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The Employee Free Choice Act (EFCA)

updated July 2009
- July 2009

 [updated July 2009]

Union membership in the United States has been on the decline for decades for a number of reasons: with a more mobile workforce workers frequently change jobs, women are an increasingly large part of the workforce and less likely to join unions, increases in productivity resulted in jobs moving away from the highly-unionized manufacturing sectors, companies able to do so choose to locate in the mostly-southern and western Right to Work states. While unions enjoyed a very small up-tick in membership last year, union “density” today is just 7.6 percent of the private sector workforce (up from 7.4 percent). Labor leaders are seeking to reverse their declining membership by enacting the so-called “Employee Free Choice Act” – card check legislation – to make it easier and less expensive for them to conduct organizing campaigns.

The three provisions in EFCA – elimination of secret ballot elections in organizing campaigns, binding interest arbitration, and increased employer penalties – are widely known today, and are summarized at the end of this report for anyone who wishes to review them; this staff report will focus on the current state-of-play in Congress.

With the election of President Obama and the significant pro-labor gains in Congress, it was anticipated that the House would vote on EFCA very early – possibly by the end of January – and that the Senate would quickly follow suit. But circumstances conspired against the unions. The collapse of the auto industry in Detroit captured center stage, with overly-generous collective bargaining agreements and the UAW’s stubborn refusal to help solve the industry’s financial crisis seen as a significant part of the problem. The President disappointed his labor supporters by not pushing for quick enactment of EFCA, and without that push, Congress gave its full attention to the auto and bank bailouts and unprecedented Federal “stimulus” spending packages. And, of course, significant advertising on EFCA through the election cycle in 2008 raised public awareness of the issue, and strengthened public opposition to the legislation.

With public opinion solidly against the provisions of EFCA, moderate Senate Democrats – especially those from Right to Work states – began voicing their concerns about the bill. With success increasingly doubtful in the Senate, moderate House Democrats demanded that their Leadership NOT bring EFCA to the House floor for a vote until after the Senate had acted on it, arguing that they did not want to cast a politically unpopular vote only to have the Senate not follow suit or, worse yet, defeat the bill.

As momentum for enactment of EFCA slowed, moderate Senate Democrats were emboldened and the likelihood of enactment of EFCA as written evaporated:

  • Arkansas Democrat Senator Blanche Lincoln announced she would vote against cloture on the bill;

  • Newly-appointed Colorado Democrat Michael Bennett said he is undecided;

  • California Democrat Dianne Feinstein said she had reservations;

  • Several other moderate Democrats said they would not support the bill or that it should not be taken up at this time; and

  • Pennsylvania Republican Senator Arlen Specter reversed his earlier support for EFCA and came out against cloture.

The Democrat reach for 60 votes was further impeded by the continued vacancy in the Minnesota Senate seat and the prolonged absence due to illness of Senators Ted Kennedy (D-MA) and Robert Byrd (D-WV).

With the collapse in support for the original language of EFCA, conversations about possible compromise became more intense. Both business and labor have consistently stated opposition to compromise, arguing that the two positions are so diametrically opposite that common ground was not reachable. But Senator Specter breathed new life into the dialogue with his announcement that he was switching parties and would run for re-election as a Democrat, prompted – as he described it himself – by polls in Pennsylvania showing that he would lose to his GOP primary challenger, and that he could not get elected as an Independent. As a newly-minted Democrat, Specter became immediately more susceptible to pressure from organized labor, so stepped up his compromise rhetoric.

Compromise talk was further highlighted when three corporate CEO’s entered the fray with former Clinton advisor Lanny Davis. In a dramatic but thoroughly inept move, Davis and the CEO’s of Costco, Starbucks and Whole Foods called a press conference for the following Tuesday morning in Washington to announce their support for a compromise proposal. When grass roots organizations working to defeat EFCA learned of the planned announcement, they activated their grass roots networks across the country, urging their members to call the three corporate headquarters to complain. The next day, the companies had reportedly received thousands of calls from angry customers, the Tuesday press conference was cancelled and a Sunday morning press briefing/conference call scheduled instead. In the call, Lanny Davis announced the group’s unequivocal support for secret ballots and opposition to binding arbitration, ensuring the end of their effort.

Despite continuing resistance and setbacks, the effort to achieve a compromise continues in the Senate, led by EFCA advocate Tom Harkin (D-IA) and moderate Arkansas Democrat Mark Pryor. Only a few Senators are participating in the talks, the President remains uninvolved, and no specific proposals have been floated at this point.

Despite the success so far this year in stopping this legislation, it is critically important that the employer community stay fully and actively involved in the issue. Members of Congress need to hear from businesses in their states and districts; they need to know that a vote for the Employee Free Choice Act in the House or for cloture in the Senate is a vote against business and job-creation, and that their constituents will be watching how they vote.

Issue Policy Background:

Under a card check system, a union conducting an organizing drive would be immediately and automatically recognized as the certified collective bargaining agent if it is able to persuade 50 percent plus one of the employees in a workplace to sign authorization cards. The right of the employer to demand that his employees be permitted to vote by secret ballot on whether or not to accept union representation would be eliminated. Workers who decline to sign an authorization card – which they would have to be willing to do in the presence of union organizers – would therefore be denied any voice or vote in the process and compelled to accept the union as their bargaining agent.

Moreover, once the union is recognized, if the employer and union fail to reach an agreement on a “first contract” within 120 days, the union can demand that the negotiations be referred to “interest” arbitration in which a third-party arbitrator – with no responsibility for the economic health and profitability of the business – will decide the terms of the agreement. That agreement would be binding on the employer for two years. Again, the workers would be denied the right to vote on whether to accept the union contract. And a binding contract negotiated by a disinterested arbitrator could easily impose work rules which would remove an employer’s ability to be flexible and could, especially in these difficult economic times, threaten a company’s survival.

Other Labor Issues:

While “card check” is labor’s top priority, they will not limit their legislative initiatives to that big prize. In addition to the expansion of the Family and Medical Leave Act which is covered in a separate staff report, there are numerous other labor issues which are likely to be considered this year. Among them:

  • The Paycheck Fairness Act – would amend the Equal Pay Act to include unlimited punitive damages in pay discrimination cases without showing of employer intent, weaken defenses available to employers under the EPA and establish “comparable worth” evaluation of employers’ pay systems;

  • The Respect (Re-Empowerment of Skilled and Professional Employees and Construction Trade Workers) Act” – this bill would change the definition of “supervisor” to make it easier for unions to include supervisors in a bargaining unit;

  • Davis Bacon Act” expansion and extension (more than 30 separate measures were introduced in the last Congress); and

  • Ergonomics – business should expect that the new Labor Department may review the Ergonomics regulations that were proposed by the Clinton Administration.