Implications Of The Employee Free Choice Act

Tuesday, September 1, 2009 - 01:00

Editor: How will the Employee Free Choice Act in its present draft form, if passed, affect your practice as a labor and employment attorney?

Goldberg: The Act as it is drafted obviously would make it very difficult for companies to fight unionization efforts. We are focusing on providing clients with advice on effective ways to communicate with their employees about the advantages of operating on a union-free basis, and the drawbacks of being unionized in today's difficult economic environment, even before a union organizing campaign begins. Effective communication measures and other preventive strategies are critical because under the proposed Act, whether there's card check in the law or not, it would be very tough for companies to fight unionization efforts only after a union files a representation petition.

Editor: Has the original plan to allow recognition by card check in lieu of the secret ballot been dropped completely?

Goldberg: No, it has not. The Act, as drafted, continues to contain the card check provision. Certain alternatives have been discussed that would eliminate the card check provision because over the past eight or nine months, since the election of President Obama and the strengthened Democratic majorities in Congress, the business community finally has become galvanized against the card check provision and made some significant inroads in building opposition to it. A number of alternatives have been offered in lieu of card check. The alternative that is being most widely discussed would call for a very quick election once a representation petition has been filed by a union. Under some proposals, the election would have to be conducted within five to ten days of a petition's being filed with the National Labor Relations Board, allowing very little time for a company to counter a union's organizing campaign. But, as you know, when legislation is debated and considered - sometimes Senators or House members try to sneak in other provisions and so you have to be wary about whether the card check is dead or not.

Editor: One onerous provision in the proposed legislation has to do with having an arbitrator from the Federal Mediation and Conciliation Service impose a settlement after a period of bargaining and mediation. How far-reaching could the imposed conditions be that are designed by someone who has no previous knowledge of the company's business?

Goldberg: The arbitration provision could be very far-reaching. This is one of the principal concerns the business community has about EFCA .It is has not received as much attention as the card check provision, but it should be of tremendous concern. If a company and a union cannot agree on a first collective bargaining agreement, the legislation, as drafted, requires that the parties submit the matter to mediation after 90 days of negotiations. Then, if the mediation is not successful in achieving a collective bargaining agreement, there would be binding interest arbitration, which basically means that an arbitrator or an arbitration panel is going to impose the terms and conditions of the initial collective bargaining agreement that would remain in effect for two years. The problem with this provision is that arbitrators don't have an intimate knowledge of the needs of the business, the operations, the practices that make the business successful, and the competitive environment, yet they are going to be responsible for setting terms and conditions for operating the business if the parties can't reach an agreement. Once those terms and conditions get into a first collective bargaining agreement, it becomes more difficult to negotiate them out of subsequent agreements between the parties because they've become an established practice. Imposition of an agreement by an arbitrator really does have far-reaching consequences.

Editor: We discussed "interest arbitration" as contrasted with ordinary arbitration in our discussion in February of this year. Again, how can this be harmful to the interest of the corporation?

Goldberg: Ordinary arbitration under a collective bargaining agreement is a situation where one of the parties, usually the union, says the company is violating the terms of the collective bargaining agreement by some action that it has taken. As in the typical ordinary arbitration case, the arbitrator's job is to determine whether the collective bargaining agreement has been breached and, if so, what the remedy should be. Interest arbitration is totally different. In interest arbitration the arbitrator establishes the terms and conditions of the collective bargaining agreement, rather than merely interpreting and enforcing an agreement that the parties themselves have reached. The arbitrator in the usual arbitration will conduct some hearing or proceeding, whether formal or informal, taking evidence and hearing arguments. The ground rules for interest arbitration haven't been determined. What kind of evidence will be considered? Will the arbitrator have free reign to set all terms and conditions, or be limited to choosing between the "last" positions of each side? Mandatory Interest arbitration has no precedent in the private sector, although it is common in the public sector with regard to state and federal government employees in general. But in the public sector, government employees often are prohibited from striking, and so the quid pro quo is that there is a binding interest arbitration process.

Editor: Is there a conflict with the NLRA inherent in this provision?

Goldberg: I think there's a critical conflict with what has been a principal tenet of labor law from the very beginning, that companies and unions should sit down and engage in good faith bargaining and through the give-and-take of the bargaining process reach an agreement without having some third party impose that agreement on the parties. Each side has certain leverage. From the union's perspective, it can go out on strike if it is dissatisfied with the progress made during the negotiations, which presumably tempers what management does at the bargaining table. Companies can lock out employees in certain circumstances, and can permanently replace economic strikers, presumably moderating a union's extreme position. Interest arbitration is going to change the dynamics of the bargaining process. To me, it is inconsistent with labor law as it has existed since the 1930s.

