IS THERE A UNION IN YOUR FUTURE



From PLI’s Course Handbook

38th Annual Institute on Employment Law

#18618

27

is there a union in your future?: EFCA and respect may play a big role

David J. Murphy

Morrison & Foerster LLP

Prepared on: July 24, 2009

The 5 Biggest Things Favoring Unions Now 1

Union Targets In A “New” Pro-union Environment 3

Where Are U.S. Unions Today? 4

Employee Free Choice Act (“EFCA”) 8

The RESPECT Act 22

The Political Future of EFCA and RESPECT 24

A New “Pro-Union” Attitude 26

What Employer’s Next Steps Should Be 29

Organized labor is on the brink of benefiting from a number of significant political and legislative developments that may greatly enhance its ability to organize previously union-free workplaces and industries. Given these developments, it simply no longer is the case that companies can rely on the dormancy of U.S. labor unions as their best and only protection for avoiding union issues being raised at their workplace. Instead, both the possibility of union organizing taking place and the risk that it would be successful have substantially changed. This article provides an overview of the key legislative developments and how they relate to union organizing issues at an actual business level, and then lays out a sound and effective business planning approach to these critical union issues.

The 5 Biggest Things Favoring Unions Now

There are five key things favoring labor unions in the United States right now. Each of them separately would enhance union prospects for successfully organizing employees at any company. Collectively, they constitute a potentially powerful force swinging the balance in the unions’ favor. These briefly are identified as follows:

The Employee Free Choice Act (“EFCA”): EFCA as initially proposed would make major changes in American labor law, including changing from a secret ballot election approach for unions and imposing the possibility that a labor arbitrator would decide the terms of what a company’s initial contract with a union would be. EFCA already is pending, and was introduced in both the House of Representatives and the Senate on March 10, 2009. It already has been the subject of much debate, and is likely to be amended before its passage as discussed herein.

The RESPECT Act: The RESPECT Act would significantly change which type of employees can be considered as “supervisors,” and thus be exempt from union organizing and union contracts. It works as a very close companion piece to EFCA to enhance a union’s organizing abilities.

Obama Administration and Congressional Support: Simply put, no President since Franklin Delano Roosevelt has been more supportive of unions than President Obama. During FDR’s presidency, the modern labor union movement and our current labor laws came into existence. It is not a mischaracterization to state that President Obama would gladly give them a “re-birth.” His supportive message also can reasonably be expected to go a long way in changing U.S. workers’ attitudes about their own need for a union as well as its worth to them and their families. His supportive stance also likely will be mirrored in a labor-friendly Congress, which owes its Democratic majority in both the Senate and the House in substantial part to organized labor’s contributions of campaign money and election-day votes.

A “New” NLRB: The National Labor Relations Board, as the federal agency responsible for enforcing labor law and supervising labor union activity in the private sector in the United States, obviously plays a greatly influential role in U.S. labor law. Besides actively pushing new pro-union laws, President Obama has the ability and already has taken steps to dramatically remake its membership as a vital force favoring unions in both its enforcement approach and its binding labor law decisions.

A “New” Pro-Union Attitude: Not since the pre-Reagan era have unions been so widely praised by our political leaders as they are now. Along with this changing political perception is a changing attitude among the American workers themselves which is far more favorable to the possibility of unionization. Since these workers themselves are the ultimate decision-makers on this issue, this point is critical, and will be further explored in this article along with all of these other foregoing factors operating in favor of unions now.

Union Targets In A “New” Pro-union Environment

Organized labor in the U.S. has developed a number of “new targets” to benefit from what it considers to be a new and developing pro-union environment. No general listing or industry announcement of these “targets” typically exists or is any way required to be disclosed by the unions. Notwithstanding this, news reports and other legal developments have highlighted what these likely “new” targets will be. A brief summary is as follows:

• Technology (Wall Street Journal 2009: “Unions are expected to focus on the tech sector, where they see strong potential to increase membership”) [1]

• “Green Economy” Jobs (BNA 2009: Joint Sierra Club/Union Study on “Job Quality in the New Green Economy;”[2] Silicon Valley Business Journal 2007: “Unions target emerging tech”) [3]

• Service Industry (Workforce Management 2009: “retailers, restaurants and healthcare facilities” and “any kind of service industry” will be “first on the hit list”) [4]

• Financial Services or any other Government-assisted Businesses and Industries (Wall Street Journal (2009): “Big Labor threatens banks on ‘card check’”) [5]

• Any multi-nationals with a significant U.S. presence (due to increasing protectionist sentiments and labor union focus)

Besides these “new” targets, unions also will re-focus their efforts on prior, more traditional union targets. These “re-newed” union targets are described as follows:

• Any prior targets of union organizing

• Any businesses with unionized competitors

• Any businesses with larger groups of workers in same or similar jobs

• Any businesses with a “blue collar” or technician workforce

• Any businesses in concentrated “union” (usually urban) areas

Obviously, U.S. labor unions are “opportunistic” organizers, and also will take on whatever other organizing situations may arise for them. However, in terms of a categorization of their focus, this listing of both “new” and “re-newed” organizing targets is an effective working summary of the unions’ own collective focus for these efforts.

Where Are U.S. Unions Today?

Unions in the United States have been in a steady period of decline over the past 50 years. From their high-water mark of representing over 35% of the American workforce in 1955, unions declined to 20.1% of the U.S. workforce in 1983, and then further to only 12.1% of the U.S. workforce at the end of 2007.[6]

Even these numbers are misleading as far as they relate to the private sector, as nearly 36% of government workers are unionized. Instead, the actual union representation level in the private sector was only at 7.5% through 2007.[7]

The reasons for the union decline in the United States are multi-fold. Some factors are internal to the United States, and involve the changing workplace, both from a “blue collar” to service and technology business approach and from a move of manufacturing facilities to the southern parts of the United States. The effects of globalization and foreign competition on the process have only added to the reduction in union membership. Moreover, unions themselves have had serious image and corruption problems, as well as a reputation for failure in industries such as Detroit’s “Big 3” automakers.

