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Labor move could backfire — on workers


Published on: 03/02/07

Facing what appears to be an unstoppable decline in membership, labor unions have pinned what may be their last hope for resurgence and survival on legislation to change the process by which workplaces become unionized.

Under the current system, employees in most instances are allowed to choose to be represented or not by casting a secret ballot in an election supervised by the National Labor Relations Board.

Richard Hankins, a partner with the Atlanta law firm Kilpatrick Stockton, represents U.S. employers in labor-related matters.
 

Citing bitterly disputed statistics, labor activists now claim employer opposition in those elections has created a "human rights crisis" in which workers' secret votes do not reflect their true preferences.

The "Employee Free Choice Act," which died in the previously Republican-controlled legislative branch, has gained remarkable momentum in the 2007 labor-friendly Democratic Congress and passed the House on Thursday. The bill would allow unions to secure representation rights based solely on presenting signatures from a majority of workers obtained — in the open — by union organizers specially trained to persuade workers. Another aspect of the bill could have unintended devastating effects on the workers the unions claim to protect.

While few employers welcome the prospect of a labor union or any other third party intervening in their affairs, even labor's supporters in Congress agree that most employers comply with their legal obligations during the union organizing process. This is likely because the current law does not require an employer to agree with any of the terms that a union might demand. Employers must only bargain with the union in good faith. The union may use reason or economic pressure (strikes) to persuade the employer, but ultimately management still decides what it will pay and how it will run its shop. This would change if the Employee Free Choice Act becomes law.

Under the proposed legislation, if an employer and a union are unable to reach agreement on a first contract within 90 days, either party may insist upon mediation. If mediation is not successful after 30 days, the dispute would be settled by an arbitrator, who would have the power to issue terms and conditions that would be binding on an employer for two years.

In other words, a company would have 120 days to make a deal with a new union or someone not accountable to shareholders and not responsible for long-term corporate success would decide employee wages, benefits, efficiency standards and other workplace issues.

It is safe to say that the prospect of losing fiscal control will not be taken lightly by employers. They may more frequently employ the lawful, but until now rarely used, tactic of "offensive lockouts" to pressure employees and their unions to accept a contract before the issue is placed in the unpredictable hands of a disinterested arbitrator.

Offensive lockouts have been acknowledged as a lawful economic weapon for employers since 1965. Recent well-publicized usages of the tactic included the National Hockey League's lockout of players during the 2004-05 season. The employer's goal in a lockout — which was met in the aforementioned example — is to deprive employees of any wages so that they will pressure their unions to accept the terms proposed by the employer. Companies may operate with supervisors or with temporary replacements while the economic pressure on workers mount.

One can easily imagine than an employer such as the retail giant Wal-Mart — a prime target of today's unions — might choose the temporary inconvenience of a lockout over permitting an arbitrator to topple the first domino that could lead to a nationwide loss of control. How many Wal-Mart employees can afford to go two or three months without a paycheck? And, even if an arbitrator ultimately granted them higher wages, how long would it take them to recover what they would lose in a lockout? While the card check provisions of the Employee Free Choice Act might inflate union membership roles, the mandatory arbitration clause could devastate the very people those unions seek to represent.

• For more on this issue, go to www.efcaupdates.com.

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