As the election approaches employers are becoming increasingly nervous about the very real prospect that the Employee Free Choice Act (“EFCA”) will be signed into law next year. Smart money says that some form of EFCA will be one of the first bills Obama signs — perhaps as early as February.
EFCA is arguably the most profound change in labor law in 70 years. Most of the focus has been on the “card check” provision. That provision substantially dispenses with secret ballot representation elections conducted by the National Labor Relations Board. Instead, unions need only present authorization cards signed by a majority of bargaining unit employees to be certified as the collective bargaining representative.
Obviously, this makes union organization far easier. The number of unionized workers has declined significantly over the last 50 years. In the mid-fifties 39% of private sector workers were unionized. By 1980, the percentage had shrunk to 23.6. Presently, only 7.5% of private sector workers are unionized. That figure promises to jump appreciably after EFCA is enacted. It’s not unreasonable to project that union organization rates could return to 1980 levels.
As nervous as employers are about card check, it’s EFCA’s first contract mandatory arbitration provisions that have businesses ordering antacids by the truckload. Under EFCA, if the company and union fail to reach agreement on a contract within 120 days after the union requests bargaining, the matter will be referred to an arbitration panel that will actually write the contract. That contract is binding for two years. I’ve negotiated more collective bargaining agreements than I can remember, but I can’t remember too many times when an agreement was reached on an initial contract in four months. It sometimes takes that long just to agree upon the shape of the table.
What if an arbitrator mandates a wage scale that makes the employer uncompetitive? What if the arbitrator puts the company into a pension plan that renders the company unmarketable? Can the arbitrator require interest arbitration in exchange for a no-strike clause? The questions are interminable.