Other modern workplace factors have contributed to this decline. Employees in the modern workforce have much higher mobility rates, changing jobs more frequently and thereby being less concerned about whether a union or its seniority benefits are available at their workplace. Social welfare laws protecting workers’ rights increasingly have been enacted at both the federal and state level, supplanting the need for similar protections from labor union bargaining that motivated union organizing in the past. Further, modern human resources approaches have been greatly successful in persuading employees that an outside union representative is not needed to give them a voice or fair treatment at the workplace.[8]

Despite all of these problems as well as these difficult economic times, unions nonetheless have seen a small increase in their support among American workers in recent times. At the end of 2008, union memberships had risen by 0.3% to a 12.4% level among all workers, and specifically by 0.1% to a 7.6% level among private sector workers.[9] On an overall basis, in the last two years, these new union level figures reflect an approximately 3% increase nationwide. It also is worth noting that, given the very low figures for unionization throughout the more recently industrialized southern parts of the Unites States, the levels of union support and its increasing nature are actually much higher in the northern, midwestern and Pacific Coast areas of the United States, with California, New York and Illinois leading the way.[10]

Ignoring this recent union increase, the American labor unions lay much of the blame for their longer-term historical decline on what they consider to be a broken law in the form of the current NLRA and a broken system in how the NLRB currently operates. In the view of labor union advocates, delays and other problems in the NLRB union election system have opened the door to management efforts to shut down organizing and change the minds of employees about whether they ever need a union.

According to unions and their supporters, the most important factor operating against successful union organizing is a “$4 billion consulting industry” that has arisen and is used by employers in over 80% of union organizing situations to unfairly “coerce” employees not to select a union.[11] This is carried out primarily in the form of management-conducted so-called “captive audience” “campaign” meetings held at company offices during employees’ working hours. In the unions’ collective view, the entire system under the NLRA, including particularly the extended time period now allowed under current NLRB election processes for these management-conducted campaigns, must be revised because it simply “does not ensure that employees can select a representative free from coercion.”[12]

The unions also specifically complain that they face extended legal hearings and their accompanying delays if employers raise disputes about the election process. At least in the view of one former NLRB Chairman, Professor Gould of Stanford Law School, these cases can be “a Bleak House-like nightmare running on into months and years!”[13]

As two union lawyers succinctly summarized all of this in a paper recently presented to the American Bar Association:

The current representation process is flawed by excessive delays, unequal access to workers, and routine unfair labor practices by employers with insufficient remedies. Workers who endure these difficulties and win an election are then greeted with vehement, often unlawful, employer opposition in obtaining a first contract. In sum, the NLRB election system is poisoned by employer coercion.[14]

The unions’ assertions about the NLRB’s delayed processes and inadequate remedies are supported by at least one prominent and influential then-Republican political leader, Sen. Arlen Specter (R. Pa.), who authored a law review article along with a Harvard Law school professor completely agreeing that these problems exist.[15] Sen. Specter and these union critics focus on specific complaints that, under current NLRB law and its remedies for unlawful conduct, an employee found to have suffered unlawful discrimination or discharge due to an employer’s ULP generally receives only back pay, less offset for any other earnings. They also focus on complaints that, for these same ULPs or any other unlawful conduct in an employer’s bargaining with unions, it only must post a notice at the workplace acknowledging its violations and commitment to refrain from repeating them.[16] However, as these same critics also emphasize, under no circumstances will either the NLRB or the courts or the NLRB ever dictate to the parties what must be included in the substantive terms of any union contract, as that instead is left entirely to the parties and their bargaining negotiations under current law.[17]

It is against this backdrop that U.S. labor unions with the assistance of the Obama Administration are attempting to move forward with an ambitious pro-union legislative agenda. An examination of EFCA’s and RESPECT’s place in this legislative agenda and its effects on the union organizing process, as well as the role of the public’s increasingly favorable perception of unions, is set forth below.

Employee Free Choice Act (“EFCA”)

EFCA, as it originally was re-introduced in the current Congress after failing to be enacted in the last Congress, would make three major changes to the current U.S. labor law under the NLRA, briefly summarized as follows:

(1) EFCA, in its current version, would require employers to recognize unions based on a “card check” of signed union authorization cards from a majority of employees in a designated bargaining unit, subplanting the current system of a “secret ballot” vote.

(2) Whenever a union and an employer cannot agree on a first contract after only 90 days of initial bargaining, EFCA would require mandatory government mediation and binding “interest” arbitration to decide the terms of the contract, supplanting the current freedom of contract approach where no contract terms can be compelled by law.

(3) EFCA would substantially strengthen penalties against employers charged with interfering with workers’ rights under the NLRA during union organizing or negotiation of a first contract, and would also provide for previously unavailable injunctions to stop these types of alleged violations by offending employers.

Obviously, simply from the description of these changes, it is apparent that they would represent significant and major changes in the current U.S. labor law. This description of EFCA’s legal changes may actually underestimate its practical effects and the full extent to which union organizing would thereby be benefitted.

One major obstacle to EFCA’s progress to date has been its “card-check” approach and the resulting loss of the “secret ballot” election long-used by the NLRB. When the NLRA was first enacted in 1935 while FDR was president, it provided for union certification either on the basis of a union authorization card check or a secret ballot election conducted by the NLRB. When disputes arose about this card check approach, the NLRB itself first decided as a matter of practice that it would rely only on secret ballot elections, and Congress later formally adopted this as part of the NLRA itself by congressional amendment in 1947.[18] As a result, under current U.S. labor law, while an employer in certain circumstances voluntarily may recognize a union based on a majority of employees signing union authorization cards, the NLRB now is “permitted . . . to resolve representation disputes by certification . . . only by secret ballot election . . .”, thereby giving the employer the right to insist upon this secret ballot election process.[19]

Due to the vigorous political opposition to the loss of this “secret ballot” election that EFCA’s current version would result in, a group of leading Democrats has just announced that they will be dropping this mandatory “card-check” recognition approach from EFCA.[20] Instead, EFCA is expected to be amended to provide for what some refer to as “fast-track” elections within 5 to 10 days after a union files its petition seeking an NLRB-conducted representation election. This would restore the cherished “secret ballot” election, while preserving EFCA’s stated objective of overcoming employer delays in the representation election process.

