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Tuesday, December 30, 2008

The Employee Free Choice Act

Those of us teaching Labor Law last semester had a rare treat: a proposal to amend the National Labor Relations Act, in a significant way, made the news. Students brought it up on their own, presidential candidates were discussing it, and my own friends and colleagues were asking me about it. I say "rare," because the NLRA is notoriously difficult to amend. Since 1960, there has only been one, relatively minor, amendment (applying the NLRA to hospitals). Indeed, NLRA amendments are exactly comparable to playoff victories by the Detroit Lions, in terms of frequency and significance, in the last half-century. Wait, that’s another post. . . .

Most of the public debate over EFCA has concerned the "card check" provision. My take on EFCA, in short, is this: "card check," while an easy target for opponents to attack, is not nearly as radical as opponents claim; the second part of EFCA, which would stiffen the remedies for employer violations of the NLRA during union organizing campaigns is obviously justified; and that the third part, which would mandate binding arbitration if the parties could not agree on a first contract within a specified time period is the most interesting and radical part of EFCA.

First, card check. Yeah, yeah, how can anybody oppose elections? I’ll get into why the union elections aren’t much like political elections, but I’ll begin by suggesting that requiring employers to recognize unions if the union produces cards, signed by a majority of workers in an appropriate bargaining unit where there is no proof of coercion or fraud, is not actually a radical idea. For one thing, mandatory card check was the law under the NLRA until the 1950s.

Also, from the passage of the NLRA through today, employers always have been allowed to recognize unions via card check and without an election. This means, among other things, that EFCA does not take away any right that any employee has to an election. EFCA would merely take away the right of an employer to force an election, in the face of a valid majority card showing. Employees would still have the same rights to, say, decertify the union later. Indeed, under Dana Corporation (NLRB 2007), before a card check recognition would be granted any protection from a decertification election, there must be a 45-day window after the recognition in which 30% of the employees are entitled to demand an election.

Further, in the public sector, where labor law is state and local law, five or six states have enacted mandatory card check recognition. I am not aware of any incidents of menacing union/mob stereotypes – the kind one sees in anti-EFCA ads – coercing employees in these jurisdictions. Similarly, mandatory card check recognition is the law in some Canadian provinces.

Second, to understand both the card check and remedies parts of EFCA, one has to understand that lots of folks think that the union election process is fundamentally broken. There are many studies on this. To summarize a few results: 91% of employers force employees to attend intimidating one-on-one meetings with supervisors; 51% illegally threaten to close their worksite when employees try to form a union; 30% unlawfully fire workers who support forming a union as a way of intimidating others. An alarmingly high percentage of employees feel that they would be fired if they supported a union in a union election process.

Now you may say, "but that’s illegal, sp why don’t unions and workers just bring claims?" The problem is the uniquely weak remedies under the NLRA. An employee fired for union organizing gets the right to reinstatement and backpay – minus whatever the employee made or should have made while waiting to be reinstated. And after all the litigation and appeals, reinstatement usually takes years. Compare other employment law statutes, like the FLSA (double damages, attorneys fees) or Title VII (punitive damages, consequential damages, emotional distress damages, attorneys fees); none of that is available under the NLRA. It’s clear that a not-insignificant number of employers intentionally violate the NLRA because the penalties are so trivial. So, I think, the part of EFCA that would increase penalties for employer violations during union organizing campaigns is a no-brainer.

Finally, EFCA would require mandatory arbitration for first contracts when the employer and union haven’t reached agreement. This addresses the problem of employers refusing to agree to contracts with unions, then provoking strikes and/or decertification campaigns, thus frustrating the purpose of the NLRA. A study by Kate Brofenbrenner shows that in about one-third of cases in which unions vote for representation, after a year, employers still have not agreed to labor contracts. Current law does not require any agreement; it merely requires bargaining "in good faith." Again, the remedy for violating the duty to bargain in good faith is almost comically weak: it’s an order to begin bargaining in good faith – which often takes years to get – and that’s basically it. Also, if the union and employees reach an impasse during bargaining, current labor law allows management to implement its proposals unilaterally.

