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.

One Down, Four to Go: EFCA

This week, the U. S. Senate decided to eliminate card checks from its proposed Employee Free Choice Act (EFCA). Unions will not be able to represent employees simply by getting them to sign cards expressing a desire to be represented by a union. This victory was won by the concerted efforts of Corporate America and all those who believe in the democratic principle of secret ballot elections.

The bad news is that a revised EFCA bill will call for a rapid time frame for new elections. Union elections would have to take place within a five to ten day period after 30% of workers had signed cards indicating that they want to be represented by a union. Current campaigns often run more than a month and often up to two months.

In addition, the revised bill would require that union organizers be permitted on company property.

As if that were not bad enough, the revised bill would also prevent management from requiring that workers attend anti-union, pro-management educational sessions.

Finally, the bill would contain a demand that employers, who fail to reach agreement on a contract with a new union, submit to binding arbitration. This, in effect, means that government agents will impose an agreement on managment, one which may be one sided and financially unsound.

Environment Friendly Unions?

Those who have negotiated with unions know they will often resort to bargaining tactics that, if used by management, would cause the unions to cry foul. They would go to union-friendly reporters, playing the lachrymose role of outraged victims, and plead for fairness.

Now, however, The New York Times, has reported that California Unions for Reliable Energy(CURE) have attempted to influence the awarding of contracts by playing both sides of an environmental issue.

When a large California solar power company, Ausra, sought approval to build a new power plant, CURE (an ironic acronym if there ever was one) demanded that a study be conducted to determine the effects of the power plant on the lives of the short-nosed kangaroo rat and the ferruginous hawk.

One might have admired CURE’s concern for those poor creatures; however, when Bright Source Energy, one of Ausra’s competitors, also filed plans for a solar facility that would be larger than Ausra’s, the union did not voice any concerns for the endangered desert tortoise, an animal that lives where the new plant would be built.

One may guess the reasons for such contradictory manifestations of concern. Asura, the Times reported, had rejected demands that it employ union workers to build its solar facility. Bright Source, by contrast, agreed to hire “labor-friendly contractors.”

The Times went on to report that “…some developers contend they are being pressured to sign agreements pledging to use union labor. If they refuse, they say, they can count on the union group to demand costly environmental studies and develop and deliver hostile testimony at public hearings.
“If they commit at the outset to use union labor, they say, the environmental objections never materialize.”

With a pro-union congress and administration in Washington, one can expect more such condoned behavior.

Financial Woes of Pro-Union States

The National Institute for Labor Relations Research (NILRR), a proponent of right-to-work policies, recently released a report that the demands of unions have greatly added to the financial woes of New York, California, and New Jersey. The Cabot Institute for Labor Relations has also been studying this phenomenon, and it concurs with the findings of the NILRR.

The percentage of unionized workers in those three states ranges from 20% to 27%, while the number of unionized workers in the rest of the country is between 12% and 13%. In the three heavily unionized states, workers receive the largest hourly wages in the country, and public-service employees receive the most generous pensions. For example, a retired police officer in Westchester county receives $200,000 a year and another in Suffolk county, New York, receives $100,000 a year. When one multiplies those numbers by the number of public-service retirees, many of whom retire in their mid-forties, it’s easy to understand why those three states are in such deep financial trouble.

When one compares job growth in right-to-work states where non-union auto makers have set up manufacturing facilities with a state, such as Michigan, home to domestic auto makers, the numbers are indeed startling. It is obvious that right-to-work states are enjoying far more robust employment figures than pro-union states. And because right-to-work states offer greater non-union employment opportunities than the big industrial states, the former states are in far better financial shape than New York, New Jersey, Michigan, and California.

Washington law makers, unfortunately, are intent on making it easier for unions to organize workers, and the results will be higher labor costs, greater unemployment, and more states in financial trouble.

Ejecting Union Spies from Corporate America

For many years, unions had sent their organizers to the personnel offices of companies so that they could be hired to infiltrate workforces. Once they had joined the workforces, they proselytized in favor of union representation and often spoke of management as selfish ogres. Such people became known as “salts” and their words and deeds often led to a diminution in productivity and profitability for companies.

Now, two Republican Congressmen have introduced a bill, the Truth in Employment Act (H.R. 2808/S 1227), that is designed to amend the National Labor Relations Act (NLRA) so that employers can legally discharge “salts,” who are nothing but undercover agents for unions seeking to unionize workers.

The proposed bill states: "Nothing in this subsection shall be construed as requiring an employer to employ any person who seeks or has sought employment with the employer in furtherance of other employment or agency status."

