Many Employers ‘Fearful’ About EFCA’s Impact

By Pamela Babcock Jan 26, 2009
Labor unions and the business community are intensifying their lobbying over the Employee Free Choice Act (EFCA), which appears poised for passage now that President Barack Obama, a longtime supporter of the law, has been sworn in, according to Jay Krupin, who leads the Labor and Employment Practice and the Litigation Practice in Epstein Becker & Green’s Washington, D.C., office.

However, Mike Aitken, director of the Society for Human Resource Management’s (SHRM) Government Affairs Department, said that while passage in the House is almost certain, "the real battle is in the Senate and far from certain." He noted that SHRM is actively engaged in advocacy efforts to oppose EFCA.

HR professionals are “very concerned about” EFCA, Krupin said, noting that, “we have an incredible number of clients who are asking questions about it.” Krupin said those with questions about EFCA are “fearful. It’s a sweeping change—the most sweeping change in labor relations law in about 30 years.”

Card Check Recognition Concerns

Andrea Terrillion, director of Labor Relations and Legal Studies Programs at Cornell University’s School of Industrial and Labor Relations and a member of SHRM’s Labor Relations Special Expertise Panel, said that, in general, concerns focus on two areas: card check recognition and bargaining time frames.

With card check recognition, employers will no longer have the right to demand a secret-ballot election before a union is certified as the exclusive bargaining representative of its employees. Under EFCA, unions organizing workers would need only to present an employer with signed authorization cards from a majority of the employees it seeks to represent and the employer would be required to recognize the union. Under current law, recognizing the union based on a showing of authorization cards, without an election, is voluntary for the employer.

“Employers express fear that if the card check process is unchecked, who knows what employees are being told to prompt them to sign the cards,” and they wonder whether promises or threats would be made to employees to get them to sign the cards, Terrillion said. Likewise, during union elections decided by secret ballot, there are campaign periods during which the union and employer speak to employees.

“With card check recognition, much of the time employers don’t often know what’s going on so they don’t have the opportunity to make a presentation to employees about how the employer feels about them or unionization, which they can do, within certain legal limits, under the current law and system,” Terrillion noted.

Bargaining Time Frame Concerns

Another key concern is collective bargaining time limits, Terrillion said. Generally, under the current law, good-faith bargaining can take two months, six months or a year. But under the proposed EFCA, employers and unions essentially have three months to negotiate a first contract.

If an agreement is not reached within 90 days of the beginning of bargaining, the Federal Mediation & Conciliation Service, a federal agency, can intervene. If those efforts are unsuccessful, there is a potential for mandatory arbitration after 120 days.

“Employers are concerned about that provision because an outside party could dictate what the relationship, pay and benefits will be,” Terrillion said. “The measure is intended to discourage delay, but with first contracts, if you’re starting from the ground up, those time frames may be difficult to meet.”

Hard to Miss All the Ads

HR and workplace consultant Bob Kustka, who spent more than 25 years as an HR executive for Gillette Corp. and now runs the Norwell, Mass.-based Fusion Factor, has clients spread across a variety of industries. He said concern about EFCA varies by the size of the organization and whether there is a “sophisticated” HR function or an HR function at all.

“The smaller clients are mostly unaware of EFCA right now,” Kustka said, adding that “the larger companies are aware [of it], but many HR departments are taking a wait-and-see approach.”

Not all HR professionals will be impacted by EFCA. Joseph Adler, SPHR, director of the Office of Human Resources for Montgomery County, Md., and a member of SHRM’s Labor Relations Special Expertise Panel, said that because EFCA amends the National Labor Relations Act (NLRA) in terms of becoming a certified bargaining agent and because public-sector employers such as Montgomery County, Md., are excluded from NLRA coverage, “the bill would have no legal effect on us.”

There certainly have been plenty of advertisements and lobbying efforts surrounding the proposed act. The AFL-CIO said in an e-mail to supporters that “the business community has ramped up a massive $200 million lobbying and advertising war against the EFCA.” Union organizers have not sat idly by. In the days leading up to and following President Obama’s inauguration, there was a barrage of prime time television advertisements promoting EFCA.

American Rights at Work produced the ads on behalf of America’s workers and partner organizations, including the AFL-CIO. The group said the $3 million advertising campaign was “designed to educate the public and our legislators about the proposed legislation,” which the group said 73 percent of Americans support.

Next Steps

Since EFCA hasn’t yet passed, Terrillion said, HR professionals and business leaders can still take steps to shape it by voicing concerns and alternatives to congressional representatives and working with large business and trade association legislative policy efforts.

“I do wonder about the effectiveness, particularly given the current political and economic climate, of the labor-management ‘trench’ mentality some espouse in response to EFCA,” she remarked. “Those that are concerned about EFCA may be better served by putting forth practical, creative alternatives that recognize the legitimate needs and interests of all involved.”

Meanwhile, Krupin continues to work with clients and legislators concerned about EFCA. “We have been pretty successful in getting the ear of a number of people who have a significant stake in this to realize you can’t have a one-sided piece of legislation that affects an economy that is in turmoil,” Krupin said.

Aitken agreed that HR professionals need to be on guard and aware of EFCA. But he also observed that “there are several major legislative issues that will impact the workplace and are burning before Congress that are just as important as EFCA.”

Pamela Babcock is a freelance writer based in the New York City area.

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