Editor: How does The Employee Free Choice Act (EFCA) fit into an overall strategy to engineer a comeback for unions?
Redeker: A lot of attention is being focused on The Employee Free Choice Act, but it is just the first prong in a five-pronged union strategy to take advantage of the change in the administration and Congress. EFCA is the opening salvo. It would, by replacing a secret ballot election with a card check, effectively eliminate the four to five week period in which the employer has an opportunity to educate employees with respect to whether a union would be in their best interest. The union would be free to launch a stealth campaign to collect cards before the employer had a chance to make its case and employees would lose their opportunity to hear both sides before making a decision in the privacy of a voting booth. Unions already have seen the value of depriving workers of the right to hear both sides by pressing for so-called neutrality agreements.
Editor: Tell us about neutrality agreements.
Redeker: A neutrality agreement is an agreement by the employer that, if its employees are subjected to union organizing, the employer will not say anything to its employees that will discourage them from becoming members of the union.
Unions convince employers to sign such agreements in a number of ways, most of which involve some level of extortion. A union, for example, will threaten an employer with picketing or will engage in a corporate campaign. In a corporate campaign, a union may spew negative publicity calculated to damage an employer's reputation or the quality of its products or services. It may go to the employer's banks and threaten to withdraw union trust fund deposits unless the banks cancel lines of credit. It may file specious OSHA, environmental and other regulator complaints.
In the case of Verizon several years ago, the neutrality agreement was part of a strike settlement. It is now common in the hotel industry for a union, in collective bargaining, to refuse to settle the contract for one hotel of a company unless the company agrees to be neutral when the union seeks to organize the employees at another hotel of the owner.
Neutrality agreements are based on the same principle as EFCA: silencing the employer. Unions are largely unsuccessful in their organizing drives when the employers have been given an opportunity to educate their employees about unions and what they cost and can and cannot do. Enlightened employees who vote in secret tend to reject unions.
Under current law, a union agent can lie, promise or threaten anything to get an employee to sign a card and the card will still be valid. The NLRB does not examine the reasons why an employee may sign the card. As proposed, EFCA would not change this.
Editor: Are there other features of EFCA that trouble you?
Redeker: Yes. Interest arbitration. Currently an employer that has its employees organized by a union has an obligation only to negotiate in good faith with the union; it is not required to agree to any demand made by a union if it does not believe that it is in its best business interest.
If the parties can't come to an agreement, the union may strike to force the employer to change its position. Under EFCA, if the parties don't reach an agreement in 120 days, the government would appoint an arbitrator selected through the Federal Mediation and Conciliation Service. The arbitrator would tell the employer what the wages, benefits and working conditions of its employees must be over the next two years. This is wildly antithetical to our system of private commerce and entrepreneurialism.
Interest arbitration is not a new concept. Most state laws provide for arbitration to settle police and fireman labor disputes, because a strike would jeopardize public safety. The arbitrators look at what is being paid by other similarly situated municipalities, look at the municipality's revenue and at other measures the township can afford and set the wages and benefits for police and firemen.
But in the public sector, there is no competition and the revenue and expense information about the employer is a matter of public record. Quite the opposite situation exists in the private sector and interest arbitration would severely impede competitiveness and the ability of an employer to manage its own business.
Editor: What about the penalties provided in EFCA?
Redeker: Less than two percent of the discharges of employees allegedly for union activity actually become validated by the NLRB. That is not a high percentage and, as a result, I am not terribly concerned about the effect of the enhanced penalties in this area. What does concern me, however, is the $20,000 per violation for a willful or repeated offense. Let's assume that an employer sends a memo to its 100 employees that is later found to have been threatening or gave an impression of surveillance. At $20,000 a violation, there would be a potential $2 million fine. I would assume that regulations are going to be enacted that make some sense, but we don't know that and there is no probability of reasonableness with the new Secretary of Labor.
Editor: You mentioned that EFCA is just one of the prongs of the comeback strategy unions are pursuing.
Redeker: Another piece of proposed legislation that is yet to reach the floor of Congress is the RESPECT Act. This law would broaden the definition of supervisor. Supervisors are not employees as presently defined by the National Labor Relations Act (NLRA) so they are not entitled to belong to unions or to the protections that benefit regular employees.
The RESPECT Act would narrow the definition of supervisor by removing certain indicia from the NLRA. Currently, an employee is a supervisor if that employee assigns work to other individuals or responsibly directs what these other individuals do. The proposed Act would take those two concepts out and add a requirement that to qualify as a supervisor, the person would have to spend a majority of his/her time supervising other people.
As a result of this legislation, very few people who are currently considered to be supervisors will continue to pass the tests. This would not only qualify millions of additional people as potential members of a union but also would make it extraordinarily difficult for employers because now these people could not effectively discipline other employees because they would be part of the same union. The employer would be denied these people as advocates. In fact, they may use their positions of authority to advocate for and organize on behalf of unions. When you consider the combined impact of the RESPECT Act and EFCA, the result would be a huge increase in the number of union members and a corresponding decrease in the ability of employers to manage and control their businesses.
There are three other prongs to the pieces to union strategy. There is legislation that then Senator Obama co-sponsored called the Patriot Employer Act. A Patriot Employer would get a tax break and a preference in getting government contracts. A Patriot Employer would be one that is neutral to union organizing, pay at least 60% of the cost of health care, have wages that are at least a federally mandated amount and have a retirement plan that is consistent with federally mandated standards. You and I, as tax payers, have to be concerned about what that is going to do to competitive bidding for government contracts and about the increased cost for the government in doing its business.
Another prong is the repeal of Section 14(b) of the National Labor Relations Act that currently permits states to have Right to Work Laws. Right now, 22 states have laws on their books that prohibit the employer from agreeing with the union that an employee has to be a member of the union or pay dues to the union in order to keep his or her job. Those Right to Work Laws would become invalid if this amendment were to be passed.
The prongs I have mentioned take the form of legislation. The fifth prong is organized labor's effort to reverse the NLRB's decision in the Register-Guard Publishing Company case. In that case, the NLRB held that an employer may prohibit employees from using a company-owned e-mail system to solicit for "non-job-related reasons" (effectively prohibiting the use of e-mail systems for union organizing). In addition, the Board in that case loosened the limitations on no-solicitation policies. This is a case that unions very much want to have reversed and I expect that, when the new labor board is fully empanelled, unions push to get it reversed.
Editor: Based on your experience, do you think that if the union strategies that you outlined are successful, they could deter recovery by virtue of making the U.S. generally less attractive to foreign companies as a business location?
Redeker: This constantly comes up when a company is looking at business locations. Any company that does not have to be in any particular location is going to try to find a place where it can develop its business and control its costs in a way that will make it successful.
Published March 31, 2009.
