The Employee Free Choice Act (EFCA) will be a top priority following the recent presidential election. As proposed, EFCA will cause the most significant overhaul of labor relations since the passage of the National Labor Relations Act (NLRA) in 1935. The EFCA passed overwhelmingly by the House of Representatives last year, but was stopped from progressing in the Senate. Given that Democrats have built on their majority in the Senate and President-elect Obama’s support of the changes, there is a very strong likelihood of reintroduction and passage in the next Congress convening January 2009.
Three Major Changes
The EFCA will overhaul current labor law in three ways. First, the EFCA allows for “card-check” certification of unions. Once a union gets a majority of employees to sign authorization cards, the union will automatically become the workers’ collective bargaining representative. This is a change from current law which allows an employer to voluntarily recognize a union once a majority of workers have signed authorization cards. But current law also gives the employer the right to refuse to recognize a union. Instead, it can insist on a National Labor Relations Board (NLRB) secret-ballot election to determine if employees wish to be represented by a union.
The majority of employers now require unions to go through the NLRB election process. They believe that employees often succumb to peer pressure and sign authorization cards that might not properly reflect employee sentiment, which is best expressed through a secret-ballot election. In addition, some believe under the EFCA’s card check procedures, an employer will have little opportunity, if any, to communicate its views regarding its opposition to the union. Generally, an employer does not have advance notice that cards are being circulated among the workforce.
Second, the proposed EFCA impacts the employer’s ability to negotiate a collective bargaining agreement. Under current labor law, an employer cannot be forced to agree to any union proposal. The parties must simply bargain in good faith with regard to wages, hours and other terms and conditions of employment. Once an agreement is reached, it is subject to a ratification vote by the employees. To the contrary, under the EFCA, the union can request mediation if a contract is not reached within 90 days. If there is no contract after 30 days of mediation, an arbitrator is appointed to impose the terms of a binding two-year contract. The employees do not get to ratify the contract, and the arbitrator is not bound by any prior negotiations. Many employers may simply agree to a majority of the union’s demands rather than allegedly risk having an arbitrator, who is unfamiliar with the employer’s business, decide the contract.
The proposed EFCA makes a third major change to existing labor law. It imposes penalties on employers who are found to have violated the NLRA during a union organizing campaign. In contrast to current law, under EFCA if an employer discharges or discriminates against an employee during a union organizing campaign because that employee engaged in union activities, the employer must pay the employee triple back pay. EFCA also provides for fines of up to $20,000 per violation against employers who willfully or repeatedly commit unfair labor practices during a campaign or during contract negotiations. Under current law, when an employer is found guilty of coercion (e.g., threatening plant closure or promising benefits), it is generally required to schedule another election. If an employer is found to have discharged or suspended a union adherent, current law requires the employer to pay back pay (lost wages minus interim earnings). The new rules under the EFCA make any potential violation much more expensive.
Action Steps for Employers
Without a doubt, the EFCA will give new lift to the labor movement. And these proposed changes will create sweeping change in labor law, too. Management lawyers argue that the most logical way to prevent a union card-signing campaign is to cultivate a workforce where employees are not inclined to sign a card. Following that step, it is essential for the employer to prepare a solid plan that includes at least the following steps:
• A program to reinforce management training about the sorts of things that support union organizing should be done. Managers should be instructed about what might make an employee susceptible to a card-signing effort and what manager conduct will make it more likely an employee will decline to sign a card.
• Make certain managers understand what can be done legally in response to organizing efforts.
• Review wage and benefit programs and make sure they are competitive.
• Develop workplace policies that promote employee involvement and provide a voice for employees in workplace matters.
• Create and prepare to communicate a campaign strategy (i.e.. union free benefits) before a majority of employees sign cards.
Regardless of what happens with the EFCA, the time spent to implement these steps will be well spent. The very same policies that make a company strong against union organizing also promote consistent and fair treatment of your client’s employees. The improved employee morale will reward your client with a satisfied and productive workforce, and hedge against the anticipated new rules under the EFCA, if and when it does pass.