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Five Steps to Avoid Unionization in Light of the EFCA
It’s not quite 300 brave Spartans holding off the entire Persian army, but the pitched battles over the Employee Free Choice Act (EFCA), or what’s been labeled “card check,” make for some pretty dramatic viewing. Both sides in the battle—organized labor and American business—have vowed no surrender. Both sides have established huge war chests with which to do combat, and they’ve taken their battles to the Internet and the traditional media—and to the ears of Washington’s politicians, who are hearing both threats and inducements. And after three months of a pro-labor Congress and administration, both sides are now…ready to negotiate?
Wait a minute. Could compromise be possible, or is one side, or even both of them, trying to slip into the defensive breaches with a Trojan Horse?
At this point, it’s anybody’s guess, and it wouldn’t be surprising if Las Vegas had set up odds on passage of this year’s most controversial piece of legislation. Labor says the EFCA is absolutely essential to level the playing field in union organizing. Business (mostly the big variety) counters that the EFCA would instead destroy the fine balance between free choice and moral suasion (read: threats and coercion on both sides) in favor of the unions. The “con” forces have scored fairly well early on by focusing on the first element of the legislation, the part that leaves the decision on whether to hold secret-ballot voting up to the union and takes it away from employers. Of course, these “con” artists (double entendre intended) paint it as a total elimination of the secret ballot, which is not entirely true. It would preserve the secret ballot, but no union would ever call for an election once it had collected a majority of signed cards from the employees. Fifty-percent-plus-one in signed cards = instant unionization. Why vote?
Under current law, organizers collect signed cards from employees and, once they gain 30 percent of the workforce’s approval, present the cards to the NLRB (National Labor Relations Board), which then sets up an election. Elections usually occur within two months, the average time being 39 days. Unions win about half the time, and in 2007 actually upped their success rate to 60 percent. The devil in the details, however, lies in the span between announcement of the election and the actual voting. The union says employers use this period, and the fact that their employees are a captive audience while at work, to virtually brainwash workers against the union and scare the hell out of them with threats and sometimes actual terminations of pro-union employees. Business shouts back that EFCA would unleash union goons on their employees to strong-arm, trick or humiliate them into signing cards. Sadly, history shows that both sides are correct.
EFCA sports some other provisions that business loathes. It allows just 90 days for bargaining before mediators are called in for another 30 days. If the two sides still can’t agree on a contract during mediation (why should the union when it can just present outlandish demands in anticipation of the next step?), binding arbitration is ordered, resulting in an imposed contract that must be followed for two years. This is the part where outlandish demands pay off. An arbitrator would appear more than fair, or at least competently doing his or her job, by just splitting the difference between the two sides. Say workers at Factory A are paid $12 an hour, and then the union comes in, gets those 50-plus signatures, and demands $36 an hour when in truth $18 or $20 would be a miracle. Arbitrator Guy looks at the union bargaining wish list, $36, and then at Factory Owner Guy’s counter-offer of $14.50, and awards the workers $20.50—a major victory. Factory Guy is finished, so he closes up shop and moves his operation to Mexico (but he’d better give his workers 60 days’ notice and their new wages for that period to adhere to federal WARN legislation!).
This is why the U.S. Chamber of Commerce has called EFCA “Armageddon.”
As things stand now, legislation for EFCA has been introduced into both houses of Congress, but barring a shady maneuver called reconciliation, the Senate can’t get it onto the floor for an up-and-down tally unless 60 of its members vote to close debate. The Democrats would easily have had that number had Pennsylvania Senator Arlen Specter, a Republican*, not changed his position from the 2007 EFCA vote. Back then, he voted “yes” for cloture, but this time around he came out and said he could not support ending a filibuster on EFCA. Since he spoke out, a few Democrats have also made some waffling comments to indicate they couldn’t support the bill in its current form. Bottom line, without Specter’s vote, the Democrats cannot reach the magical number of 60 cloture-voters. Even if (or when) Al Franken joins the group after his Minnesota court challenge is over, the Democrats will still have just 59 Senators (just?). With Specter, the Republicans are thus completely united against allowing EFCA to come to a full vote, so 59-41 appears to be the best EFCA supporters can hope for.
Dead on arrival? It would seem so, but labor isn’t giving up. What could transpire is some sort of compromise based on the second two provisions of EFCA—the binding arbitration part along with increased employer (but not union as it stands) penalties for breaking the rules. In fact, a group comprised of Costco, Whole Foods and Starbucks has already floated just such an idea, which the Chamber of Commerce and other big business interests immediately rejected. In fact, “No compromise!” was shouted from both dueling rooftops upon hearing the trio’s compromise proposal to drop card check and set up speedier elections with both sides’ gaining equal access to politick the employees pro and con.
