Labor Law Guy

Business Group Offers Alternative to Employee Free Choice Act

Posted in Federal Labor Law, Random Musings by laborlawguy on March 23, 2009

Starbuck’s, Whole Foods and Costco have floated a proposal to level the playing field, as they term it, in union organizing. The group rejects two prongs of the proposed Employee Free Choice Act (EFCA)–the card-check and binding arbitration provisions–and keeps in place the current system of secret balloting.

What they do retain from the EFCA is the provision for increased penalties on employers who obstruct the unionization process or who otherwise threaten, intimidate or outright terminate activist employees.

What they offer in place of card check and arbitration are an expedited election process and equal access for the union to employee gatherings held pre-election for informational purposes, meetings which unions claim are currently used by employers to spread disinformation and scare employees into voting no.

The proposal was instantly rejected by Congressional sponsors of the EFCA as “written by CEOs, for CEOs.” An AFL-CIO spokesperson said it was “simply not an alternative.”

The three companies found little comfort in the business world either, where a line of no compromise has been drawn in the sand.

It appears that friends and foes of the EFCA alike have adopted an all-or-nothing appoach. Time will tell if one side or the other eventually blinks–or if both do.

(For the record, Costco is the only one of the three companies to be unionized, and it is just partially unionized through a handful of  locations that were organized by the Teamsters when they were Price Clubs. Costco does, however, give all its employers the same wages and benefits that it negotiates with the Teamsters every three years. Whole Foods actually once had one unionized location in Madison, Wisconsin, out of 300 or so total outlets. The company’s co-founder, John Mackey, has routinely blasted the “intellectually bankrupt left” on his blog and derided unions as “like having herpes.” In fact, Mackey discovered an online community on Yahoo devoted to Whole Foods and contributed nearly 1400 comments over seven years using the pseudonym rahodeb, a variation on the name of his wife Deborah. This activity of his came into play when Whole Foods made an offer to purchase Wild Oats, and the SEC discovered that Mackey had used the online communities for Whole Foods and Wild Oats to game the deal. Whole Foods, to its credit, does provide all employees with free health insurance and competitive wages, factors which have helped stave off unionization at all locations save that one. Starbucks has been in and out of hearings and courtrooms in the past for alleged union-busting activities, and late last year was found guilty by a National Labor Relations Board judge and ordered to reinstate three employees with back pay. There is a Starbucks Union Web site, but its account has been suspended, which hosting services will do for unpaid bills, overuse of bandwidth, violations of terms of service, and other reasons. Even if I had the time, I doubt I’d be motivated to find out why the union’s site has been suspended–unless I can discover some kind of scandal hidden therein.)

That ‘Human Molestor’ Rick Berman Is At It Again

Posted in Random Musings by laborlawguy on March 18, 2009

The man whose very son called him “despicable” and a “human molestor,” labor antagonist Rick Berman, is spreading the word again–the word against the EFCA, Employee Free Choice Act.

At least he’s come up with interesting anti-EFCA studies, though one can never know the extent of the bias (if any) built  into these things.

First, he cites Princeton economist David Lee, who studied the effect of unionization on companies’ stock valuations.

According to Berman, Lee found “substantial losses in market value following a union election victory–about a 10 percent decline, equivalent to about $40,500 per unionized worker.”

Should EFCA pass, the Human Molestor concludes, “Lee’s data suggest that the market value of firms will decline by as much as 11 percent.” The U.S. Chamber of Commerce, which he also cites, chimes in that EFCA will cost the nation 600,000 jobs in the first year.

Here’s more labor molestation:

In a 2002 study, economists Richard Vedder and Lowell Gallaway calculated the burden that labor unions had on American economic productivity. They found that between 1947 and 2000, ‘the economic cost of unions’ in cumulating lost income, investment, and output was $73 trillion. That’s more than the gross world product last year.

Dunno, but that sounds awfully inflated or made up to me, and I’m no fan of the EFCA.

Berman gets in some licks of his own, of course, but he doesn’t reveal his source when he claims that the top ten most unionized states achieved just two-thirds the job growth of the top ten least unionized states from 1997-2007.

