Employee Free Choice Act: What It Means and Why Non-unionized Employers Should Care
By: RICHARD A. ROSS, KAREN G. SCHANFIELD & KRISTA A.P. HATCHER
November 2008
The Employee Free Choice Act (EFCA) is proposed national legislation that would overturn nearly 60 years of labor law by amending the National Labor Relations Act (Act) in several unprecedented ways.
The U.S. House of Representatives passed the EFCA last March by a significant margin (241-185). While 51 Senators supported the bill, it stalled in the Senate because of a threatened filibuster. Most commentators expect that it will ultimately pass the new Senate and be signed by President Obama in some form.
The key provisions of EFCA are:
1. Card check in place of secret ballot election
Labor law, as it has existed since the mid-1930s, has required that unions present authorization cards from at least 30% of the employees it seeks to organize to the NLRB. The NLRB then conducts a secret ballot election in which employees vote whether they want union representation. The election is typically held about five or six weeks after the petition is filed.
Under the proposed amendment, unionization would be based on a “card check,” meaning that employees could be asked to sign cards authorizing the union to represent it. Pursuant to the bill, if a union presents cards from 50% plus one or more of the employees, the union may be certified as the exclusive bargaining representative based upon the card check alone. In practical terms, this means that most, if not all, determinations will be based on the card check without a secret ballot election.
2. Mandatory Arbitration
Under EFCA’s current language, once a union is certified as the exclusive representative, it can demand that bargaining over terms and conditions of employment begin in 10 days. If an agreement cannot be reached after 120 days, the negotiation is referred to an arbitrator and the arbitrator determines all remaining contract issues, including pay, benefits, hours, or work. Since experience teaches that first contracts are rarely finished in 120 days, it’s likely that many of the terms of new contracts will be decided by an arbitrator, effectively depriving not only the employer but also employees from having a say in the terms of the contract.
3. Increased Penalties
Finally, the EFCA provides for liquidated damages of two times back pay in addition to an employee’s back pay if an employer unlawfully terminates pro-union employees in certain circumstances. Currently, damages in these circumstances are limited to actual back pay.
In addition, the EFCA would impose a $20,000 penalty on employers for each violation if the NLRB and/or a court finds that the violation is willful or repetitive. Currently no such penalties exist.