EFCA allows employers or employees to request mediation by the Federal Mediation and Conciliation Service (FMCS) if no agreement on a first contract has been reached after 90 days of bargaining. If the FMCS is unable to bring the parties to agreement after 30 days of mediation, the dispute must be referred to binding arbitration. Unions and employers can agree to lengthen these time limits.

Binding arbitration is a relatively radical idea under the NLRA, in that the NLRB and courts have always been loathe to do almost anything that would set substantive terms of labor contracts. On the other hand, such procedures are common in the public sector in the U.S., and are used in a number of Canadian jurisdictions. Also, it’s likely that if this part of EFCA were enacted, the vast majority of negotiations would not actually use binding arbitration; rather, the law would serve as an incentive to bargain in true good faith.

I don’t have any inside information, but obviously there will be a tough fight over EFCA, and compromises might well be made. Along those lines, I note that the public sector jurisdictions that use binding arbitration to resolve bargaining impasses tend to have very specific rules about how the arbitrations should work (e.g., what criteria arbitrators should use). Some more details might be useful in EFCA’s arbitration section. I also wonder whether, if the unions got the tougher remedies, they would feel quite as strongly about either or both of the other two sections. So we’ll see if EFCA will pass as written, or at all. One thing is for sure, however: in the next couple of years, labor law reform is looking a lot more likely than another Lions playoff win.

Posted by JosephSlater on December 30, 2008 at 04:50 PM in Workplace Law | Permalink

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Comments

Any thought given to binding arbitration using the procedure where each side submits a lat binding offer, and the mediator or arbitrator must pick one or the other?

Posted by: Jim Rose | Dec 30, 2008 5:38:13 PM

Jim: Nothing like that is specified or even mentioned in EFCA, but that's a great example of an issue that many public sector labor laws that use binding arbitration to resolve bargaining impasses (and there are a lot of them) explicitly cover.

Posted by: JosephSlater | Dec 30, 2008 6:01:19 PM

Lucid. Persuasive. Right on point on why EFCA is legislation whose time has come.

Posted by: Paul Secunda | Dec 30, 2008 8:32:23 PM

I notice that much of the argument boils down to "it is not radical because it is done in the public sector in the U.S. and in some Canadian jurisdictions." The persuasiveness of the argument, then, depends a great deal on whether we really want U.S. companies to be more like the U.S. public sector and Canada. Let me speculate that this is not a line of argument that will convert many of the unconverted.

Posted by: anon | Dec 31, 2008 3:37:57 AM

Anon:

You make a fair point, but here is my two cents. First, some of the unconverted are liberals (e.g., George McGovern) who are worried about election rights. Such folks might be convinced not just by demonstrating the flaws in the union election process but also by explaining how labor law works elsewhere, since liberal skeptics probably don't mind the public sector or Canadian comparisons.

Second, sure, other types of opponents would be more skeptical of those models. But a main point of the "they already do this in the public sector and in Canada" argument is that certain very specific "horribles" that opponents predict would happen with card check, have not happened. Again, the notion that card check will lead to big problems with union/mob stereotypes intimidating and coercing employees to sign cards is not born out by any evidence from jurisdictions in the U.S. or Canada that have card check.

When discussing EFCA with these types of skeptics, I will try to make sure that my point about comparisons is at least mostly limited to rebutting these inaccurate charges.

