Bryan O’Keefe
2007-02-27 08:00:00.0
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WASHINGTON -

Big labor’s major legislative priority for this year, “The Employee Free Choice Act,” will be voted on by the House this week and, with more than 230 co-sponsors, its passage is virtually a foregone conclusion.

The most discussed part of the bill would eliminate secret ballot elections in workplace representation elections and replace them with a system of card checks. Only requiring that they get a signed card from a majority of employees would make it much easier for unions to organize workers.

A lesser-known provision in the legislation could actually affect both union and nonunionized workers and employers even more than abolishing the right to a secret ballot in representation elections.

According to the EFCA, when a nonunion company is unionized through the card-check method, management and labor would only have 90 days to settle a contract. After that, the union could force the newly unionized company into government-supervised mediation.

If union and management still have not reached an agreement in another 30 days, a government-appointed arbitrator would set the final binding contract terms.

In reality, negotiations for new contract terms almost always take longer than 90 or 120 days, especially when management and labor are negotiating for the first time. The consequence of this proposal then is that government-appointed arbitrators would be setting wages and benefits for private sector companies.

Instead of labor and management working together toward an agreement, the normal collective bargaining process for first-time contracts would in effect be eliminated.

This would be troublesome for many reasons. From a practical standpoint, even if the government arbitrators are well-meaning, they are not familiar with the day-to-day operations of the newly organized company, nor do they necessarily have the long-term best interests of the company at heart.

It’s easy to imagine scenarios where arbitrators set unrealistic contract terms that companies cannot afford. And, philosophically, this type of arbitration would represent one of the biggest government intrusions ever into the private sector.

Such compulsory arbitration is also a raw deal for workers because they would not be allowed a secret ballot ratification vote on the new contract terms. Whatever the government arbitrators decide, employer and workers would have to live with it. Workers unhappy with their new contracts would have no recourse.

This arbitration could also have ripple effects on employers and workers, even nonunionized ones, throughout the specific industry in which the newly organized company operates. With the government-appointed arbitrators setting compensation and benefits, standard wages and benefits in given industries would likely rise beyond market levels.

The likely result is that even more companies will be forced to close shop and move jobs offshore. It’s a mystery how this type of government policy would help the middle class that organized labor speaks of so often.

In fact, the only people who will truly benefit from this type of arbitration are union leaders. By forcing contract terms on new union members without a ratification vote, union leaders would not have to be accountable for their actions or even work in good faith with management.

Also, with their enthusiasm for the minimum wage increase and universal health care reform, it’s clear that many union leaders have no objection to the government playing a bigger role in establishing wage and benefits.

Here’s hoping that when the Senate debates the “Employee Free Choice Act,” senators will recall the original intent of our nation’s labor law. As former National Labor Relations Board member Charles Cohen testified recently before Congress, the National Labor Relations Act was “founded on the notion that the parties, not the government, should determine the applicable terms and conditions of employment.”

Let’s keep it that way.

Bryan O’Keefe is a labor and higher education policy analyst in Washington.