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Proposed Employee Free Choice Act Presents Major Changes for Employers

October 31, 2008
Labor and Employment Blog Post

The Employee Free Choice Act of 2007 (EFCA) proposes several major amendments to the National Labor Relations Act (NLRA), including less opportunity for employers respond to unionization, greater penalties and easier recognition for unions.

The House of Representatives passed EFCA on March 1, 2007 but concerns over whether President Bush would veto it led to the legislation being tabled last year. However, if Barack Obama wins the presidential election in November, he has committed to sign EFCA. Given that possibility, employers need to re-educate themselves about EFCA's requirements and consider their strategic response. As such, this advisory highlights the amendments and their impact on employers.

1. Recognition by "Card Check"

Under the NLRA, and current rules and regulations of the National Labor Relations Board (Board), an employer is entitled to demand a Board-conducted secret ballot election if at least thirty percent of employees in a unit appropriate for bargaining demonstrate an interest in a union as a collective bargaining representative.

EFCA would allow unions to circumvent the secret ballot election. The Act specifically states:

If the Board finds that a majority of . . . employees in a unit appropriate for bargaining have signed valid authorizations designating . . . [the union] specified in the petition as a bargaining representative . . . the Board shall not direct an election but shall certify the . . . [union] as the [collective bargaining] representative.

In other words, if this legislation passes, unions could demonstrate a majority and win certification by simply collecting signed "authorization cards" from a majority employees and presenting those cards to the Board.

EFCA provides no similar "card check" provisions for the decertification of a union, and it provides no mechanism for withdrawal or revocation of authorizations, once signed.

2. Requirements for Bargaining First Contracts

Upon the union's certification, EFCA requires that negotiations with an employer for a collective bargaining agreement must begin "not later than ten days" after the union's request. Ninety days after the commencement of bargaining, EFCA allows either party to enlist the Federal Mediation and Conciliation Service (FMCS) to assist the parties in reaching an agreement. Thirty days after such assistance, if the parties still have not reached agreement, the FMCS would be required to refer disputed items to an arbitration board established by the FMCS. The arbitration panel would then render a decision settling the dispute, and that decision would be binding on the parties for two years, unless it is otherwise amended by the parties in writing.

None of these restrictions on the bargaining of a first contract are currently contemplated by the NLRA. The binding arbitration requirement is a genuinely radical departure from existing law as it regards an employer's bargaining obligation.

Since 1947, a company whose employees decided, by secret ballot, to be represented by a union had an obligation to participate actively in deliberations with the union "so as to indicate a present intention to find a basis for a collective bargaining agreement." This is commonly referred to as a duty to bargain in good faith.

The NLRB currently cannot force an employer to make a concession on any proposal offered by the union. Under the new law, however, an arbitration panel, with presumably little or no first hand familiarity with the employer's business, would be able to decide what concessions an employer must agree to, whether the employer wants to or not.

3. Enhanced Enforcement of Unfair Labor Practices by the NLRB

EFCA also introduces two new measures of damages, both punitive in nature, for employers who violate Section 8(a)(3) of the Act during a union organizational campaign or the period between the union's certification and the execution of an initial collective bargaining agreement. They are:

  • Liquidated damages of two times any back pay awarded, in addition to the Board's traditional make-whole remedy.
  • A civil penalty up to a maximum $20,000 for each violation of the Act where an employer has "willfully or repeatedly" committed unfair labor practices during this time period.

EFCA also provides for injunctive relief against employers during a union's organizing campaign.
In sum, the EFCA has the potential to provide significant changes to employer realities of unionization. Employers are encouraged to begin critically examining their strategy in preparation for the possibility of the EFCA becoming law.

For addition information on the EFCA or other labor relations matters, please contact an attorney in Varnum's Labor and Employment Relations Practice Team at 616/336-6000.

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