Posted by: Joseph Slater | Dec 31, 2008 9:23:19 AM

"it’s likely that if this part of EFCA were enacted, the vast majority of negotiations would not actually use binding arbitration; rather, the law would serve as an incentive to bargain in true good faith"

I think an alternative scenario is just as likely. Public sector interest arbitration is a good example. In many cases, the parties are reluctant to submit reasonable positions at the table for fear that those positions will be used against them in arbitration. Instead, the parties just dig in at the bargaining table and create a record to utilize in the arbitration process. For example, if an employer proposes a 2 percent wage increase in response to a union's demand for 5 percent, the arbitrator has a range of reasonableness to guide his or her decisionmaking. An employer is therefore incentivized to make unrealistic/unreasonable economic proposals (e.g., propose a wage freeze or even reduction in this example). Interest arbitration is less likely to incentivize true good faith bargaining, and instead turns the early bargaining sessions into nothing more than pre-arbitration maneuvering. This has been the experience in public sector interest arbitrations, at least.

Posted by: Jeff Wilson | Dec 31, 2008 10:22:19 AM

Jeff:

You make a good point. I'll hark back to the first comment on this thread, though, and suggest that the risk of your alternative would be significantly less if some sort of "final offer" arbitration was used.

For the handful of readers out there who might not be up on differing forms of impasse resolution in public sector labor law, "final offer" requires the arbitrator to choose the last offer of one side or another -- no "splitting the baby" is allowed. This comes in two variations: "total package" (accept either all the union's proposals or all of the employer's); and "issue by issue" (accept one side or the other's proposal on all outstanding issues, but you can pick some employer proposals and some management proposals).

The theory (and some data/experience supports the theory) is that "final offer" arbitration gives the parties a strong incentive to make their last proposal(s) reasonable, because the arbitrator can only pick which of the actual proposals the arbitrator thinks is more reasonable.

Of course, this gets back to the problem that EFCA doesn't specify the process/procedure/criteria for the impasse arbitrations.

Posted by: JosephSlater | Dec 31, 2008 11:56:37 AM

Joseph: exactly right. The problem is that EFCA in its most recent form leaves open the procedure for interest arbitration, subject to rulemaking I suppose. Another unanswered question is whether and when a card-check-certified union may be decertified via card-check. Other than exisiting certification bar and contract bar doctrine, it is unclear how and when a certification via card check can be challenged. Presumably, a decert petition followed by secret ballot vote would be required. That is certainly asymmetrical and perhaps unfair.

In any event, I agree with your initial comments about teaching this in labor law courses. I spent a day out of the fall semester examining the policy considerations raised by the proposed legislation, and my students were highly engaged (I am an adjunct prof in addition to my private l/e practice).

I look forward to more discussion of EFCA on this blog. Epstein's recent criticism of EFCA's constitutionality is worthy of discussion (even if much of his argument is unpersuasive). Happy New Year.

Posted by: Jeff Wilson | Dec 31, 2008 1:19:57 PM

Jeff:

Thanks for your very thoughtful comments. I think we pretty much agree.

While it's fair to ask EFCA proponents whether they favor card check de-certifications, and while it's correct to say that allowing the latter and not the former is asymmetrical, I don't think that state of the law would be unfair.

First, of course, we already have card check certifications (voluntary process) and we don't have card check decertifications. So the asymmetry already exists but is tolerated for good policy reasons. Obviously, other asymmetries in labor law exist: employers can hold captive audience meetings, unions can't and can't get "equal time"; unions can promise/predict much improved wages, hours, and working conditions if the union wins; employers are more limited in making threats or promises based on the outcome of a union election.

One policy argument for asymmetry in elections, is the belief that employers unduly/illegally interfere both in union certification elections and would unduly/illegally interfere in decertification petition drives if the union didn't have a chance for an election. My personal sense from both the literature and years in practice is that this is a more realistic concern than the union/mob stereotype intimidation that EFCA opponents claim to worry about.

Finally, as to decert elections, again the current law is Dana Corporation, and under that case, all you need to force an election after a card-check certification is 30% of the bargaining unit.

Happy New Year to you (and anyone else reading this) too!

Posted by: JosephSlater | Dec 31, 2008 1:57:06 PM

I came here thinking I'd find a legitimate policy reason for card-check. Didn't find it. You make a legitimate argument that it's not the end-of-the world, that it's not that bad, but I still don't see any reason why the employer shouldn't get to call an election if it doesn't trust the results.

