EFCA's Binding Arbitration: Down the Road to Ruin

As we recently reported, the congress may remove card check from the Employee Free Choice Act, but it will still keep binding arbitration. With pro-union arbitrators making final decisions on union contracts, Corporate America will be facing one the most destructive challenges to collective bargaining.

If a company and union cannot come to an agreement, then a government appointed arbitrator will step in and make a decision for a first contract. In effect, someone who has little or no knowledge or experience about how a particular company is run will make a decision that will have far reaching financial consequences. This may have been exactly what organized labor wanted all along; in other words, card checks was a red herring, for binding arbitration will deliver precisely the results that unions want to obtain.

Binding arbitration may be used by a company and a union to settle a specific individual dispute, but when it is used to determine an entire contract, the effects can be devastating. Salaries, wage and hour issues, medical insurance, length of paid vacations, seniority, could all be decided by a single arbitrator!

If Corporate America hopes to defeat the provision for binding arbitration in the Employee Free Choice Act, it must continue lobbying congress. If the unions succeed in making binding arbitration the focal point of the ACT, they will have set many companies on a fast-paced trip down a road to ruination.