With Barack Obama's election Tuesday, and Congressional gains by Democrats, employers need to plan for upcoming legislative efforts that could significantly change basic employer-employee relationships in the U.S. President-elect Obama has indicated his support for the proposed Employee Free Choice Act (EFCA). EFCA has been long sought by unions frustrated by their inability to prevail in more secret ballot elections, and by declining union membership and influence. If enacted, EFCA will make a series of fundamental changes to the National Labor Relations Act, as well as the balance of rights between unions and management.
First, EFCA would eliminate secret ballot collective bargaining elections. All a union would have to do to be recognized as the bargaining representative is to collect authorization cards from a majority of employees in the bargaining unit. This means that employers may have no idea that an organizing effort is underway until it is too late. The company may not have any opportunity to present its position, or to educate employees on the downsides of union representation. Employers are also concerned that without the opportunity for secret ballot elections, union organizers and co-workers will coerce, intimidate, and mislead employees into signing authorization cards.
The bargaining provisions of EFCA may be even more damaging to employers than elimination of secret ballot elections. If a union is elected, the employer would have only 10 days to begin negotiations over the initial collective bargaining agreement. If the union and employer cannot reach agreement on the labor contract within 120 days, the terms and conditions of the agreement will be submitted for binding arbitration.
In other words, a third-party arbitrator will have final authority to establish all terms and conditions of employment for up to two years, including wages, benefits, work rules, and seniority provisions. The arbitrator's decision could not be appealed by the employer on the grounds that it is unreasonable or contrary to competitive business demands. This arbitration requirement may cause unions to take extreme positions in negotiations, hoping to reach an impasse, and to rely on an arbitrator awarding them more than could be obtained through good faith bargaining.
Passage of EFCA will be the top 2009 priority for organized labor. Employers are already beginning lobbying efforts intended to educate lawmakers regarding the potential effects of the law on their businesses. EFCA could exacerbate already weak economic conditions. It could also have a devastating effect on foreign investment in the U.S. Overseas companies often choose the U.S. for manufacturing operations due to their ability to operate union-free.
If these lobbying efforts are unsuccessful, employers need to begin preparing now for EFCA's enactment. Union authorization cards are valid for a year. This means that organizers may begin card collection efforts now, with the intent of presenting them for certification as soon as EFCA is enacted. EFCA would, in essence, cause many employers to engage in perpetual union campaigns. A number of employers have already begun employee education efforts, including letters, DVDs, Web sites, and other efforts to educate employees on the effect of signing a union card, and on the company's position with respect to unionization.
Even with EFCA in effect, not all employers will automatically become subject to organizing campaigns. However, businesses that have experienced past organizing efforts, and those in industries targeted by union organizers cannot afford to sit back and wait to see what happens with the legislation. In addition to employee education efforts, employers need to train managers and supervisors about the potential effect of EFCA, as well as enlisting them to serve as early warning detectors for organizing activities. Existing legal restrictions on employers' reaction to organizing campaigns will still apply post-EFCA, and supervisor training needs to include appropriate guidance on proper company responses to employees.
Human resource professionals will play a crucial role in responding to EFCA. It will be more important than ever for HR to monitor employee relations, and to report to management employee concerns and issues. Swift responses to these issues, and open lines of communication with employees can go a long way toward making a company less vulnerable to organizing efforts.
Employers may also consider joining efforts to oppose EFCA's enactment. Working through trade groups, and contacting local legislators may be the best ways for companies to express their concerns over the proposed legislation.
If adopted, EFCA presents challenges to employers unlike those seen in recent memory. The potential consequences of the law are serious enough for management, in-house counsel, and human resource professionals to make their responses a top corporate priority. Parker Poe has established an EFCA Task Force to assist employers with designing and implementing supervisor training and employee education efforts. These efforts take a proactive and aggressive approach to set up systems intended to detect, deter, and respond to any potential organizing efforts. Please contact Jonathan Crotty at (704) 335-9041, Patti Bartis at (919) 890-4161, or Walker Coleman at (843) 727-2660 if you have any questions or need assistance.