While the exact form of this new approach remains to be developed into an actual “amended” EFCA, it appears almost certain that this will be the result, and that this will be part of the version of EFCA Congress ultimately votes on. It is worthwhile to note that the AFL-CIO already has been reported to have had a fallback position on EFCA to secure its passage in the form of a proposal for “fast-track” elections, with only 5 days from the union’s election petition to the conducting of the related NLRB election.[21]

Obviously, this type of approach is designed to overcome objections to the loss of the secret ballot, which is a major focus of the opposition to EFCA. Further, it reflects a position in line with other commentators, including former NLRB Chair Gould, in their suggestions for similar “fast-track” elections in 10 days, as well as some modified form of “interest” arbitration only when companies have been found to have committed unfair labor practices.[22] Others suggest that the amendments for a “fast-track” election preserving the secret ballot, which the AFL-CIO apparently long ago already had in mind, will be a successful step because “the Republicans have made so much of the secret ballot that if that provision were removed, they might find themselves somewhat disarmed.”[23]

One Democratic House member also already has introduced another alternative to EFCA, which would preserve the secret ballot vote in union elections at the cost of requiring companies to give “equal” on-site access to union organizers during union organizing and election campaigns.[24] In recognition of this same point, three major retailers—Costco, Whole Foods, and Starbucks—have also just recently announced their own alternative proposal to EFCA, providing for more severe penalties and more union access while preserving secret ballot elections. Further, Senator Specter, when announcing his own opposition to EFCA recently, staked out a position closely similar to these major retailers. [25]

Although it is at best unclear that these alternatives themselves will be the end result, their introduction at this early stage by a Democratic representative and a high-level corporate group emphasizes that an amended EFCA rather than its initial form is clearly possible if not likely as a political reality. According to the ad hoc retailers’ group, “simply opposing [EFCA] might prove futile given a union friendly environment in Washington. . . .”[26]

In summary, however, even with an amended EFCA, many of the same basic problems as with a “card-check” approach would remain with a “fast-track” approach.

1) EFCA’s Change Either to Union Authorization Cards or “Fast-Track” Elections

In order to understand the significance of changes from EFCA’s reliance on either union authorization cards or a “fast-track” election to determine a union representative, it is important to understand the process by which union recognition happens now. Unions frequently target companies for organization, and conduct campaigns over lengthy periods of time to garner employee support. The most important part of that support is in the form of signed union authorization cards, which the unions use to petition the NLRB to schedule a “representation” election.

According to the NLRB’s current rules, a union needs signed authorization cards from 30% of the employees in the designated bargaining unit in order to get this election.[27] In practice, unions only file petitions for representation elections when they have signed authorization cards from well over 50% of the employees involved. This extra level of support is routinely considered necessary by unions because they know employees frequently change their minds when management has a chance to communicate its response.[28]

Employers frequently do not become aware that an authorization card drive has begun or is ongoing, and there is no requirement either under current law or EFCA for such notification to occur. Instead, the authorization card stage, rather than being the “battle of ideas” which is the hallmark of any secret ballot election, can fairly be characterized as a “one-sided” union-biased campaign. Under current law, unlike the restrictions imposed on employers, unions are free to make inflated promises about benefits they may grant to or obtain for the employees, and are under no obligation to deliver on them.[29] The authorization card campaign may be started by just a few union activists or just some disgruntled employees, and then expands from there relying on the “bandwagon” effect of employee sentiment to sign up for the union. Indeed, the resulting “peer pressure” is the union’s biggest ally, and rightly has been criticized as opening the door to threats, intimidation and the like.[30]

Thus, if either the authorization card process alone or “fast-track” elections (which would happen immediately after the union completes its authorization card process) become the decider for union representation as the current or an amended EFCA would propose, the simplest and most direct element of all—the basic “timing” of the union recognition decision—would dramatically turn the tables in the union’s favor. On one very basic level, the union would be completely free to pick the timing on which it would move forward with a recognition demand. At least under current law, the union also is under no effective time restraints in its gathering of authorization cards.[31] In effect, therefore, if mandatory “card-check” decided the issue, the union chooses the “timing” of when the organization campaign ends as being the same time that it “wins” representation as provided in EFCA’s terms! If a “fast-track” election immediately thereafter is all that is left, the unions have a tremendous new electoral advantage and a considerably enhanced prospect of winning NLRB elections on a much easier and more often basis.

Besides making unions the “master of the timing” of union recognition situations, what EFCA correspondingly does is take away from employers a number of critical steps they and their employees who oppose unionization now have available to overcome union organizing efforts. These three steps and their significance are summarized below.

The “Missing” Bargaining Unit and Election Process Negotiations Under EFCA

The first “missing” step from the current NLRB system could be that employers and employees opposing unionization no longer would have the opportunity to negotiate the terms of a fair NLRB-conducted election. That is what would happen with the mandatory “card-check” approach. One key aspect of this is to set an effective and workable election date. This guarantees employees would have sufficient notice in advance of its occurrence and a likelihood according to their work schedule that they would actually be able to appear and vote and thereby express their opinion on this union issue.

More significantly, however, there no longer would be a meaningful opportunity to address precisely what employee “bargaining unit” will be involved before employees are deciding whether they even want a union. Under current NLRB processes, negotiations and discussions both with the union and the NLRB about what is the definition of the “bargaining unit” to be involved in the election are often key to its outcome, since this quite simply defines “who is eligible to vote.” Under the NLRA, the standard for defining an acceptable “bargaining unit” of employees is only that it must be “an appropriate bargaining unit,” but not “the appropriate bargaining unit.”[32] Thus, while the union already has a significant advantage in defining this as a practical matter under this generous legal standard, the regular practice now is nonetheless that this “bargaining unit” issue itself is bargained with the NLRB and the union. This “bargaining unit” negotiation process not only maximizes inclusion of all affected employees in the very decision about whether this will be a union, but it also helps to prevent fractured “bargaining units” that the union often will seek when it lacks broader support just to “get its foot in the door.”[33] EFCA’s bypassing of this important step instead facilitates the union in achieving just that, even when it only has weak and limited support in a larger employee group.

While the “fast-track” election alternative may restore some of this, the exact details of this approach remain to be seen. It very well may be that what previously had been a good-faith opportunity for management to either negotiate or, if necessary, litigate these issues will be taken away. Unfortunately, these issues cannot be further addressed until an amended EFCA is presented.

