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Copyright: © 2009 Jackson Lewis LLP
Preparing for the Employee Free Choice Act (“EFCA”)
GREATER VALLEY FORGEHUMAN RESOURCES ASSOCIATIONGOVERNMENTAL AND LEGISLATIVE
COMMITTEE
MAY 19, 2009
Maria L. Petrillo Brian P. KirbyJackson Lewis LLP Brian P. Kirby Law Offices
James A. Geier Michael GiantomasoHuman Capital Consulting Aker PhiladelphiaPartners LLC Shipyard
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Today’s Program
The Perfect Storm
• Economy
• The resurgent labor movement
• Politics
The National Labor Relations Act Today
• Organizing process
• Free speech rights/restrictions
• “Make Whole” Unfair Labor Practice Remedies
The Employee Free Choice Act (“EFCA”)
• Revised Organizing Process: No Election or Election
Campaign
• Enhanced Unfair Labor Practice Penalties for Employers
• Collective Bargaining Timeframes and Mandatory
Arbitration
• Winners and Losers
Steps to Prepare for EFCA2
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The Perfect Storm
The Economy• Market down
• Job insecurity up
“State of the Unions”• Steady decline in membership• Fewer NLRB supervised elections• “Change To Win” breaks from AFL-CIO (2006)
Political Environment• President Barack Obama
• Larger democratic majority in Senate
• Labor’s contributions and expectations
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“State of the Unions”
Percentage of Unionized U.S. Workforce – Private Sector
0
5
10
15
20
25
30
35
40
1935 1945 1955 1965 1975 1985 1995 2007
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THE NATIONAL
LABOR RELATIONS
ACT TODAY
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National Labor Relations Act (NLRA) Today
Current “Road to Unionization” • Union solicitation of support (via signed cards)
• Petition for election filed with NLRB (30% or
more required; unions normally won’t file unless
50 - 75%)
• Employer communications under Section 8(c)
• Secret-ballot election
• Good faith negotiations
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National Labor Relations Act (NLRA) Today
Union Certification
• Can occur voluntarily through “card check
recognition” (majority required)
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The National Labor Relations Act (NLRA) Today
Union Certification (cont’d)
•NLRB-supervised secret
ballot election is the norm
•“Card check recognition”
optional/rare; employee
challenge can force election
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National Labor Relations Act (NLRA) Today
Union Certification (Cont’d)
• National Labor Relations Board supervised secret ballot
election – private vote
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Employer Free Speech Rights Under NLRA Today
Section 8(c)“The expressing of any views,
argument, or opinion, or the
dissemination thereof, whether in
written, printed, graphic or visual
form, shall not constitute or be
evidence of an unfair labor practice…”
---- National Labor Relations Act
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Free Speech Rights Under NLRA
YOU MAY SHARE:
•Facts
•Opinions
•Examples/Experiences
• Okay to initiate conversation
• Not in management office
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Company action
that is unlawful
And a Few Limitations:
•TT hreats
• II nterrogation
• PP romises/bribes
• SS pying/surveillance
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National Labor Relations Act (NLRA) Today
Employer Penalties For
Unlawful Discharge
• Designed to restore status quo
• Notice posting
• Reinstatement with Back Pay
• No Fines
• Injunction
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National Labor Relations Act (NLRA) Today
Collective Bargaining
• Mutual obligation to bargain in good
faith
• No obligation to agree; sometimes no
contract
• No time deadlines for “good faith”
negotiations; can be protracted
• Unit employees have right to vote upon
and ratify negotiated contract terms
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EFCA:
What is it?
How does it
change things?
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National Labor Relations Act (NLRA) After EFCA
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National Labor Relations Act (NLRA) After EFCA
Certification WITHOUT Election!
