Posted on September 17, 2009 by James A. Burns, Jr.

"EFCA Lite": Revised Version of Employee Free Choice Act Moves Forward

As we predicted in our September 14 piece on the Employee Free Choice Act (EFCA), organized labor’s increased pressure on Congress to pass such legislation is starting to bear fruit.  At this week’s AFL-CIO convention, Sen. Arlen Specter (D-Pa.), a leader in the Democrats’ effort to forge a bill that can withstand a Republican filibuster, announced the outlines of a compromise that he has been discussing with a small group of senators, which he predicted would become law before year-end.  Specter’s prediction echoes comments by Sen. Tom Harkin (D-Iowa), who said last week that there had been 60 votes to pass some compromise form of EFCA in July, and that the Senate could act on the bill later this year.

Sen. Specter said that he and his colleagues had reached a “consensus” on three “core principles:”

  • No card check, but speedier elections and union access.  Any revised version of EFCA would not include the widely attacked “card check” provision found in the current version of EFCA, under which employees could find themselves represented by a union without any vote.  Saying that no bill that did away with secret ballot elections could be passed, Specter described the proposed compromise as requiring such elections to take place promptly after a petition for certification was filed with the National Labor Relations Board (rather than the current approach, which allows elections to take place as late as six weeks later), and giving unions a right to enter the workplace to campaign.  Specter did not specify how long the shortened election period would be, or give any details about how and when unions could visit employees at work.
  • Mandatory “baseball style” arbitration.  The bill would retain the binding interest arbitration found in the current version of EFCA, so that if an employer and union failed to reach agreement on a first contract within so many days following the election, federal arbitrators could step in and impose an agreement on the parties dictating employees’ wages, benefits, hours, layoff procedures, and so on.  To address concerns that this approach would give parties an incentive to make unreasonable proposals, Sen. Specter said the bill would require the arbitrators to adopt the last best offer of one party or the other, so-called “baseball style” arbitration.  He said no decision had yet been reached on how long the parties would have to sign a contract before they would be forced into arbitration.  The current version of EFCA allows 120 days.
  • Treble back pay.  The bill would include significantly increased penalties like those found in the current version of EFCA, under which employers who discharge employees because they join or support a union would face treble back pay.

Shortly after Sen. Specter announced this framework, however, labor officials said they had not agreed to it.  Incoming AFL-CIO president Richard Trumka said “card check” remained in play, and the AFL-CIO’s director of governmental affairs said the labor federation had not agreed to any compromise.  Business leaders were equally dismissive, describing Specter’s approach as permitting “ambush elections,” contracts imposed by a “government-appointed bureaucrat,” and acting as a smokescreen for a last-minute return of card check.

All sides agree that any revision of EFCA cannot and will not move forward until the Democrats have 60 votes, which will depend on when Massachusetts selects a replacement for the late Sen. Ted Kennedy.  Although the special election to replace Kennedy will not take place until January, the Massachusetts legislature is considering a bill that would give the Democratic governor authority to name an interim replacement, meaning that a new Democrat could join the Senate within the next few weeks.

We will continue to keep a close eye on EFCA so that our clients can be fully prepared for whatever bill may emerge.

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Posted on September 14, 2009 by William Bevan III

The Employee Free Choice Act: An Update

While many suspected that the Employee Free Choice Act (“EFCA”) might become law within the first 100 days of the new Administration, that has not come to pass. Indeed, with the focus in Congress on the recession and the Administration’s push for healthcare reform, EFCA seems to have been all but forgotten. Like the disappearing canine in the old childhood song that we all remember, “Oh Where, Oh Where Has My Little Dog Gone,” EFCA seems to be lost in the Congressional agenda. 

But has it been forgotten? As we headed into Labor Day, EFCA emerged in the news. Although Senate Majority Leader Harry Reid (D-Nev.) announced last week that EFCA was unlikely to be considered until some time next year because Congress had “too many other things on [its] plate,”1 staunch supporters of the bill within organized labor beg to differ. Indeed, Andy Stern, president of the Service Employees International Union, was quoted in The New York Times as saying that he not only expected to see EFCA pass, but that it would still include “card-check” — the provision, widely attacked by Republicans and the business community — that would mandate union representation on employees without any secret ballot election in which employees could vote.2 While EFCA may be on the back burner, for now it is unlikely that labor will let it remain there for long. 