Even a union titan and stalwart the likes of Andy Stern, dictatorial leader of the Service Employees International Union (SEIU), has begun to vacillate. He recently told the Washington Post: “We are on the hunt for a solution. No matter what you do, you have to change the election process. Whether it’s majority sign-up or not, workers have to have a choice about having an election.” So, what do you do—have an election to determine if the workers want a secret-ballot vote to unionize? The most likely outcome is that the unions will hold out for the best they can get now and then work on electing some additional Democrats to the Senate in 2010 when more elephants than donkeys are up for reelection.
Bottom line is that 2009 will no doubt see a decidedly more union-friendly piece of legislation passed, most likely without card check—temporarily, anyway. Card check might either re-emerge in 2011 if Democrats can not only hold onto but also increase their seats in the Senate (remember 1994 under a similarly liberal president?), or be slipped in somewhere along the way in another piece of legislation that can pass the 60-vote threshold in the Senate. The union Trojan Horse, in this scenario, is already standing outside the gates of Congress.
If or when card check is enacted, Anne-Layne Ferrar of the Law and Economics Consulting Group (LECG) estimates that for every three percent increase in unionized employees, there will be a corresponding one percent increase in unemployment and a decrease in annual job creation by 1.5 million. In “An Empirical Assessment of the Employee Free Choice Act: The Economic Implications,” she writes:
¶Thus, if EFCA passed today [March 3, 2009] and resulted in an increase in unionization from the current rate of about 12% to 15%, then unionized workers would increase from 15.5 to 19.6 million while unemployment a year from now would rise by 1.5 million, to 10.4 million. If EFCA were to increase the percentage of private sector union membership by between 5 and 10 percentage points, as some have suggested, my analysis indicates that unemployment would increase by 2.3 to 5.4 million in the following year and the unemployment rate would increase by 1.5 to 3.5 percentage points in the following year.
Therefore, as any good Boy Scout would tell you, the message for business in America is “Be prepared.” Or, as Texas attorney Michael Maslanka points out: “Some version of EFCA will be the law no later than next year at this time. Advice: Avoid ostrich-like attitudes of self-delusion.” Clearly, easier unionization, if not card check itself, is on the way, so the onus is on business to address the threat and stave off unwanted union organizing. Legal and human resources consultants across the nation have been busy collecting hefty fees to train others in the art of fending off unionization. While they collect their fees, you should be asking yourself: “What drives employees to unionize in the first place?” Though important, wages and benefits are not always the answer. More often, it’s because work has become just that, work, and the employees are there because they must “work to live” rather than “live to work.” Here then are the main union-motivational causes listed by human resources researchers:
• Poor supervision, which in turn creates poor employee morale and overall dissatisfaction, along with employee feelings of misunderstanding and lack of being appreciated
• Poor organizational structure, which lacks a clear chain of command that results in confusion of roles and responsibilities—both supervisors and employees might feel lost and powerless
• Failure to communicate, which leads to workplace dissatisfaction as the employees feel they have no voice and aren’t getting the responses and answers they seek; not respecting employees and lacking an open-door policy on management’s part often contribute
• Failure to get the employees to feel a sense of partnership by not consistently communicating company goals, changes in operations, and company successes and shortcomings
• Retaining poor employees who are a drag on others and breed resentment; worse, advancing “jerks” and poor employees into supervisory or higher positions; also, letting some employees “get away with murder” while sincere employees feel slighted and ignored
• Employee feelings of job insecurity, which is a tough one to avoid in these hard economic times when downsizings are widespread, as are contractions of operations, but reassurances must be conveyed to core employees that their jobs are safe (don’t do this like sporting team owners who stand behind their coaches “110 percent” one day and fire them the next!)
• Failure to provide opportunities for advancement, which leads to a stagnant atmosphere, deterioration of enthusiasm, and a feeling of disconnect between employees and management
• Failure to reward and recognize employee contributions and successes, which can breed distrust and resentment
Obviously, then, the answer to staying union-free lies in not just avoiding the pitfalls listed above but also—and mainly—in creating a place of employment where people come to “live to work,” or at least to feel they’re part of a community that’s joining hands to accomplish important goals. Work is as much a social experience as it is a center of economic production, so employers need to maintain policies and a work atmosphere that enable their employees to enjoy their experience rather than dread coming to work. This is admittedly a tall task, and as hard as one might try, be forewarned that, as those weight-loss infomercials often warn, “Results may vary,” and even worse, “Results not typical.”
