Ever since the Presidential primaries ended, a storm has been gathering in the business community. Talk of the Employee Free Choice Act, or EFCA, legislation by then candidate Barack Obama energized labor unions and terrified businesses both large and small across the country. Presented in politically charged sound bites, and a very well done advertising campaign, EFCA sounds to the untrained ear like an excellent piece of legislation which would present workers with new rights and serve to reinvigorate the middle class in our country. However, the legislation that is being proposed would completely revolutionize labor law as we know it and seriously damage the business community's ability to maintain control over its workforce and to satisfy the ever-changing needs of its customers in a global economy. In short, this is bombshell legislation and it is not only on the horizon, but teed up any day to be introduced in the House where it was passed in 2007. With an intense debate in the Senate looming, I began to ask myself "What has changed so radically in our make-up to make this and other pro-union, anti-business legislation so prominent on the agenda of Congress. So much of which is likely to become law?
After practicing traditional labor law for 30 years, and being involved in every type of union organizing campaign, collective bargaining situation, work stoppage, etc. that there is, I know that this legislation would never have seen the light of day 15, 10 or even 5 years ago. Again, what has changed? I believe that there has been a profound change in the business climate with regard to employee rights in the workplace. This coupled with a virtual dearth of union organizing over the past 20 years, has produced a whole generation of owners, senior executives, managers, supervisors, legislators, judges, lawyers and employees who have not experienced any type of labor organizing situation much less experienced any type of labor strife. Because of this, they are more open to discuss the union question. Couple this with the fact that our educational system, to some extent, and our work environment has evolved into one that trains for and rewards teamwork, tolerance and collaborative thinking, all of which are noble objectives. In that context, many of our current stakeholders in business are more open and malleable when it comes to the old-school, black-or-white attitude towards workers' rights and unionization. Of late, I and many of my colleagues, have been asked to speak extensively on this topic and invariably two things happen at these sessions: 1) I ask the question of how many in the audience have been through any union organization and are knowledgeable of the process, and depending upon the group, there is rarely more than 3 to 5 people who have any significant experience; and 2) in the course of the question and answer period, someone will ask, "Jim, how bad can this actually be? Can't we all just get along?" Indeed it astounds me the number of senior executives and owners who opt not to take the important first step of advising the workforce of their own personal position, that they do not believe that a union would be a good thing for their business or for them as employees.
Another reason for the current situation is the basic misunderstanding of what EFCA really does. Political action committees and labor unions have executed a brilliant publicity campaign which has misled the general population about the legislation. The Bill is actually very simple. The three main tenants of the bill include 1) the abolition of a secret ballot election, 2) compulsory binding arbitration for first contracts after 120 days of bargaining and 3) punitive fines for violations of the National Labor Relations Act. These elements strip not only the business of its rights, but the workers of theirs as well. The average worker could be intimidated into voting a particular way because of the lack of a secret ballot (interestingly, the secret ballot would still be appropriate for elections where the employees are trying to throw the union out, namely decertification elections). The employer would be stripped of the ability to mount an information campaign once the union certified by the filing of valid authorization cards only. The employer would be denied rights of freedom of contract and subjected to an arguably unconstitutional taking of property by having a two-year contract forced upon it by the government.
The three tenants of the EFCA mentioned above have been in place for well over 60 years. One wonders why the tried and true analysis of, "If it ain't broke, don't fix it," doesn't seem to apply in this situation. Labor has decried for years that the system is broken, but is it truly broken? The facts are that unions win anywhere from 45% to 50% of secret ballot elections. That seems relatively balanced. Unions gained first contracts in 1 in 3 of the elections they win. The opposition argues that this is a shameful number and is far too low. I happen to have considerable experience in the negotiation of labor contracts in general, and first contracts specifically. I can relate to you that the reason why most first contracts fail is because unions come to the bargaining table and make demands that are excessive, demands that refuse to allow the business the flexibility it needs to meet the needs of its customers. The smart owners of businesses, knowing that these demands are anti-competitive and will diminish, if not eliminate, their ability to make a profit, refuse to concede to them and simply say, "No." Those that do not, and capitulate, typically struggle when the business cycle turns against them, or some profound business event occurs such as an increase in competition or loss of a major customer, they cannot be competitive, their business suffers, or in the worst case vanishes. If this sounds familiar, it should. The woes of the auto industry are one of the best examples of the above. A few words on the punitive aspect of EFCA: Currently, if someone violates National Labor Relations Act ("NLRA") the regulators believe that punishment is not due, a Company needs only to remedy the wrong by providing back pay, back wages, benefits, interest, and/or reinstatement, and/or cease and desist from their unlawful practices. The new regime argues that punishment is necessary. Indeed stiff punishment, in the form of injunctive relief and fines of up to $20,000.00 per violation. I may point out that those punitive measures as proposed would only apply to companies that are found to have violated the NLRA, not unions. My father's response to me as a child when I claimed something was not fair comes to mind: "Son, the fair left in October."
As I sum up my thoughts on EFCA and other pending labor legislation, I wonder if what is afoot here is not a very keen understanding by organized labor of what is needed by them to get back in the membership game. The unions' core objective has always been to organize members. That was their sole mission. In the 1960's, they represented 23% to 25% of the workforce. Today they represent less than 6% of the private sector workforce. Essentially, they have failed miserably in their core business. They have wisely replaced that core business with one of gaining influence, raising money for PACs, 529s and political candidates. They have proven to be absolutely brilliant in their new found business model. Whether it is the EFCA, in whole or in part or whether it is simply gaining a better time frame from Congress from the time they file cards until the time they get a secret ballot election, or a set time frame by which the parties must agree on a first contract, any kind of change will significantly enhance Labor's organizing efforts. In short, they don't need the EFCA, they just need minimal change in a system that actually has worked for the past 60 years and they will turn the tables in their favor. Increases in the number of union-organized employees in this country will occur. That will be due in part to modifications in existing Labor laws and a great desire that we all have to just get along.
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