EFCA: Employers Face Challenges Ahead

As the 2008 election season enters the home stretch, employers need to learn about, and prepare for, organized labor's top legislative priority if the unions' endorsed Democratic Party candidates win. It is called the Employee Free Choice Act (EFCA). Ice Miller LLP can provide detailed analysis and training for employers about EFCA, but in this article we offer an introductory summary of its anticipated provisions. If enacted, it will truly constitute the most significant change to laws regarding union organizing of employees and collective bargaining in over 70 years.

Employee Free Choice Act

The EFCA was passed by the U.S. House of Representatives a little over a year ago on March 1, 2007. The legislation ultimately died in the U.S. Senate, but if the Democratic Party makes gains as substantial as some commentators suggest, EFCA stands a good chance of enactment.

The EFCA, as passed by the House, has three basic functions: (1) to "streamline" the certification process for unions to become the representatives of employees of employers; (2) to "facilitate" the negotiation of initial collective bargaining agreements after a union becomes the certified representative; and (3) to provide for enhanced remedies for employees and penalties to employers for unfair labor practices and "interference" committed by employers during organizing and initial bargaining activities.

Streamlined Certification

The EFCA amends the National Labor Relations Act (NLRA) by requiring the National Labor Relations Board (Board) to permit unions to become the certified representative of employees without having to be elected by the employees. EFCA will require the Board to certify a union as the bargaining representative of employees in an appropriate unit if the Board finds that a majority of the employees in the unit simply "signed valid authorizations designating the individual or labor organization specified in the petition as their bargaining representative." Under current law, employers are permitted to recognize unions based on so-called "card checks," but EFCA would mandate it!

Enhanced Remedies and New Penalties

The EFCA also provides for triple back pay for employees found to have been terminated for engaging in organizing activity and for new "civil penalties" of up to $20,000 per violation for employers found to have willfully engaged in interference with organizing efforts or termination of employees for engaging in organizing activity.

"Facilitating" Initial Bargaining Agreements

The third effect of the EFCA is to "speed up" the process of obtaining an initial collective bargaining agreement. It does so by specifying that: bargaining must begin no later than ten days after the newly certified union requests bargaining; if no agreement is reached 90 days after the onset of bargaining, the parties must contact the Federal Mediation and Conciliation Service (FMCS) and begin mediation for the new agreement; if no agreement is reached 30 days after mediation is initiated, FMCS "shall refer the dispute to an arbitration board established in accordance with such regulations as may be prescribed by" FMCS. The arbitration panel shall issue a decision on terms of a binding contract to last two years.

What You Should Do

One obvious course of action is to do whatever you can politically to ensure that EFCA does not pass. Lobbying legislators to educate them to the burdens that will be placed on U.S. employers in the global economy if they are saddled with collective bargaining agreements imposed by arbitrators may persuade them that EFCA is too dangerous to the U.S. economy to be enacted even if they made promises to union supporters.

Closer to home, make sure that your employees understand that unions are not necessary, that your employees do not need a union to look out for their interests.

We have known for years that unions do not organize employees, employers do. The ultimate issue when employees are confronted with union organizing is the employer's credibility. If employees believe at least five essential things about their employers, unions will find it difficult, even under EFCA, to organize employees. The five things are:

· The employer believes that its success is based on the skill, effort and devotion of its employees.

· The employer deals with all employees fairly and honestly.

· The employer respects and recognizes each employee as an individual adult.

· The employer believes that unionization would interfere with the company's policies and practices as set forth above.

· A union free environment is in the best interests (self interests) of the employees themselves.

If employees do not believe these five things, countering the efforts of a union trying to organize those employees will be nearly impossible. The bottom line for the employer is credibility, and an employer is credible only if its actions are the same as its words. In other words, an employer "runs on its record."

This means that as a safeguard against EFCA, you must communicate this message to employees effectively without waiting for passage of the law or for a traditional union campaign to begin because by then it will be too late. We can help you and your supervisors communicate that message. The time to act is now.

Michael Boldt is a partner at Ice Miller LLP. His primary area of practice is labor law on the management side, including responding to union organizational drives, collective bargaining, arbitration, employee discipline, construction labor law, and equal employment opportunity law.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.