The “Missing” “Other Side of the Story” Under EFCA

The second “missing” step under EFCA’s approach is nothing more nor less than “the other side of the story” involved in the employer’s campaign response to the union’s organizing efforts. Secret ballot elections typically occur within 39 days after the union organizers file an election petition, and 94% of all elections take place within 8 weeks.[34] It is this election campaign window of time, in which the employer communicates both the “positive” aspects of company employment with no union as well as its response to the union’s “one-sided” campaign of inflated promises and false or unfair company criticisms, that the unions resent most.

On a practical level, this actually is the major focus of EFCA. The reason quite simply is that these responsive employer campaigns are effective in persuading employees that their best choice is to remain union-free. A big key throughout this responsive campaign is that employees who oppose the union now are supported with facts and the ability to speak out, which frequently is not the case during the authorization card stage. In a very realistic sense, this opportunity will be lost in any meaningful way under either EFCA’s current mandatory “card-check” approach or the newly-proposed “fast-track” election approach.

The “Missing” Secret Ballot and Other Election Protections Under EFCA

The third “missing” step under EFCA as it initially was proposed would be the employer’s ability to ensure the “secret ballot” vote on election day, and to thereby ensure employees’ privacy in a federal government-run election under government-supervised “laboratory conditions.”[35]

This “secret ballot” approach substantially cuts down the effects of peer pressure as well as simply the fear in many employees’ mind of being forced to take a public stand. This government-supervised election process also provides for objections to improper conduct during the election proceedings, whether based on employer or union conduct, which improperly influence or coerce the employees and their vote. While unions blame employers for many of these evils, the legal record is clear that they themselves have been guilty of this conduct on multiple occasions, causing courts to overturn election results in unions’ favor because of such union misconduct.[36] The final voting results are also tabulated and certified by the NLRB itself, ensuring their ultimate accuracy.

While the “fast-track” election approach on its face may restore the “secret ballot,” one other alternative being pushed by some reformists is to include a “mail ballot” option.[37] In reality, if this “mail ballot” approach were followed immediately on the heels of the union’s authorization card campaign, many of the same evils which caused the opposition to “card check” would still apply in a practical sense. In short, the “mail ballot” would proceed on much the same basis as the “authorization card” signing process, with otherwise neutral employees being pressured to send in their mail ballots in favor of the union immediately and without any consideration of why this may not actually be against an individual employee’s best interest.

Under EFCA, then, in either its current or amended form, and as it intentionally was designed by its union supporters, each of these critical steps for an employer’s response to union organizing would either be lost or dramatically changed in the union’s favor. The evils of false union promises, mind-changing peer pressure and even improper threats will control when there is no time available to cure this. As one business owner succinctly observed would be the result instead under EFCA, “If over half of my employees get invited to a pizza party with a keg of beer and they sign cards, they’re union members the next day.”[38] The result with “fast-track” elections, especially with “mail ballots”, may be to delay the pizza and beer party by only one week!

2) EFCA’s Bargaining Changes and “Interest” Arbitration

One bargaining change proposed by EFCA that has received little discussion compared to other issues EFCA raises is that, should authorization card recognition happen, the employer on the union’s request must immediately commence bargaining within 10 days. No such time limit exists now, and bargaining typically only begins in one to three months after recognition. However, under EFCA, an employer faced with union recognition, based on an authorization card campaign it may not have been aware was even ongoing, would need to develop in this compressed 10-day timeframe its entire bargaining approach for the most significant part of the new union bargaining relationship, and that is the parties’ new first contract.

This same accelerated timing also ignores the burden on the employer of the union’s information demands, which typically are at their highest during contract bargaining and especially for the first contract.[39] Obviously, such immediate bargaining also would start while the emotional effects among the workforce from the union organizational campaign are at its highest, and this situation itself typically corresponds with less ability to make concessions but instead more rigid union bargaining position. As a result, since strikes are still permitted under the NLRA even as amended by EFCA at any time during bargaining, this result itself may be more likely.

What this immediate bargaining start also leaves little time for is to simultaneously prepare the employer’s bargaining position in light of what may be the forced mediation and “interest” arbitration that EFCA requires if the initial contract is not reached within 90 days. The first stage of this, involving a required contract mediation conducted by mediators from the Federal Mediation and Conciliation Service (FMCS), quite simply is not a step any experienced management negotiator would recommend. The FMCS mediators are government-employed and trained, and not always familiar with the demands of private industry. At best, the FMCS approach generally ends up being nothing more than a basic “horse-trading” mediation, and at worst it involves serious flaws from FMCS pro-union bias and the adverse publicity the FMCS process itself often can generate.

The mere prospect of the mandatory “interest” arbitration that follows all of this may also harden the union’s position both in mediation and throughout the preceding collective bargaining itself. Quite simply, unions could insist on unreasonable demands from the outset based on whatever “campaign promises” they may have made during authorization card gathering, without a willingness to engage in the typical contractual “give and take” involving the necessary concessions for successful collective bargaining. Instead, unions not only would still have the “guarantee” of an arbitration-forced agreement, but also the entirely plausible belief that the arbitrator would be a more sympathetic listener than management. As a result, the union’s bargaining and mediation positions may simply remain unreasonable, despite best efforts by a company and its management to negotiate in good faith.

A union belief that the “interest” arbitrators may be “sympathetic” to the union’s position is well-based simply from a general awareness of the overall FMCS arbitration panel members. There are very few experienced private sector labor arbitrator left as a direct result of the decline in private sector unionization. Further, as any experienced practitioner would confirm, the range of arbitrators on any given FMCS panel are decidedly pro-union. This has arisen in part from what has become arbitrators’ own business necessity to retain their ability not to be rejected by unions as too “management-oriented” in the diminished labor arbitration business that the decline in unions has left.

