Sep 15, 2008 Labor Relations

It’s Back: the Employee Free Choice Act

Strictly speaking, the Employee Free Choice Act of 2007 is not yet back before the United States Congress. However, if the Democrats prevail in November’s Presidential election, we can expect to see Big Labor and its Democratic Party allies in the United States Senate and House of Representatives bring the bill charging back.

The Employee Free Choice Act (“EFCA”), if enacted, would be the most revolutionary change in the National Labor Relations Act (“NLRA”) since at least the Taft-Hartley amendments of 1947. EFCA, which died in the 2007 session of the Senate when President Bush threatened to veto the bill after it had passed the House, would radically change union organizing in the United States.

In general, the proposed law is designed to “establish an efficient system to enable employees to form, join or assist labor organizations, to provide for mandatory injunctions for unfair labor practices during [union] organizing efforts, and for other purposes” relating to first contract collective bargaining.

To these ends, EFCA would allow a union to be certified as the exclusive representative of employees without a secret ballot election conducted among the affected employees by the National Labor Relations Board (“Board”). Rather, if a union is able to convince a majority of employees (50% plus one) in a company’s workforce to sign “union authorization cards,” then the Board would certify the union as the employees’ exclusive bargaining representative, compelling the company to engage in negotiations with the union over the terms of a labor agreement. In many circumstances, a union could achieve a majority of signed cards without the employees ever hearing a word from the company as to why collective bargaining may not be in their best interest. In fact, these days, union organizing is frequently conducted covertly, and often away from the workplace, so that the employer will not learn about the union’s presence until it is too late to turn the tide. As a result, if EFCA becomes law, employers may not have an opportunity to explain to targeted employees why they should remain union-free until after the union has already extracted a majority of signed cards from uninformed employees – when it will be too late.

EFCA’s card check procedure would work a sea change in the current law and in the nature of union organizing.

First, as the law now stands, when a union demands recognition as the representative of employees, the company may decline to recognize the union unless and until a secret ballot election has been conducted by the Board and a majority of the employees votes for the union in the election. During the run up to that election, the employer is lawfully entitled to campaign vigorously and to urge the employees to vote against having a union represent them in collective bargaining. Card check recognition will, as a practical matter, eliminate any incentive for unions to seek secret ballot elections. The Board will be turned into nothing more than a “card counting agency” that issues certifications whenever a union amasses a bare majority of signatures from workers in a proposed bargaining unit.

Second, in another radical change, this one relating directly to collective bargaining, if the union and the employer fail to conclude a collective bargaining agreement within 90 days after the newly certified union demands bargaining, there would be mandatory meetings with the Federal Mediation and Conciliation Service (“FMCS”). Voluntary mediation often can be helpful in the ordinary course of collective bargaining; but EFCA provides for mandatory mediation, which is unlikely to be successful with a reluctant party. EFCA further provides that if no agreement is reached within 30 days after FMCS enters the dispute, then the parties must proceed to interest arbitration before a government-designated arbitration panel which will have the power to impose binding terms and conditions of employment on the company and the union for two years. The evil in this plan is that a union would be able to hold out in bargaining for 120 days with outlandish proposals; it could then proceed to interest arbitration where it could expect to have at least some of its excessive demands accepted in the arbitrators’ two year award. This process will often not make for economically sound collective bargaining agreements.

A third significant change EFCA would bring is the broader availability of injunctions regarding unfair labor practices alleged by a union during an organizing campaign or during the time that the parties are bargaining a first contract. Under current law, when an unfair labor practice charge is filed the Board has discretion whether or not to seek a federal court injunction against either the employer or the union to halt the unlawful practices while the charge is litigated before the Board. However, EFCA would dictate that the Board must seek an injunction against an employer whenever there is “reasonable cause” to believe that a company has “significantly interfered with employee rights” under the NLRA during an organizing campaign or first contract bargaining. No comparable mandatory injunction applies to union misconduct during organizing and bargaining. The court’s authority would extend to granting temporary restraining orders and other injunctive relief against the employer pending the outcome of the Board’s litigation of the unfair labor practice case, which sometimes lasts for years. 

Yet another change EFCA would bring relates to the remedial powers of the Board. The back pay provisions of the NLRA would be amended to create “liquidated damages” of two-times the net back pay owed to an employee who has been discharged or otherwise suffered a loss of earnings as a result of an employer’s unfair labor practice during an organizing or first contract situation. These liquidated damages would be awarded in addition to the normal back pay remedy, which equates to trebled damages for back pay claims. No such penalty would apply to discriminatory conduct by unions towards employees.

Finally, EFCA would convert the NLRA from a remedial to a punitive statute. Civil fines of up to $20,000 could be imposed for each willful or repeat violation of employee rights during a union organizing campaign or first contract bargaining. Again here, no civil penalty would be available to victims of unfair labor practices committed by unions.

The meaning for employers in all of this should be perfectly clear: union avoidance programs must be reinvigorated. Employers should consider implementing new employee orientation programs, and additional communications efforts with incumbent employees, to assure that all employees are fully aware that the company prefers a union-free workforce. Employers should explain the perils for employees in signing union authorization cards and the many risks and hazards that may come with union-negotiated contracts, such as strikes, hiring of permanent replacements and costly initiation fees and dues for union members. Additionally, companies should train their supervisors and managers, not only on good employee relations policies, but also on the techniques of lawful union avoidance programs and compliance with the requirements of the NLRA.

Please contact any of our attorneys if you desire more information about EFCA.