• Free Choice or Free-for-All?
  • December 16, 2009 | Authors: W. Melvin Haas; Clifford H. Nelson; Stephen P. Schuster
  • Law Firms: Constangy, Brooks & Smith, LLP - Macon Office; Constangy, Brooks & Smith, LLP - Atlanta Office; Constangy, Brooks & Smith, LLP - Kansas City Office
  • This has been a busy year for the US labor field. With the start of a new presidential administration, the political climate is swiftly changing in Washington, especially for em­ployment issues. Proposed legislation up for consideration has the potential to drastically alter the employment and labor law land­scape, affecting businesses across the United States -- and their bottom lines.


    Union and labor organizing issues have long been a top concern of company man­agement in the United States. One of the ma­jor bills on the agenda is the Employee Free Choice Act (EFCA), which has been on the forefront of many political debates this year. Essentially, if passed, EFCA would dramati­cally revise the National Labor Relations Act of 1935 (NLRA), changing the way employees can become unionized. To thoroughly appreci­ate this proposed legislation, understanding of the current system is critical.


    Currently, for a union to gain representation rights, the union must present to the National Labor Relations Board signatures supporting a ‘showing of interest’ along with a petition ask­ing the Board to schedule an election. Almost always, the signatures are obtained on union authorization cards. Often, the union tries to keep its efforts secret as long as possible, be­cause it knows that a smart employer will start educating employees to counter the union orga­nizing efforts. Union support tends to drop off as the employees learn how to ask questions of the union organizers, which is also why educa­tional campaigns are so essential in providing employees with a fair and free choice.


    Technically, the union must present signa­tures from 30 percent of the employees who would be eligible to vote, but in practice the union won’t petition for an election until they have signatures from at least 60 percent. The election usually is set within 42 days of when the petition is filed, and in that period the com­pany and the union work hard to persuade the employees how to vote. Right now, the cam­paign period may be, and often is, the first time employees really learn anything about unions.


    When election day comes, a Board agent ar­rives with a voting booth, a ballot box and a stack of ballots. The employees come in one by one, are given a ballot, go into the booth, mark the ballot in secret and put it in the bal­lot box. Once the voting period has ended, the Board agent will count the ballots immediately in public.

    If the union wins, then the parties must bar­gain in good faith in an effort to reach a con­tract. No one has the power to make either party agree to anything, and both sides are free to make and reject proposals. Ultimately, if the parties are unable to reach an agreement, the matter is resolved through economic bargain­ing power. This means the union can try -- but sometimes fails -- to persuade the employees to go on strike. The union can file unfair labor practice charges and use other pressure tactics, but it still may wind up without a contract.


    Now, the deceptively named Employee Free Choice Act threatens to change this system. The proposed legislation contains three sec­tions that would fundamentally alter the NLRA by: (i) requiring union certification by card check and not secret ballot election; (ii) requir­ing initial collective bargaining agreements; and (iii) substantially increasing the penalties (up to $20,000 per violation and mandatory in­junctions) against employers who commit un­fair labor practices during an organizing drive or before a first contract is reached. Employers would be required to recognize and bargain with the union if the union presented the sig­natures of 50 percent plus 1 of the members of an appropriate bargaining unit. There would be no secret ballot election and no campaign pe­riod as in the current system. Thereafter, if the parties cannot reach an agreement, an arbitra­tor will be selected by the federal government to decide all the terms of the first contract for two years. The binding arbitration provision will allow the government to set the terms and conditions of employment, thereby jeopardiz­ing the competiveness of American business.

    A number of congressmen and senators that supported EFCA in 2007 have now backed off in their support of EFCA unless a compromise is reached. Most prominently, Senator Arlen Specter (D., Pa) said he would oppose the legislation until the economy improves: “The problems of a recession make this a particu­larly bad time to enact [this] legislation... Em­ployers understandably complain that adding a burden would result in further job losses.”


    EFCA compromises have started to spring up recently as views on the bill have shifted. One highlighted compromise, suggested in March by Costco, Starbucks and Whole Foods, pro poses to maintain a secret ballot election (but with a limited campaign period), and perhaps do away with the mandatory arbitration provi­sion while leaving the heightened penalties for unfair labor practices. The ridiculously high fines will force employers to be neutral and re­sult in employees only hearing the union’s side of the story. Another compromise that has been discussed is the possibility of mirroring Can­ada’s ‘quickie election’ system, which varies from province to province. Of the provinces that utilize a secret ballot election, the elec­tion period is substantially shorter compared to the current US system, often a company has merely two weeks to respond to an organizing campaign, which barely allows employers to counter the union’s promises. The disadvan­tage for employers under this system is under­scored by the fact that one-third of Canada’s private-sector employees are unionized, a stark contrast to the 7 percent who are unionized in the United States.