What specifically do these highly paid attorneys and HR consultants advise during their training sessions? Recommendations generally fall into these five imperatives:
Conduct an Employee Relations Audit: Best done by an outside consulting agency so it’s independent and unbiased, an employee relations audit will turn up what’s really on your employees’ minds—what drives them and what ticks them off. From the results of the audit, take action to correct whatever is in your power to correct. Aim for a happy, contented workforce, and put policies and procedures—and personnel—in place to ensure future, continual contentment. This initial audit is the single most important step in creating a place of work that renders unions unnecessary, provided the audit’s findings are followed through and corrective actions are taken.
Train and/or Rearrange Your Supervisors: Virtually nothing can be more corrosive on your employees’ morale than bad, indifferent, hostile or nonexistent supervision. Train your supervisors in both their management tasks and basic human relations; transfer or shove upstairs (or eliminate through layoff or early retirement) supervisors who are deeply resented for all the right reasons, meaning they’ve earned their resentment. As Texas lawyer Michael Maslanka observes: “I have practiced labor and employment law for almost 30 years; untrained supervisors are the single biggest source of union organizing. Think management training is expensive? Try the alternative.”
Review and Update All Policies: Again, you should aim for good if not great employee relationship policies. Make it clear in your policies that you aim to remain union free and back that up with effective, employee-friendly policies. A huge area of concern lies in problem solving and grievance airing. The Equal Employment Opportunity Commission (EEOC) recently issued guidance that any system wherein the employee has only one avenue to complain—to his or her direct supervisor—is a system bound to fail. (What if the employee wants to complain about the supervisor?) Multiple avenues of grievance airing, or simply being able to complain to someone with authority rather than a co-worker, will help solve a lot of problems before they fester.
Other policy areas to review and reinforce include harassment and discrimination, health and safety, equal advancement, equal pay for equal work (it is the law), electronic communications (e-mail policy and Web usage), work attire, lunch and break times, overtime pay (and the proper classification of employees as exempt or non-exempt), even work schedules and parking plans. You get the idea—revamp and reinforce wherever necessary so each employee is treated uniformly and fairly with policies that are clear, sensible, understandable and enforceable. Then be sure to enforce the policies equally. Don’t let “good old boy” networks develop and don’t let anyone play favorites. (When it comes to equal treatment, however, please see prior warning gleaned from weight-loss infomercials.)
Recognize and Reward Employee Achievement: Nothing can be worse than having a staff or workforce that feels unappreciated. Even if the employees are highly compensated and enjoy a great benefits package, restlessness and even resentment can seep in if they are treated as mere cogs in a machine. Often the biggest motivators, however, come not in the form of cash rewards but in honest, sincere recognition for a job well done. In this regard, many firms rely on employee-of-the-month recognitions, but in no time this practice invariably becomes either a popularity contest or a cycle-through-everyone-once charade. While the recognized employee might get a jolt from the award (the first time anyway), the rest of the workers won’t necessarily buy in and might see it as a useless exercise. This is not to say you should abandon the practice, but you need to supplement it with a real personal touch. Supervisors should be trained to recognize their employees’ work and thank and congratulate them, while also correcting and disciplining them as necessary. Letting some employees get away with murder will lessen and cheapen any goodwill that comes from praising the others for their hard work. You need to develop the reputation—and reality—of running a fair and equal operation for all concerned. Union organizers immediately seize upon and exploit employees’ feelings of unfair treatment and favoritism.
Above All, Communicate: Communication is a two-way street, and if you follow the steps above, the result should be a policy that fosters healthy communication by setting up clear channels and procedures, backed by trained, competent supervisors. You will also need to communicate specifically and directly about unions and, if EFCA passes, about card check itself. Make it clear that the employees don’t need an outside organization, least of all one that will take a chunk out of their paychecks each month, to speak for them and take over negotiating their job rights. The National Labor Relations Act (NLRA) even permits you to post and distribute a written anti-union policy. In the end, if you’ve done the previous steps thoroughly, correctly and consistently, you should be able to enlist your employees as your allies in the prevent-unionization struggle. However, if your employees remain disgruntled and not gruntled, as one blogger famously puts it, expect to see a stack of union cards plopped on your desk one day with the announcement, “Welcome to your new union. Let’s negotiate.”
* After this was written, Specter—sensing sure defeat in the Republican primary—switched to the Democratic party, where he no doubt truly belonged anyway, but said he would not change his “no” vote on EFCA cloture. Time will tell.
About the author:
Gary McCarty is a researcher and Web Content Manager for Personnel Concepts.
Note: The details in this white paper are provided for informational purposes solely. All answers are general in nature, not legal advice and not warranted or guaranteed. Readers are cautioned not to rely on this information. Because laws change over time and in different jurisdictions, it is imperative that you consult an attorney in your area regarding legal matters and an accountant regarding tax matters.