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Employee Free Choice Act Introduced In Congress

March 11, 2009

By Jacqueline M. Damm & J. Kent Pearson, Jr.


For weeks, Bullard Law has cautioned employers about a potential new federal law designed to facilitate union organizing. Yesterday, Sen. Tom Harkin (D-IA) and Rep. George Miller (D-CA) introduced the Employee Free Choice Act of 2009 (EFCA). If enacted as proposed, the EFCA would be the most radical and sweeping change in federal labor law since 1935. The proposed bill would make three major changes to the National Labor Relations Act (NLRA) by changing: how unions organize; how initial contracts are bargained; and the penalties that will apply to employers who break the rules. An earlier version of the bill passed the House in 2007, but stalled after a filibuster in the Senate. However, President Obama, one of the sponsors of the 2007 bill, has promised to sign the EFCA if it reaches his desk.

“Streamlining Union Certification”
The EFCA effectively eliminates traditional secret ballot voting. It would require employers to recognize a union as the collective bargaining representative of its employees if the union presents authorization cards signed by a majority of unit employees. It offers no guidelines on the cardgathering process and does not protect against misleading or coercive union organizing tactics.

The EFCA would modify the current long-standing rule that allows a union seeking to organize a workplace to obtain an NLRB-conducted secret ballot election where it can make a showing of interest, which it does by submitting to the NLRB cards signed by one-third of the employees eligible to join a union. In the post-EFCA era employees who are familiar with the current authorization card system may believe that in signing a card they are merely supporting the right to have a union election supervised by the NLRB. They would be mistaken; under the EFCA the act of signing that card would be the “vote” and there would not have to be an election.

“Facilitating Initial Collective Bargaining Agreements”
Perhaps of even greater concern to employers facing union organizing efforts is the mandatory interest arbitration called for in the EFCA. Following union recognition, the EFCA requires the parties to negotiate and agree upon a first contract within 120 days, unless an extension of time is mutually agreed upon by the parties. If the parties are not able to agree upon a contract in the time allotted, the EFCA calls for interest arbitration upon either party’s request. In arbitration a federal arbitration panel could unilaterally impose a binding 2-year contract on all parties. 

Unfortunately, the EFCA offers no guidance to these potential arbitrators on how to fashion a contract. Thus, employers will be unable to anticipate and plan for their labor costs – leading to even greater economic uncertainty in already difficult economic times.

“Strengthening Enforcement”
Finally, the EFCA provides for significantly enhanced liability in the case of employers who violate the NLRA during an organizing campaign. In addition to the traditional back pay remedy, the EFCA provides for liquidated damages equal to twice the lost wages for wrongly terminated employees. Moreover, for willful or repeated violations of the Act, the EFCA provides for penalties up to $20,000 per violation against employers. Under current law, an aggrieved employee would receive only back pay and benefits – essentially make-whole relief. There is no corresponding change in the penalties against unions that violate the Act.

Now Is The Time To Prepare
Now is the time to prepare for the EFCA. It is critical to train managers and supervisors about what to expect, and to consider communicating with employees about what signing a card could mean if the EFCA is passed.

Please feel free to contact us with questions regarding the substance and implications of the EFCA, as well as with questions regarding any labor, employment and benefits issues.

- Sarah M. Petersen, J. Kent Pearson, Jr. and Jacqueline M. Damm