Moreover, since “interest” arbitration scarcely if ever is used in the private sector, the only experienced “interest” arbitrators that now exist are ones who have worked on such cases for the public sector. No requirement exists or is likely to be imposed that any “interest” arbitrators at least must have any industry knowledge for the contracts they would be deciding. Nonetheless, it is essentially these unskilled, inexperienced, and potentially biased arbitrators who would be deciding what the parties’ first labor contract would be under EFCA, in abrogation of the guiding principle of freedom of contract in place since union bargaining in the U.S. first started under the NLRA.[40]

Complicating the absence of skilled, experienced, and unbiased “interest” arbitrators is the complete lack of standards to govern this type of “interest” arbitration anywhere in EFCA. Instead, these standards presumably will be set by the arbitrators themselves, or according to some regulations to be drafted by the FMCS or NLRB.[41]

The only actual guidelines that now exist about the controlling factors in “interest” arbitration are general labor arbitration case precedents on this subject. These arbitration decisions typically have considered the following factors: (1) prevailing practices in the industry or geographic area; (2) what wage differentials (skills, training, etc.) should affect wage rates; (3) industry wage and benefit patterns; (4) an employer’s ability to pay (for which employer bears burden of proof); (5) whether there should be a COLA or wage escalator; (6) the competitive nature of employer’s business; (7) employee productivity (as factor requiring wage increases); (8) pre-arbitration negotiations; (9) past practice (especially for initial contract); and (10) the public interest.[42]

As even the briefest review of these multiple “interest” arbitration factors illustrates, the process is tremendously costly, time-consuming, unpredictable, and ultimately risky. In short, it requires a business to permit an outside arbitrator to decide its employment costs, its management rights, and other key points, regardless of the arbitrator’s lack of expertise or even pro-union bias.

The Silicon Valley Business Journal correctly summarized the ultimate weakness of the “interest” arbitration process when editorializing to “End Arbitration on Union Deals” in local governments. Its editorial, which criticized an “interest” arbitrator’s $26 million award against a city without sufficient funds to fund it, quite correctly stated as follows: “The [“interest” arbitrator’s] decisions are made issue by issue . . . . [An] arbitrator typically will go down the list and give to both sides. It’s a balancing act rather than an equity decision.”[43]

3) EFCA’s Penalties and Injunctions

EFCA’s provisions would increase penalties for NLRB unfair labor practices in two circumstances. The first is when such ULPs occur during any union organizing, and the second is when they occur in the closely following time period before a first union contract is reached. In these two time periods, instead of the current back pay remedy imposed under the NLRA, EFCA would impose a treble damages remedy of three times back pay for any employee discharged for union activities. It also would impose a separate penalty of $20,000 per violation for any employer “willfully or repeatedly” committing any ULPs in these two circumstances.

In addition to these new monetary penalties, EFCA also would make it “mandatory” for the NLRB to seek injunctions in certain circumstances during these same two time periods. According to EFCA, if there is “reasonable cause” for finding that an employer has discharged or discriminated against employees in these two time periods, or threatens to do so, due to their union activity, the NLRB then must seek an injunction to restrain that activity. A catch-all provision also is added requiring the NLRB to similarly pursue injunctions whenever an employer “significantly” threatens any other employee rights under the NLRA in the same circumstances, broadening this mandatory injunction remedy and its scope to a much wider range of potential actions. Moreover, this new “injunction phase” would obviously happen before the NLRB even actually has adjudicated that anything illegal in fact ever occurred.

In summary, EFCA accurately has been described as “the biggest pro-union shift in the balance of labor-management power since the Wagner Act of 1935.”[44] Indeed, if EFCA were to pass in its form as proposed, the view of many labor relations observers in the United States is that “the legislation . . . is expected to result in a jump in union membership from the current 7.5 percent of the country’s [private sector] work force to 20 percent.”[45] Whether or not EFCA and its provisions would lead to this as the actual numerical result, there is no question that, as part of all of the other factors favoring unions today, it would substantially benefit unions and their organizing efforts. The other factors favoring unions today support this conclusion very strongly.

The RESPECT Act

The RESPECT Act[46] is designed to reverse a recent set of NLRB decisions which had effectively expanded the definition of which employees can constitute a statutory “supervisor” under the NLRA. The Board, which at the time was dominated by members appointed by President Bush (the “Bush Board”), accomplished this in three decisions known as the “Kentucky River Decisions.” In those decisions, the Bush Board relied on two parts of the existing statutory definition of “supervisor” in the NLRA, relating specifically to the supervisory duties to “assign” work and “responsibly direct other employees,” to find that a protected supervisory status existed.[47] Thus, under current NLRB law, since these types of employees possess statutory “supervisor” status, they are employees whom a union cannot organize or properly include within a union’s sought-after bargaining unit during union organizing.

Under RESPECT, however, supervisory status no longer would consider these two key factors of “assigning” tasks and “responsibly to direct” others. Instead, RESPECT would limit supervisory duties to the rest of the categories otherwise left in the NLRA to define a supervisor’s tasks (which are to “hire, transfer, suspend, lay off, recall, promote, discharge or reward other employees.”[48]) This duty restriction would itself substantially restrict the number of employees who qualify as supervisors, and expand the unions’ ability to organize them.

More significantly, however, RESPECT would impose a new standard that a statutory supervisor must perform what remains as covered supervisory duties for a “majority of the individual’s work time.” No such limitation now exists in the NLRA in this or any other percentage amount. This greatly heightened standard quite obviously could result in virtually all employees below the equivalent of a department head level from qualifying as a statutory “supervisor” under the NLRA. Instead, similar to what exists in the public sector, all of these employees who otherwise right now regularly carry out management functions would very possibly become part of union organizing, union bargaining and even union strikes.

In short, companies would be faced with a front-line as well as probably mid-level supervisory staff with “divided loyalties,” particularly including when it came to disciplinary matters for “fellow union members.” In addition, union organizing efforts would be greatly strengthened by inclusion of these former “supervisors” and their obvious ability as part of their own potential union preferences to effectively coerce their subordinates to sign union cards. The overall union bargaining position would also be greatly benefited, since a company typically needs supervisory employees to keep running during strikes but would now no long be able to count on them as being outside the union when strike threats are made. Thus, the changes brought about by the RESPECT Act would themselves be substantial and far-reaching, notwithstanding its rather innocent-sounding title.