While most employers no doubt breathed a sigh of relief when it was reported earlier in the summer that card-check was unlikely to become part of any final bill,3 organized labor still continues to push for it,4 and President Obama is expected, at the AFL-CIO convention in Pittsburgh during the week of September 14, to come out strongly in support of EFCA as his next priority after health care. In light of labor’s strong support of the President and other Democrats during last year’s campaign, we expect a major push for EFCA or similar legislation as soon as the health care debate is over. 

What are the prospects for passage? Aside from disagreement within their own ranks, Senate Democrats face the practical problem that their filibuster-proof Senate majority of 60 votes has disappeared with the death of Senator Kennedy, who may not be replaced for some time. Nevertheless, at this point, we are still of the view that there will be labor law reform legislation, but more likely in 2010, than this year.5 The economy is still the central focus of concern for most Americans, and the country is still fighting two wars abroad. Yet, labor is not about to give up on its “crown jewel,” given the amount of time and money it spent on campaigning for various candidates for the current Congress.6 

As for the ultimate contents of the bill, while no one has a crystal ball, EFCA will probably end up replacing card-check with some form of “quickie” elections within 10 to 15 days following the filing of an election petition, giving employers a very limited opportunity to try to respond to a union organizing campaign that may have been going on for months.7 It also appears likely that any bill will include significantly increased penalties for employers that discriminate against union organizers or supporters, or other violations of the Act committed during an organizing campaign. As for the remaining aspect of EFCA — mandatory interest arbitration of an employer’s entire first contract with a union by a government-appointed arbitrator unless the parties can strike their own deal within four months following a union being certified — it is hard to know whether it will survive the legislative process. This provision is particularly offensive to those who have been involved in collective bargaining and understand the “give and take” needed to produce an initial collective bargaining agreement that will be respected by both parties. If labor is willing to surrender on card-check in order to get some form of EFCA passed, it seems unlikely that it will also walk away from interest arbitration.8 Senator Arlen Specter (D-Pa.) has previously suggested “baseball style” arbitration, which would force the arbitrator to resolve disputed issues by choosing the last best offer of one side or the other.9 Certainly, this type of interest arbitration would force both parties, but unions in particular, to bargain more realistically. 

In short, while the focus may have shifted to other issues, it seems fair to say, paraphrasing Mark Twain, that reports of EFCA’s death are greatly exaggerated.


1  Reid was quoted in the Las Vegas Review Journal as saying, “We have too many other things on our plate.” Indeed, although Reid spokesman Jim Manly was quoted in the Daily Labor Report (BNA) for September 2, 2009 as saying EFCA was not “dead” for this year, he did confirm that the remainder of the legislative year was likely to be taken up with healthcare, an energy bill, and banking and financial regulatory reform. 168 DLR‑A‑11 (September 2, 2009). 

2  The New York Times (July 17, 2009). The Times article reported that card-check would be dropped in an alternative version of the bill in favor of “quickie” elections — elections held 10 to 15 days after the filing of an election petition, rather than the current 42. There are, of course, conflicting reports, and representatives of labor have said “majority sign-up is still on the table.” Daily Labor Report (BNA), 144 DLR‑A‑6 (Jul. 30, 2009). Of course, an alternative bill, such as the Sestak bill (“The National Labor Relations Modernization Act”) pending in the House (HR 1355), which could involve union access to employees while at work, and control over the number of captive audience speeches an employer may give by giving the union conducting an organizing drive the same right. 

3  The New York Times, supra.

4  Reportedly, labor has been exerting intense pressure on many Senators during the August recess which is consistent with the earlier pronouncement to that effect, supra. n.2. Indeed, in an article in Politico, labor is said to be launching an all-out offensive that began September 1 with the announcement of survey results showing that “younger workers” support EFCA. J. Cummings, “Labor Mounts Autumn Offensive,” Politico (Sept. 1, 2009). 

