Congress Retreats on Employee Free Choice Act; Time for Employers to Shift Tactics

By Ted Olsen & Patrick Scully

In our April 2009 newsletter, we apprised everyone of the toxic features of the so-called "Employee Free Choice Act," a bill before Congress that would substantially revise the National Labor Relations Act to make it easier for unions to become legally-binding bargaining representatives for employees.  A number of Sherman & Howard lawyers and clients mobilized to educate our respective U.S. Senators about the many objectionable features of EFCA, and our strong opposition to the bill and cloture, which would result in a Senate vote on the measure.

Sponsors of the bill have now announced that they will remove one of the most objectionable features of the legislation, the so-called "card check" provision.  This is good news for employers and employees.  However, employers and employees should not be lulled into inaction by this maneuver, as the revised version of EFCA now being discussed would still have highly objectionable provisions.

The "card check" portion of EFCA would have required the National Labor Relations Board to certify a union as the exclusive representative of employees upon presentation of a majority of signed authorization cards.  This would have effectively eliminated the NLRB supervised process of a secret ballot election for employees.  The business community rightly expressed outrage over the elimination of the secret ballot election, but often disregarded the other anti-employee and anti-business features of the bill.  The proponents have now pulled the "card check" provision.

It remains to be seen exactly what will be proposed in lieu of "card check," although labor unions have spoken generally in favor of "quickie elections," putting short time frames on the election process.  There is no need to accelerate the normal schedule for NLRB elections.  Presently, the average time taken to complete a secret ballot election is only 39 days, and 94 percent of elections are completed within 56 days. 

Further, "quickie elections" themselves are objectionable, as they stifle debate and preclude employees from making an informed choice.  Putting short time frames on the election process allows professional union organizers to "campaign" for months, while providing employees with limited - if any - time to hear from their employer about potential downsides to unionization.  A short timetable can virtually eliminate an employer's right to provide employees with adequate information about the union and respond to the union's pitch.  Moreover, it simply denies employees the opportunity to hear both sides of the argument on unionization.  Considering the significance of the employees' decision, they should be permitted to make an informed decision.  Hearing from just one side deprives employees of that information.

Even with the pulling of "card check," many objectionable features of the original EFCA remain.  One of the most burdensome provisions for employers is that EFCA would require the parties in first-contract bargaining to proceed to mandatory, binding interest arbitration if they are unable to reach agreement after the 90 days allowed for bargaining and 30 days allowed for non-binding mediation.  This would effectively permit an outsider (i.e., a law professor or retired labor lawyer) to dictate the terms of first collective bargaining agreements, and would reverse one of the guiding principles of American labor law.  The NLRA was found constitutional in part because it did not compel either side to agree.  But if EFCA passes, neither the employer nor the union in such a situation will have a vested interest or involvement in reaching the terms of the collective bargaining agreement.  Without such interest or involvement, both sides will often be dissatisfied with the contract forced on them.

Finally, EFCA would significantly enhance the penalties against employers that violate the NLRA, particularly in the context of initial union organizing.  Employers that willfully violate the Act during initial organizing or first contract bargaining will be subject to $20,000 fines per willful violation.  The NLRB will be required to seek injunctions against employer violations in those circumstances, and disciplined employees will be able to collect treble back pay.

Congratulations to those of us who - through communications with Congress and other efforts - helped urge EFCA's sponsors to pull the "card check" provision!  Despite that victory, there are many battles yet to be fought.  Let's keep up the good work.

Sherman & Howard has prepared this advisory to provide general information on recent legal developments that may be of interest. This advisory does not provide legal advice for any specific situation. This does not create an attorney-client relationship between any reader and the Firm. If you want legal advice on a specific situation, you must speak with one of our lawyers and reach an express agreement for legal representation.

© 2009 Sherman & Howard L.L.C.                                                    August 5, 2009