If enacted, the Employee Free Choice Act ("EFCA" or "the Act") would change the basic rules of labor organizing under the National Labor Relations Act which have been in place for over sixty years. The EFCA would bring about a radical streamlining of the union organizing process, making all private sector workplaces subject to unionization -- and all that comes with it -- through just the stroke of a pen by the majority of a company's employees, without secret ballot election. We strongly urge our clients and friends to become familiar with the EFCA's very real threat to their union-free environments, and to take preventative action now. Now that Barack Obama has been elected to the White House, and Democrats control both the House and the Senate, all observers agree that the EFCA will be among the first pieces of legislation addressed. Backed by organized labor, who strongly supported President-Elect Obama in the election, the EFCA passed in the U.S. House of Representatives on March 1, 2007 by a wide margin. While it languished in the Senate before Congress adjourned, it now will be placed on the front burner.
Current NLRB Organizing Procedure
Fixing What's Not Broken
Since the Taft-Hartley amendments to the National Labor Relations Act were passed in 1947 -- guaranteeing employees' rights during organizing efforts while respecting employers' rights to oppose unionization -- a procedure has been in place by which employees may choose a union to become their exclusive bargaining representative with their employer for purposes of wages, benefits, and all other terms and conditions of employment. This procedure, supervised by the NLRB, has served us remarkably well over the years.
Currently, a union seeking to organize a given "bargaining unit" must first present a "showing of interest" before the NLRB schedules a secret ballot election at any worksite. This "showing of interest" is tremendously easy for a union to obtain. If at least 30% of the employees in the proposed bargaining unit sign union-printed authorization cards indicating their interest in the union, the union can force an election. If a union obtains signatures on these cards of more than 50% of the proposed unit, the union simply can request recognition by the employer and to bargain a first labor agreement. Understandably, most employers faced with such a request decline the union's request and indicate that they do not believe that the majority of employees actually wish to be represented by the union. Whether after so approaching an employer, or simply upon gaining signatures of more than 30%, a union can petition the NLRB to schedule a secret ballot election conducted by the Board, where all employees in the proposed unit may cast a ballot for or against representation. Voting currently decides whether a union is selected as the bargaining representative for employees.
Once these cards are filed with the Board and a petition is issued, the Board schedules the election. Typically, the Board allows approximately six weeks between the issuance of the petition and the conducting of the election. In this period, an employer is free to communicate with employees as it deems fit, typically through letters, handouts, group meetings, and one-on-one communications. An employer can exercise its free speech rights to emphasize that it believes that union representation is a bad idea. It may share information about the downsides of unionization in general, and the specific union seeking to organize employees in particular. Significantly, current law prohibits an employer from doing anything to harass, intimidate, or otherwise interfere with an employee's right to cast his/her secret ballot as he/she deems appropriate. Many employers now are familiar with the acronym "TIPS," which outlines what an employer is prohibited from doing during the pendency of an NLRB election: threaten, interrogate, promise change, or engage in surveillance. Unions frequently communicate with employees as well, but have no legal right to speak to employees on the company's premises.
The actual election is supervised by trained representatives of the NLRB. Typically, the election takes place during working hours, and voting times are staggered so that all employees on all shifts have the opportunity to vote. Employees away from work on medical leave, vacation, or on layoff with a "reasonable expectation" of recall are eligible to vote. The Board agent brings with him/her a collapsible voting booth which is set up in a convenient common area, such as a cafeteria or large meeting room. Both the employer and the union have sympathetic employees as observers to sit with the Board agent throughout the voting to ensure only actual employees vote and that there are no improprieties. Neither management nor union officials are allowed in the voting area to attempt to influence voters. Voters typically cast paper ballots secretly in the booth, voting "Yes" for the union, or "No" against representation. Each voter places his/her ballot in a cardboard box carefully watched by the Board agent. The Board agent secures the box after each voting session. At the end of all sessions, the box is opened and the votes are counted before the observers and appropriate representatives of both parties. If a majority of the actual voters has voted in favor of representation, the employer must recognize the union and begin the process, at mutually convenient times, to bargain a first labor contract. Typically, a first contract takes several months -- sometimes over a year - - to negotiate. If the union loses the election, the workplace remains union free, and neither the union seeking representation nor any others may seek to organize these workers for the next year.
Both parties to this procedure may file objections with the NLRB after the election if either believes that the other engaged in any unlawful conduct, such as threatening, inter- rogation, unlawful surveillance, etc. Such objections are investigated and ruled upon by the NLRB's Regional Office, subject to full review by the Board in D.C. Either party feeling aggrieved by any final decision of the NLRB may appeal to the Federal Appellate Court governing the jurisdiction, or to that sitting in D.C. Ultimately, the United States Supreme Court may be petitioned to rule upon the fairness of the election. Thus, there currently exist innumerable safeguards and appeals processes to make certain that the rights of employees to select voluntarily whether they wish to be represented by a union are respected in full.
Through the EFCA, organized labor now seeks to change this traditional election process. Why? To increase duespaying members! Unions represent only 12% of all employees in the United States today, and even fewer in the private sector alone. The steady decline in unionization over the past several decades is evidence that unions have failed to convince employees that a union offers them the best recourse for improving their wages, benefits, and other terms of employment, as well as for providing them real job security. While organized labor has complained that the current system is unfair, giving certain advantages to employers, the numbers maintained by the NLRB would suggest otherwise -- the union win rate in NLRB-supervised elections has ranged from 50 to 60% each year over the past eleven years. Organized labor wants the EFCA to fix what is clearly not broken.
