The time for nonunion employers to evaluate their labor practices is now. Although Congress has rejected three prior attempts to make the Employee Free Choice Act ("EFCA") law, the current Congress will very likely pass some form of the bill, and President Obama has pledged to sign the bill into law. If enacted, the EFCA will make it easier for unions to organize employees, remove an employer's right to negotiate a labor contract with a union in most situations, and increase the penalties for "unfair labor practices" committed by an employer.
From Secret Ballot to Card Check
Currently, if a union obtains signed authorization cards from a majority of bargaining unit employees, the employer may recognize the union. But the employer may also reject the union. If at least 30 percent of the employees have signed authorization cards, the National Labor Relations Board ("NLRB") will hold a secret ballot election. Before the election, the union and the employer may campaign by informing the employees of the facts of unionization and their opinions about the same. At the election, each employee votes in secret, and to prevail, a union must receive a majority of the votes.
Under the EFCA, if a union got a majority of bargaining unit employees to sign authorization cards and the NLRB validated the cards (its "card check"), the union would be certified as the employees' representative. No election required.
Thus, if a union gets a majority of the employees to sign authorization cards without the employer's knowledge, the employer will have no opportunity to talk to its employees about unionizing before the union becomes the employees' representative.
From Bargaining to Arbitration
Currently, in negotiating a first collective bargaining agreement (after a union becomes the employees' representative), employers must bargain with a union in good faith. The parties are not required to reach an agreement, and one may not be imposed by the union, the employer, the NLRB, arbitrators, or anyone else.
Under the EFCA, if a collective bargaining agreement is not agreed to in 90 days, either party may submit the dispute to mediation. If mediation does not result in agreement in 30 days, the dispute will be submitted to arbitration. An arbitration panel will decide the terms of the contract, which will be binding on the parties for two years. The EFCA provides no procedures or standards that arbitrators must follow in setting the terms of the contract.
From Penalties to More Penalties
Currently, if an employer commits an unfair labor practice (e.g., firing or suspending employees thought to be union supporters), the NLRB may seek a court order against the employer and may award back pay to affected employees.
The EFCA requires the NLRB to seek a court order and award any affected employee back pay and twice that amount as liquidated damages. Any employer found to have willfully or repeatedly committed any unfair labor practice would also be subject to a $20,000 civil penalty. The penalties for unfair labor practices committed by unions do not change under the EFCA.
Nonunion employers should start planning for these likely changes now. Employers should consider documenting any plans to reduce employee compensation or benefits and the reasons therefor. If any such reductions are implemented after the commencement of a union organization effort, without proof of proper justification an employer will be subject to the unfair labor practice penalties. Supervisors should know the dos and don'ts of responding to an organizing effort. Educating employees about the facts of unionization and the employers' opinions about unionization is also something to consider — especially since under the EFCA an employer may not be aware of an organizing effort until a majority of its employees have already signed authorization cards and it is too late.
Some commentators question the EFCA's constitutionality, and if it becomes law contentious legal battles are expected. But even if those commentators are right, the legal battles might not be decided for years. Now is the time for open-shop employers to start developing strategies to deal with the EFCA.
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