The Clock Is Ticking: What The Faster Labor Contracts Act Means For Employers

Newly proposed federal legislation would, for the first time in more than five decades, impose hard federal deadlines on negotiating a company's first union contract. Under the Faster Labor Contracts Act (FLCA), employers would have to start bargaining within 10 days of union certification, with federal mediators stepping in at day 100 if no deal is reached. Should mediation stall, binding arbitration would be required by day 130, and a three-person arbitration panel would be seated to impose final terms to bind the parties for a two-year contract. This means companies would only be given roughly 120 days of combined bargaining and mediation to manage bargaining on their own terms. This is a tight window, given that historically fewer than one in ten first-time contracts are finalized that quickly. The current framework under the National Labor Relations Act (NLRA) imposes no timeline for reaching a first contract.

Critics argue the proposed bill creates more problems than it solves. The legislation would hand outside arbitrators, who lack deep knowledge of a company's finances or operations, the final, binding say over core contract terms like pay and benefits, sidelining both management and the union. The bill also takes away the current right of employees to vote on ratification of the final contract terms. Small businesses are seen as especially vulnerable, since they would face the same compressed timeline as large corporations without comparable legal or HR resources, potentially landing in arbitration simply due to limited bandwidth rather than bad-faith bargaining.

The bill faces a steep climb: it will need 60 votes to clear the Senate, and several legal challenges are already being discussed by interested parties. 

Employers are encouraged not to wait on the outcome. Recommended steps include contacting Senators to register objections, shoring up positive employee relations to avoid being the target of union organizing, and reviewing first-contract bargaining strategy with legal counsel in the event the workplace is organized, and a truncated bargaining timetable is imposed. 

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