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Employee Free Choice Act: What Employers Should Do Now
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by Donald D. Berner and Forrest T. Rhodes
The election of Barack Obama as the next president, coupled with the Democratic Party’s increased majority in both the U.S. Senate and House of Representatives, is certain to bring changes. The Employee Free Choice Act (EFCA), which President-elect Obama and Democratic congressional leaders vow to pass in early 2009, would radically alter the labor relations landscape in this country.
The legislation, as currently proposed, would provide employees (and unions) unprecedented rights by making three dramatic changes to existing labor law. You should think about proactively preparing your business for these potential changes.
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From secret ballots to secret unionization
The primary thrust of the EFCA is to ease the road to union organization for employees and labor unions. The Act would permit employees to skip the secret-ballot election process used today and go straight to a unionized workforce by a simple "card check."
Union authorization cards are obtained by labor organizers for the purpose of showing employees’ interest in unionization. Under the current rules, once a union demonstrates employee interest, a secret-ballot election is scheduled approximately eight weeks later.
It’s not uncommon for labor organizers to obtain cards for large portions (upwards of 80%) of the workforce because employees have heard only from the labor organizer on the topic. After the cards are signed and an election is scheduled, the employer then has an opportunity to present its side and educate employees on the subject of unionization.
The EFCA would require only the card-signing phase. Once a labor organizer convinces a simple majority of employees to sign authorization cards, the workforce would be unionized. There would be no campaign period allowing the company to present the pros and cons of unionizing. There would be no secret ballots to prevent fraud and ensure employee anonymity or intrinsic fairness.
Instead, labor organizers could conduct a successful card check and form a union in your company before you have any notice of its efforts. Once the signatures are verified, the National Labor Relations Board (NLRB) must certify the union, and your business would be obligated to recognize and bargain with the union.
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From compromise to compulsion
Under the current system, after a workforce is unionized, the employer and the union begin negotiations. The length and outcome of those negotiations are private concerns between you, the union, and your employees. The only requirement is that the parties must negotiate in good faith.
As proposed, the EFCA would change that and allow government mediators to dictate the terms of your collective bargaining agreement. The obligation to negotiate in good faith would still exist, and the parties would be required to begin negotiating within 10 days and to reach a contract within 90 days.
If the parties can’t reach an agreement, either side could solicit the Federal Mediation and Conciliation Service (FMCS) to mediate the negotiations. If the parties haven’t reached an agreement within 30 days of contacting FMCS, a federal arbitration board may be assigned that would have authority to unilaterally impose contractual obligations on the company. The arbitration-imposed contract would be binding for two years, with no right of appeal under any circumstance.
The inevitable consequence of such a process is that a newly formed union would assume unrealistic negotiating positions and hold out for better terms from a government mediator. The days of mutual compromise and workable solutions would be gone.
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From ‘make whole’ to ‘holy $%!#!’
The EFCA doesn’t stop at fast-tracked organization and compelled contracts. It would also ratchet up the company’s (but not the union’s) expenses and penalties for labor violations while making inadvertent violations more likely.
The Act would require the NLRB to seek a court imposed injunction against alleged employer violations whenever warranted, imposing expensive litigation costs on businesses. Whenever violations occur, companies would be liable not only for the traditional “make whole” remedy of reinstatement plus back pay but also a triple back-pay award.
If the Board finds that violations are willful or repetitive, the EFCA would grant it authority to impose fines up to $20,000 per violation. The proposed penalties are particularly alarming because companies might unwittingly commit an unfair labor practice by changing (or delaying planned changes to) employee benefits or working conditions during a “secret” card check.
What you should do now
You should proactively prepare your business for the possible passage of the EFCA now. If, when, and in what final form the EFCA will become law are difficult to predict, particularly in light of the weighty economic issues in front of our elected representatives. That being said, political pundits say it’s almost certain to become law sometime in 2009.
If your company fails to develop a response to these changes or to engage its employees before the Act becomes law, it could find itself with an unexpected union and its future at the mercy of a federal mediator. To prepare, you should consider implementing a plan that incorporates the following practices:
- Identify a legal or HR representative to monitor EFCA developments. You can’t prepare for what you don’t know.
- Update your workplace policies to address the company’s views on a union-free workforce. Employees who believe the company is neutral on the topic are much more likely to support unionization.
- Evaluate the existing workplace policies that are unpopular with employees. Can they be modified to ease tensions?
- Educate management at all levels on the current and proposed EFCA unionization processes. Union membership is at historic lows, so management may have little understanding of how the process works. Explain how employees are solicited and what managers can and can’t do to encourage a union-free workplace.
- Evaluate the personnel management skills of frontline managers, and work to address shortcomings. A company’s first line of defense is good relationships between the frontline managers and the employees. Those same relationships, if negative, can be a company’s downfall.
- Educate employees on the EFCA. This may be your only chance to get your message out to your employees before a labor organizer pays them a visit. You can rest assured that the labor organizer will be talking about only the pros of union representation, not the cons.
- Begin a concentrated program of positive employee relations beyond the supervisory relationships. There are plenty of feel-good stories about your company and its personnel policies and practices. Take some time to shine a spotlight on the finer points.
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Bottom line
The EFCA, as proposed, doesn’t merely amend federal labor law; it revolutionizes it. It will radically shift power in labor relations in favor of unions. Although the Act may not pass as currently proposed, its passage in any form will affect all employers, including those unaccustomed to union activity.
Welcome or not, the EFCA could bring organized labor to your doorstep. There’s no better time than the present to begin preparing for change. As with all legal matters, you should seek assistance from competent counsel — in this case, legal counsel experienced in union relations matters.
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Don Berner and Forrest Rhodes practice labor and employment law with Foulston Siefkin LLP. If you have questions about the EFCA or other labor law matters, you can contact either of them at (800) 267- 6371.
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Copyright 2009 M. Lee Smith Publishers LLC. KANSAS EMPLOYMENT LAW LETTER . KANSAS EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in Kansas employment law. Questions about individual problems should be addressed to the employment law attorney of your choice.
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