Pros & Cons of the Employee Free Choice Act

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The Employee Free Choice Act ("EFCA") is labor-union backed legislation that proposes to amend the National Labor Relations Act "to establish an easier system to enable employees to form, join, or assist labor organizations" and "to provide for mandatory injunctions for unfair labor practices during organizing efforts."

In summary, the Employee Free Choice Act of 2009, also known as "card check" legislation, would cause three major pro-labor changes to the National Labor Relations Act:

  • 1. If more than 50% of employees sign blank card from an existing labor union requesting representation by that union, then the National Labor Relations Board ("NLRB") will certify it as the exclusive representative of employees for collective bargaining with managment.

    Previously, if more than 30% of employees signed the cards, the employer may decide to hold a secret ballot election regarding unionizaton.

  • 2. Under EFCA, within ten days after certification as the exclusive labor union, that union may demand that management begin negotiating a new collective bargaining agreement.

    If the union and management can't reach terms within 90 days on the first agreement, either side may request federal mediation, which could lead to binding arbitration.

    Previously, no such time clock requirement was in effect.

  • 3. Under EFCA, if an employer was found by the NLRB to have unlawfully fired pro-union employees, the employer would be liable for three times back pay for those employees. Also, the NLRB could impose a $20,000 penalty for each willful violation by the employer of the prevailing statutes.

    These penalties are a substantial increase in levies that the NLRM may assess on employers.

    Latest Developments

    The Employee Free Choice Act of 2007 was passed by a strongly favorable House vote of 241 to 185. The Senate passed it by a 51 - 48 vote, nine votes short of the required 60 votes to enforce cloture. Thus, EFCA of 2007 was dead for the 110th Congress.

    The Employee Free Choice Act of 2009 was introduced in both houses of the 111th Congress on March 10, 2009: as H.R.1409 in the House, and S.560 in the Senate.

    In 2007, Sen. Barack Obama voted in favor of EFCA. President Obama reportedly backs the Employee Free Choice Act of 2009.

    Democratic leadership in both the Senate and House support the Employee Free Choice Act of 2009, although some resistance to it has been voiced by the House's fiscally conservative Blue Dog Democrats. (See Meet the Blue Dog Democrats: United on Pro-Business Issues.)

    Congressional Republican leadership is adamantly opposed to EFCA legislation, especially the "card check" provision which they claim strips away employees' rights to a secret ballot election.

    In fact, Republicans on the House Education and Labor Committee voted unanimously against allowing the bill to be put to a full House vote.

    Background

    All major U.S. labor unions support the Employee Free Choice Act of 2009, as they believe that workers' rights have steadily and radically eroded since Congress created the National Labor Relations Board in 1935.

    Rep. George Miller, Chair of the House Education & Labor Committee commented on March 10, 2009: "The current process for forming unions is badly broken and so skewed in favor of those who oppose unions, that workers must literally risk their jobs in order to form a union.

    Although it is illegal, one quarter of employers facing an organizing drive have been found to fire at least one worker who supports a union...

    "Sadly, many employers resort to spying, threats, intimidation, harassment and other illegal activity in their campaigns to oppose unions. The penalty for illegal activity, including firing workers for engaging in protected activity, is so weak that it does little to deter law breakers.

    "Even when employers don't break the law, the process itself stacks the deck against union supporters. The employer has all the power... "

    Fiercely Opposed by U.S. Chamber of Commerce

    The U.S. Chamber of Commerce and all major corporations with large, hourly labor forces oppose EFCA legislation.

    Writes the U.S. Chamber of Commerce, "This bill would undermine long standing principles of workplace democracy and fairness and result in employees having less ability to determine if they wish to be represented by a union...

    "While EFCA is being promoted by organized labor as labor law reform to level the playing field, it does not represent 'reform' in any sense of the word.

    "Rather, the legislation will radically restructure 60 years of carefully crafted labor law balances that have served both unions and employers well for many decades."

    Pros

    The AFL-CIO advocates for EFCA legislation because "workers need the freedom to form unions and bargain." The AFL-CIO explains:

    "Joining together in a union to bargain for health care, pensions, fair wages and better working conditions is the best opportunity working people have to get ahead...