My wife's a union worker. Granted, in full disclosure, we're in Chicago, but she feels extremely intimidated to vote in favor of whatever the union wants, and the pressure comes not from some union mafia boss, but from her co-workers.

I'm not really seeing how the pressure an employer can bring to bear outside the voting booth (money, time, hints of layoffs, whatever) is at all the equivalent of the pressure a co-worker can bring to bear right in your face asking you to sign something "for the Union... for you... for us". But again, I"m in Chicago. Maybe we're just more mobbish than other places.

Posted by: Brett | Jan 3, 2009 1:32:15 AM

Brett:

There are many, many studies documenting the illegal pressures that employers put on employees in union organizing campaigns: as noted in my original post, among other things, something like 1/4 to 1/3 of employers illegally *fire* pro-union employees during organizing campaigns. There is nothing that co-workers do or can do that is remotely similar in terms of level of intimidation. Again, the comparisons to the Canadian provinces and the U.S. public sector jurisdictions that already have mandatory card check was to show that there is no evidence that mandatory card check leads to employee intimidation that EFCA opponents warn of -- there are no cases to show it.

If you are worried about the employer "not trusting the results," you should know that currently and under EFCA, employers are allowed to refuse to recognize unions on the basis of card check if there is evidence that the cards were obtained by fraud or coercion.

Beyond that, I'm curious whether you really think that, under current law, the main reason employers refuse voluntary recognition in the face of a majority card showing is because they are honestly unsure about whether the union enjoys majority support, and thus employers are just trying to ensure that the workers get what they really want. If that is your opinion, I have a bridge in Brooklyn I would like to sell you.

Posted by: Joseph Slater | Jan 3, 2009 10:25:34 AM

Joseph, I'm not sure that I understand. You're worried about undue pressure on workers to go one way or another on unionization, so the remedy is to eliminate the requirement for a secret ballot (even if, as you say, the secret ballot only comes into play at the behest of the employer)? Aren't you adopting an uncomfortable perch whence you worry that the employer will threaten its employees to do something it can't verify, while ignoring the concern of unions threatening its members to do something that it will be able to verify?

Although obvious, it should also be noted that the entire discussion is premised on the assumption that unions are a positive force, and that we should legislate in ways beneficial to them. That isn't clear.

Posted by: Simon | Jan 3, 2009 7:42:52 PM

Simon:

The evidence is overwhelming that employers on a regular basis put illegal pressure on employees to try to coerce them against what would actually be their free choice. On the other hand, I've brought up the examples of mandatory card check rules in the public sector and Canada to show that the idea that co-workers put anything like similar "undue pressure" on workers is, in fact, not supported by any actual evidence.
Imagine an election where one party could and regularly does fire people for supporting the other party. That's the "undue pressure" problem.

We could match cites all day on the benefits of unions. There is a considerable literature pointing out their desirability. The point, however, is not what you or I think about unions. The point is that the NLRA is supposed to guarentee the free, uncoerced choice of employees as to whether they want to join unions or not, and they are not getting that now.

Studies show that around 40% of eligible employees in the U.S. want to join unions. American workers in the public sector have a union density of near 40%. American workers in the private sector, however, have a union density of under 10%. That's because those workers aren't being given a legitimately free choice. That's because the union election process under the NLRA is fundamentally broken. EFCA is one way to fix that process.

Posted by: Joseph Slater | Jan 3, 2009 9:48:33 PM

Joseph, that still doesn't answer the key point. Coercion only works when the person doing the pressuring has a mechanism to know whether the person being coerced actually complied. That being so, if the election is by secret ballot (which it is, as I understand it), I fail to see how "illegal pressure on employees to try to coerce them against what would actually be their free choice" is at all relevant unless you posit a world where employees would never tell the coercing employer that they were going to accede and vote against unionization, then do it anyway.

