Employee Free Choice Act Update

By Jonathan W. Greenbaum

Within the past few days there have been some significant developments in the debate over the Employee Free Choice Act (EFCA). As we previously reported, the EFCA was introduced in Congress on March 10, 2009. The legislation would amend the National Labor Relations Act to require the NLRB to certify a union as the representative of employees if a majority of employees in the proposed unit sign valid union authorization cards. The proposed legislation would also allow parties that are unable to reach a first labor contract within 90 days to refer the contract dispute to the Federal Mediation and Conciliation Services. If the FMCS is unable to mediate an initial agreement within 30 days, the contract would be referred to binding arbitration.

This past week, three large retail employers announced the formation of an ad-hoc committee to discuss a “third-way” approach to “level the playing field” in union elections. The “third way” proposed by these companies would largely protect the secret ballot election. The ad-hoc proposal would guarantee a fixed time period for a secret ballot election to certify or decertify a union and would allow management to initiate a union decertification through a secret ballot. The proposal would also grant unions access to employees during non-work hours to make presentations to employees. Unlike the proposed EFCA legislation, the ad-hoc proposal would not provide for mandatory arbitration of first contracts, but would impose penalties and expedite enforcement of bargaining rules, including an expedited timetable for bargaining after union certification.

The sponsors of the EFCA legislation, Rep. George Miller (D-CA) and Sen. Tom Harkin (D-IA), immediately denounced the ad-hoc proposal. They asserted it is not a serious attempt at labor law reform because it does not address key problems that prevent workers from joining unions, such as mandatory recognition if a majority of employers sign union authorization cards and binding arbitration of first contracts. Legislative opponents of the EFCA also criticized the ad-hoc proposal stating that there is simply no room for compromise on the issue.

Most recently, this past Tuesday (March 24, 2009), Senator Arlen Spector (R-PA), the sole Republican to side with the Democrats on the last EFCA legislation (which was identical to the current proposed legislation), said he would not support the EFCA in the current legislative session. Senator Spector, citing the current economic environment, gave the following explanation for not supporting the EFCA this time around:

The problems of the recession make this a particularly bad time to enact Employees Free Choice legislation. Employers understandably complain that adding a burden would result in further job losses. If efforts are unsuccessful to give Labor sufficient bargaining power through amendments to the NLRA, then I would be willing to reconsider Employees’ Free Choice legislation when the economy returns to normalcy.

Senator Spector did offer some suggested revisions to the National Labor Relations Act, including speedier elections, increased penalties, attorneys fees for bad-faith bargaining, and limits on “captive audience” speeches.

While the EFCA legislation is now faced with an uncertain future with the loss of a key supporter, is clear that the NLRB may be making some regulatory and enforcement changes which do require legislative action. It is anticipated that the NLRB will continue to expedite the election process and may use its 10(j) injunctive powers to a greater extent—especially in union organizing campaigns and first contract bargaining. Under the 10(j) scenario, if there is an injunction in place, the parties are not only reporting to the NLRB, but also a federal district court judge, who monitor the parties’ conduct during the life of the injunction. In fact, this past year the NLRB General Counsel issued a directive to NLRB field offices to closely monitor first contract bargaining and to utilize 10(j) injunctive relief for bad faith bargaining during initial negotiations.

Thus, with all the focus on the EFCA legislation, the NLRB itself may step-up its enforcement implementation of the Act to maintain its relevance in the debate. Regardless of the form and shape that labor law reform may take, employers should continue to be proactive in their employeemanagement relations, and keep abreast of any legislative or regulatory changes that may impact those relations and its business.

We will continue to monitor both the legislative and regulatory updates. For any additional information on this update please contact your regular Nixon Peabody attorney or: