Employee Free Choice Act Slowed, But Not Dead

“Frankly, there's plenty of room for franchisors and franchisees to slow down the union process,” Sokol said. “The truth of the matter is that competent employer lawyers are going to immediately raise all kinds of issues: Are the signatures genuine? Are the cards real? What is the appropriate bargaining unit? ' There can still be all kinds of litigation hearings that still make the process somewhat of a farce or the cumbersome, bureaucratic mess that it is today.”

Kevin Adler is associate editor of FBLA.

Although passage of the federal Employee Free Choice Act (“EFCA”) has taken a distant back seat to health care reform, the proposed changes to workplace unionization and collective bargaining rules have significant potential impacts for business owners. Employer representatives have denounced EFCA, while union backers are pushing hard for passage of the law.

On Sept. 1, the ABA Center for Continuing Legal Education produced a webinar that looked at the key provisions of EFCA and the prospects for its passage ' with a specific focus on the possible impact on franchisors and franchisees. The four presenters, split evenly into pro-labor and pro-employer camps, gave starkly contrasting perspectives on the current state of labor union law and the changes that EFCA might produce.

EFCA is designed to “level the playing field” in worker-management relations, said Dr. John Logan, director of research, Labor Center, Institute for Research of Labor and Employment, University of California-Berkeley. He described the current system as bedeviled by “coercive” employers that “deny employees free choice” to unionize. He cited surveys that indicate a majority of workers would like union representation.

However, from management's perspective, almost every claim that Logan made is suspect. In the webinar, David French, vice president of government relations for the International Franchise Association, referenced one prominent study that found that only 9% of nonunion workers say they want to join a union. French argued that EFCA is solving a problem that does not exist. “This bill is based on one premise ' that unionization should be inevitable in the workplace,” he said, and he added that provisions in EFCA would undermine workplace democracy, rather than expand it.

Key Provisions of EFCA

EFCA's three key provisions are:

• Majority Support Recognition (“Card Check”). For a union to be certified today, a majority of workers in a potential bargaining unit must sign a card requesting a union election. Then, the employer can recognize the union, or it can require an election. If the union wins a majority of votes in the election (and the bargaining unit is valid), the union is formed. With EFCA, if the union presents a sufficient number of legitimately signed cards, the National Labor Relations Board (“NLRB”) could certify the union without an election.
• Prompt First Contract. Today, there is no timetable for conclusion of good-faith negotiations on a first contract between a new union and an employer. Sometimes, the negotiations go on for years without a contract. EFCA would require that bargaining begin within 10 days of a union being certified (or later, if both parties agree), and it would allow either party to demand mediation after 90 days. If mediation fails, either party can demand binding arbitration for a first contract that will be valid for two years.
• Remedies for Unlawful Acts. EFCA would increase the monetary penalties for employers who are found to be intimidating or firing workers because of union activities.
• Card Check is the most contentious aspect of the proposed legislation, and it's the part that is least likely to survive the legislative process, said William Sokol, senior partner with Weinberg, Roger & Rosenfeld (Alameda, CA), the largest union-side law firm in the country. “[Sen.] Arlen Specter [D-PA] has told us ' that we should not expect to see Card Check as part of the final law,” said Sokol.

Yet, Sokol argued that even if it is passed, Card Check is a “tweaking” of the system, not a wholesale change in the law. The NLRB recognized signed union cards as the basis for union certification in the 1930s, he said.

However, Richard J. Curiale, managing partner, Curiale Hirschfeld Kraemer LLP, (San Francisco), who represents employers in labor disputes, pointed out that unions can bend the rules in order to get cards signed ' and that's why secret-ballot elections are so important. “The union can say anything to get the card signed; this is not a regulated part of the law,” he said. “The only thing the union can't do is to threaten a worker with violence ' but it can misrepresent what's on the card in order to get it signed.”

Employees sign union cards for many reasons, Curiale continued, referencing his experience in more than 200 organizing campaigns on the union side. “Maybe the employee just wants more information about the union,” he said. The secret ballot is the true test of whether the worker wants union representation, he said.

But given employers' other powers related to workplace union activity, Sokol challenged the idea that secret ballots are fair. “Imagine if you had an election in America for political leaders where one candidate could force you to attend his rallies or could prevent the other candidate from doing any daytime campaigning. Or one candidate, even if the other one wins the election, he can delay the winner taking office for years,” said Sokol.

One alternative to Card Check that's been floated by union proponents is a requirement that elections be held quickly after cards requesting a union are validated, perhaps in as little as five days. But French noted flaws with that plan from an employer's perspective. “The union may have had maybe six months to build a case with employees” to get cards signed, said French. “[In a quick election], the employer will be carved-out completely and will not be able to exercise free speech.”

“That's propaganda,” responded Logan. “Employers have unlimited access to employees all of the time at the workplace.”

Franchises As Targets

The panelists also discussed which types of franchises would be affected if EFCA is passed. Unions focus on large employers, so hotel chains might be targeted with more union organizing, said Sokol. But he predicted that franchises that have few employees, such as most retail operations, will be untouched.

“Historically, unions have been good for small businesses that compete in local labor markets,” Logan added. “Unions reduce turnover, which reduces training ' and that's important to a small business. Unions also can pool together workers to reduce health care costs.”

However, French and Curiale said that the complexity of union law would be a nightmare for any franchisor or franchisee, especially smaller ones. “For the average franchise, a single-unit operator with eight employees, this is a very challenging law,” said French. “That franchise does not have a labor lawyer on retainer. So the rule about having a quick election presents a challenge in knowing what the employer and the front-line supervisor can and cannot do. It's easy to commit an unfair labor practice.”

Franchises also should be wary about binding arbitration for the first contract, said Curiale. “I have no problem with a neutral hearing an arbitration, but I do have a problem with someone hearing the facts and writing a contract that an employer has to live with for two years,” he said. “It takes away any leverage the employer has in bargaining.”

IFA's French added, “Franchising is a relationship between a franchisor and franchisee, and now [EFCA would impose] a third party in the room, an arbitrator. There's the potential for some very capricious contracts.”

Summary

The panelists did agree on several points. First, none of them predicted that EFCA with Card Check will pass Congress. “It's likely that the final version of EFCA may not include Card Check. It may include a system of quick elections with harsher employer penalties and some form of first-contract arbitration,” said Logan.

Second, none of the panelists foresee EFCA passing soon. “Sen. Harry Reid [D-NV] says it's off the agenda for now; health care is the priority. My expectation is that we will not see it [reach a vote] until 2012,” said Sokol.

“I wouldn't rule it out before then,” said French, “But it is off the table as long as Sen. Reid is unsure he has 60 votes of support for what he is bringing up.”

Finally, even a tough EFCA would not necessarily open the door for rapid or large-scale unionization. “Is this bill all bad? The answer is no,” said Curiale. “But it is killing a fly with a sledgehammer.”

“Frankly, there's plenty of room for franchisors and franchisees to slow down the union process,” Sokol said. “The truth of the matter is that competent employer lawyers are going to immediately raise all kinds of issues: Are the signatures genuine? Are the cards real? What is the appropriate bargaining unit? ' There can still be all kinds of litigation hearings that still make the process somewhat of a farce or the cumbersome, bureaucratic mess that it is today.”

Kevin Adler is associate editor of FBLA.