On March 10, 2009, the Employee Free Choice Act, (“EFCA”) was introduced in both the House of Representatives and the Senate (H.R. 1409, S. 560) of the 111th Congress. While Senator Edward M. Kennedy (D-MA), chairman of the Senate Health, Education, Labor and Pensions Committee, has described the bill as “a critical step toward putting our economy back on track,” it is being viewed by others as a loss of management’s control in the workplace, with
Bernie Marcus, cofounder and former CEO of The Home Depot, going as far as calling it “the demise of a civilization,” and Sen. John Ensign (R-Nev.) referring to it as “the worst things to ever happen to our country.” Although the bill is still pending in Congress, it is already receiving tremendous support and is expected to be passed into law, in some form, sometime in the near future. As such, employers must take steps now to begin to prepare for the EFCA and the changes it will have on the workplace.

Aimed at “amend[ing] the National Labor Relations Act to establish an easier system to enable employees to form, join, or assist labor organizations, to provide for mandatory injunctions for unfair labor practices during organizing efforts” the EFCA, if passed, will represent the most dramatic change in labor relations and make it extraordinarily easy for unions to organize in both the “traditional” sectors and in many other sectors of the service economy. These changes in labor law will be seen in three major aspects of the bill—specifically:

1) allowing employees, rather than the employer, to decide whether to hold a secret-ballot election;
2) requiring companies and newly certified unions to enter binding arbitration if they cannot reach      agreement on an initial contract after 90 days of negotiations and 30 days of mediation; and
3) dramatically increasing the penalties for most unfair labor practices committed by employers.

Current Labor Law

Under current labor law, workers can select union representation either through an election process or through majority sign-up (also known as “card check”). The “card check” is done through a secret ballot election whereby an employee obtains signature cards from his or her colleagues. Once 30% of the work force have signed the cards, the employer may decide to hold a secret ballot election on the question of unionization. In the private sector, if the majority of votes favor the union, the National Labor Relations Board (“NLRB”) will certify it as the exclusive representative of the employees for the purpose of collective bargaining. Pennsylvania has a similar process for public sector employers, with the Pennsylvania Labor Relations Board (“PLRB”), instead of the NLRB, certifying the union as the exclusive representative of the employees.

Presently, neither the National Labor Relations Act (“NLRA”) nor the Pennsylvania Labor Relations Act (“PLRA”) require employers to honor their workers signed authorization forms as designations; rather, employers may insist that the workers use a so-called secret-ballot election conducted by the NLRB, for private employers, or PLRB, for public employers, to establish their union even if 100% of the employees provide the NLRB or PLRB with signed authorizations designating the union as their bargaining agent. The choice of whether to use an election process or majority sign-up to form the union is now exclusively controlled by companies.

EFCA Changes to Labor Laws
Certification on the Basis of Signed Authorizations

If enacted, the most widely publicized change made by the EFCA would be its requirement that the NLRB certify the union as the bargaining representative without directing an election so long as a majority of the employees signed union cards. This is different from the current law whereby an employer is permitted to demand a secret ballot election even if a majority of employees have signed cards authorizing the union representation. However, it is important to note that the EFCA does not abolish the secret ballot election; employees are still permitted to request a secret ballot election if 30% of employees petition for one. The change is seen in that the EFCA would allow the employees—rather than the employer—to decide whether to hold a secret-ballot election. The concern is that unions would generally bypass secret ballot elections in organizing drives, thus preventing management from insisting on a secret ballot, where employers would be able to campaign for a month or more against unionization during that time.

First Contract Mediation and Arbitration

Another significant change caused by the EFCA would be its requirement that companies and newly certified unions enter binding arbitration if they cannot reach agreement on an initial contract after 90 days of negotiations and 30 days of mediation. Pursuant to the bill, a union can demand that a company begin bargaining within ten days of certification of the union as the exclusive bargaining representative for an appropriate unit of employees—via either an NLRB election or majority sign-up (card check). If an employer and a union are engaged in bargaining for their first contract and are unable to reach agreement within 90 days, either party may refer the dispute to the Federal Mediation and Conciliation Service (“FMCS”) for mediation. If the FMCS is unable to bring the parties to agreement after 30 days of mediation, the dispute will be referred to arbitration. There would be no appeal to the arbitrator’s ruling, and the contract would last for two years.