Your hypothetical about "an election where one party could and regularly does fire people for supporting the other party" fails for the same reason. It's three months ago, you're my boss, and you tell me that you're going to fire me unless I vote for Barack Obama. I say "fine, I'll vote for Barack Obama." You either will or will not fire me shortly thereafter, but your decision it won't have anything to do with whether I actually gave in to your attempted coercion: no matter what I do in the voting booth, I'm going to tell you that I voted for Obama, and your decision will turn not on my vote but whether you believe me.

By contrast, a system that allows the union (and the employer, for that matter) to know which way any given employee voted faciliates coercion. It encourages it. Perhaps there's something to be said for such a system, but I cannot understand how you can reconcile a claimed concern about coercion with supporting a move from a system that prevents coercion to one that encourages it.

And I'm utterly mystified by what I take to be your premise of your penultimate paragraph that because the policies of the NLRA are being ill-served by the existing statutory framework, the discussion ought to be confined to how to more closely tailor the statute to serve its policy (or the policy we'd like to read into it) to the exclusion of questioning the wisdom of the underlying policy.

Posted by: Simon | Jan 4, 2009 12:06:08 AM

Simon:

You seem to be positing a world in which employers (supervisors, managers, etc.) don't know who the leading union organizers and supporters are in the employer's workforce when there is a union election campaign. That is not the real world. In the real world, union activists are visible because they need to be in order to get their message out to co-workers. Employers then routinely fire these leading activists. Other employees get the message about how the employer intends to deal with union supporters and the union in general were it to be certified.

I note, by the way, that neither you nor anyone else on this thread has even tried to deny or counter the considerable evidence that very serious employer violations of the NLRA routinely occur during union organizing campaigns, or provided any actual evidence of union coercion in jurisdictions that already use mandatory card check.

Further, tracking your Obama analogy more closely makes my point even stronger. If the only way Obama could be elected was to convince a majority of your co-workers to vote for him, and the main place anyone could communicate with this group of workers was your workplace, and your boss is set on firing anyone who appears to support Obama, would Obama get elected? Oh, and your boss is telling everyone that if Obama is elected, he's going to shut his plant down and move to Mexico, leaving you unemployed. . .

Finally, as to broader policy concerns, the policy that workers should be given an uncoerced choice of whether or not to join unions is uncontroversial. It's been the policy in the U.S. for over 70 years, it's the law in every other democracy (the only countries that Countries which don't allow free trade unions are generally dictatorships of one form or another). Nobody in the U.S. is calling for the repeal of the NLRA, or amendment to make it harder to form unions.

So, instead of giving you links to studies showing various benefits unions bring (I'm sure you can find them if you want), I'll end by saying that if you object to EFCA because you simply don't believe that workers should be given a free, uncoerced choice as to whether to form unions, OK, fine. Just don't pretend that your opposition to EFCA has anything to do with concerns about the rights of workers.

Posted by: Joseph Slater | Jan 4, 2009 10:43:05 AM

Joseph, any reply to that will do little more than repeat my last comment, so I'll be brief. With respect, I just don't think you've grappled with what is - unless I'm missing something obvious - the reality that card check replaces a system where the prerequisite of coercion is missing with one that lends itself to and encourages coercion by both employers and unions. Your own post hammers the point home: "union activists are visible because they need to be in order to get their message out to co-workers ... [and e]mployers then routinely fire these leading activists." Quite so. An employee is more vulnerable to retaliatory action when their position on unionization is known. How you get from that premise to the conclusion that we should make the positions on unionization of 100% of the workforce known, without the consent of those workers, rather than just a few of them who choose to make their position known, is a mystery to me.

Posted by: Simon | Jan 4, 2009 1:38:09 PM

Simon:

I agree we are beginning to repeat ourselves, so I will similarly try to keep it brief. First, in a mandatory card check system, the employer is muchh less likely to know who the union supporters are until the union has a right to be certified, because there wouldn't be the often-lengthy election period. When the union is certified, employer retaliation is much less likely because the employer's main incentive for, e.g., illegal firings -- preventing certification of the union -- doesn't exist, because the union has been certified. Also, the union is now in place, and it has more formal rights to deal with discrimination.

