The Employee Free Choice Act -A Status Report

Tuesday, September 1, 2009 - 01:00

The Editor interviews Glenn Spencer, Executive Director, Workforce Freedom Initiative, U.S. Chamber of Commerce.

Editor: Please describe the Workforce Freedom Initiative.

Spencer: The central mission of the Workforce Freedom Initiative is to hold back some of the anti-growth and anti-employer agenda items that the unions have been pushing, including the Employee Free Choice Act (EFCA).

Editor: I understand your objective this year is to assure a full and informed debate on the EFCA so that it doesn't get rushed forward in an expeditious fashion. How are you doing?

Spencer: So far we have succeeded, in that there was no vote on EFCA before the August recess. Currently, a group of six or seven democratic senators are working behind closed doors to fashion some kind of compromise, as they call it. Our definition of compromise differs from theirs in that we consider a compromise to be when both sides of an issue can discuss it and come to agreement.

The reality is that this group consists entirely of democratic senators, and they've been talking exclusively with unions trying to hash out an alternate bill. So this is, in fact, not an effort at reaching a compromise; they're just trying to tweak the edges of EFCA - thus far without success.

Editor: I have heard that the card- check provision has been removed as part of the discussions you described.

Spencer: Astory was floated before the Congressional recess in The New York Times that suggested that this group of senators had agreed to get rid of the secret ballot provisions of EFCA. However, that story was quickly shot down, most notably by the Service Employees International Union (SEIU). The AFL-CIO also said that they wouldn't be supportive of a bill that did not allow them to bypass secret ballot elections. Therefore, I'm not sure that there actually is an alternate bill that's even close to being ready to go, but obviously we will monitor that very closely.

Even if The New York Times story were right and the card-check provision was definitively eliminated there are other elements in the so-called compromise which would make the bill unacceptable to business.

Editor: How do you see the battle for passage of EFCA shaping up? Spencer: The action is going to take place in the Senate. The bill has also been introduced in the House, with fewer co-sponsors than it had in 2007, but the House has not yet voted on it because the members are waiting until the Senate takes it up.

It was conventional wisdom at the start of the year and is probably still true that the House has the votes to pass the bill.But members have said, "Why would we stick our necks out on such a controversial vote when the Senate is either going to change the legislation or not take it up at all? Why should we walk the plank?"

In the Senate the most important vote, really the only important vote, is the cloture vote on the motion to proceed. That's the key vote that would actually bring the bill to the floor. In the wake of that New York Times story, the importance of that vote has been amplified even further because of what the SEIU said immediately after the story was published.Andy Stern issued a statement saying, "The Employee Free Choice Act is going through the usual legislative process, and we expect a vote on a majority sign-up provision in the final bill or by amendment in both houses of Congress."

What the SEIU is saying is that a compromise is completely irrelevant because the unions will use the legislative process to force back into the bill whatever objectionable elements, like card check, get taken out, once the bill gets past the initial cloture petition. The unions have made it very, very clear what their end game is. They'll accept whatever deal they might have to accept just to get this thing moving and then they'll add back all those elements.

The card-check provision is utterly unacceptable to business. By and large the business people that I have talked with are shocked to learn that Congress is actually considering doing this. Employers respect the right of their employees to organize under the NLRA, if that's what they wish to do, but they feel that the decision to unionize should be made in an informed fashion in the privacy of a voting booth. Card check would allow union organizers to know who is in favor and who is not and give them ample opportunity to pressure workers who haven't signed.

Editor: Tell us about some of the elements in the so-called compromise discussed in the Times's story. What about the decision to include interest arbitration in the compromise package?

Spencer: When you explain interest arbitration to employers they become really upset. They view it as a new layer of government interference that involves turning over to a government-appointed arbitrator the fate of their businesses.Wages, benefits, work rules - these are life and death issues for companies.

It is our view even if card-check provisions were taken out, EFCA would remain unacceptable because it would still include the interest arbitration provision. Government-appointed arbitrators would be empowered to dictate contracts after just 120 days of negotiating - even if there were no showing of bad faith - and there are no appeal rights.

One of the untold stories of interest arbitration is that an arbitrator could force a very healthy company with a healthy balance sheet into a union multi-employer pension plan. Many of these union pension funds are in very, very poor financial shape. They simply don't have enough money on hand to pay out the benefits that they have promised.Some of them have asset to liability ratios as low as 30 percent or 40 percent.

A company would suddenly find itself with a huge unfunded liability and could even be put on the hook for paying pension benefits to people who never even worked for their company. So this is a huge problem.

Editor: Our readers would appreciate your response to some of the other requirements reported to be included in the so-called compromise. Let's start with its requirement that elections be held within five to ten days after 30 percent of the workers signed cards favoring the union.

Spencer: The whole idea behind a five- or ten-day election is to prevent employers from having a chance to tell their side of the story. The union has the opportunity to pressure employees for months in the lead-up to the date that they request an election, but the employer would then have only five or ten days to get out its side of the story. The result is that workers are denied information to help them make an informed choice.

Editor: Another provision requires employers to provide union organizers equal access to company property.

Spencer: One of the central purposes of the NLRA is to promote the free flow of commerce. If unions were allowed on company property to solicit workers and to talk about unionizing this would impede business operations, which would therefore violate this core principle of the NLRA. Therefore, we have serious concerns about any type of access provision.

Even a joint presentation by the employer and the union at a company-wide meeting presents problems. Under the law, the union is allowed to promise essentially anything, whereas management is strictly limited as to what it can say.

Editor: The compromise also would bar mandatory employee meetings held by the company.

Spencer: This provision would stifle employer free speech. It is well established that employers can hold these meetings so that they have their chance to rebut some of the claims that the unions may have been making and to discuss with workers the relative merits of unionizing.

Editor: Another provision increases penalties if employers break the law in fighting union activities, such as imposing triple back pay.

Spencer: The problem with the penalties provision of the compromise is that it's one-sided - these penalties apply to employers, but there are no enhanced sanctions on union misconduct.It also changes the current penalty structure under the National Labor Relations from a "make whole" system of remedies to a punitive system. For example, back pay awards would now be treble damages.

Editor: Also civil fines up to $20,000 per violation are imposed if an employer is found to have willfully or repeatedly violated employees' rights during an organizing campaign or while bargaining for a first contract.

Spencer: When people look at this provision they tend to think, "Well it's willful or repeat right so these are clearly bad actors, they deserve to be punished." The reality is that many employers - particularly small businesses - don't understand the restrictions imposed on employers by the National Labor Relations Act. So, unless you've got a battery of attorneys and HR professionals who are very familiar with the Act, it could be easy for employers who have never had to deal with unions to get tripped up and incur the $20,000 per violation penalty.

Editor: Also, bargaining is required to begin within 10 days of certification.

Spencer: I don't think it's very realistic, and even the AFL-CIO has admitted it's unrealistic.Gordon Pavy, who is the director of collective bargaining for the AFL-CIO, said in a recent speech that it would be very difficult to prepare to bargain in such a short time. He also conceded that the AFL-CIO doesn't even have a program to train members in how to negotiate collective bargaining agreements.