    "But workers who belong to unions earn 28 percent more than nonunion workers. They are 52 percent more likely to have employer-provided health coverage and nearly three times more likely to have guaranteed pensions."

    Of course, the specific benefits to union members of quicker contract negotiations and higher penalties for employer non-compliance are obvious: both encourage employers to negotiate with unions in good faith and on a timely basis .

    Pros of New "Card Check" Rules

    The main benefit to strengthening "card rules" is that workers will be able to more easily unionize, and with far less management interference.

    EFCA does not eliminate secret ballot elections. If 30% or more employees sign cards opting to be represented by a specific union, then employees may still request a secret ballot election.

    The change is that under EFCA, employees, not employers, call for and set the secret ballot election.

    A second significant "card check" change under EFCA is that if more than 50% of employees sign such cards, no election is deemed necessary: the NLRB may certify that labor union as that shop's representative without an election.

    Under current law, management can refuse to bargain with a union selected by majority sign-up, even if 100% of employees have requested that union.

    Cons

    The primary objection of the U.S. Chamber of Commerce to the Employee Free Choice Act of 2009 is that it could "open up wide swaths of the economy to union organizing, especially small business."

    The Chamber accurately observes, "Back in the 1950s, roughly one-third of the workforce was unionized. Today, that number has declined to 12.1 percent,... Card Check has the potential to completely reverse this trend."

    Per the Chamber, specific drawbacks include:

    • "Card Check" Drawbacks
    • "Once 30% of workers have signed cards, the union can petition the Federal National Labor Relations Board to hold a secret ballot election.
    • "Card Check allows unions to skip the time, expense - and potential risk of losing - that comes with secret ballot elections. Under Card Check, if union organizers can persuade more than 50% of workers at a facility to sign cards, they win.
    • "Under Card Check, a union has no obligation to tell an employer it is launching an organization drive. An employer may not find out an organizing campaign is underway until ordered by the Federal government to start collective bargaining."
    • Other Drawbacks
    • " The obvious flaw of forcing the complex negotiation of a contract into a compressed time frame.
    • "It... brings the Federal government into contract talks, which was never intended under the NLRA.
    • "Binding arbitration would mean that both parties are likely to get stuck with a contract they don't like. For an employer, you could be stuck with a contract that it completely incompatible with your cost structure... "

      Where It Stands

      The battle to pass, or defeat, the Employee Free Choice Act of 2009 will be extraordinarily emotional and hard fought.

      The battle lines are clearly drawn, with progressive Democrats lining up to firmly support labor unions, and with the vast majority of Republicans supporting the business community by opposing the bill.

      In the Middle: Pro-Business Democrats, Working Class Republicans

      In the middle of the controversy are moderate, pro-business Democrats, especially the House's Blue Dog Democrats, and Congressional Republicans who hail from working-class "Rust Belt" states as Ohio, Indiana and Pennsylvania.

      Such "Rust Belt" states normally vote Republican, but in 2008, smany, including those three, cast their presidential ballots for Democrat Obama. (See Why Red States Turned Blue in 2008.)

      All Sides Agree That EFCA Strengthens Unions

      All sides agree that the Employee Free Choice Act of 2009 strenghtens labor unions's ability to organize and bargain with management, and takes away some of management's upper-hand advantages under current laws.

      The real question for both sides of this contentious issue is not found in the details of EFCA legislation.

      Rather, The real question is this: Should labor unions be strenghtened in their ability to negotiate with employers?

      At a time when wages of middle-class and lower-income workers have been depressed for a decade or more, and unemployment is rampant, labor unions and their supporters answer an unequivocal YES.

      At a time when most business have been hurt by the weak U.S. economy, the business community and its supports answer an unequivocal NO.

      Under a Democratic-led Congress with significant Democratic majorities, and led by a Democratic administration headed by a President who was strongly supported by labor in his White House campaign... the chances have never been better for passage of the EFCA bill introduced in Congress in March 2009.

      Said then-Sen. Barack Obama to the Chicago Tribune in March 2007, "We will pass the Employee Free Choice Act. It's not a matter of if, it's a matter of when."

      But regardless of labor's enthusiasm and progressive optimism, passage of the Employee Free Choice Act of 2009 is far from assured.