The Political Future of EFCA and RESPECT

The most contested votes in Congress on this pro-union legislative agenda undoubtedly will involve EFCA. In the last Congress, it passed the House by a 241 to a 185 margin, and more Democrats occupy the House now than then. In the Senate, it fell 9 short of the 60 votes needed for cloture on a filibuster vote, falling 51 to 48. While the Senate now has 60 Democrats, some may oppose EFCA on its merits, although their cloture vote remains to be seen. In fact, the issue for EFCA’s passage in its current or an amended form is almost exclusively the cloture vote in the Senate. Some commentators suggest that one likely scenario is a vote supporting cloture while allowing dissident Democratic Senators to vote against it, but still achieving its passage. Senator Specter, who as already has been noted, co-authored a Harvard Law Review article supporting labor law reform and covering virtually all of EFCA’s same concepts, previously had stated he nonetheless will not support it,[49] but now not only is a Democrat but also is in the leading group of Democrats who just announced their support of an amended EFCA dropping its mandatory “card-check” approach.

Thus, while it is always difficult to predict Congressional results in these or any other circumstances, it appears that the RESPECT Act and an amended EFCA have a very strong chance to be enacted. RESPECT likely will ultimately be enacted in a version close to what it originally provides, but EFCA will be substantially amended.

EFCA likely will have no mandatory “check-card” approach in its final version, but instead will have the expedited 5 to 10 day “fast-track” election approach. Since “card check” now appears to be gone, debate will now intensify on EFCA’s “interest arbitration” requirement for initial union contracts, and this may be amended to apply only to situations where a refusal to bargain in good faith by the employer has been established. Its “interest arbitration” approach may also very well be limited to a “baseball arbitration”, where the arbitrator decides only between each parties’ last offer and not according to the arbitrator’s own view of what the contract should be. The apparent purpose of this is to cause each party to present their own best proposals in bargaining, and not simply wait for an arbitrator to decide.

Finally, a “wild card” EFCA addition that may come more strongly into consideration in response to union demands after mandatory “card check” is dropped may be restrictions on an employer’s ability to conduct “captive audience” speeches. The proposal made by the 3 major retailers (Costco, Whole foods and Starbucks) already contemplated this, and one Democratic House member already has introduced an alternative bill providing for this.[50] In essence, unions would get greater employer property access rights to directly counter the employer’s own campaign. While this has not been seriously debated so far, there is now at least some chance a concept like this may end up in the final version of EFCA.

As one commentator put it, however, if and when EFCA passes in whatever form it ultimately takes on, it will be a “whole new world.”

A New “Pro-Union” Attitude

In addition to EFCA and RESPECT and their likely passage, a final factor which cannot be overemphasized is the changing perception of the potential union-voting “public” toward unions today.

A recurring theme in the recent national political discussion has been the decline of the American middle class and the growing inequality between rich and poor in the United States. The news media of all types have trumpeted this theme, declaring that “The Gap Between America’s Rich and Poor is the Largest it’s Been Since 1928.”[51] These same news reports and their commentary emphasize messages such as the following: “Now, with the economy in freefall and likely to get worse, Americans—despite their suffering—have an opportunity to reshape the society, and then move it in a fairer, smarter and ultimately more productive direction. That is the only way to revive the dream. . . .”[52] Jared Bernstein, who is the Chief Economic Advisor to Vice President Biden, aptly summarized this in his book on the same subject titled “Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries),” as follows: “Economics has been hijacked by the rich and powerful, and it has been forged into a tool that is being used against the rest of us.”[53]

This same pro-working-person, pro-middle-class message is exactly what organized labor has settled on as its primary focus. John Sweeney, the long-term AFL-CIO President, has stated this theme in a repeatedly published article as follows: “We are determined to enact a new economic agenda that will lift America’s working families . . . a union card remains the single best ticket into the middle class . . . .”[54] Thus, the message of the U.S. labor unions and the national political discussion are aligned for the first time since the pre-Reagan era. The effectiveness of organized labor’s message along with its receptiveness by working employees is correspondingly at a higher level than at any point in the same time period.

As a close corollary to this, what the Obama Administration and unions each are saying are virtually identical messages about the economy and the country as a whole. The “birth” of the modern union movement was during the Great Depression, and a similar message about the need for labor unions is conveyed today to a similarly receptive “working person” audience. While their economic plight is nowhere near the levels experienced during the Depression, reductions-in-force and unemployment levels clearly are at modern highs. Picking up on this union theme, pro-labor economists now repeatedly are stating, whether this is accurate or not, that rising union membership may be a key to the economic recovery.[55] President Obama echoed this same thing very recently when he stated that making it easier for unions to organize is a way “to restore some balance” to the economy and the losses it has caused for working families.[56] Clearly, all of this aligns the efforts of the national economic recovery and unionism in the minds of many in the workforce as potential union members.

One vivid example of this in action was the nationwide reaction to the Chicago-area factory union workers who took over their plant late last year in the face of a shut-down notice from a bank depriving them even of severance pay. These workers and their signs proclaimed “You got bailed out, we got sold out,” and they were called national heroes for “fighting for our rights” when they ultimately got other banks to contribute to their severance pay.[57] This is the same kind of economic message that the U.S. politicians and pro-labor economists are making, and it is the type that assists greatly in helping workers believe unions have value to them.

The real key to any successful union organizing, whether on a local or national level, involves what the employees themselves think and say. Recent surveys suggest that three (3) out of five (5) workers would now consider joining a union.[58] Starting in 2007, private sector unionization has finally started to rise after its long decline, increasing by nearly 3% since then.[59] A poll conducted by Parade Magazine in February of 2009 asked the question “Does America still need labor unions?,” and received a resounding 92% to 8% “Yes” response.[60]

On a more general level, it also is clear that there is a diminished employee loyalty from cutbacks and reductions-in-forced matched only by a nationwide increasing distrust of what senior corporate executives make. The recent national “outrage” over the AIG bonuses highlighted this point and led to vivid comparisons being made to “undeserving” corporate executives receiving excess monies compared to hard-working and presumably “honest” union auto-workers whose union agreed that their labor contracts needed to be broken.[61] In short, even these most-criticized of “union” workers now are being treated sympathetically when compared to what the nation considers to be the “villains” of “Corporate America.”[62] The union leaders correspondingly have themselves now started to publicly argue that these corporate executive compensation excesses “are yet another example of an economy that has become fundamentally imbalanced” and reflect “why we need unions.”[63]

In this setting, for companies as well as any co-workers who oppose unionization, they have far less ammunition to use, and their key role in defeating union organizing is correspondingly diminished. All of these points reflect the simple but key point that unions now appear as a more positive alternative to U.S. workers than for a long period of time.

