• Employee Free Choice Act of 2009: A Radical Departure from Fundamental Labor Policy
  • April 3, 2009
  • Law Firm: Sheppard, Mullin, Richter & Hampton LLP - Los Angeles Office
  • The Employee Free Choice Act of 2009 (H.R. 1409) was introduced in the United States House of Representatives on March 10, 2009. If passed by the Congress and signed into law by the President, the Employee Free Choice Act of 2009 will impact employers in three significant ways.

    First, where an employer opposes unionization, the Act eliminates the current requirement that a majority of employees must vote in favor of unionization, by private ballot in an organizing election, prior to the union being certified by the National Labor Relations Board (NLRB). Under the Act, “If the Board finds that a majority of the employees…has signed valid authorizations…the Board shall not direct an election but shall certify the individual or labor organization.” Under this provision, employers lose vital procedural safeguards designed to ensure that employees’ voices are heard through a private ballot free of intimidation and coercion.

    Second, the Act requires companies and newly certified unions to enter into binding arbitration if they cannot reach agreement on an initial contract after 90 days of negotiations and 30 days of mediation. “The arbitration panel shall render a decision settling the dispute and such decision shall be binding upon the parties for a period of 2 years.” The decision cannot be appealed by either party.

    Third, the Act dramatically increases the penalties employers face if found liable of discriminating against an employee in violation of the National Labor Relations Act (NLRA) . The NLRA currently provides that employees who are terminated for organizing activities are entitled to backpay and reinstatement. Employers who engage in other unlawful activities are subject to orders to cease such activities. If the unlawful conduct is egregious enough, an employer may be subject to a bargaining order – which means the employer is required to recognize and bargain with the union, even though the employer may have won the election. The Act would amend Sections 10 and 12 of the NLRA to provide penalties as follows: (1) if an employer is found to have discriminated against an employee for union organizing or other union-related activity before an initial collective bargaining agreement is signed, the employee is entitled to treble damages, in other words, the amount of backpay times three; and (2) Also, employers would be subject to civil penalties in an amount up to $20,000.00 for each unfair labor practice that the employer “willfully or repeatedly” committed during union organizing or other union-related activity. Unions, however, would not be subject to the penalty increase.

    Employers must begin to prepare now for the EFCA’s potential passage and the effect that the Act will have on the workplace. The EFCA will dramatically shift the balance of power to unions in whatever form it ultimately takes.