5  A possible scenario is that while the health-care debate rages on, seemingly with labor’s approval, supporters of EFCA are quietly at work crafting an alternative that will have just enough support in the Senate to get by in the remaining days of 2009. It has been reported that supporters of EFCA are attempting to resolve the concerns of at least 12 Democratic senators who have been unwilling to support EFCA as currently drafted. Daily Labor Report (BNA), 172 DLR‑A‑7 (Sept. 9, 2009). 

6  Labor also faces a different public perception than in past years. A recent Gallup poll showed that for the first time since polling on the subject began in the 1930s, a majority of Americans disapprove of unions and believe they harm the U.S. economy. Daily Labor Report (BNA), 172 DLR‑A‑7, (Sept. 9, 2009). 

7  Although retiring AFL-CIO president John Sweeney has sent mixed signals, he was recently quoted in the Daily Labor Report (BNA) that while EFCA must contain a “fair and just process” for employees to decide whether they wish to be represented by a union, that process, according to Sweeney, “does not necessarily have to be card-check.” 170 DLR‑B‑1 (Sept. 4, 2009). 

8  The interest arbitration features of EFCA are hardly less controversial than the card-check provisions. Indeed, the U.S. Chamber of Commerce has indicated ever since EFCA was first introduced in 2007 that it found the mandatory interest arbitration requirements as unpalatable, if not more so, than the card-check provisions. Daily Labor Report, 192 DLR‑C‑1 (Oct. 4, 2007). That position remains the same. B. James, “Nixing Card-Check Could Shift, Not Quell EFCA Debate,” employment.law360.com (August 20, 2009). 

9  See Daily Labor Report (BNA), 114 DLR‑C‑1 (Jun. 16, 2009). 
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Posted on March 11, 2009 by William Bevan III

Organized Labor Gets Its Wish: Congress Introduces the Employee Free Choice Act

This post was written by William Bevan III and James A. Burns, Jr.

Seeking to impose dramatic changes in how employers are unionized and who writes an employer’s first contract with a union, Democrats in the House and Senate yesterday re-introduced the Employee Free Choice Act (“EFCA”). The bill (H.R. 1409, S. 560) is identical to legislation that passed the House in 2007 as H.R. 800.

EFCA would make three radical changes to the National Labor Relations Act:

  • First, the bill would permit unions to obtain certification through a mandatory card check reviewed by Regional Offices of the National Labor Relations Board (“NLRB” or “Board”), rather than through a secret ballot election held and closely monitored by the Board. Predictably, the proposed legislation would not allow employees seeking decertification of a union to use such card check procedures; employees who wished to oust a union would instead be required to vote in an election.
  • Second, EFCA would allow an arbitration panel to write the first labor contract between an employer and a union where the parties themselves cannot do so. In particular, if the parties had not reached agreement on their own within 90 days, either side could ask the Federal Mediation and Conciliation Service to mediate the contract and, if no contract was in effect 30 days later, an arbitration panel would step in and write the contract for the parties. Any such contract would remain in effect for two years.
  • Third, the bill would change the procedures and penalties for alleged violations arising out of union organizing campaigns. NLRB Regional Directors, acting at their own discretion, would be allowed to seek injunctive relief against employers for such alleged violations. The Board would be required to assess both back pay and double liquidated damages on employers who discharge employees during an organizing campaign. The Board would also have authority to assess a civil penalty of up to $20,000 per violation of Section 8(a)(1) or (3) of the Act that substantially interferes with the union organizational process during the period of organizing and, after certification or recognition of a union, until a first contract is signed.

