Congress is about to consider legislation known as the Employee Free Choice Act, or Card Check. While few people have heard of this bill, it is the most sweeping rewrite of federal labor law in 70 years. Card Check would essentially abolish the protection of a private ballot during union organizing campaigns, would likely eliminate workers’ ability to vote on a union contract establishing the terms and conditions of their employment and would impose substantial new penalties, but only on employers.
Not only is this bill bad for business, but it is equally bad for workers. Workers would effectively lose their right to a secret ballot and would also potentially lose their right to approve the terms and conditions of their union contract. So why this legislation and why now?
Over the past 50 years, union membership has declined sharply. Unions view Card Check as critical to bringing in new members. Unfortunately, it does so by infringing on the rights of workers and employers.
The legislation itself is fairly short, with just three principal sections. The first deals with the way in which unions organize. Under the traditional process, union organizers ask workers to sign cards indicating an interest in an election. Once more than 30 percent have signed, the union can ask the federal government to hold a secret ballot election. After a campaign period that averages about a month, during which both the union and the employer can make their cases to workers, the government supervises the election. If the union wins more than 50 percent of the vote, it is certified, and collective bargaining begins.
Under Card Check, union organizers could skip the election and would only need to collect signature cards. Once they get more than 50 percent, the union would automatically be certified and a secret ballot election would be prohibited. The signature cards would be signed publicly—essentially meaning that a worker’s “vote” would be public. Union organizers would know who had, or hadn’t, signed a card supporting the union and could relentlessly pursue those who refused to sign until they got their majority. It’s not difficult to imagine the tactics that might be used to get those workers to concede to unionizing.
Supporters of Card Check argue that the current election process allows employers to put too much pressure on workers to oppose the union. In fact, pressure on workers comes from all sides in unionizing campaigns. The beauty of the secret ballot is that the worker makes the final choice in the privacy of a voting booth, and no one—not the union, not co-workers and not the employer—knows how he or she voted.
Supporters of the bill also claim that workers could still choose to have an election under Card Check if they wanted one. Technically, that’s true, in that the law doesn’t specifically abolish elections. But once union organizers have the 50 percent plus one of the signatures they need, such an election would be against the law. Therefore, in effect, the only election workers could have is one they thought they would lose. And even if workers wanted an election, nothing prevents union organizers from pursuing signatures until they cross the 50 percent threshold.
Claiming that workers could still have a secret ballot election under Card Check is a bit like saying you could still get off an airplane after it’s taken off: theoretically possible, but in reality out of the question.
The second provision of the bill deals with the collective bargaining process once a union is certified. Under current law, the parties get together, negotiate over the terms and conditions of employment, and through a process of give and take reach a contract. Typically, workers then get a chance to ratify the contract by means of a vote. In a majority of cases, the process works.
The Card Check bill would completely undermine this collective bargaining process through binding arbitration. Under binding arbitration, the parties must reach a deal within 120 days. If they can’t, a government arbitrator would step in, write the contract and impose it on both sides. This unilaterally dictated contract would be binding for two years.
This has several unfortunate ramifications for both workers and employers. Because the contract is binding, workers would be denied a ratification vote. Even if they thought they got a poor deal, they would have no say over the terms and conditions of their union contract, including pay, benefits and work rules.
Additionally, employers could be stuck with a contract that is completely incompatible with their cost structure and business model and would just have to figure out how to live with it for two years. The only alternative is likely to be bankruptcy.
Finally, binding arbitration removes any incentive to compromise. Instead, the incentive is to put forward the most extreme proposals possible and hope that the arbitrator would give you most of what you want. The collective bargaining model that has worked for 70 years would be completely undermined.
In addition to employers losing in this scheme, workers lose, too. Under current law, workers often get the chance to vote on their contracts—and they sometimes reject the deal. But when government bureaucrats are dictating the contracts, melding together widely divergent positions taken by labor and management, it doesn’t matter what the workers want—the Employee Free Choice Act would deny them a chance to vote.
Supporters of Card Check claim that binding arbitration is needed because employers sometimes refuse to bargain in good faith. In most negotiations, however, a contract is reached. It may not always happen as quickly as unions would like, but it is critical to get these contracts right, because they set the template for all the contracts that follow. This takes time.
Moreover, federal law recognizes that there are situations in which an agreement simply isn’t possible. While the law makes clear that a contract is the desired outcome, it never intended for it to be a guaranteed outcome. And federal law never contemplated a situation in which government arbitrators, who may know nothing about a business, would be given the authority to step in, take over negotiations between two private parties, and dictate wages, benefits and work rules.
The final provision of the bill imposes substantial new penalties—but only on employers. Also, the law requires that employer misconduct be investigated by the federal government first—effectively turning the National Labor Relations Board into a one-sided enforcement agency that only goes after employers.
The effect of this provision is that many employers, particularly small businesses, would be too scared of penalties to say anything to their workers about the impact of unionizing. Workers would be denied equal information, and employers would have their free speech rights chilled.
Clearly, there are numerous problems with the Employee Free Choice Act. Nevertheless, unions claim that the bill is essential to “restoring the middle class.” In reality, though, states with the largest number of union members are worse off than those with the fewest across a number of measures. States with the most union members have higher rates of unemployment, slower rates of job growth, slower economic growth, a higher cost of living, higher tax burdens, lower rates of homeownership and less entrepreneurial activity. Card Check isn’t a ticket to the middle class. It’s a ticket to economic stagnation.
So who should worry about Card Check? Workers who value the protection of a private ballot. Workers who want a say over their contract. Small business owners who don’t want to see their businesses taken over by aggressive union organizers. And everyone who realizes that in today’s tough times, the last thing we need is productivity-killing work rules imposed on wide swathes of our economy.
Congress will take up the Card Check bill this year. Unions are pressuring them to pass it. Your elected officials need to hear from you, too.