The Employee Free Choice Act (EFCA)

What is EFCA? The Employee Free Choice Act (EFCA) was introduced in both the US Senate and the US House on March 10, 2009. The proposed legislation is identical to a version that passed the House last year during the Bush Administration, and stalled in the Senate. In the last Presidential election, President Obama and the Democratic Party made its passage part of its campaign theme; in a recent taped address to the AFL-CIO, President Obama stated that “we will pass the Employee Free Choice Act.” In follow-up statements to the AFL-CIO leadership, Secretary of Labor Hilda Solis stated that the Department’s view towards organized labor would change, and was quoted as saying “there’s a new sheriff in town.”

In brief, the EFCA eliminates the secret ballot election, and replaces it with the union’s choice on whether to ask for a vote or to simply certify the union once more than 50% of the employees in the targeted bargaining unit (or entire company, depending on the union’s focus) sign authorization cards. Throughout the remainder of this article, I will refer to the target unit/company as a bargaining unit. In addition, I will make the assumption that the EFCA, as proposed in both the Senate and House, will pass as it is currently written.

Present law allows a union to request a secret ballot election, administered by the National Labor Relations Board (NLRB) if it obtains signatures from at least 30% of the employees in the bargaining unit. If a union obtains at least 50% of the signatures from employees in the bargaining unit, a private sector company has the choice on whether to call for a secret ballot election or simply to recognize the union and begin negotiating a contract. Most companies will choose to call for an election and then spend the 42 days allowed by law (the pre-election period) to present its position to the company’s employees. History has shown that the company will win about 75% of elections held when it can present its position before a vote. If the union does win the election, the company must enter negotiations with the union about wages, benefits, retirement, working conditions, discipline, termination, and other matters. Negotiations typically take about six to twelve months before a contract acceptable to both parties can be reached.

The EFCA provides for immediate recognition of a union after it can muster at least 50% of the signatures of the bargaining unit’s employees asking for a union, and then presents the employer with a document requesting certification. Past union practices have shown that in the absence of a secret ballot, some employees are coerced into signing, or sign the card just to get the union organizer(s) to stop asking for their signature. For this reason, large labor unions do not usually go to a company with the signature cards until they have received signatures from at least 70% of the bargaining unit’s employees; history has shown that many will not vote for the union once the company has presented its position to the employees and the vote is taken in secret. A 70% majority will typically be enough to get the union certified with at least 50% of the secret ballot votes being pro-union.

Under the EFCA, once a union asks the NLRB to certify it (this is guaranteed if they can present cards signed by over 50% of the bargaining unit’s employees), the company and the union must begin negotiations within 10 days. Negotiations must be concluded within 90 days; if they are not (and the company and union do not agree to a time extension), the Federal Mediation and Conciliation Service will be asked to intervene for 30 days. If these two efforts are unsuccessful, then the contract can be sent for mandatory arbitration; in this scenario, it is possible that neither the employees nor the company will end up with a contract to their liking. Any arbitrated contract will remain in force for two years before it can be re-negotiated—even if both sides would like to re-open negotiations earlier.

The imposition of a contract on a business is sufficient grounds for many employers to oppose passage of this act, but there is more. The EFCA provides for punitive damages on employers (triple the current damages for wrongful discharge of an employee involved in the organizing campaign, fines of $20,000 for each unfair labor practice, and mandatory injunction proceedings for campaign-related issues). No such damages are assessed if the union engages in unfair labor practices. Additionally, the EFCA puts an employer at a significant disadvantage, as it eliminates the 42-day pre-election period that has historically allowed the employer to present its viewpoint to its employees. The final major disadvantage to the EFCA from the employer’s viewpoint is that while it eliminates the secret ballot and 42-day pre-election period on the front end, it does not allow employees an equal opportunity to rid themselves of a union on the back end by signing cards; the viewpoint of the unions and those who introduced the legislation is that a vote to remove the union from the workplace can only be done via a secret ballot after allowing the union an opportunity to present its viewpoint to the employees.

It is EMPO’s position that an employee should be allowed to freely choose whether he or she wishes to be represented by a union by means of a secret ballot election. Further, it is our position that any company can best prepare itself for the passage of the EFCA, in either its present form or an altered form, by ensuring that its employees are properly paid, properly trained, provided with an adequate benefits package, and have above-average supervisors. It could be the company’s supervisors who ultimately determine, by their treatment of their employees, whether a company becomes a target of a union organization campaign or not. For this reason, the company should invest time and money to ensure that supervisors are trained to provide encouragement and feedback to their employees, and not to simply manage by exception—catching the employees only when they do something wrong, but leaving them alone when there is nothing to correct. A company should also identify any other potential workplace problems and correct them if possible. Finally, identify any potential bargaining units; for example, is there a department of the company that is always grumbling? Perhaps it is the entire company? Target those areas with your analysis of what can be done better, and you will go a long way towards keeping your workplace union-free.

How Can EMPO Help You? A Professional Employer Organization (PEO) such as EMPO is an organization that assists its client companies with human resources, payroll, benefits, retirement accounts, and much more. When a company partners with a PEO, the PEO is considered the employer-of-record for all employees, and the company is considered the worksite employer. Although this helps mitigate risk regarding employee relations issues, there are no provisions under law that prevent a PEO’s employees from belonging to a union; therefore, a PEO is not a means to keep a union at bay. However, a PEO can help keep a company’s employees more satisfied with a more generous benefits package and training opportunities than many companies can provide or afford on their own.