The Employee Free Choice Act: Challenges For Employers

Sunday, February 1, 2009 - 01:00

Editor: Mr. Krupin, would you tell our readers something about your professional background?

Krupin: I am Co-chair of the National Labor Practice Steering Committee at Epstein Becker & Green. I have practiced labor and employment law for about 30 years before a variety of federal agencies. Our clients include management across a range of industries, including hospitality, financial services, retail, healthcare, and media. While I have seen many changes over this period, the issues we are now going to face are unprecedented, with a new Administration, a significant Democratic majority in the Senate, and an economy in distress.

Editor: A little over a year ago you spoke to us about the Employee Free Choice Act, which, at that point, appeared to be stalled in Congress. Would you bring us up to date on how this proposed legislation has fared since that time?

Krupin: The EFCA was proposed legislation in 2007. In it, the American labor movement was making a statement. At that time, we had a Republican President who was not going to sign the legislation, and while the bill would pass the House of Representatives, it would never get to the floor of a filibuster-proof Senate. What labor wished to say is that this is a matter of significant importance to us and certainly crucial for a Democratic Administration. The 2008 elections have made this something that they now expect to accomplish.

Editor: Can you give us an overview of some of the crucial aspects of the proposed legislation? What, indeed, is it attempting to accomplish?

Krupin: The legislation proposes to change the playing field and to make it easier for unions to organize. Over the last few years unions have won about 48 percent of their elections. They are not satisfied with this record, and in 2005 seven unions, representing about six million workers, established the Change to Win Coalition. This became the testing ground for the Employee Free Choice Act, which if passed, would do away with the 74-year old process of using secret ballot elections to determine whether or not employees wish to be represented by a union. One of the new labor group's key weapons was the development of Neutrality Agreements. This was a method to make organizing easier, through the recognition of cards signed by employees, and in return the unions agreed not to contest tax abatements, certain types of zoning arrangements, and not to picket, among other things.

Editor: Are there target industries or industry sectors? Any new ones?

Krupin: The service-oriented industries that have drawn the attention of the labor movement continue to be the focus here. Labor is looking at the hospitality, healthcare, and even educational institutions. But any employer will be a target of the process of organizing cases.

Editor: Notwithstanding its name, the proposed statute appears to threaten the employees' right to a secret ballot. What are the implications of such a step, first of all on employees of companies which succumb to the siren song of the unions?

Krupin: Well, the current process is really not broken. Under today's rules, if the union gets 30 percent of the people in an appropriate unit to express their wish to be organized and sign cards to that effect, the cards are filed with the NLRB, which conducts a hearing on what are called questions concerning representations. This is a process that has worked for many years. The unions, however, want to avoid going through the NLRB democratic process. Just as importantly, the proposed legislation effectively prevents the employers from having a say in the process.

Editor: And management is up in arms about that?

Krupin: In my experience, most employers are not anti-union, but most of them want the employees to make an educated and informed decision - by which I mean a decision made after having heard from both sides. The present secret ballot election process provides for that. The EFCA does not.

Editor: At a time when the economy is probably in its worst shape since the 1930s - heavy manufacturing has left our shores, many service company jobs have been outsourced and consumer spending is down - the timing of the EFCA appears unfortunate. Does it represent a return to the confrontational labor-management relationships of the past? If so, what are the implications?

Krupin: Employers and unions need and can work together as business partners. To paraphrase Samuel Gompers, one of the great labor leaders in our history, "the enemy of the worker is an uncompetitive employer." When unions act as victims, rancor rules the day. When unions act as business partners, much can be achieved. This is so especially in these difficult economic times.

Editor: As you know, most of our readers are general counsel and the members of corporate legal departments. What should they be doing to prepare for the possible passage of the Employee Free Choice Act?

Krupin: Corporate counsel must understand that what is proposed will not pass in its present form. For the moment, the traditional concerns of labor relations continue to apply. Management must continue to communicate with its employees, must continue to be transparent in the dissemination of information, must analyze the issues that concern both sides of the employment relationship on a continuing basis, and must ensure that management staff charged with oversight on these issues is sensitized to labor's perception of them. Above all, during this period prior to passage of the EFCA, the best course to follow if the company is going to succeed is to listen to the employees and, where appropriate, communicate in a responsive and thoughtful manner. The unions do not organize the workforce; management does. The sooner management understands this, the better position they will be in.

Editor: What might a compromise look like?

Krupin: At this point, the unions have taken a very strong line, something that they usually do coming to the negotiating table. The EFCA, in its present form, is unlikely to survive even if the Democrats have 59 seats in the Senate. There will be need for compromise. That compromise might be something like this: if the union presents the company with cards totaling 70 percent of the workforce, there is a possibility that the company will be required to recognize the union because the 70 percent is so far above the 50 percent currently required for recognition. If the union has 50 percent of cards signed, rather than conduct an election with a 42-day campaign as currently required, the campaign may be limited to a 10- or 15-day period with a fair secret ballot election. The compromise results in a shorter period of time for management to get its message out to the workforce, something labor wants, but management does get its secret ballot election. A third aspect of the compromise under review would arise if the union attains 30 percent of the cards. In this circumstance, it would permit the union to come onto the employer's premises to talk to the employees. This 70/50/30 program is something that corporate counsel should be reviewing with some care, and ensure proper procedures are in place, as we move closer to the passage of the EFCA or some alternative.

Editor: Is there anything you would like to add?

Krupin: One provision of the proposed EFCA that I have not mentioned but which I find disturbing has to do with mandatory arbitration. This provides that if the union and the company cannot reach a contract within 90 days, either party is entitled to submit their proposals to mediation and, if that does not result in a contract, to binding arbitration after 30 days. The disastrous effect of this proposal is the ability to establish wages, benefits, hours, and conditions of employment, which has always been done through negotiation, will be taken away from the parties and handed over to someone who may not know the workings of the industry, the company or the bargaining unit. How is a company to operate its business under terms set by an arbitrator without institutional knowledge, and consideration of other business interests? To set standards for negotiations is one thing; to patently restrict an employer to negotiate terms of economics and work rules is quite another. This part of the proposed legislation is just poison to any employer.

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