The bill is meant to obviate a Supreme Court ruling that “salts” could not be terminated from their employment.

The bill further notes that “salting has evolved into an aggressive form of harassment not contemplated when the National Labor Relations Act was enacted and [it] threatens the balance … of collective bargaining."

It is absolutely necessary that the collective bargaining playing field be kept level and that there be a balance between workers and management. The Truth in Employment Act will go a long way to ensuring such an outcome.

Congress Keeps On Truckin'

Congress is determined to promote the unionization of FedEx Express drivers by passing a bill that would change the labor status of those drivers. Rather than operating under the Railway Labor Act, FedEx Express would have to operate under the National Labor Relations Act (NLRA).

Under the rules of the Railway Labor Act, drivers can only join a union if there is national vote. Under the rules of the NLRA, however, drivers could vote to join unions in individual geographical areas.

Once the bill is passed by the Senate, union organizers will encourage drivers to vote for union representation, and it is likely that the majority of workers will do so. Should that occur, the labor costs for FedEx (where many drivers are independent contractors who own their routes) would skyrocket. In addition, the competitive edge that FedEx enjoys vis-à-vis UPS would vanish, for all UPS drivers operate under the NLRA.

It’s not surprising that UPS has been lobbying Congress to get FedEx Express classified under the NLRA.

FedEx is fighting back by accusing UPS on its website BrownBailout.com, that the federal government, in effect, is giving UPS a government bailout by supporting a change of rules for FedEx drivers. U.P.S. and the Teamsters union, however, have denied the accusations of FedEx and are planning a PR campaign to the present their point of view. The Teamsters represent about 240,000 UPS workers.

This is just another example of a Democratic congress doing the bidding of organized labor, and it portends bad times for Corporate America.

Burning Union Money

The Wall Street Journal and other publications have reported that the unions spent many millions of dollars to elect Barack Obama to the Presidency. In fact, the president of the Service Employees International Union, Andy Stern, stated: “We spent a fortune t o elect Barack Obama.” To that fortune can be added the many millions of dollars spent by the AFL-CIO. The unions apparently spent their members’ money not like drunken sailors, but like lobbyists on a mission.

Now Bloomberg News has reported that one of the AFL-CIO’s officials has circulated a report claiming that the union indulged in “creative accounting.” The union members would no doubt like an explanation of how their union went from a $45 million surplus to liabilities of more than $90 million. And the net assets of the SEIU went from $64 million to $34 million. Yet a few years back, Andy Stern vociferously declaimed that the AFL-CIO was spending too much on Washington politics and not enough on union organizing efforts. We can assume that both men finally came to an agreement after realizing that if they financed the election of a pro-union congress and president, they could spend a lot less money on organizing, especially if their indebted friends on Capitol Hill pass the Employee Free Choice Act.

When President Bush strengthened and dilated the union disclosure rules, the unions howled as if the hammer justice were about to smash their piggy banks. Now, however, Washington is overrun with union advocates, and they are listening to union concerns about the Bush Administration’s rules. If the unions aren’t asking for those rules to evaporate, then they certainly want them to be watered down.

Call It a Politburo for Unions

The National Labor Relations Board, comprising five members, will soon be supervising union elections from a decidedly pro-union viewpoint. Two newly nominated members of the Board, Mark Pearce and Craig Becker, along with Chairwoman Wilma Liebman are expected to provide rubber stamp approvals in support of unions.

The president of the AFL-CIO, John Sweeney, has endorsed t the new nominees, stating that they are aware of “the need to restore balance” to the Board. Business groups, such as the U. S. Chamber of Commerce, do not agree and, indeed, have misgivings about what will be in store for Corporate America.

Among the questions the Board will respond to are the following: Who is entitled to join a union? Can unions use e-mail solicitations in organizing efforts? What constitutes tactics of intimidation? One can expect the answers to those and other questions to favor unions.

In addition, Corporate America can expect to see quicker responses to hold elections for union representation than occurred during the Bush Administration. Indeed, all pro-union decisions are expected to arrive with a breathtaking alacrity so that union membership will increase and Corporate America will find itself in a new defensive position as it futilely seeks fair hearings before an NLRB with a pro-union majority.

A Sign of Things to Come: Common Sense Up in Smoke

Eight months ago, we reported that fourteen state universities and colleges in Pennsylvania had banned smoking. No doubt deans, chancellors, and presidents wanted to protect the health of their students.