What Employer’s Next Steps Should Be

Based on very real and extensive experience in labor law matters, any company facing the potential risk of union organizing needs to implement a comprehensive and responsible plan to address these possibilities now. The precise details of this plan obviously depend on the resources and needs of each respective company. These considerations include an accurate assessment of the company’s existing management capabilities to address these issues; the nature of its own employee group; the nature of its business and industry; and its overall unionization risk. The plan needs to be developed well before any actual organizing starts, or it simply may be too late to be effective under these changed circumstances.

The following are the 10 key steps that we believe a company seeking to maintain union-free status must implement in this new union environment:

Step 1: Decide Whether Your Company Wants To Be Union-free In Light Of All Of The Potential Risks And Issues

Step 2: Designate A Person Or Committee To Be In Charge Of Your Company’s Union-free “Labor Relations” Efforts.

Step 3: Assess The Likelihood Of Being An Organizing Target Under This New Pro-Union Environment.

Step 4: Assess Your Company’s Overall Compensation And Benefits Along With Any Possible Plans For Their Adjustment.

Step 5: Review Your Company’s Human Resources Policies For Key NLRB Issues.

Step 6: Review Your Company’s Workforce Organization & Structure To Avoid “Balkanization” Into Multiple Bargaining Units In Organizing & “Supervisory” Status That Won’t Be Upheld By The NLRB.

Step 7: Review Your Company’s Employee Discipline And Open Door/Dispute Resolution Policies To Avoid Union Issues From Unfair Discipline Or Discharge Or Other Rallying Points For Unions Organizing.

Step 8: Set Up An Effective Monitoring Procedure For Signs Of Union Organizing At Your Company.

Step 9: “Timely” Train Managers, Supervisors And Key Labor Relations/Human Resources Personnel On Union Issues.

Step 10: Seriously Consider Developing And Delivering Union-Free Communications To Employees At Your Company Starting Now.

The exact nature of all of these steps will be affected by whatever the finalized version of EFCA is. However, the need for them along with their focus on these newly-emerging union realities is not likely to change

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[1] Wall Street Journal, “Corporations Step Up Drive Against Bill to Ease Unionization”, March 7, 2009

[2] BNA Daily Labor Report, “Green Companies Not always Treating Employees Well,” February 4, 2009

[3] Silicon Valley Business Journal, “Unions Target Emerging Tech”, October 26, 2007

[4] Workforce Management, “Likely Business Targets for Organizing Push from Unions”, March 10, 2009 at

[5] Wall Street Journal, “Shut Up, They Said” editorial, February 13, 2009

[6] See, Gould, supra, at 294 n.12; see also, BNA Daily Labor Report, “Unions Added 428,000 Members in 2008,” January 29, 2009.

[7] Id.

[8] See, generally, for a discussion of various of these factors involved in the unions’ decline, Gould, supra, at 293-99; and also Richard A. Epstein, “The Case Against the Employee Free Choice Act,” University of Chicago Law School (2009) at 12-16 (available at ).

[9] BNA Daily Labor Report, “Unions Added 428,000 Members in 2008,” January 29, 2009.

[10] Id. at p.3.

[11] B.J. Chisholm & Scott Kronland, “The Employee Free Choice Act: Why We Need It”, California Labor & Employment Law Review, at pp. 1 & 29 (November 2008).

[12] Id. at 29.

[13] Gould, supra, at 315

[14] Brent Garren & Zachary Henige of UNITE HERE, “The Employee Free Choice Act (“EFCA”): Salvaging Sec. 7 Rights” (ABA 2008); see also, Gould, supra, at 298-99 and 303-04.

[15] Arlen Specter and Eric Nguyen, “Representation without Intimidation: Security Worker’s Rights to Choose Under the NLRA,” 45 HARV. J. ON LEGIS 311 (2008).

[16] See, American Bar Association, The Developing Labor Law, at 2746-2788 (5th Ed. 2006); and Phelps NLRA Dodge Corp. v. NLRB, 313 U.S. 177, 198 (1991) (NLRA provides only this limited remedy).

[17] See e.g., NLRB v. Am. Nat’l Ins. Co., 343 U.S. 395, 401-404 (1951) explaining that “the Act does not compel any agreement whatsoever between employees and employers” and holding that “the Board may not, either directly or indirectly, compel concessions or otherwise sit in judgment upon the substantive terms”); H.K. Porter Co. v. NLRB, 397 U.S. 99, 103-108 (1970) (“[I]t was never intended that the Government would in [cases where agreement was impossible] step in, become a party to the negotiations and impose its own views of a desirable settlement”).

[18] See, William B. Gould IV, “The Employee Free Choice Act of 2009, Labor Law Reform, and What Can Be Done about the Broken System of Labor-Management Relations Law in the United States,” 43 U.S. of San Francisco L. Rev. 291, at 306-309 (2009).

[19] Id. at 308, citing to NLRB v. Gissel Packing Co., 395 U.S. 575, 585 (1969), and Linden Lumber v. NLRB, 19 U.S. 301, 309-310 (1974) (emphasis added).

[20] See, New York Times, “Democrats Drop Key Part of Bill to Assist Unions: Heading Off Filibuster” (July 17, 2009).

[21] Wall Street Journal, “Labor Wants Obama to Take on Big Fight,” November 6, 2008.

[22] See, Gould, supra, at 321, encouraging a “vote now litigate later” approach; see, also, Wall Street Journal, “Labor Bill Faces Threat in Senate,” March 10, 2009, confirming discussions among Senators with former Chair Gould about his proposals.

[23] Id.; , “The Life and Times of EFCA, Part 1,” March 11, 2009; Law 360, “Arbitration Rule May Spell Trouble for EFCA in Senate”, March 17, 2009.

[24] Employment Law 360, “Alternative to EFCA Introduced In House,” March 11, 2009.

[25] See, San Francisco Chronicle “Big Retailers try to stake out middle ground in union fight”, March 22, 2009; and BNA Daily Labor Report, “Specter Announces Opposition to EFCA,” March 25, 2009.