NLRB is precluded from holding election if
union requests certification upon
achieving card majority
• No “pre-election” educational process
• No assurance that all employees
participate
• Risk of pressure tactics and
misrepresentations by organizers
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National Labor Relations Act Under EFCA
Employer Penalties For Unlawful
Discharge
• Notice posting
• Reinstatement
• Treble back pay
• $20,000.00 Fines for
willful/repeated unfair labor
practices until negotiation of first
contract
• No corresponding fines for union
unfair labor practices18
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National Labor Relations Act (NLRA) After EFCA
FIRST CONTRACT NEGOTIATIONS• 10 days to commence bargaining; 90 days to
reach agreement on all terms
• 30 days of mandated mediation; reduced
incentive for union negotiators to adopt
reasonable positions
• Arbitration – third party government appointed
arbitrator has power to impose contract terms for
two years
• Little or no risk of strike gives leverage to union
• Where contract terms imposed, unit employees
lose right to vote upon and ratify agreement
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Winners and Losers in an
EFCA World
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Practical Effects Of EFCA
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Practical Effects Of EFCA
Unions would win . . . • Millions of new members
• Increased financial resources
• Effective elimination of secret ballot elections
and lawful employer communications in
opposition
• Leverage to offer less reasonable contract
demands
• Guaranteed initial contracts
• Intimidation of supervision via remedial
processes
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Practical Effects Of EFCA
Employees could lose . . .• Secret ballot election, freedom from intimidation
• Ability to consider complete information before
making decision to unionize
• Opportunity to participate in decision (employees
not approached to sign cards left out)
• Ratification vote on contracts
• Chance to decertify the union for at least 24
months (and only through secret ballot election)
• Option/right to strike for better contract terms
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Practical Effects Of EFCA
Employers . . . • Lose ability to communicate fully and effectively
with employees about union in timely manner
• Expect unreasonable/excessive contract
demands by union; Lose leverage in initial
negotiations
• Face arbitrator-imposed labor costs and
standards regardless of unique business
circumstances
• Add union/cards as an ongoing business
“agenda item”
• Anticipate increase in unfair labor practice
charges, and greater difficulty
preventing/defending them23
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Likely Organizing Tactics
• Increased use of “salts” (union plants)
• First-time organizing of small and medium-sized employers
• Increased filing of unfair labor practice charges
• Organizing Incentive Programs
Practical Effects Of EFCA
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Organizing incentive program…
$5.00 per authorization card obtained during the organizing campaign, paid to the person obtaining the authorization card
$10.00 per authorization card at the successful conclusion of a card check or the successful conclusion of an NLRB election…
Practical Effects Of EFCA
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Practical Effects Of EFCA
Summary
• Effective elimination of secret ballot
elections• Increased union coercion and employee
peer pressure to get signed cards• Employer difficulty in effectively
communicating position on unionization• Less reasonable union contract demands • Big increases in union market share,
financial resources and political influence
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EFCA Status
Report:
Where Does It
Stand Now?27
Practical Effects Of EFCA
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Status of EFCA
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STATUS
“Change is finally
having a President…
who will make the
Employee Free Choice
Act the law of the
land.” --- Barack
Obama
3/09: Obama and Biden both commit to support EFCA passage at AFL-CIO Convention5/09: Obama calls for reform to make it easier to join unions
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• In 2007, passed House by vote of 241 – 185
• Senate cloture vote failed 51-48 (need 60) (Specter voted with Democrats)
• 2009: 8 likely supporters of EFCA have replaced Senators who opposed EFCA in the 111th Congress
EFCA Introduced March 10, 2009 following Obama and Biden speeches pledging EFCA support to AFL-CIO
H.R. 1409 (Rep. Miller, D-CA)
S.C. 560 (Sen. Harkin, D-IA)
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Status of EFCA
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EFCA – POLITICAL STATUS
The 111th Congress (2009-10)
House passage assured but Senate support a
problem. Some prior supporters not willing to
sponsor EFCA or vote for cloture
• Mobilization of business
lobbying groups
• Polls strongly against “card
check”
• Concerns re impact on weak
economy
• “Bigger fish to fry” 30
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EFCA – POLITICAL STATUS
The 111th Congress (2009-10)
March 5, 2009: Rep. Sestak (D-PA) introduces compromise bill: National Labor Relations Modernization Act.
• Retains secret ballot election
April 8, 2009: Sen. Blanche Lincoln (D-Ark) announces inability to support EFCA in present form. “Nail in EFCA coffin.”
• Or is it?
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EFCA – POLITICAL STATUS
The “Specter” of EFCA –
April 28, 2009: Sen. Arlen Specter
becomes a Democrat and declares
continued opposition to EFCA in present
form.
• Relies upon promises of Sen. Reid (D-
NV) to retain seniority on committees in
making switch.
