: The Employee Free Choice Act (EFCA)
February 1, 2010
Last Week: Expanding Pay Discrimination Laws
This Week: The Employee Free Choice Act (EFCA)
Next Week: Expanding employees' right to leave and alternative work arrangements
The misleadingly-named Employee Free Choice Act (EFCA) is the most far reaching proposal to change labor relations law in decades. While opposition to the EFCA appears to be growing, and it now seems unlikely that the EFCA will pass in the first 100 days, this bill remains significant and merits immediate attention by employers. Employers' concerns focus on two critical changes that are contained in the current version of the EFCA. First, instead of employees deciding in a secret ballot election whether they want to be represented by a union, the EFCA would allow a union to be certified as the bargaining agent for a unit of employees automatically when the union presents authorization cards signed by the majority of the unit's members – effectively skipping the secret ballot election that has been a hallmark of labor law for decades and taking away the opportunity for employees to hear from both sides about the advantages and disadvantages of union representation before making a decision. Second, the EFCA would force an employer to agree to a first contract with a union within a very short time or, if the union so-requests, submit to mandatory arbitration before an arbitrator who may or may not have appropriate training, experience, and impartiality or an understanding of the employer's business and industry.
- Train managers to recognize and report union activity and to address potential problems before employees see the union as a means to improve their situation.
- Train employees about what signing a union authorization card means or might mean if EFCA is passed.
- Review your solicitation, distribution, email and internet policies to make sure that they are well-drafted and uniformly enforced so that union activities in the workplace can be appropriately curtailed to the extent permitted by law.
- Research and stay up to date on what other companies in your industry and geographic area are doing and facing. This will be helpful not only in anticipating union organizing efforts, but also in preparing to commence bargaining with a union should it be necessary to do so.
- Consider lobbying lawmakers (either through a trade association or individually) to reject the EFCA, or at least change it to keep unions from obtaining an unfair advantage.
The EFCA has generated an unprecedented level of attention, and for good reason. Though the current economic crisis has pushed other issues in front of the EFCA on the Obama administration's priority list, it remains likely that a revised version of the EFCA will become law early in his first term. The current version of the EFCA – which is based on a Canadian law – contains two provisions that should be especially troubling to employers.
First, as now written, the EFCA pushes aside the union election process and creates a requirement that the National Labor Relations Board ("NLRB") certify a union if a majority of the employees in a bargaining unit sign authorization cards. As a result, a union could be certified before an employer even knew that there was an organization effort underway. Employees would only hear the union's position, not the employer's, before making the decision whether to support the union. Also, because the EFCA does not include any process for considering the means by which the union obtains signatures on authorization cards or for challenging their validity, it would essentially encourage unions to use coercive or deceptive tactics that – in the context of an election – would have been deemed illegal.
More troubling, though, are the EFCA's provisions relating to the negotiation of the first collective bargaining agreement. Currently, there is no requirement that an employer ever agree to a contract with a union, so long as the employer bargains in good faith. In contrast, under the EFCA an employer would be required to commence bargaining with a union within 10 days, and if the employer and union were unable to reach an agreement within 120 days, either the union or the employer would have the option of referring the matter to an arbitrator who would be empowered to decide the terms of the collective bargaining agreement. Those terms would remain in place for two years.
The EFCA's timeframes – both to commence bargaining and to complete bargaining without an arbitrator stepping in – create significant practical problems. Requiring an employer to commence bargaining within 10 days likely will leave the company unprepared (or at least under-prepared) to effectively negotiate with the union. Similarly, 120 days is an extremely short period of time in which to negotiate a first contract, and the ability to reach agreement within that time is compounded by the union's knowledge that, if it can prolong negotiations until the 120 days have expired, it can force the employer's hand in arbitration.
At the heart of the problems with the current version of the EFCA is the fact that it takes away the employer's ultimate right to decide whether or not to agree to contractual terms. By way of example, consider a manufacturing company that is negotiating its first contract and has determined that, because of business pressures – including cost of labor at competing firms – the maximum hourly wage it can afford is $22 per hour, but the union is insisting on $28 per hour. Under the EFCA, an arbitrator could impose the $28 per hour maximum wage, despite the company's legitimate competitive pressures. This example also serves to highlight an additional problem with the EFCA: that it provides no guidance for arbitrators on how to conduct such arbitrations, and very few arbitrators are experienced with such proceedings. Thus, the individual who may ultimately be deciding on contractual terms that will control for two-years may or may not have the appropriate knowledge or experience, and may or may not be truly impartial. The harm is then compounded by the fact that, because the initial contract serves as the starting point for future negotiations, an unfavorable initial contract reached as a result of the EFCA most likely will carry through to subsequent collective bargaining agreements.
In addition, as currently written, the EFCA's negotiation provisions, like the recognition provisions, leave too little in the way of checks on the union's actions. Where currently a negotiation until resolution forces unions to be more reasonable in their demands, the EFCA's provisions have the potential to encourage unions to be unreasonable. The EFCA also removes the final check on the negotiation process by removing the employees' right to ratify or refuse to ratify a collective bargaining agreement reached as a result of the arbitration. Thus, like employers, employees will be left without a final say in the contract that will govern their employment.
It is far from clear that that the EFCA will pass at all and unlikely that it will pass in its current form. Still, the threat of the EFCA is significant enough to warrant immediate employer attention and action. It is particularly critical for employers to educate their supervisors now about how unions operate and organize so that they can respond immediately to union activity.
If you have any questions regarding the EFCA, if you would like to discuss options for training supervisors and employees, or if you would like to revisit your employment policies to confirm that they will be helpful – not harmful – if a union decides to try to organize your workforce, please contact Laura Friedel or any member of the Labor & Employment Service Group.