    The binding arbitration provision will allow the government to set the terms and conditions of employment, thereby jeopardizing the competiveness of American business.


    Another proposed piece of legislation threatening companies is the Re-Empowerment of Skilled and Professional Employees and Construction Tradeworkers (RESPECT) Act. This bill seeks to narrow the definition of who is considered a supervisor under NLRA, creating two effects: it would greatly increase the number of supervisory employees covered under collective bargaining laws, and it could limit an employer’s ability to communicate with workers in a union organizing campaign, since the individuals with greatest influence are generally the first-line supervisors. Conversely, if supervisors become eligible to join a union, they could use their inherently coercive position to force rank-and-file employees to also join the union. RESPECT could greatly undermine the balance that American labor law has favored since the inception of the National Labor Relations Act. That is, the union’s role is to represent employees when dealing with supervisors; the supervisors’ role, in turn, is to further the interests of the employer. In a recent article, the Heritage Foundation, a public policy re search institute, correctly observed: “Being in the same bargaining unit as the workers would divide supervisors’ loyalties between the company and the union.” Compromise or not, EFCA and the RESPECT Act present a challenge to employers. Along with the pro-labor appointees to the NLRB, these major changes could possibly lead to a dramatic increase in organized labor. Although the outcome of the bills is not certain right now, a major change in the labor field is. With speedy elections (assuming EFCA’s card check fails), employers will not have ‘time’ to educate voters before any election. To counter all of the anticipated changes, companies need to embark upon a comprehensive preventive employee relations pro gram to build a positive work environment where employees do not see the need for third-party representation. Positive relations can go a long way to ensuring employees’ loyalty -- and protecting the long-term viability of employers.


    Cliff Nelson Partner Atlanta, Georgia T: +1 (404) 230 6714 E: [email protected] Cliff Nelson is co-chair of the Constangy, Brooks & Smith’s labor relations practice group. As a partner in the Atlanta office, his more than 30 years of experience in labor relations help his clients in defending against union organizing drives and NLRB election campaigns, strikes and litigation of NLRB unfair labor practice cases.


    Steven Schuster Partner Kansas City, Missouri T: +1 (816) 472 6400 E: [email protected] Steven Schuster, partner at Constangy, Brooks & Smith’s Kansas City office, is co-chair of the firm’s labor relations practice group. He focuses his practice in the areas of labor relations, union avoidance consulting and campaigns, NLRB litigation and employee relations counseling.


     W. Melvin Haas Partner Macon, Georgia T: +1 (478) 750 8600 E: [email protected] As vice chair of the Labor Relations Committee for the U.S. Chamber of Commerce and a former attorney with the NLRB, W. Melvin Haas brings a unique perspective to the labor and employment law field. He is a partner with employment-labor law firm Constangy, Brooks & Smith in Macon, GA and was recently named among the Top 10 Most Powerful Labor Attorneys by Human Resource Executive magazine.


    This article first appeared in September 2009 issue of  Financier Worldwide.


    Constangy, Brooks & Smith, LLP has counseled employers on labor and employment law matters, exclusively, since 1946. A ‘Go To’ Law Firm in Corporate Counsel and Fortune Magazine, it represents Fortune 500 corporations and small companies across the country. Its attorneys are consistently rated as top lawyers in their practice areas by publications such as Chambers USA, Super Lawyers, and Top One Hundred Labor Attorneys in the United States. More than 115 lawyers partner with clients to provide cost-effective legal services and sound preventive advice to enhance the employer-employee relationship. The firm’s partners and associates come from a wide background -- human resources, federal administrative agencies, investigation and law enforcement. Our attorneys understand what it’s like to walk in clients’ shoes -- whether in the board room, the courtroom, or the factory. Constangy Offices are located in Georgia, Florida, South Carolina, North Carolina, Tennessee, Alabama, Virginia, Missouri, Illinois, Massachusetts, Wisconsin, Texas and California. Firm partners W. Melvin Haas, Cliff Nelson and Steven Schuster are among the seven Constangy labor attorneys named as one of the Top 100 Labor Attorneys in the US by LRI. For more information, visit www. constangy.com.