The Employee Free Choice Act

On March 1, the House passed the Employee Free Choice Act (EFCA), H.R. 800, 110th Cong. (2007). That bill is highly unlikely to become law anytime soon. Senate Republicans will surely filibuster the bill, and Vice President Cheney has stated that President Bush will veto the bill if it reaches his desk. The bill probably will not garner enough support to overcome a Republican filibuster, much less a Presidential veto. Nevertheless, the bill merits discussion.

If enacted, the EFCA would: (1) obligate the NLRB to certify a union based on a card check; (2) permit a newly-certified union to subject an employer to mandatory interest arbitration if the parties’ negotiations fail to produce a first contact; and (3) impose harsher penalties on employers that violate the NLRA.

Proponents of the EFCA argue that current law does not adequately protect employees against employer coercion and that employees therefore cannot truly exercise free choice when deciding whether to select union representation. Under current law, an employer may lawfully refuse to recognize a union until the union wins an NLRB secret-ballot election. To obtain an election, a union must garner support from 30% of employees and file an election petition. The Board immediately notifies the employer about the petition and schedules an election. The median interval between petition and election is 39 days. During that time (i.e., the campaign period), an employer has an opportunity to unlawfully coerce employees by, for example, discharging union supporters, soliciting grievances, promising benefits, and threatening plant closure. The campaign period also creates an opportunity for employers to hold repeated non-coercive and non-objectionable captive-audience speeches and one-on-one discussions in which they urge employees to vote against union representation. Proponents argue that such speech (which I will call “unbalanced speech”) interferes with employee free choice, even though it is non-coercive and non-objectionable, because employees do not hear from unions to the same extent.

EFCA supporters seek to eliminate or reduce unlawful coercion, objectionable conduct, and unbalanced speech through, among other means, card-check certification. Under the EFCA, the Board would certify a union after receiving a petition along with signed authorization cards from a majority of employees. There would be no election, and hence no formal campaign period. If a union is able to quietly gather cards from a majority of employees without the employer’s knowledge, the employer will lose its opportunity to counter the organizing drive with coercion and unbalanced speech. Even if an employer informally learns about an organizing drive, it might have fewer days to respond to the union’s campaign than the approximately 39 days it has under current law. For these reasons, proponents argue that card-check certification will help employees exercise truly free choice.

Opponents of the EFCA counter that the secret-ballot election is the only method that ensures free choice. Behind the voting booth’s curtain, an employee can privately decide whether to vote for or against representation without either party knowing how she voted. If the EFCA is enacted, non-employee union organizers and pro-union employees would unlawfully coerce employees into signing cards. At best, some employees would sign a card after succumbing to lawful peer pressure in order to please organizers and pro-union colleagues. Some EFCA opponents assert that most employers do not coerce employees during union campaigns and argue that card-check certification is not the way to handle the bad apples.

Would card-check certification reduce coercion, objectionable conduct, and unbalanced speech by eliminating the formal campaign period? Somewhat, in my opinion. In some cases, unions will quietly gather cards, the employer will not learn of the organizing campaign until the union is certified, and the employer will have lost its opportunity to counter the campaign. That said, I suspect that most employers learn about a union campaign not from the NLRB, but by observing open activity or from an employee who volunteers the information. If that is true, most employers will still have an opportunity to coerce. Will an anti-union employer refrain from coercing merely because it learned about an organizing campaign from these other sources rather than from the NLRB. I think not. Additionally, under card-check, some employers who fear the possibility that an undetected campaign is underway might start constantly coercing employees year-round.

What are the negative effects, if any, of card-check certification? First, without the formal campaign period, employers may lose the opportunity not only to coerce, but also to share the disadvantages of unionization in speeches that are not coercive, objectionable, or unbalanced. I believe that employers have a legitimate interest in speaking to employees about unionization given the restrictions and costs that the NLRA imposes on employers who have a unionized workforce. I also believe that employees sometimes benefit from listening to non-coercive, non-objectionable employer speech on the merits of unionization. Restricting that legitimate employer speech is unwise. Second, card-check certification may introduce an irrelevant factor into the calculus of deciding whether to select union representation. Under card-check certification, employees necessarily reveal whether they support or oppose the union. Some employees who would have voted against union representation free of coercion, objectionable conduct, and unbalanced speech in a secret-ballot election will sign an authorization card after succumbing to non-coercive, non-objectionable peer pressure from pro-union coworkers and non-employee organizers. I suspect that this number will be relatively small, but it may be outcome determinative in some cases. All else being equal (which it is not), the secret-ballot election has a distinct advantage over card-check recognition by ensuring that employers will have an opportunity to engage in legitimate speech and by eliminating the chance that employees select union representation based on a desire to please coworkers (or to avoid irritating them) and not based on its relative merits.

Given card-check certification’s limited effectiveness and negative consequences, is there a better way to reduce employer coercion? I suggest enacting even harsher penalties for NLRA violators. Under current law, it is often economically advantageous for employers to coerce employees. Unionization imposes significant costs on employers. Unionized employers must pay their negotiators, incur financial losses associated with refraining from making unilateral changes, and likely pay higher wages and benefits (i.e., the union premium). Coercing pro-union employees has a big benefit: it may avoid these costs by preventing unionization.

On the other hand, what are the costs associated with coercing employees? Often very little. Under current law, when the Board finds an employer guilty of many types of coercion (e.g., threatening plant closure or promising benefits), it will merely order the employer to cease and desist and schedule another election. In other words, such coercion costs the employer nothing, and it may save it many thousands of dollars. And what if the Board finds an employer guilty of discharging or suspending a union adherent? Under current law, an employer must make a discriminatee whole with backpay (lost wages minus interim earnings). In 2003, the average backpay award was $3,800. You can see that employers interested in the bottom line have a great incentive to coerce and slight disincentive to be found guilty of coercion.

The EFCA provides for mandatory triple backpay, discretionary civil fines up to $20,000 per willful or repeated violation, and mandatory injunctive relief when the Board has reasonable cause to believe that an employer has violated the Act during an organizing drive. If Congress seeks to eradicate employer coercion, it should consider enacting even harsher penalties. Given the economic benefit of remaining non-union, I doubt that the EFCA’s remedies are sufficient to effectively discourage employer coercion. Congress should consider eliminating the set-off for interim earnings, increasing the backpay factor to 5 or 10, and/or increasing the limit on civil fines to $100,000. Such remedies would likely serve as an effective economic disincentive, much like the one that exists under Title VII. And we all know that employers think twice before exposing themselves to liability under that statute.

To address the separate problem of unbalanced speech, Congress should consider expanding unions’ opportunities for communication rather than reducing employers’ opportunities. Congress could help level the playing field by entitling unions to access employers’ non-work areas to communicate with employees on non-working time about the merits of unionization. A similar access provision appeared in the Labor Law Reform Act of 1977, which was defeated by a Republican filibuster.

In short, I agree that the current legal regime fails to adequately protect employees against employer coercion. Imposing harsher penalties will go a long way toward eliminating that coercion. In contrast, card-check certification would likely have a limited impact on employer coercion. Moreover, it poses significant disadvantages when compared to the secret-ballot election.

More to come on mandatory interest arbitration and reducing delay in the certification process.