EMPLOYEE FREE CHOICE ACT STATUS Representative George Miller (D-CA), Chairman of the House Education and Labor Committee introduced H.R. 1409, the Employee Free Choice Act. The late Senator Ted Kennedy (D-MA), Chairman of the Senate Health, Education, Labor and Pensions Committee, introduced S 560, the companion bill in the Senate. President Obama made passage of this legislation one his campaign promises. While it seems like this legislation has been discussed forever, there have been no votes on it in this Congress. The House majority decided to wait until the Senate acted. LEGISLATION Under current law, individuals interested in organizing a union must file a petition with the National Labor Relations Board (NLRB). This petition must demonstrate that 30 percent of potential union members want to have a union organizing election. Generally, the potential union members sign an authorization card indicating their desire to join a union. Importantly, within 45 days of receiving the petition, the NLRB then will conduct a secret ballot election to let employees decide whether they want to join the union. The secret ballot election allows employees to choose in private whether or not they wish to join the union. Instead of using a petition to force a union election, under the proposed legislation, if an organizing campaign can collect signed authorization cards or a petition from more than 50 percent of the employees (this is often referred to as the "50 plus one" rule as the cards must collected from 50 percent of the employees plus one more employee), an employer would be required to recognize the union. There would be no secret ballot election in such a case. The legislation also provides for the mediation and binding arbitration of the initial collective bargaining agreement following any recognition of the union. The parties must begin collective bargaining within 10 days of receiving a request for bargaining from the other party. If the parties do not execute a collective bargaining agreement within 90 days of the start of bargaining, either party may request mediation from the Federal Mediation and Conciliation Service (FMCS.) The FMCS is directed to use its best efforts, via mediation and conciliation, to then bring the parties to agreement. If, 30 days after mediation request is made, there is still no first contract, the FMCS is directed to refer the contract negotiations to an arbitration board, under regulations as may be prescribed by the FMCS. The arbitration board must issue a decision settling the negotiations, binding on the parties for two years. The legislation outlines penalties against employers that illegally fire or discriminate against workers for their union activity during an organizing or first contract drive. It also will require the NLRB to seek a federal court injunction against an employer whenever there is reasonable cause to believe that the employer has discharged or discriminated against employees, threatened to discharge or discriminate against employees, or engaged in conduct that significantly interferes with employee rights. It further authorizes the courts to grant temporary restraining orders or other appropriate injunctive relief. This bill also triples the amount of the employee's back pay when an employee is discharged or discriminated against during an organizing campaign or first contract drive. Finally, the bill will provide for civil fines of up to $20,000 per violation against employers found to have willfully or repeatedly violated employees' rights during this process. ANALYSIS Many unions and their supporters believe that the NLRB elections are stacked against those who wish to form a union. They believe that it is unfair to give the employers the secret ballot election option when a majority of employees have expressed support for a union, asserting that employers are able to leverage more anti-union votes when the election is held in private. H.R. 1409/S. 560 would leave that decision in the workers’ hands and allow them to choose which avenue to form a union. Supporters also believe that the current penalties against “employer intimidation” are too soft and do not provide an effective deterrent against such interference. They believe that the stronger penalties in H.R. 1409/S. 560 will send an appropriate message to employers to give their workers’ the freedom to choose whether to form a union. Opponents of H.R. 1409/ S. 560 believe that it will have the converse effect. Rather than employer intimidation, it will encourage union intimidation. They contend that the authorization process will allow those who support the formation of unions to coerce employees into signing the card, as the “votes” will now be made public, instead of the private votes offered through secret elections. Without the regulated, and secret, election system provided by the NLRB, the proposed open authorization card process will be vulnerable to bullying and deceptive tactics. Furthermore, the authorization cards would be susceptible to fraud through forged signatures. The National Labor Relations Act is the basic law from which the NLRB derives its authority. The authority is very broad; generally, it has jurisdiction over any enterprise whose operation affects commerce, with “commerce” meaning interstate commerce but “affects” interpreted to include indirect activity. There are some specific exclusions for types of employees, most notably agricultural laborers, but there is no exclusion based on the number of employees. The NRLB has the discretion NOT to assert jurisdiction over enterprises. The NLRB’s requirements for exercising its power or jurisdiction are called “jurisdictional standards.” These standards are based on the yearly amount of business done by the enterprise, or on the yearly amount of its sales or of its purchases. They are stated in terms of total dollar volume of business and are different for different kinds of enterprises. Most of the Board’s current standards were set on July 1, 1990. The ceilings on these exclusions are very low. The two most notable for small business are: Nonretail business: Direct sales of goods to consumers in other States, or indirect sales through others (called outflow), of at least $50,000 a year; or direct purchases of goods from suppliers in other States, or indirect purchases through others (called inflow), of at least $50,000 a year. Retail enterprises: At least $500,000 total annual volume of business. There are separate “exclusion” amounts for several specific categories such as hotels, motels and residential apartment houses, or newspapers. More information on specific exclusions can be found at www.nlrb.gov. OUTLOOK From the beginning of this Congress, it has been all about the 60 votes necessary to invoke cloture and end a filibuster. Before he changed parties, Senator Arlen Specter (D-PA) announced his intent to oppose the bill in its original form and he re-affirmed his opposition after changing parties. This appeared to pour cold water on the prospects for the bill. Since then, efforts have focused on a compromise. The secret ballot requirement will be retained. The changes in the rumor mill seem to swim around the process such as giving organizers more access to the workplace; reducing employers’ communication rights and/or increasing organizers communication rights; speeding up the election cycle; or, making it easier to cast the ballots. Even with Senator Al Franken’s (D-MN) swearing in, the majority has to persuade Senator Specter and perhaps some Democrats to vote to invoke cloture. If health care reform becomes law in 2010, the fate of this legislation may hinge on whether unions are happy or not with the outcome of the health care debate. If they are not, this may be the consolation prize. /I38100110 ### Back to Issue Papers