[26] Id.

[27] See, The Developing Labor Law, supra, at 542 and 2663; NLRB Rules and Regulations and Statements of Procedure, Series 8, §101.18.

[28] Epstein, supra, at 9.

[29] See, The Developing Labor Law, supra, at 152-160 and 511 at n.202.

[30] Gould, supra, at 309-311; Epstein, supra, at 29 and 41-44; note, “Union Authorization Cards, 75 Yale L.J. 805, 823-25 (1966).

[31] There are no express restrictions in EFCA’s terms or under current law for the time period a signed union authorization card remains effective, except for a generalized NLRB approach into whether authorization cards are “current” or should be considered “stale.” See, e.g., A. Werman and Sons, Inc., 114 NLRB 629, 630 (1955), and NLRB Casehandling Manuel, Part II, Representation Proceedings P 11027.4.

[32] See, The Developing Labor Law, supra, at 640.

[33] The concept of an “appropriate bargaining unit” is significant because a union can gain entry into employer’s operations if supported by just a majority of a subgroup of the employer’s employees; i.e., the union need not be supported by a majority of all the employees at the facility. Whether a particular subgroup of employees is an appropriate bargaining unit depends on whether the group of employees share a community of interest, which examines such factors as mutuality of interests in wages, hours and other working conditions; commonality of supervision; degree of skill and common functions; frequency of contact and interchange with other employees; functional integration; and any prior bargaining history. Turner Indus. Group, 349 NLRB No. 42 (2007).

[34] National Labor Relations Board, Office of General Counsel, “Memorandum to GC 07-03 Revised, Summary of Operations: Fiscal Year 2006.”

[35] These “laboratory conditions” are strict standards developed by the NLRB and the courts to guarantee that employees’ choice is free from coercion and intimidation, and is in many respects a higher standard than what applies in our own general electoral politics across the United States. See, The Developing Labor Law, supra, at 475-534.

[36] See, generally, General Shoe Corp., 77 NLRB 124 (1948), and The Developing Labor Law, supra, at 475-534, and esp. 511-534.

[37] See, San Francisco Chronicle, “Major Labor Law Changes Possible” (July 21, 2009)

[38] Roll Call, “Card Check to Create a Colossal Class” (December 8, 2008), at .

[39] See, generally, Epstein, supra, at 52-53 for discussion of these points.

[40] See, note 24 infra, and the cases cited there.

[41] Due to the lack of these standards as well as other general infirmities in this “interest” arbitration approach, many commentators have questioned the constitutionality and enforceability of this requirement. See, Epstein, supra, at 54-60 and 98-102; Gould, supra, at 324 n.124; BNA Daily Labor Report, “Mandatory First Contract Arbitration Violates Constitution,” June 11, 2008. However, as the analysis of these same commentators reflects, a number of courts have upheld “interest” arbitration laws in the past, making this at best an unclear legal contention. See, esp., Gould, supra, at 324 n. 124.

[42] Elkouri & Elkouri, “How Arbitration Works” (ABA/BNA 6th Ed. 2004), at 1407-1443. For general reference, the Elkouri treatise generally is considered as the “bible” for labor arbitration and is regularly citable in labor arbitrations.

[43] Silicon Valley Business Journal, “End Arbitration on Union Deals,” August 17, 2007 (referring to San Jose, California, and its police union “interest” arbitration—emphasis added).

[44] Wall Street Journal, “A Liberal Supermajority” editorial (October 17, 2008).

[45] Employment Law 360, “Alternative to EFCA Introduced In House,” March 11, 2009.

[46] Its formal title is the Re-Empowerment of Skilled and Professional Employees and Construction and Tradeworkers Act.

[47] The three “Kentucky River Decisions” were Oakwood Healthcare, Inc., 348 NLRB 686 (2006); Croft Metals, Inc., 348 NLRB 717 (2006); and Golden Crest Healthcare, 348 NLRB 727 (2006).

[48] See, Section 2(11) of the NLRA, 29 U.S.C. §152 (11).

[49] See, note 22 infra.

[50] See Footnotes 24 and 25, infra, and the related text.

[51] Parade Magazine, “Does American Still Need Labor Unions” February 22 and March 22, 2009.

[52] Id.

[53] New York Times, “The Big Squeeze” by Bob Herbert, March 11, 2009.

[54] See, e.g., South Florida Sun-Sentinal, “Free Choice Act: Working People Would Get Real Power” by John Sweeney, March 8, 2009.

[55] BNA Daily Labor Report, “Higher Wages of Unionized Workers Show Need for Passage of EFCA, Group Says,” March 10, 2009; BNA Daily Labor Report, “Economists Support EFCA,” February 25, 2009; AFL-CIO now BLOG, witness statements to Senate Help Committee, “Employee Free Choice Critical to a Stronger Fair Economy,” March 10, 2009, at .

[56] BNA Daily Labor Report, “Obama Sees Union Organizing, Davis-Bacon, Immigration Reform As Ways to Help Workers,” March 20, 2009.

[57] San Francisco Chronicle, “Sit-down Strike Makes a Comeback,” by David Bacon, December 15, 2008.

[58] Testimony of Prof. Harley Shaiken before House of Representatives Subcommittee of Health, Employment, Labor, and Pensions (Feb. 8, 2007), available at joinaunion/voiceat-work/efca/upload/EFCA_Shaiken_20070208.pdf, citing Peter D. Hart Research Associates, New Opinion Research on Unions and Employee Free Choice Act (Dec. 2006).

[59] See, note 16 infra.

[60] See, note 65 infra.

[61] See, for example, San Jose Mercury News, “AIG Bonus Furor Grows” (along with accompanying editorial cartoon comparing corporate compensation and auto-worker labor contracts), March 18, 2009; San Francisco Chronicle, “A Government of men, not laws,” by David Sirota, March 20, 2009; San Jose Mercury News, “Revenge against AIG isn’t enough,” by Patty Fisher, March 20, 2009.

[62] Wall Street Journal, “Of Bernie and Bonuses: Disanguishing Between Madoff and Merrill Lynch,” March 13, 2009.

[63] Daily Labor Report, “Card Check Legislation Touted As AIG Bonuses Chastised by SEIU,” March 20, 2009.

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