EFCA UPDATE: LABOR LAW REFORM BY OTHER MEANS?

[June 30, 2010] Employee Free Choice Act proponents, both in organized labor and in Congress, continue to push for changes that will assist unions in organizing more workers. Most recently, the NLRB has indicated that it is considering instituting electronic voting for representation elections. Senator Tom Harkin (D-Iowa) declared during a radio show that EFCA or critical components of it could be taken up by the “lame duck” Congress after the mid-term elections. Employers must remain informed.

As we have explained in previous EFCA Updates, we expect the newly-constituted NLRB to use its rulemaking authority and power to change the law through decisions to accomplish many goals of EFCA. An early indication of the accuracy of this prediction is the RFP issued by the NLRB seeking proposals from vendors on how to implement secure electronic voting. Although electronic voting may not be as insidious as “card check,” it is fraught with the potential for voter coercion to the detriment of free and fair elections. Beyond the potential for fraud, which is significant, employees could be coerced to vote in settings that are not private.

Employers covered by the NLRA also should take notice of recent action by the National Medication Board (“NMB”), the federal agency that oversees labor-management relations in the airline and railroad industry under the Railway Labor Act. The NMB used rulemaking to abandon its 75 year old tradition of deciding elections based on whether a majority of all eligible voters chose union representation. The new standard measures majority status against the number of valid ballots cast, which is a drastic change. On June 28, 2010 the U.S. District Court for the District of Columbia rejected challenges to the validity of the new rule, holding that the NMB’s actions were within its rulemaking authority and undertaken in accord with applicable procedures. Although the RLA and NLRA have dissimilarities, this decision underscores that agencies may radically alter settled procedures through rulemaking. Rulemaking is a process that must provide for a period of public comment. Employers need to participate.

Finally, employers must keep abreast of developments in Congress. Senator Harkin’s suggestion that a lame-duck Congress might pass EFCA may be a stretch. It assumes that legislators who have been voted out of office will, having “nothing to lose” any longer, adopt positions on EFCA that previously were untenable. However, more significant is the potential for parts of EFCA to be engrafted onto wholly unrelated legislation in order to gain passage. As many will recall, the law mandating that employers provide reasonable breaks for breast feeding mothers to express milk was buried in the healthcare legislation. Recently, 110 pages of domestic spending – including for education -- were added to a defense spending bill. Key components of EFCA might be passed in this manner. Hence, employers must remain informed

Messrs Becker and Pearce will join current NLRB members Peter Schaumber, a Republican appointee and Wilma Liebman, a Democrat appointee. (NLRB nominations traditionally are made alternatively from Republican and Democratic circles.). Mr. Becker, who is the first ever nomination of a sitting union official to the NLRB, has authored law review articles arguing that employers lack traditionally recognized “free speech” rights to oppose union organizing. He also has expressed the view that many provisions of EFCA – changes to the card check recognition doctrine and the expediting of elections, to name two – can be achieved through NLRB rulings rather than legislation.

The Administration has not given up on EFCA, however, and recently reiterated its commitment to the legislation. In February 2010 the “Middle Class Task Force” established by the White House issued its 2009 annual report which included statements of support for EFCA, including the following: “Over the course of this year, the Task Force will continue to promote the benefits of union membership and to amplify the President’s message of the importance of EFCA as a way to guarantee workers who want to organize a fair chance to do so.” In March 2010 Vice President Biden addressed the AFL-CIO’s winter meeting and expressed confidence that EFCA would be passed this year. While passing EFCA perhaps remains a tall order given that the Democrats lack a filibuster-proof majority in the Senate, the appointment of Becker and Pearce show that the Administration intends to deliver on its debt to organized labor. Recess appointees, unless confirmed to their posts, serve through the end of the Senate Session in which they are appointed (in this case through 2011).

[January 31, 2010] With the Democrats having lost their 60th vote in the Senate and with prospects of a healthcare bill that will satisfy both chambers of Congress waning, can unions possibly still get the “labor law reform” that they demanded after the 2008 elections?

Even without the controversial card check provision, the prospect that EFCA will gain sufficient support to come to a vote in the Senate before the mid-term elections in 2010 is remote. The decision to re-nominate Service Employees’ International (SEIU) Associate General Counsel Craig Becker to the National Labor Relations Board signals that the Administration may try to repay its debt to organized labor through administrative rather than legislative action. By way of background, Mr. Becker has made it known that he believes that many of the provisions of the EFCA – increased union recognition by card check, expedited elections, and drastic limitations on the right of employers to oppose union campaigns – can be achieved through NLRB decisions. (The NLRB traditionally defines the scope of the law through its rulings, which can vary substantially with changes in the composition of the NLRB). So controversial are Becker’s positions that his nomination was returned to the Administration for reconsideration by the Senate before it recessed in 2009, which typically means the death knell of a nominee. The Administration’s decision to re-nominate Becker signals that organized labor’s goals may be pursued through these non-legislative means.