That admirable and beneficent goal, to the bewilderment of most students and faculty, was put in jeopardy by the Association of Pennsylvania State College and University Faculties, which objected to the policy because it had not been the result of negotiations with union representatives, and so the Association filed a grievance.

In response to that grievance, the Pennsylvania Labor Relations Board overruled the smoking ban at the fourteen state universities and colleges. The labor board said that the government, the universities, and the colleges had no authority to prohibit smoking without first negotiating with the appropriate unions then gaining their consent.

Since President Obama has been intent on appointing pro-union members to the National Labor Relations Board (and since he is allegedly a surreptitious smoker), we can not only expect smoking bans to be eliminated, but we can also expect Big Brother rulings from the NLRB that will defy common sense and prove injurious to the commonweal.

Less Transparency from Unions

In 1959, Congress realized that unionized workers needed protection from union officials who indulged in unethical behavior. As a result, the Landrum-Griffin Act was passed and signed into law. It was specifically designed to curtail the opportunities for embezzlement and other forms of fraud.

Now, it looks as if a Democratic Congress will attempt to vitiate the 50-year old Act. For example, shortly after President Obama took office, the Labor Department delayed the implementation of a regulation that would have demonstrated how union dues are tied to the compensation of union officials. The regulation would have called for full and complete documentation of all purchases and asset sales by unions. In addition, the Labor Department has recently announced that it will not enforce compliance with a newly revised conflict of interest disclosure rule. (There was a brilliant editorial about this by former Labor Secretary Elaine Cho on the editorial page of The Wall Street Journal).

On a regular basis, since January 20, the Labor Department and the Democratic Congress have made it abundantly apparent that they will do the bidding of organized labor, which spent tens of millions of dollars to make sure that their own advocates were firmly installed in pivotal government offices.

Bad News for Corporate America

Have you heard of Craig Becker? He is a recently named appointment of President Obama to the National Labor Relations Board (NLRB). While awaiting senate confirmation to take his new position, Mr. Becker is serving as Associate General Counsel for the Service Employees International Union (SEIU), which is run by one of the most aggressive union leaders in North America, Andy Stern.

Mr. Becker, like most members of organized labor, is not an advocate of secret ballot elections. While Corporate America has been gritting its teeth awaiting the passage of the Employee Free Choice Act (EFCA), it may have even more to worry about. Craig Becker wrote that employers should be not be permitted to attend NLRB elections and should not be permitted to challenge election results. An editorial in the Wall Street Journal reported that Mr. Craig wrote that “Employers should also be barred from ‘placing observers at the polls to challenge ballots.’ ”

The editorial continued: “Mr. Becker advocated a new ‘body of campaign rules’ that would severely limit the ability of employers to argue against unionization. He argued that any meeting a company holds that involves a ‘captive audience’ ought to be grounds for overturning an election. If a company wants to distribute leaflets that oppose the union, for example, Mr. Becker said it must allow union access to its private property to do the same.”

With its majority in both houses of Congress, the Democrats will no doubt confirm Mr. Becker as a member of the NLRB. No one likes to play cards with a dealer using a stacked deck; and under the Obama selected NLRB, the deck will be decidedly stacked against Corporate America. And that’s bad for economy, bad for America, and bad news for democratic traditions.

George McGovern Blasts The Employee Free Choice Act - AGAIN!

GEORGE MCGOVERN BLASTS

THE EMPLOYEE FREE CHOICE ACT – AGAIN!

George McGovern, former senator and presidential candidate known for his liberal viewpoints, has once again blasted the Employee Free Choice Act (EFCA) for its proposed debasement of democratic practices. His criticism appears on the editorial page of The Wall Street Journal.

He was particularly irked by the fact that if employers and unions cannot reach agreements then the government will step in and impose, in each case, binding arbitration.

Under the National Labor Relations Act, which has been in place since 1935, employers are free to reject union demands, and unions can strike if they are dissatisfied with employer proposals. If, however, the EFCA becomes law, then government bureaucrats with little understanding of the unique subtleties of various positions will impose their own solutions. Such a process is hardly in keeping with the principles of collective bargaining.

Former Senator McGovern wrote: “A federally appointed arbitrator cannot be expected to understand the nuances specific to each business dispute, the competitive market position of the business, or the plethora of other factors unique to each case…. Compulsory arbitration is, in one sense, government dictating to employees what they will win or lose in the deal with no opportunity to approve the agreement.”

Such an outcome would be disastrous for Corporate America. Even George Meany, while head of the AFL-CIO, stated that “mandatory arbitration is an abrogation of freedom.”