While this process would be unique for most private sector employers, it would be a familiar practice for many Pennsylvania public employers, such as police officers, probation officers, correction officers, court appointed employees and court related employees.

Civil Penalties for Unfair Labor Practices

If passed, the EFCA would also dramatically increase the penalties and remedies for most unfair labor practices committed by employers (but not unions) during an organizing drive—as seen in increased damages in the form of triple back pay; civil fines up to the amount of $20,000; and injunctive relief against the employer.

Currently, employees who are illegally discharged or discriminated against during an organizing campaign or first contract negotiations are entitled to lost wages in the form of back pay, less any wages earned by an employee if they are hired by another employer. The EFCA increases this amount of damages an employee can recover to two times back pay as liquidated damages, in addition to the back pay owed, for a total of three times the back pay.

In addition, the EFCA would provide for civil fines of up to $20,000 per violation against employers who willfully or repeatedly violated employees’ rights during an organizing campaign or first contract drive. Currently, there are no civil fines for violations.

Finally, if passed, the EFCA would require the NLRB to seek a federal court injunction against an employer whenever there is reasonable cause to believe that the employer has committed an unfair labor practice during an organizing or first contract drive. It also authorizes the courts to grant temporary restraining orders or other appropriate injunctive relief. Currently, such federal court injunctions are required only for violations by unions. No such remedy exists for unlawful acts committed by employers in violation of workers’ rights.

Employers’ Response to EFCA

Research presented to Congress indicated that nearly 60 million employees would form a union tomorrow if given the chance. The media attention given to this bill is also highlighting labor’s interests and possibly increasing employee’s interests in union representation. As such, the increased interest in union organizing through a petition or card-signing campaign makes a thorough re-evaluation of company policies, procedures and practices essential. Employers should take affirmative steps now in order to keep their operations union-free and save time, money and resources in the long run. While a formal training session with management employees is strongly suggested, below are a few prudent and cost-efficient steps that employers can take right now to minimize employee dissatisfaction and resolve festering employment issues, both of which are leading causes of unionization.

• Research employee satisfaction in the workplace and take affirmative action to resolve any issues. In connection with employee wages, be aware of external employee salaries in the relevant industry. External salary reviews, which tend to be more accurate than internal ones, are recommended.
  
  
• Maintain open lines of communication with your employees. Employee feedback on issues and problems that arise is critical to ensure that management views are not insulated from workplace realities. Employees’ views on the fairness of problem resolutions have a significant effect on the way employees tend to respond to union organizing. This is done both at the supervisory level and with a strong and reliable Human Resources department.
  
  
• Audit of company policies and procedures. It is important to review current company practices to ensure they are compliant with established company policies and procedures. Also, if the employer knows of any necessary additions or changes to company policies and procedures, steps should be taken now, before any union activity occurs, to make these additions and/or changes. Waiting to create policies or make changes to policies after unionization occurs may be viewed as an unfair labor practice because the employer will be required to negotiate on all terms and conditions of employment.
  
  Certain policies which assist in minimizing employee dissatisfaction and resolving festering employment issues include an open door policy encouraging employees to bring their concerns directly to management and a policy governing dispute resolution. Other policies employers should consider include a no-solicitation policy.

Conclusion

The EFCA failed to pass during the 110th United States Congress because it came nine votes short of the 60 votes required to enforce cloture. Its passage is believed to be a strong possibility for the 111th Congress, with President Obama already voicing his support, telling a labor federation meeting in 2008, “I will make it the law of the land when I’m President of the United States.” As such it is recommended that employers take immediate steps now to prepare
for this major change in labor law as we know it today.

If you have any questions about the EFCA or steps you can take to deter successful union organizing efforts, please contact any of the following members of the labor and employment group who specialize in labor law: Kathleen D. Bruder at kbruder@rhoads-sinon.com (717) 237-6731, Kevin M. Gold at kgold@rhoads-sinon.com (717) 237-6702, Robert J. Tribeck at rtribeck@rhoads-sinon.com (717) 237-6701 or Cory A. Iannacone at ciannacone@rhoadssinon. com (717) 237-6778.

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