NLRB nominations traditionally are made alternatively from Republican and Democratic circles. Currently, the NLRB has only two sitting members (a Republican appointment, Peter Schaumber, and a Democrat appointment, Wilma Liebman). In addition to the SEIU’s Becker, the President has nominated Mark Pearce, an attorney with a Buffalo law firm who has a history of representing unions, and Brian Hayes, a labor policy assistant to Republicans.

Employers should remain in contact with their Congressional Representatives both about EFCA and the NLRB appointments advanced by the Administration. Organized labor surely will continue to make its demands clear.

[December 31, 2009] As 2009 comes to a close, the Employee Free Choice Act (EFCA) remains in political limbo. The post-Labor Day compromise reportedly reached by a small group of Senators (one that would eliminate “card check” but retain other onerous provisions) has not resulted in a revised bill.

Although Obama the administration is likely to include the EFCA as part of its job creation/economy-focused agenda in 2010, EFCA remains unpopular generally. The administration expended an enormous amount of political capital to obtain compromise healthcare legislation and now has less leverage to persuade moderate Senate Democrats to vote for the bill. These Democratic lawmakers are keenly aware of the upcoming mid-term elections and hesitant to further antagonize key constituents by supporting the EFCA. Beyond that, according to The Hill, Speaker Pelosi has promised moderate House Democrats privately that they will not have to vote on controversial legislation before the 2010 elections. With respect to EFCA, the Hill reports that Ms. Pelosi has stated that the Senate will have to act first.

In light of this dynamic, the EFCA could remain sidelined through 2010. However, labor is likely to push its agenda in other ways.

• Regulation would be one means. For example, the National Mediation Board, which oversees labor relations in the airline industry, has proposed regulations to change how votes are counted in union elections in that industry. These proposed regulations, which were sought by the AFL-CIO, would dramatically lower the bar for unions to achieve representation. Other private industry employers can expect attempts to alter the established organizing and bargaining rules through regulations promulgated by the National Labor Relations Board.

• Another avenue that organized labor is using to achieve its agenda is State legislation. For example, a law scheduled to go into effect in Oregon on January 1, 2010 would prohibit employers from requiring employees to attend presentations concerning the company’s position on union representation. This would drastically limit the ability of companies to inform employees about the downside of unionization. Similar measures are being pressed in other States. Although the U.S. Chamber of Commerce has filed suit to block the Oregon law (arguing that it is preempted by the NLRA and violates statutorily protected employer Free Speech rights), it is clear that organized labor views States as more likely to adopt pro-union laws.

In summary, 2010 will be a year of union initiatives aimed at eroding an employer’s ability to operate union free. Stay tuned for future updates.

[September 30, 2009] At the AFL-CIO convention earlier this month, Senator Arlen Specter declared that he and a small group of Democratic colleagues have developed a revised version of the Employee Free Choice Act that he expects to pass this year. The revised bill eliminates the highly controversial card-check provision but, in exchange, significantly limits the time in which to hold secret ballot elections, from the current 42 days after the filing of a petition to 5-10 days after the filing. The bill also guarantees union access to workers if employers hold mandatory anti-union meetings during company time. It further sharply increases the monetary penalties for employers for labor law violations. With regard to the controversial mandatory arbitration provision, which would permit a government arbitrator to set the terms of the collective bargaining agreement, Senator Specter has proposed “last best offer arbitration.” This is the process currently used in baseball arbitration, by which the arbitrator chooses between the final offers of the player and the baseball club. Final offer arbitration, in the collective bargaining context, affects not just one player on a baseball team but the employer’s entire bargaining unit, and not just salary but all fringe benefits and working conditions. Moreover, the baseball player can be released by the club the next year if the club feels his salary is not consistent with the club’s interests. An employer, on the other hand, will be saddled with the arbitrator’s award for two years, and will no doubt face great difficulty reducing the arbitrator’s award during the collective bargaining negotiations that will occur two years after the award.

[August 31, 2009] According to recent reports, top labor leaders have advised the Obama administration that they are willing to let action on the Employee Free Choice Act wait until Congress has completed its work on healthcare reform, another key component of labor’s legislative agenda. Organized labor is well advised to wait. The card check provisions proved to be a non-starter with both the general public and key Senators whose votes were needed to pass any legislation. Proponents of legislation favoring unions are working in closed door sessions to find a compromise that will garner the votes necessary for passage. With Senator Robert Byrd of West Virginia still ailing and the passing of Senator Edward Kennedy, a key cosponsor and proponent of the EFCA, the need for a legislative compromise has become even more acute. The next big issue is whether mandatory arbitration of contract terms on which the parties cannot agree in the negotiation of first contracts will be part of any proposed bill. This is a provision that organized labor views as key, and the presumed-next President of the AFL-CIO, Richard Trumka, has vowed that labor will push its agenda more aggressively than before. The U.S. Chamber of Commerce and other business groups are equally adamant that mandatory arbitration is unacceptable.