Like its predecessor, EFCA requires that the Board certify a union once it finds that most of an employer’s employees in a unit appropriate for collective bargaining have signed valid authorization cards designating a particular union as their representative. In other words, if a union submitted cards to the Board signed by 50 percent plus one of the employees in an appropriate bargaining unit, the Board would be required to certify the union as the representative of all employees in that unit without holding any secret ballot election. The proposed legislation, like the prior bill, is silent on what sort of authorization cards would be valid, and directs the Board to develop language for such cards and procedures for determining their validity without setting any deadline for the Board to do so. The current House version of EFCA also does not indicate how traditional representation issues involving the scope and composition of bargaining units will be determined. Under current NLRB procedures, these issues are determined by means of a representation case hearing that results in a written decision by a Regional Director, which is subject to review by the NLRB.

The bill is also silent on several critical issues as to how the binding interest arbitration would work, including how the arbitration board would be selected, whether the arbitrators would need to know anything about the employer’s business, and whether they would need to take into account the parties’ earlier contract proposals in coming up with the final agreement to be imposed on the parties.

The House bill was introduced by Rep. George Miller (D-Cal.) with 222 co-sponsors. With Democrats in solid control of the House, there is little question that the bill could pass there as is.   The Senate bill was introduced by Sen. Tom Harkin (D-Iowa) with just 40 co-sponsors, meaning that even though President Obama strongly supports EFCA, 18 Democratic Senators are unwilling to attach their names to the legislation. Although EFCA supporters could probably find 51 votes in the Senate, the business community’s strong and uniform opposition makes it all but certain that Republicans will seek to filibuster the bill, requiring 60 votes to end debate. Organized labor and the business community are thus expected to focus almost all of their money and attention on the swing votes of about four or five moderate Democratic Senators and Sen. Specter (R-Pa.), seeking to secure 60 votes.
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Posted on October 16, 2008 by William Bevan III

The Employee Free Choice Act: The Crown Jewel of Organized Labor's Legislative Agenda

In perhaps no U.S. presidential election in recent memory has the outcome been more important to a change in our basic labor law, the National Labor Relations Act (“NLRA” or “Act”). Predictions are that if Sen. Obama is elected President and the Democrats take control of Congress, the crown jewel in labor’s legislative agenda, the Employee Free Choice Act, which passed the House last year but fell short in the Senate,1 could become the law of the land.2

The Employee Free Choice Act (“EFCA”), as passed by the U.S. House of Representatives, has three major features that make sweeping changes in the current provisions of the NLRA. First, the Act will permit unions to obtain certification through a mandatory card check conducted by Regional Offices of the National Labor Relations Board (“NLRB” or “Board”). Second, EFCA will impose first contracts through interest arbitration where the parties are unable to agree on the terms of such agreements. Third, EFCA will amend certain provisions of the Act to permit NLRB Regional Directors, acting at their own discretion, to seek injunctive relief against employers for alleged violations arising out of union organizing campaigns. The Board will be required to assess both back pay and double liquidated damages on employers who discharge employees during an organizing campaign. In addition, the Board will have authority to assess a civil penalty of up to $20,000 per violation of Section 8(a)(1) or (3) of the Act that substantially interferes with the union organizational process during the period of organizing and, after certification or recognition of a union, until a first contract is entered into. Each of these changes and its significance is examined below.

In its current form (H.R. 800), EFCA requires that the Board must certify a union upon finding that a majority of an employer’s employees in a unit appropriate for collective bargaining has signed valid authorizations designating a particular union as their bargaining representative in support of this petition3. The proposed legislation is silent on the question of what constitutes a valid designation, and the Board is specifically directed by statute to develop model union authorization card language and procedures for determining the validity of authorization cards.4 The Act does not, in any of its current forms, specify a timetable for the Board to accomplish this task.

The current version of EFCA also does not indicate how traditional representation issues involving the scope and composition of bargaining units will be determined. Under current NLRB procedures, these issues are determined by means of a representation case hearing that results in a written decision by a Regional Director, which is subject to review by the NLRB. Moreover, the card check provisions in the proposed legislation do not provide for the use of such procedures for employees seeking decertification of a union.