• Likely seating of Al Franken (D-MN)
gives Democrats potential 60-seat,
filibuster-proof majority.32
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EFCA – POLITICAL STATUS
The “Specter” of EFCA (cont’d):
May 5, 2009: Specter is stripped of seniority. Nowmost junior Democrat on 4 out of 5 committees onwhich he serves. • Gives Democrats tremendous leverage. Spectermust go along with party leaders to regain seniorityafter 2010 elections
- Seating of Franken could provide 60 votesneeded to pass EFCA in present form.
May 14, 2009: Obama says he wants to correct the “monkey business” affecting union organizing
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The Myths Behind EFCA
MYTH REALITY
Employers coerce employees to vote “No”
Employer violations occur in 2% of election cases
Unions can’t win elections under the current system
Unions won 59% of NLRB elections in 2007
Labor Board conducted elections take too long
94% of NLRB elections held within 56 days
A card check is best way to gauge employee support
The secret ballot is universally validated by federal courts
Employers have unlimited access to employees
Unions get employee names/addresses within seven days
Pre-election proceedings are contentious
Election agreements reached in 85% of cases
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Union Win Rates in Representation Elections
»2000 – 53%
»2001 – 55%
»2002 – 57%
»2003 – 58%
»2004 – 59%
»2005 – 61.4%
»2006 – 61.5%
»2007 – 59%
»2008 – 66% as of June 30,
2008 35
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EFCA Action Plan
What to
Consider Now?
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6 Legal Steps to Insulate Your Business
Legal Musts!• Create a union-free philosophy statement /
issue-free philosophy statement
• Identify your supervisors
• Train your supervisors on lawful
communications with employees
• Conduct a bargaining unit analysis
• Lock down your facility to minimize union
access
• Educate all employees about EFCA and the risks
of signing a union authorization card
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Who is a Supervisor under the NLRA?
Section 2(11) of the NLRA defines the term
supervisor:
The term "supervisor" means any individual having
authority, in the interest of the employer, to hire,
transfer, suspend, lay off, recall, promote,
discharge, assign, reward, or discipline other
employees, or responsibly to direct them, or to
adjust their grievances, or effectively to
recommend such action, if in connection with
[these activities] the exercise of such authority is
not of a merely routine or clerical nature, but
requires the use of independent judgment.
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12 Steps to Neutralize EFCA
Step 1 Understand the various components of the Employee Free Choice Act (EFCA) and its likelihood of passage
Step 2 Advise your senior management on EFCA and its possible impact on your organization
Step 3 Identify your organization’s business strategy, mission and values and plan to communicate this to employees
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12 Steps to Neutralize EFCA
Step 4 Evaluate your organization’s human resources or “people strategy”
Step 5 Review your employee policies and procedures for legal compliance and enhancing communication
Step 6 Analyze your compensation systems and processes
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12 Steps to Neutralize EFCA
Step 7 Coach and advise supervisors and managers on improving communication and being better leaders
Step 8 Teach all employees about the importance of annual performance reviews
Step 9 Take the pulse of your employee population
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12 Steps to Neutralize EFCA
Step 10 Hire, retain and develop the “right people”
Step 11 Insure all employees understand their job responsibilities and accountabilities
Step 12 Communicate, Communicate, Communicate
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EFCA Timetable
• Passage once expected by spring
or early summer 2009
• Compromise bill is being drafted
now
• Projected debate and passage-
perhaps fall 2009
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Therefore…
• Employers need to very
seriously consider taking
action now in the time
available before EFCA, in
some form, becomes law.
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Questions?
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Our Presenters
Maria L. Petrillo, Esquire Brian P. Kirby, EsquireJackson Lewis LLP Attorney at Law Three Parkway 171 W. Lancaster Avenue1601 Cherry Street, Ste 1350 Suite 100Philadelphia, PA 19102 Paoli, PA 19301Tel: (267) 319-7806 Tel (610) [email protected] [email protected]
Jim Geier Michael GiantomasoPresident and Founder Vice President,Human Capital Consulting Human ResourcesPartners LLC Aker Philadelphia ShipyardThree Neshaminy Interplex 2100 Kittyhawk AvenueSuite 301 Philadelphia, PA 19112Trevose, PA 19053 Tel: (215) 244-8110 Tel: (215) [email protected]
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Copyright: © 2009 Jackson Lewis LLPReproduction in whole or in part by any means whatsoever is strictly prohibited without the advance written permission of Jackson Lewis. | This document is for informational purposes only and not intended as legal advice. | This information may be considered attorney advertising in some states. Furthermore, prior results do not guarantee a similar outcome.