Second, respectfully, you are missing -- or choosing not to respond to -- the actual evidence of how both systems work. Again, in the election system under the NLRA, there is overwhelming evidence of massive coercion by employers. In jurisdictions which use mandatory card check, there is little-no evidence of coercion by unions, and much less coercion by employers.

In other words, we don't need you, me, or anybody else to speculate about what MIGHT happen if mandatory card check was enacted (or about the current system). We know there's a problem with the NLRA election system. The question is, what should we do about it? We have significant experience mandatory card check, and the parade of horribles you suggest has not happened.

Posted by: Joseph Slater | Jan 4, 2009 1:55:21 PM

Joseph:

Where are you getting this data? "30% unlawfully fire workers who support forming a union as a way of intimidating others."

Posted by: Grant | Jan 7, 2009 3:50:13 PM

Joseph, I enjoyed your view and the exchange about the EFCA. I am a union staff person who is supportive of new member organizing but even more concerned with decertifications. Believe me, it is not the employer that causes the kind of work place civil war that union decerts generate. Generally, the employer sits quietly in the wings and enjoys the action. The real threat is to legitimate unions by fly-by-night rouge groups that give our movement a bad name. Workers are too often taken in by rash promises of higher raises and lower dues. The result is bad feelings for all unions when only a few bad seeds are guilty of poor performance and unmet expectations.

The symmatry of card check for initial union representation and card check for decerts does not meet the reality. Workers rarely decertify unions in favor of "No Union" - they leave to join a different union. And, since legitimate unions have agreements not to raid one another, it is usually to a group that is an ebarrasement to those of us who are committed to workers rights.

Posted by: Blue Vino | Jan 24, 2009 9:28:24 PM

Thanks for the interesting comment/persective, Blue Vino (or may I call you Blue?)

Posted by: Joseph Slater | Jan 25, 2009 9:58:57 AM

"[I]n a mandatory card check system, the employer is much less likely to know who the union supporters are until the union has a right to be certified [thereby not knowing against whom to retaliate], because there wouldn't be the often-lengthy election period."

Simon, I'm confused -- if the problem is the lengthy election period, can't we just shorten that period? Why do we need card check too? It seems like if workers all want unions as badly as you say they do, a shorter election period won't hurt unions much.

Posted by: Aaron | Jan 26, 2009 6:26:04 PM

I meant to Joseph Slate, not Simon, above. My bad.

Posted by: Aaron | Jan 26, 2009 6:27:03 PM

Aaron:

I would be all in favor of shortening election periods, but previous attempts to do that have been less than successful. For one thing, there are various delaying tactics certain employers use -- notably, challenging the composition of the proposed bargaining unit. Also, even in a shorter election period, a decent percentage of employers will fire union supporters, in part because (as described above) the penalties for doing so are so trivial. Which is why another part of EFCA increases the remedies.

Now, could I imagine a whole new set of rules that would make the election period shorter, strongly and effectively punish employer ULPs during elections, and make various other amendments to the law to make union elections more? Sure.

But my point remains that card check would do that too, and it wouldn't be anywhere near as radical as opponents try to portray it. Again, we have long had a system of *voluntary* recognitions by employers; again, EFCA doesn't take away any right that *employees* currently have to an election; and again, mandatory card check was the rule in the private sector up to the 1950s, is the rule in a number of public sector jurisdictions, and has been the rule in various Canadian provinces.

And if anyone cares what the statute actually says, nowhere in the NLRA does it say that unions should only be recognized through elections. It says that employers must recognize unions if a majority of relevant employees "designate or select" the union.

Posted by: Joseph Slater | Jan 26, 2009 9:31:44 PM

The first sentence in the second paragraph above should end "to make union elections more fair." Or maybe "fairer."

Posted by: Joseph Slater | Jan 26, 2009 9:34:54 PM

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