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Employee Free Choice Act Brought Before Congress: A Change in Labor Law to Follow?

March 11, 2009

On Tuesday, March 10, Democratic leadership in the House and Senate introduced the Employee Free Choice Act (HR 1409, S. 560) ("EFCA"). This amendment to the National Labor Relations Act ("NLRA") was originally proposed, but not passed, in 2007 and has since been a controversial topic, both during the 2008 presidential campaign and thereafter. As many employers are aware, the EFCA would significantly amend the NLRA's provisions regarding how employees select unions to be their collective bargaining representative (and how unions organize those employees), how unions and employers bargain collective bargaining agreements (especially in "first contract" situations) and how the National Labor Relations Board ("NLRB") remedies unfair labor practices committed during a union organizing campaign.

The EFCA version introduced on March 10 is the same as that previously proposed in 2007. Specifically, EFCA has three separate elements:

  • "Card Check" Instead of NLRB Secret Ballot Election – Currently, employers have the right to demand that unions seeking to represent employees file a petition with the NLRB for a secret ballot election. Employees participate in an NLRB supervised election, usually held about 42 days after the filing of a petition. A union becomes the employees' representative if it garners the votes of a majority of voting employees. Under EFCA, the secret ballot election would be replaced by a "card check" method in which unions would become the bargaining representative of employees simply by gathering signed authorization cards from the majority of the employer's employees. Employers would have no ability to demand an NLRB election.
  • Mandatory Arbitration For First Contracts – Under EFCA, employers and employees bargaining "first contracts" (i.e., contracts bargained after the union's initial certification as the representative of employees) would be required to engage federal mediators if a bargaining agreement cannot be reached in the first 90 days. If an agreement cannot be reached after 30 days of mediation, the parties would be required to have their contract settled by an arbitrator. This represents a significant deviation from the existing law in which parties are merely required to bargain in good faith until they reach agreement on their own.
  • Enhanced Damages For Certain Unfair Labor Practices – Currently, remedies applicable to employers violating the NLRA's prohibition on discrimination against employees for union activities are generally limited to "make whole" (i.e. reinstatement and back pay) measures. Under EFCA, employers found to have discriminated against employees in the exercise of their rights under the NLRA would be subject to triple damages for certain unfair labor practices committed during a union organizing campaign or during the period when the parties are bargaining toward a first contract. Employers would also be subject to additional penalties of up to $20,000 per violation in cases where an employer is found to have "willfully or repeatedly" violated employee rights.

In short, the proposed amendments in the EFCA represent the most significant changes to the NLRA in over half a century. If passed, EFCA will forever change both the way unions organize employees and the strategies and methods by which employers who wish to stay union-free counter union organizing initiatives.

Observers expect a significant legislative battle over EFCA. The focus will be on the Senate where Democrats need at least 60 votes to avoid debate on the measure. Traditional labor and business constituencies will be heavily lobbying Senators. At present, observers are unsure whether supporters of EFCA will ultimately have the votes to pass the measure in its current form. A compromise on the legislation (i.e., a watered down version of EFCA) remains a possibility.

For employers wishing to stay union-free, EFCA is without question the most significant legislative issue for the foreseeable future. Employers should pay close attention over the course of the next several days and weeks. Varnum's Labor and Employment Group will be monitoring the situation as well and will be happy to discuss the issue or answer any questions on the matter.

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