What Would the EFCA Mean?
If the EFCA becomes law, unions will be able to bypass the election process entirely by proving that a majority of employees in a proposed bargaining unit have signed authorization cards. When a union maintains that more than half of the proposed unit have signed cards, it would file a petition with the Board, who would then begin the process to establish the validity of the signed authorization cards. The Act as passed by the House is silent as to what exactly this validation process would entail. Once these cards are verified by the Board, the union would be certified as the exclusive bargaining representative of all employees in the proposed unit. That's it. No campaign. No election. The employer would then be required to meet and begin bargaining with the union for a first contract "[n]ot later than ten days after receiving a written request for collective bargaining from an individual or labor organization that has been newly organized or certified as a representative . . . , or within such further period as the parties agree upon . . . ."
What would it mean for the union to be the exclusive representative for the unit employees? The employer would be limited to discussing wages, health insurance, production schedules, leaves of absence, holiday schedules, etc., with the chosen representatives of a union. Federal labor law prohibits an employer from "direct dealing" with individual employees so as to bypass a union. In addition, the employer would be forbidden from making "unilateral changes" to any terms and conditions of employment which are mandatory subjects of bargaining without first approaching and bargaining with the union. Disciplinary actions would be reviewed by the union and could subject the employer to unfair labor practice charges. In fact, the EFCA provides that any employee discriminated and/or retaliated against during an organizing campaign, or during the period after a labor organization has been certified but before a first contract, would be entitled to back pay and two times that amount as liquidated damages. Moreover, employers so violating employees' rights would be subject to a civil penalty "not to exceed $20,000 for each violation," where the Board shall consider "the gravity of the unfair labor practice and the impact" thereof in determining the amount of the penalty. These penalties would represent significant changes in federal labor law.
After bargaining commences, the EFCA dictates that the parties must agree upon a labor contract within ninety days "or such additional period as the parties may agree upon." If they fail to reach agreement, either party could request the involvement of a mediator from the Federal Mediation and Conciliation Service ("FMCS"). If, after the next thirty days, the parties still fail to arrive upon a labor contract, the FMCS "shall refer the dispute to an arbitration board established in accordance with such regulations as may be prescribed by the Service." A designated "arbitrational panel" would then "render a decision settling the dispute" and such "decision" would be binding on the parties for a period of 2 years!
Incredibly, the Act provides no detail as to who would sit on this "arbitrational panel," what the process would entail for parties to be heard, and no time limit for the arbitration process. The contract imposed by the arbitrational panel would be binding for a minimum of 2 years, and the Act provides no right to appeal the decision of the panel regardless of how costly, unrealistic, or ill-reasoned the decision of the panel.
While employees may decertify a union under current NLRB procedures, this is rarely done. In fact, decertification would not be an option for at least 2 years while a first contract is in place under the EFCA. Union organizers like to emphasize that employees could always kick out a union if they are somehow dissatisfied, however the pressures and tactics that would come to bear on any employee(s) who would attempt to decertify an incumbent union make decertification largely impossible.
What Employers Can Do Now
The EFCA represents the most significant change in labor rela - tions over the past seventy years. Federal labor law now requires both parties to engage in good faith bargaining, but does not mandate that they eventually come to an agreement. Some contracts are negotiated quickly. Others take long periods of time, particularly when significant changes are necessary due to the evolving state of a business or industry. The EFCA's process of recognition simply upon presentation of signed cards from a majority of workers can allow unions to exploit workers' unfamiliarity with the NLRB recognition process. It would reward and protect a union's negotiating strategy seeking unreasonable and unrealistic demands. Moreover, it likely will cause arbitrators completely unfamiliar with the workplace typically to dictate the terms of employment. Employers faced with unrealistic labor contracts likely would seek cost savings through job eliminations, layoffs, outsourcing, and perhaps moving operations offshore. Companies could close. Jobs would be lost. The effect of the EFCA on the U.S. economy potentially could be devastating.
Employers must act now to inform employees as to what the EFCA really entails. In particular, employers should make employees aware that, if the Act passes, their signing authorization cards could lead to the union becoming their representative in the workplace. Under the current process, employees often sign cards simply to gain more information about the union. Those signing cards are free to vote "No" in any scheduled NLRB election after considering the pros and cons of union representation. The EFCA would make these cards binding indicators of an employee's desire to have a union speak for him/her -- employees must be made aware of the consequences of a simple signature!
Of course, communications with employees regarding the EFCA should include discussion about what unionism actually entails. Most employees are surprised to learn how few people in this country actually are represented by a union in the private sector. Most have never lived through a strike. Many are unfamiliar with the dues-paying process, and how an employer would be prohibited by law from dealing directly with them. Now is the time to discuss the reality of unions with your employees.
Keep in mind that signed authorization cards have no expiration date. Thus, unions may begin obtaining cards now with an eye toward presenting them to the Labor Board shortly after the EFCA is passed. Accordingly, we very much urge our clients and friends to begin the process of EFCA education and preparation today.
John Cernlich serves as co-chair of Calfee, Halter & Griswold's Labor and Employment group. He offers numerous years of experience in representing management in labor and employment law, including negotiating and administering collective bargaining agreements.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
