This afternoon, the Employee Free Choice Act (EFCA) was re-introduced in the House and Senate. If passed, EFCA will dramatically alter labor-management relations in the United States.  In its current form, EFCA amends the National Labor Relations Act (NLRA) and authorizes the National Labor Relations Board (NLRB) to certify a union as the exclusive bargaining representative of employees based on valid authorization cards signed by a majority of employees in the proposed bargaining unit alone (known as the "card check" process). The card check provisions mandate recognition of the union if more than 50 percent of the workers in the bargaining unit sign authorization cards. Secret ballot elections, now used to determine a union’s majority status, would become largely obsolete.

EFCA also would change the process of how the parties' negotiate their first contract. The bill establishes a 120-day period for the parties to reach an initial agreement. If unsuccessful after 90 days, either party may notify the Federal Mediation and Conciliation Service and request mediation. If mediation is unsuccessful after 30 days, the dispute will be referred to binding interest arbitration. The arbitration board will determine the terms of the collective bargaining agreement, which will be binding on the parties for two years.

Finally, EFCA provides increased penalties for violations of the NLRA committed by employers during any period when employees are attempting to organize a union or negotiate a first contract with the employer. EFCA requires the NLRB to seek a federal court injunction against an employer for unfair labor practices and provides damages of back pay plus two times that amount as liquidated damages to an employee who is discharged or discriminated against during these periods. It also provides for civil fines up to $20,000 per violation against employers found to have willfully or repeatedly violated employees’ rights.

In its current form, EFCA leaves many unanswered questions. It is unclear what avenues of appeal, if any, an employer or union would have to contest an unreasonable or overly burdensome interest arbitration award. Further, there is no indication of how employers would be able to contest the validity of union authorization cards, how a proper bargaining unit would be established, or how an employer or employees could seek to decertify a union. While regulations might clarify some of these issues, EFCA does not explicitly provide for regulations to be issued.

On February 25, 2009, House and Senate Republicans introduced a partial counter-measure to EFCA -- the Secret Ballot Protection Act (SBPA) (H.R. 1176, S. 478). If passed, the SBPA would amend Section 8(a)(2) of the NLRA to make it an unfair labor practice for an employer to recognize or bargain collectively with a labor organization not selected by a majority of employees in an NLRB-conducted secret ballot election. The measure also creates a new unfair labor practice if a union causes or attempts to cause an employer to recognize or bargain with a labor organization that has not been selected by the employees in a secret ballot election. The SBPA essentially guarantees the protections of a secret ballot election, in direct response to EFCA's card check provision.

Even without measures like the SBPA, EFCA may not pass in its current form. Recently, Democrats have indicated that they do not yet have the 60 votes needed to invoke cloture (move the bill to a vote) because certain members, such as Senator Ben Nelson (D-Neb.), have indicated that they will rethink the matter and make a determination once the Senate has amended the bill.  If passed, however, President Obama promised to sign this legislation while campaigning.  Now is the time for employers, particularly if susceptible to unionization, to be proactive and take steps in anticipation of the effects of EFCA. Steps to consider include:

  • Reviewing employment policies that impact unionization, such as solicitation, distribution, and electronic communications;

  • Reviewing wage and benefit packages to ensure competitiveness;

  • Training managers and supervisors about union authorization cards and their legal effect under EFCA; and

  • Conducting vulnerability assessments related to unionizing efforts.

Employers also should consider training supervisory or management employees to deal with issues causing employee dissatisfaction (a key cause of unionization) and to recognize potential unionization activity in its nascent stages. For additional measures that an employer may wish to consider, please refer to our earlier legal alert on this topic by clicking here. In addition to preparing the workplace, employers may want to contact their federal legislators to express their views about EFCA and the SBPA.

Lawyers in Ballard Spahr's Labor, Employment and Immigration Group are ready to assist you with EFCA preventive planning, including training, policy development, and vulnerability assessments.  We also are prepared to answer your questions about these pieces of legislation.

Copyright © 2009 by Ballard Spahr LLP.
(No claim to original U.S. government material.)

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This newsletter is a periodic publication of Ballard Spahr LLP and is intended to alert the recipients to new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your situation and specific legal questions you have.