This is all good stuff in the arsenal of weapons to be used against the EFCA, but I doubt any Democrats will be listening in Congress.

Are you listening, filibuster-killer Arlen Specter?

EFCA Could End Up Unionizing 4,180,000 Small Businesses

Posted in Random Musings by laborlawguy on March 13, 2009

The 1935 National Labor Relations Act (NLRA), commonly referred to as the Wagner Act, exempted small businesses from union organization, but the definition of small business has not been updated since 1959. The exemption ends when a small, non-retail business grosses $50,000 in a single year; for retail operations, the figure is $500,000 a year.

However, the Employee Free Choice Act (EFCA) now before Congress contains no exemption, nor any updating of the NLRA exemption. Thus…

Using census data, the Heritage Foundation (admittedly a pro-business, pro-capitalist outfit) estimates that 4,180,000 U.S. small businesses employing 38,934,000 Americans could end up being unionized.

The Foundation poses this scenario: Say you own an automobile repair shop employing five people. A union guy comes by at the close of work one day and corrals three of them into a local pub, where they all sign cards authorizing a union. Now, using a typical tactic, the union rep might call these cards “requests for information” or some such, but anyway, the shop is thereby unionized.

You, the owner, now have 10 days to begin negotiating with union guy, who now represents all your employees. He makes deliberately ridiculous demands for wages, benefits and working conditions, demands to which you could never accede and stay in business, so you refuse. In 90 days, rep guy calls in a federal mediator, but his demands stay the same. After 30 days, the mediator calls in an arbitrator, who then dictates a two-year contract that splits the difference between what you proposed and what union blackmailer wanted.

Result: Your costs go up by 50 percent, and you go out of business. You go back home and start working out of your garage, making as much or more than you did owning a business. Meanwhile, five people are out of work, but union guy has moved down the street to organize other small businesses.

Read the full scenario and explanation.

Dems Looking to Modify the Employee Free Choice Act?

Posted in Federal Labor Law, State Labor Law by laborlawguy on March 12, 2009

The business-feared, loved-by-unions Employee Free Choice Act (EFCA) was introduced in both the House and the Senate on Tuesday. Passage by the House seems a done deal, but in the Senate success hinges on getting 60 votes to choke off a filibuster.

With 58 (and potentially 59 with Al Franken) Democratic Senators, invoking cloture wouldn’t seem like such a high hurdle, but a handful of Senate Dems is having reservations about EFCA while Senator Arlen Specter of Pennsylvania, who voted for EFCA the last time around, is more hesitant in the midst of a re-election tussle.

Also, consider this: The Senate bill listed 40 co-sponsors, six fewer than in 2007. The House bill had 223 co-sponsors, compared with 230 co-signers on an earlier version of the legislation.

Already, there’s talk that the proposed law might be modified, and some have even speculated on a “grand bargain” in which the card-check provision is stripped out but the other portions are left intact.

Card check is what opponents like to call the EFCA since the law would allow workers to unionize once 50 percent plus one of them sign an authorizing card. A secret ballot would no longer be required but would be an option–at the workers’ choosing, not the employers’.

Even with card check out, the EFCA would still create many headaches for businesses. Its other  provisions increase penalties for interfering with union organizing efforts and also mandate binding arbitration if union and company can’t agree on a contract. In fact, the final result of the arbitration could be a dictated contract forced down the company’s throat!

Representative Joe Sestak (D.-PA) has already introduced an alternative piece of labor legislation–the National Labor Relations Modernization Act–that basically removes card check but leaves the other provisions in.

Senator Specter, who voted with the Democrats to end the filibuster when the EPCA was first introduced in 2007, is no longer a sure “yes” vote. He’s facing an extremely tough primary opponent, Representative Pat Toomey, who vociferously opposes EFCA and almost beat him last time around. Plus, Specter himself authored a paper last summer for a Harvard symposium, in which he recounted horror stories of union lies and intimidation employed to trick and force workers into signing authorization cards.

At any rate, as Personnel Concepts has reported in its white paper on labor law under Obama, the battle over EFCA should be grand drama.

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