Imposing mandatory card checks on employers represents a sweeping change in the manner in which unions gain bargaining rights under the Act. Under the NLRA, as currently structured and interpreted by the United States Supreme Court, an employer has an absolute right to insist on a Board-conducted secret ballot election, rather than accept the outcome of a card check, unless it has previously agreed to have the question of the union’s majority status tested by means of the latter procedure, or has committed unfair labor practices that impair the election process.5 This is based on the theory that while cards may have validity, a secret ballot election is by far the preferred means for determining the question of whether employees wish to be represented for the purposes of collective bargaining.6  At the current time, most NLRB elections take place pursuant to voluntarily agreed-upon election agreements (approximately 90 percent in the Board’s fiscal year 2006).7

As indicated above, the second major change EFCA invokes is the imposition of a mandatory first collective bargaining agreement on parties who are unable to achieve such agreements through traditional collective bargaining.8 EFCA as proposed requires an employer to commence bargaining within 10 days of a request by a certified or voluntarily recognized union, and to bargain for up to 90 days from that date. If no agreement is reached during the 90-day period, either party may request that the Federal Mediation and Conciliation Service (“FMCS”) mediate the dispute. If mediation fails after 30 days, the FMCS is required to appoint a board of arbitration to resolve the disputed issues between the parties. EFCA does not specify the rules or regulations under which such interest based arbitrations are to be conducted. This change imposes, for the first time, government supervision over not only the process of collective bargaining, but also over the terms of such bargaining. Any contract imposed as a result of interest arbitration will be for a period of two years.

The final provisions of EFCA that have received perhaps the least amount of publicity are the special or extraordinary remedies outlined above.9 This transforms the Act from one that is remedial in nature and simply seeks to preserve and protect the status quo, to one that will impose significant punitive sanctions on employer conduct. The cumulative affect of such provisions is obvious: only those employers with significant resources will consider risking such litigation, particularly where court review is generally time consuming, expensive, and a long time in coming because of the Board’s inherent delays in decision-making.

EFCA is truly revolutionary. No less a liberal Democrat and supporter of organized labor than Sen. George McGovern, a former candidate for the U.S. presidency, has staunchly opposed the notion of imposing collective bargaining relationships except through the process of a secret ballot election. Sen. McGovern described the card check provision of EFCA as “a disturbing and undemocratic overreach not in the interest of either management or labor” . . . that “runs counter to ideals that were once at the core of the labor movement…” and “[i]nstead of providing a voice for the unheard, EFCA risks silencing those who would speak.”10 In short, mandatory card checks are not consistent with the American way of secret ballot elections.

______________________________
1 The bill that passed the House of Representatives was introduced as H.R. 800. The Senate version was S. 1041.
2 Indeed, a sitting member of the National Labor Relations Board recently stated in an address to the U.S. Chamber of Commerce on “Labor Policy at the Crossroads” that a “perfect storm” exists for changes to U.S. labor law. Board member Wilma Liebman, speaking for herself, said there is “record wage inequality” and the lowest rate of union representation in the private sector coupled with eroding health care and retirement benefits, rising immigration, and millions of citizens
“feel[ing] like they are walking an economic tightrope.” 54 Construction Labor (BNA, October 8, 2008).
3 See Section 2, H.R. 800, 110 Cong. § 2 (1st. Sess. 2007).
4 Id.
5 Linden Lumber Division v. NLRB, 419 U.S. 301, 310 (1974).
6 NLRB v. Gissel Packing Co., 395 U.S. 575, 602 (1969). While the Supreme Court approved the use of authorization cards as a measure of union sentiment for the purpose of imposing a bargaining order as remedy for an employer’s unfair labor practices, that prevent the holding of a fair election, the Court was careful to point out that authorization cards are “admittedly inferior to the election process...” Id. at 603.
7 2006 NLRB Annual Report, at p. 15.
8 See Section 3, H.R. 800, 110 Cong. § 3 (1st Sess. 2007).
9 See Section 4, H.R. 800, 110 Cong. § 4 (1st Sess. 2007).
10 “My Party Should Respect Secret Union Ballots,” George McGovern, The Wall Street Journal (Aug. 8, 2008).
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