Should Congress pass the EFCA (which seems more likely now that Senator Specter has switched parties) and should President Obama sign the bill into law, then America will be taking a major step away from the free market principles which have been the basis for the country’s remarkable record of commercial achievements, industrial innovations, and the creation of one of the most affluent societies in the history of the world.

The Specter Switch & The Employee Free Choice Act

Now that Senator Arlen Specter has switched his membership from the Republican Party to the Democratic Party, one may ask “will he fall in line with the rest of his party and support the Employee Free Choice Act (EFCA)?”

A spokesman for the Teamsters Union stated that “this certainly gives us more opportunity to talk to [Specter] and address our concerns about his position on the Employee Free Choice Act.” Such a nuanced statement certainly portends a likelihood that Senator Specter may go along with his new party, especially if it adopts certain modifications that make the EFCA more palatable to the senator.

Labor leaders and their congressional supporters need 60 votes in the Senate to overcome a Republican filibuster on EFCA. With Specter in the fold, they’ll have 59 votes. All they will need is for Al Franken to be officially seated as the new senator from Minnesota.

Though Specter has said that his party switch does not mean that he will vote in favor of the EFCA, he has indicated that he would like to see changes in the language of the bill. If such changes are forthcoming, one may logically assume that Senator Specter will give his assent to the passage of the bill. To help engineer Senator Specter’s support, Teamsters’ President James P. Hoffa recently met with the senator so that they could discuss the EFCA. Hoffa need not have reminded Specter that Pennsylvania has 80,000 Teamster members as well as thousands of members of other unions, the vast majority of whom will vote next year for their senator.

Does anyone doubt that with a few cosmetic face-saving changes to the EFCA bill that Senator Specter will not vote for the bill? One doesn’t switch parties to become a pariah in one’s new party.

CITIZENS OPT FOR SECRET BALLOT UNION ELECTIONS

CITIZENS OPT FOR SECRET BALLOT UNION ELECTIONS
According to a survey by the National Retail Federation (NRF) conducted from March 31 to April 7, 81% of US citizens support the use of secret ballots for employees when it comes to accepting or rejecting union representation. When the survey was conducted solely amongst union members, the number choosing secret ballot elections rather than card checks was even higher! It was 84%.

The Employee Free Choice Act (EFCA), which Congress will soon begin debating, is designed to do away with secret ballot elections in union organizing elections. Secret ballot elections have been integral to all organizing efforts since 1935 when Congress passed the National Labor Relations Act. If the EFCA becomes law, the NLRB would then have to recognize a new union if a majority of workers sign cards authorizing union representation.

Replacing secret ballot elections with card check will certainly open the door for union organizers to intimidate and coerce reluctant employees to join unions.

We hope that President Obama and the U.S. Congress are listening to the voices of citizens, for it is those citizens that the government represents.

OBAMA'S PRO-LABOR ADMINISTRATION

OBAMA’S PRO-LABOR ADMINISTRATION

In addition to Hilda Solis, Secretary of Labor, who comes from a strongly pro-union family, the Obama administration is full of many pro-labor advocates who will do what is necessary to consummate the successful passage of the Employee Free Choice Act. The list of pro-labor members of the current administration includes the following:

Parrick Gaspard, a political director in the White House, had been executive VP for legislation for the Service Employees International Union (SEIU).

Ronald W. Bloom, who had been an assistant to the president of the United Steelworkers of America, is a member of the Presidential Task Force on the Auto Industry.

J. Randolph Babbitt, who had been president of the Air Line Pilots Association, is now an FAA Administrator.

T. Michael Kerr, an Assistant Labor Secretary, has worked for AFSCME and the SEIU.
Wilma Liebman, who will serve as chair of the NLRB, had previously served as counsel to the Bricklayers and Teamsters Unions.

Joseph C. Szabo, Federal Railroad Administrator, had been the Illinois legislative director of the United Transportation Union.

Helen Kanovsky, general counsel at the Department of Housing and Urban Development, had previously worked for the AFL-CIO.

The list goes on and on, and it is apparent that the Obama Administration will be profoundly pro-labor. It is, therefore, essential that Corporate America develop effective and innovative techniques for dealing effectively with aggressive new union organizing and bargaining policies.

I have recently written an article entitled How Corporate America Can Deal with the Proposed Employee Free Choice Act, which appears on the website of Industry Week magazine and can be found at http://www.industryweek.com/articles/viewpoint_--_how_corporate_america_can_deal_with_the_proposed_employee_free_choice_act_18884.aspx