Labor officials and Democrat members of the Senate have agreed the provision of the Employee Free Choice Act (EFCA), which eliminates secret ballot voting on union membership is out. The Senate Democrats are rumored to be drafting a new version of the controversial bill.
Sens. Sherrod Brown (D-Ohio), Thomas Carper (D-Del), Tom Harkin (D-Iowa), Mark Pryor (D-Ark), Chuck Schumer (D-N.Y.), and Arlen Specter (D-Penn) are the main forces rumored to be working on this “card-check lite” version of EFCA. However, there is one provision that labor will never give up – binding arbitration.
Arbitration, in its most basic form, is a tool used by two parties (in this case unions and employers) to resolve disagreements on contracts, benefits, responsibilities, or any number of issues. Usually arbitration is reserved as a means to resolve disputes between two previously contracted parties outside a formal courtroom.
The rumored new version of EFCA, “EFCA-Plus,” will fundamentally change the arbitration process, shifting the power from private business and workers to a partial governmental entity (i.e. a government-appointed arbitrator).
Current arbitration legislation is founded on the principle of mutual consent. Section eight of the National Labor Relations Act (NLRA) requires employer and employee representatives to meet and bargain “in good faith with respect to wages, hours, and other terms and conditions of employment,” correctly encouraging negotiating members to compromise.
“Good faith bargaining” that occurs during present-day arbitration is preferred by both parties. This prevents each side from making unreasonable demands.
It saves both parties time and money by encouraging a good faith effort outside the courtroom. Mandating government intervention changes the rules of the game, and thus how negotiations will take place.
Under EFCA-Plus, negotiations between labor and business parties cannot exceed 120 days. If they do, a government-appointed arbitrator enters the dispute and imposes a binding ruling upon both parties.
Current negotiations last approximately 10 months. The majority of labor disputes will end up being resolved by the government, a non-interested third party who has no stake in either side. The employees’ hands will be tied.
The threat of government arbitrators under EFCA-Plus creates faulty incentives that deter consent among negotiating parties. With this power, labor unions will have no reason not to propose radical conditions.
By making it impossible for employers to accept their terms, they can reach forcing binding arbitration. Many employers, knowing they will be forced by government-appointed arbitrators to accept terms that may have disastrous negative economic effects, will simply choose to shut down. In fact, that decision has already been made by companies all across America.
EFCA-Plus leaves too many questions about arbitrators unanswered while simultaneously giving them unprecedented power. There is no provision that lays out how arbitrators will be chosen, leaving questions about qualifications and bias.
Government is increasing its influence in every part of your life, from what car you can buy to your health insurance. Now they want to dictate to employees and employers the terms of negotiation. It figures.
Brian M. Johnson is the executive director of the Alliance for Worker Freedom and the author of the forthcoming 2009 Index of Worker Freedom.