[July 31, 2009] If a Senate compromise is successful, “card check” may be sacrificed in an attempt to salvage the EFCA. Employers, however, should remain cautious. In addition to the unacceptable “mandatory arbitration” of first contract terms on which unions and employers cannot agree, the proposed alternative reportedly would require expedited union elections (perhaps in as few as five or ten days from the date the union files a petition). Unions make expansive promises (and often inaccurate ones) about what they can deliver when they are collecting employee signatures on authorization cards. Affording employers only five or ten days to “make their case” to employees before a union election is held is insufficient time for a meaningful exchange of information. The problem created by this compressed election period is worse for small companies. The card collection process in a small voting unit is often completed in a few days, well before the company has any notice that a union has targeted its workforce, and well before the company has the ability to formulate and articulate a considered response. While a shorter window between a petition and a union election may be appropriate, the compressed time reportedly being proposed does not strike the proper balance, especially for small employers.

[July 20, 2009] Six pro-labor Senate Democrats reportedly are working on a compromise aimed at gaining passage of the Employee Free Choice Act, which abandons the controversial “card check” provision. For more on the compromise, click here.

[May 29, 2009] President Obama reiterated his support for EFCA earlier this month but also acknowledged that there are not enough votes in the Senate for the bill to pass without compromise. Keenly aware of this fact, Senator Tom Harkin (D. Iowa), a lead EFCA proponent, spent May working behind the scenes to try to bridge the gap with an alternative to the EFCA. Affording unions easier access to employees at the worksite, restricting the use of binding arbitration, and using mail-in ballots rather than a card check all have been suggested. These have been rejected by the business community as “EFCA Lite.” Although Arlen Specter of Pennsylvania insisted that his recent party switch does not change his position on the bill, he remains a key player in the effort to craft a compromise bill. On other fronts, organized labor is taking its appeal to Wall Street. Union pension funds managers recently sent detailed questionnaires to firms in which they are invested demanding to know fund managers’ positions on EFCA, whether they have been funding anti-EFCA lobbying efforts, and asking for information on their relationships to organizations that oppose EFCA. The rationale? An asserted belief that the fund managers’ positions on EFCA could adversely affect the pension fund assets.

[April 30, 2009] Senator Arlen Specter’s decision to switch parties offers fresh hope to supporters of the proposed Employee Free Choice Act. Employers are once again concerned that this dramatic change in labor law might be enacted by Congress.

[March 31, 2009] The Employee Free Choice Act (EFCA), was, as our prior Elert explained, introduced in Congress on March 10, 2009. The battleground for the bill is the Senate, where 60 votes are needed to end debate and permit the bill to proceed to a floor vote. There, a simple majority vote would carry the bill.

On March 24 Senator Arlen Specter, who supported the bill in the last Congress, announced that he will oppose the measure. (Senator Specter is up for reelection next year. EFCA opponents made clear that if he did not oppose the bill, they would work to defeat him in the Republican primary). Spelling more trouble for EFCA, on March 27 Senator Diane Feinstein pulled her prior support for the bill, saying that a compromise was needed to reconcile the legitimate interests of management and labor.

Compromise legislation has been introduced. For example, one alternative measure would expedite the election process and require employers to provide unions with advance information about company communications during a union organizing campaign. Unlike the EFCA, this bill does not alter the secret ballot election or subject first contracts to binding arbitration. The EFCA itself could be amended in an effort to address some of businesses’ concerns. Compromise could help EFCA supporters overcome the hurdle of a filibuster of the bill in the Senate. EFCA opponents are wary, however, because any compromise bill could be amended in committee to include unacceptable provisions (e.g. a return of “card check” or “interest arbitration”) that make the bill unpalatable to the business community.

The Maryland Chamber of Commerce and Shawe Rosenthal will hold an EFCA Webinar on April 22, 2009, 10:00 a.m. For more, click here.

RIVAL UNIONS ANNOUNCE AGREEMENT TO ORGANIZE NURSES
[March 23, 2009] On March 19, 2009 the Service Employees International Union (“SEIU”) and the California Nurses Association/ National Nurses Organizing Committee (“CNA/NNOC”) announced that they were ending their bitter rivalry. These unions now will join forces to organize healthcare workers and push for passage of the Employee Free Choice Act (“EFCA”). For more, click here.

[February 27, 2009] The prospects of Congressional passage of the Employee Free Choice Act continues to be a significant concern to the employer community. Employer associations and many individual companies are conducting meetings among their management officials and supervisors in order to be prepared in the event that the EFCA becomes law. Stephen Shawe and Maryland Chamber of Commerce CEO Kathy Snyder, and others, met earlier this month with Maryland’s U.S. Senators Mikulski and Cardin to explain the Chamber’s concerns and objections to the proposed EFCA legislation and to listen to the Senators’ views on the legislation and its prospects for passage. To listen to Stephen Shawe’s interview, click here.

Shawe Rosenthal, LLP provides this publication for informational purposes, and it should not be construed or relied upon as legal advice. You should contact your Shawe Rosenthal, LLP lawyer to discuss any questions that you may have concerning your own situation.

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