The Corner

EFCA, Solis, and Minority Enterprises

Secretary of Labor nominee Hilda Solis is a strong proponent of the Employee Free Choice Act. She also claims to be a strong supporter of small and minority-owned businesses (“small businesses and minority enterprises are the backbone of our economy”).

 

Rep. Solis may wish to consult with Al Sharpton, who is skeptical that the two positions can be reconciled.

 

Small businesses with relatively small potential bargaining units are more easily organized under EFCA. Once their employees are organized,  businesses — small or large – will have just 120 days to negotiate a collective bargaining agreement after the union demands bargaining, otherwise an arbitrator will write the “contract.”

 

Negotiating a first contract in 120 days is a daunting prospect even for large companies with experienced, sophisticated human resource departments. For a smaller enterprise, whose lead negotiator is likely to be wearing two or three other hats in the business, it’s even more of a challenge. That doesn’t necessarily mean that a small business can’t reach a workable agreement with the union within that timeframe. But it’s far more likely that two other scenarios will unfold:

 

1) In an effort to avoid arbitration, the small businessman without prior labor negotiating experience concedes to union demands that he would reject if he weren’t compelled to reach an agreement in 120 days (under current law, the parties aren’t required to reach agreement within a specific timeframe); or

 

2) The small businessman goes to arbitration. (Interest arbitration isn’t cheap. It can go on for months and the legal fees alone can be substantial). The arbitrator writes a “contract” that the businessman would never have agreed to if he’d had the opportunity to bargain with the union in the context of their respective economic leverages. The business is saddled with uncompetitive labor costs and restrictive contract terms after having expended tens of thousands in arbitration.

 

Not good for the “backbone of our economy.” Especially at a time when some businesses are running on fumes.

Peter Kirsanow — Peter N. Kirsanow is an attorney and a member of the United States Commission on Civil Rights.

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