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Weekly UpdatesAs this issue of the Cornell Quarterly reaches you, a new administration is preparing to move into the White House. With the financial markets in turmoil and the war in Iraq continuing, the first hundred days of the new administration should be full in terms of issues and decisions. One issue that has taken a back seat is the Employee Free Choice Act, which changes the rules of union elections. As many have said, you can't move all your hotels and restaurants overseas, so unions have and will continue to focus on the hospitality industry.
On March 2, 2007, the House of Representatives overwhelmingly passed the Employee Free Choice Act. If it were made law, this act would require the National Labor Relations Board (NLRB) to recognize a union if a majority of the employees signed authorization cards (i.e., documents stating the employee wishes to be represented by a union), would increase the back pay owed to employees who were disciplined or discharged for trying to organize a union from back pay to triple back pay, and would impose fines of up to $20,000 for certain willful or repeated unfair labor practices. As passed by the House, the bill would also require the unions and the employers who cannot agree on a contract after ninety days of negotiations to submit their issues to what is referred to as "interest arbitration," a process whereby an arbitrator decides the terms and conditions of employment. Interest arbitration is required in many public sector employment situations but is rare in the private sector. The bill, not yet approved by the Senate at this writing, would likely not have survived a promised veto by President Bush. With a new administration, however, this bill will be brought back.
As I write this, it is unclear what will become of the legislation. While it seems unlikely that a Republican would support the bill, John McCain's campaign has defined him as the "maverick" who is for working people, and Sarah Palin's husband is a proud union member. For his part, Barack Obama cosponsored the bill while he was in the Senate. Thus, it seems that either candidate could support the bill.
The rhetoric surrounding this legislation is strong. A New York Times editorial argued that this law levels the playing field because employers were firing employees who were attempting to organize and using other unfair and unlawful tactics. Often cited are the so-called "captive audience speeches," where employers require employees to listen to the employer's (antiunion) story.
What has not been mentioned in that context is that employers cannot make promises, nor can they confer benefits, to employees. Unions, on the other hand, can promise employees higher wages, better benefits, and improved work roles. In addition, buying employees pizza and beer the night before the election is not only allowed, it is common.
Because a union would be recognized as soon as it gains card signatures from a majority of employees under the House legislation, employers fear that unions will intimidate employees into signing cards. Employers argue this law will do far more than level the field because it will take away their right to tell their side of the story. In addition, because discrimination claims will be more expensive, employers may not be so quick to settle claims for 80 percent of back pay and may litigate--a much more expensive proposition, (l) Moreover, interest arbitration seems a draconian measure to business owners. For an arbitrator to determine how much an employer pays its employees, establish what benefits it should offer, and decide what type of conduct is permitted at the company seems to usurp management's purview. Employers contend that it is hypocritical to label the bill "free choice" when it eliminates a secret-ballot (democratic) election process. Interestingly, a poll conducted by Zogby International in June 2004 of 704 randomly chosen union members living in the United States revealed that 66 percent of those polled disagreed it should be legal for a company and a union to sign a card-check agreement. (2)
This is not to say that the current system is by any means perfect or that it is fair. The reality is that the process of unions gaining recognition is governed by case law developed over eighty years, often decided by National Labor Relations Boards that are, by definition, political because the members are appointed by the president of the United States to five-year terms. This means that at a certain point in each president's administration that president's party represents a majority of the NLRB members. Consequently, labor law often changes to comport with the views of the party in power.
Thus, I do believe that most management lawyers and labor relations professionals would support labor law reform that sought to establish fair elections. What management and a number of union supporters do not accept is that secret ballot elections are inherently unfair. The challenge is to develop a system that allows for elections that are fair. This would really be a free choice. This is an opportunity for hospitality industry owners, operators, professionals, unions, and academics to study this issue and develop the right way to address this issue.
--D.S.
(1.) Standard operating procedure is for the National Labor Relations Board (NLRB) to allow the parties to settle for 80 percent.
(2.) Results of the poll are reported at www.mackinac.org/article.aspx?ID=6806. The actual text of the question at issue is as follows: "Some companies and union organizers want to make a special agreement to unionize the workers if at least half of the workers sign their names on cards saying they want a union, rather than letting all the workers vote in a secret-ballot election overseen by the government. Do you agree or disagree that it should be legal for a company and union organizers to make this special agreement to bypass the normal secret-ballot process to determine whether to unionize the workers?" Twenty-six percent of those polled agreed with the statement, and 8 percent were not sure.
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