Editor: The requirement for elections to be held within five to ten days after 30 percent of the workers have signed cards requesting such elections gives employers very little time to make a case for not joining a union. This is further buttressed by the provision that mandatory employee meetings are prohibited. How can this provision be challenged on a constitutional or other basis?

Goldberg: I think there are going to be certain challenges if this legislation passes with regard to any potential requirement that limits companies in their ability to communicate with their own employees. Again we're in a fluid process now where there are a lot of different alternatives that are being bandied about including: (1) a speedy election of five to ten days after a petition is filed; (2) restricting employers from holding mandatory employee meetings on company time, which is a right that companies have had for decades (except during a 24 hour period before an election); (3) forcing companies to open their doors to union representatives to come on site and campaign. There is talk about allowing mail ballots, which will raise significant issues. So there are aspects of some of the alternative proposals that I think could be challenged on a constitutional basis.

Editor: What penalties under these proposals could thwart employers from challenging too vigorously union attempts to organize?

Goldberg: One of the provisions of the proposed legislation would dramatically increase the damages and penalties for unlawfully discharging employees because of union activities. Right now, under the National Labor Relations Act if an employer terminates an employee unlawfully because of union activities or protected activities, the remedy typically is back pay and reinstatement. Under the proposed EFCA, the back pay would be tripled and there would be civil penalties as well. Employers would have to be very, very careful about actions they take with regard to any employee who might be viewed as being active in union efforts.

Editor: What are the prospects that the bill in its present form will be passed? Are there more middle-of-the-road Democrats on board?

Goldberg: I think it's hard to predict. Certainly the suggestion that some of EFCA's supporters are willing to back off the card check provision and substitute some sort of quick election in its place was designed to try to bring some of the more centrist Democrats and Republicans on board. It's hard to say whether that's going to be successful. There are still some middle-of-the-road Democrats who even if they were willing to go along with that provision have serious concerns about the mandatory interest arbitration requirement. There has been some talk about whether there's a compromise that could be achieved with respect to that provision. Senator Specter of Pennsylvania has suggested perhaps requiring mediation, but not arbitration. Clearly the people who favor this bill are trying to drum up support in the face of what appears to be strong opposition to the card check provision and perhaps even the arbitration provision. The other problem in predicting is that Congress has a whole lot of things on its plate right now, both with regard to the economic recovery as well as healthcare reform, and the longer that EFCA lingers without action being taken, the less likely the prospects of passage this year. If action is delayed until next year, there will be mid-term congressional elections which create additional pressures on members of Congress to avoid voting on controversial legislation.

Editor: Do you forecast that Obama will risk alienating the moderates in Congress by putting his full weight behind this legislation, given his preoccupation with healthcare legislation?

Goldberg: It doesn't seem as if he's putting a lot of weight behind it. Clearly he owes something to organized labor in return for the support that they gave him (and congressional Democrats) in the 2008 elections, but we also need to remember that the composition of the National Labor Relations Board is changing. The President has nominated pro-labor members who will constitute a majority of the NLRB and who are likely to be confirmed fairly quickly. The NLRB, through interpretation of the existing law, can make some significant changes in how the election process is conducted as well as other aspects of the law, so it may be that some of the changes that organized labor is hoping for will be accomplished through action by the NLRB, even though other changes will require congressional action.

Editor: Do you regard our present system of NLRB elections and mediation and arbitration by knowledgeable parties a more balanced approach that should be maintained, especially in the light of the economic crisis where businesses are fighting for their very survival?

Goldberg: I think the system that has been in place for decades and decades has worked very well and I don't think there's a compelling reason to change it. I think if you look, for example, at the union success rate in NLRB elections, there was a period of time in the 1980s and '90s when unions were losing more than half of the elections that were conducted by the NLRB. That has changed in recent years. In fact in 2008, the union win rate was almost 67 percent, the highest win rate since 1955, so it is hard to buy the union argument that the process is not working. The fact of the matter is that even in terms of the speediness of NLRB elections, the typical time frame nowadays for an election to be conducted is usually within 30 to 40 days after a petition is filed and that gives companies enough time to get their message out to employees while giving unions a speedy period for elections. The union success rate of winning almost two out of three NLRB elections under existing law strongly suggests that "if it ain't broke, don't fix it."

Please email the interviewee at agoldberg@daypitney.com with questions about this interview.