The Proposed "Employee Free Choice Act" to Modify the National Labor Relations Act (NLRA) May Become Law in the Near Future.

November 13, 2008
The Employee Free Choice Act (EFCA) is a proposed law to modify the collective bargaining and negotiation processes currently in place under the National Labor Relations Act. As noted in the legislation, the EFCA would amend the National Labor Relations Act (NLRA) "to establish an efficient system to enable employees to form, join, or assist labor organizations, to provide for mandatory injunctions for unfair labor practices during organizing efforts, and for other purposes." President-elect Barack Obama supports this pending legislation. Along with the firm backing of a Democratic majority in both the House and the Senate, there are strong indications that the EFCA can become law in the near future under the new Obama Administration. Below is a summary of the EFCA.

Brief History of the NLRA and EFCA

The National Labor Relations Act was enacted in 1935 to govern union organizing and to establish a set of procedures to resolve labor-management disputes and balance the rights of employers and employees in the workplace. The EFCA was proposed to modify the NLRA’s current procedures in certain areas. As proposed, the EFCA will modify the methods to unionize employees from the current secret ballot election to a majority card check election. As well, the EFCA potentially could require an arbitration board to effect a binding collective bargaining agreement for a first contract if the parties cannot reach an agreement within 90 days of the commencement of bargaining. Injunctive relief, remedies, and civil penalties for unfair labor practices would also be modified under the EFCA.

The EFCA was first introduced as a bill by the House of Representatives in 2007, but was stopped in the Senate. The bill is up again this year with increased support and is in a better position to pass and become law.

Impact of the EFCA on Private Sector Employers and Employees

No More Secret Ballot Elections To Unionize

The first major change under the EFCA would be to modify the process for union organization from a secret ballot election to a majority card check election. Under current law, when at least 30% of employees in a proposed bargaining unit sign authorization cards to petition for unionization ("card check"), a secret ballot election is then administered by the National Labor Relations Board (NLRB) to confirm that a majority of employees want to unionize. In a secret ballot election, employees cast anonymous votes in voting booths, complete with privacy curtains, where they mark either "yes" or "no" to union representation. These ballots are then placed into sealed boxes and tallied up in a secure location by a NLRB agent.

The EFCA would eliminate the secret ballot election and make the card check election final and binding on both the employer and employees if the union can show more than 50% support among the proposed bargaining unit. As the bill states, "If the Board finds that a majority of the employees in a unit appropriate for bargaining has signed valid authorizations designating [union representation] ... , the Board shall not direct an election but shall certify [the union]."

Mandatory Binding Arbitration for Initial Collective Bargaining Agreements Not Agreed Upon Within 90 Days of the Commencement of Negotiations

Currently, the NLRA requires unionized employees and their employers to engage in good faith bargaining to come to a collectively bargained agreement on wages, hours, and other conditions of employment. Under this system, the parties are free to reach a compromise on terms agreeable to both parties. If, after working in good faith, they fail to settle on the terms, the union may call a strike and there is an impasse until the parties are finally able to reach a collective bargaining agreement. During a strike, the parties may voluntarily agree to have an impartial third party mediator oversee the negotiations and help facilitate the parties to reach an agreement.

Under the EFCA, this traditional collective bargaining process would be modified for negotiations of a first contract between a union and the employer. The EFCA would require binding arbitration with a federal arbitration board for a first contract whenever the employer and union cannot reach an agreement within 90 days after bargaining commences. In such a situation, the first step would be to refer the matter to a mediator from the Federal Mediation & Conciliation Service (FMCS). If the mediator "is not able to bring the parties to agreement by conciliation," the dispute is referred to an "arbitration board" that will "render a decision settling the dispute and such decision shall be binding upon the parties for a period of 2 years."

Increased Authority to Seek Injunctive Relief and Civil Penalties

The EFCA would also expand the authority of the NLRB to seek injunctive relief and civil penalties related to unfair practice charges under the NLRA. The NLRB would be Private sector employers found in violation of the NLRA who are required to reinstate affected employees with back pay would now be liable for up to triple back pay damages for each affected employee. Civil penalties for violations could now be increased up to $20,000 for each unfair labor practice.

Conclusion

Regardless of your position on the EFCA, private sector employers should be aware of this pending legislation and its potential impact on unionization efforts by employees and collective bargaining processes.

This article was written by Gage C. Dungy and Elizabeth A. Avedikian, attorneys with the labor and employment law firm of Liebert Cassidy Whitmore (LCW). Mr. Dungy (gdungy@lcwlegal.com) and Ms. Avedikian (eavedikian@lcwlegal.com) are Associates in the Fresno office and can be reached at (559) 256-7800. For more information regarding the discussion above or on our firm please visit our website at www.lcwlegal.com, or contact one of our offices below.

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