Dealing With a More Union-Friendly World

By Christina Beau

Mar. 6, 2009

If the Employee Free Choice Act becomes law, small-business owners will be among the many employers dealing with unions for the first time.

    The act, supported by President Barack Obama, would require employers to recognize a union if a majority of workers sign cards indicating they want representation.

    With other priorities on the table—especially the economic stimulus bill—the Employee Free Choice Act may have to wait its turn for an Obama administration push on Capitol Hill. But labor and business groups already are fighting over the bill, which promises to make it easier to organize American workplaces.

    No matter what happens with this so-called card-check bill, Obama has made it clear that labor will have a voice. Already he has issued three pro-labor executive orders, picked a secretary of labor (Hilda Solis) with union roots, and signed into law the Lilly Ledbetter Fair Pay Act.

    The tide has changed. What does that mean for business?

    “It means an employer who violates the law is more likely to get caught, but that’s it,” says Robert Bruno, director of the labor education program at the University of Illinois at Chicago. “It certainly doesn’t hurt business if you’re otherwise operating consistent with the law.”

    Despite the other steps the Obama administration has taken, the Employee Free Choice Act remains a key goal for organized labor.

    The card-check petition isn’t new. Under current law, the National Labor Relations Board will certify a union if 51 percent of workers sign cards asking for representation or if 51 percent vote yes in a secret-ballot election (which first requires a petition signed by 30 percent of the workers). But current law also says that employers don’t have to recognize a card-check request for representation and can demand a secret-ballot election instead.

    Advocates say that the Employee Free Choice Act  would leave that decision—card check or secret ballot—up to employees. But once a majority of workers sign cards authorizing a union, a company would have to recognize it. Employers could no longer insist on the secret-ballot election, nor could any employees who might have signed a card with the intention of invoking such an election. Both labor and business groups are predicting a surge in unionization, as much as doubling the 7.5 percent of private-sector workers now represented by unions.

    The bill also would require employers and unions to submit to binding arbitration if they can’t negotiate a contract within 120 days. And it increases penalties for employers who infringe on employees’ right to organize.

    Small businesses certainly will be among the newly unionized workplaces (though there are revenue limits on the NLRB’s jurisdiction over small employers). UIC’s Bruno cautions that ease of organizing isn’t the only issue.

    “Do you really organize a mom-and-pop just because you can? No, there are still economic factors,” he says. “Does the employer have the ability to pay higher wages? Is the employer in an industry where it can pass increased labor costs on to customers?”

    Business groups such as the U.S. Chamber of Commerce have been running ads and raising the specter of companies having to close if unions demand too much.

    The current economy notwithstanding, historically that reasoning hasn’t held up, according to data compiled by the AFL-CIO and American Rights at Work, a nonprofit pro-labor group based in Washington. They argue that although 51 percent of companies threaten to close if a union wins an election, only 1 percent actually do.

Coercion concerns
   Business groups also contend that mandatory recognition of card-check petitions would erode employee privacy and allow organizers to coerce workers into signing. And employers worry about ceding control over pay and work conditions to an NLRB arbitrator.

    “It is a scary proposition to have a third party imposing on an employer the terms and conditions of employment,” says Mark Spognardi, a partner representing employers at Arnstein & Lehr in Chicago.

    David Goss, 46, general manager of Imperial Zinc Corp., a foundry on Chicago’s South Side with $75 million in annual revenue and 22 of 35 employees unionized by the Teamsters, says he prefers negotiating directly with the union.

    “Once the NLRB is involved, employers are at a great disadvantage,” he says. “You’re going to be encouraged to work out an agreement to do something you normally wouldn’t have done.”

    Labor groups counter that secret-ballot elections often are corrupted by management coercion.

    Provisions could change as the act evolves, notes Jules Crystal, a former NLRB trial attorney who now represents employers as a partner at Bryan Cave in Chicago.

    One possibility: Instead of allowing mandatory card check, the act could shorten the time between petition and election by a week or so, from the more typical 30 to 60 days.

    “The unions are right—the process is much too long,” he says.

    No matter the specifics, Crystal thinks much can be resolved with a little civility.

   “Many employers take the position that it’s a war, that it’s we vs. they,” he says. “Not to be Pollyanna-ish, but when it’s a collective approach, if you’re honest and explain what you need, unions respond to that.

    “Then you bargain hard at the negotiating table.”

This story was updated March 13. An earlier version did not fully describe a key provision of the Employee Free Choice Act.

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