By Kelley M. Wynne
Employers - are you prepared to recognize a union based on a simple majority of signed authorization cards, to accept union contract terms decided by an arbitrator or risk awards of triple back pay for alleged improper termination? These risks may become reality if Congress passes and President Obama signs the proposed Employee Free Choice Act ("EFCA") as an amendment to the National Labor Relations Act ("NLRA").
The NLRA is based upon the principle that workers should have the freedom to decide whether or not to bargain collectively with their employer to improve their working conditions. Passed in 1935 and amended in 1947 by the Taft-Hartley Act, the NLRA applies to retail businesses with over $500,000 in annual sales or non-retail businesses with over $50,000 in annual sales. Currently the NLRA protects workers from being retaliated against for decisions regarding union membership.
I. "CARD CHECK"
Today, under the NLRA, if a union wants to be recognized by an employer as the representative of that employer's workers, it must obtain signatures from 30% of that employer's workers in a process called "card check". Once a union obtains those required signatures, the employer and union have two options: (1) the employer may recognize the union or (2) either the union or the employer may request a secret-ballot election be conducted by the National Labor Relations Board ("NLRB"). The secret ballot election normally takes place about six weeks after the NLRB receives the authorization cards. During this period, both the union and the employer attempt to persuade the workers to either unionize or not. If, during the secret-ballot process at least 50% of the workers vote in favor of joining the union, the union must be certified by the NLRB to represent all of the employer's workers.
Under the proposed EFCA, the simple act of having a majority of workers sign an authorization card during the "card check" process, would require the employer to recognize a union without a secret-ballot election. What does this mean for small employers who meet the threshold of required annual sales? At a business with just 30 workers, it would be possible for a union organizer to persuade a mere 16 workers to sign authorization cards in a half-hour. An owner could leave work on Friday afternoon without a union and come back on Monday morning and be required to recognize and negotiate with a newly formed union.
II. BINDING ARBITRATION
The second significant proposed change to the NLRA that would result from the passage of the EFCA requires the use of binding arbitration to resolve bargaining impasses between the new union and the employer. Under the current law, the initial negotiations on a union contract are treated as any other contract would be - the parties negotiate in good faith until they agree on terms. If the union and the employer fail to agree to the terms of the first contract, several things could happen: (1)the union may call for a strike, (2)the employer might implement its last offer to the union or (3) the employer might lock out workers.
The EFCA radically changes that bargaining practice. It provides that after 90 days of bargaining on the initial union contract, either the union or the employer may request mediation by the Federal Mediation and Conciliation Service. If, after another 30 days in mediation, the union and the employer are still not able to agree on contract terms or not able to extend the timeline for negotiations, the Federal Mediation and Conciliation Service must refer the dispute to arbitration. The arbitrator will use his or her judgment to determine contract terms that will bind the union and the employer for two years.
III. PENALTIES
The third and final proposed change dramatically increases the penalties against employers for unfair labor practices conducted during an organizing drive and requires the NLRB to make investigations of those cases a priority. If it is determined that an employer has discharged or discriminated against a worker for supporting a union during an organizing campaign, the NLRA requires the employer to provide that worker with full back pay. Under the EFCA, the employer would have to provide triple the back pay for those offenses. The EFCA also adds a civil penalty of up to $20,000 per violation against employers who are found to have willfully or repeatedly violated workers' rights during an organizing campaign or first-contract negotiation. The EFCA, however, does not increase penalties for unions who commit similar unfair labor practices against workers or employers.
For additional information on the EFCA or any other employment law issue, please contact Betsy Davis or Kelley Wynne.
