Elizabeth’s Hospitality Law Blog / by Elizabeth Ardanowski

Now that the elections are FINALLY over (can you even remember a time when we were NOT talking about this election?), let’s talk about something that is swiftly coming down the pike and has been largely (and frighteningly) obscured:  The Employee Free Choice Act.  Trust me, you (if you are an employer, and all of you employees out there) will want to know about this and will want to prevent it from passing.  It has been described as “the most dangerous legislation facing American business.”  And the name “free choice act” is an intentional misrepresentation of what the act would effect.  Here’s the low-down:

The Employee Free Choice Act (EFCA), if passed, would fundamentally alter how Americans do business by making unionization of a work force an easy and almost automatic foregone conclusion.  To unionize a workforce currently, a private-ballot election, overseen by federal authorities, is required.  Decisions on the ballots by workers are made in the good old election way:  privately.  An employee can privately and in secret vote to unionize or remain free of union control, thus giving an employee effective free choice in the decision, just as in the election this week.  Under the EFCA, privacy is jettisoned and is replaced with a union- favoring process whereby an organizer with signed cards from a simple majority of employees (i.e. anything more than 50%) can bypass the actual election by private ballot to determine whether the work force will become unionized, and instead demand instant recognition as a unionized work force.  HUH???  That’s right, your privacy (or the privacy of your employees) is trampled, because the signing of the cards is done publicly – there is no private or secret ballot allowing you or your employees to freely and privately give an opinion without fear of retribution from others who feel differently.

Easy to see where this new proposed process is fraught with peril:  any bossy or bullying union organizer (perhaps your fellow employee) could put pressure on employees to agree to form a unionized work force.  What if you don’t agree??  We all know that retaliation in the workforce is a reality (I’m not talking about the illegal retaliatory demotions or firings in the employment law realm), especially in workforces that are large.  You (or your employees) could be harassed into signing the cards.  The harassment can even take place at your home.  This prospect has labor bosses salivating. 

If the EFCA passes, get ready for the tsunami of unionization.  The EFCA primarily benefits the unions themselves by leading to billions more in union dues.  This translates to more organizing, more labor relations nightmares, and more political power for the very few running the unions at all levels of government.   Moreover, the EFCA would alter the rules of collective bargaining in a dramatic manner:  once a union is certified, the employer/business will have 120 days to work out a contract.  If the union wishes, it can stall negotiations and invite federal arbitrators to write its provisions, including wage rates, benefits, disciplinary procedures and work rules.  In other words, the business owners will no longer have any say in what they pay their employees, what benefits they will offer to their employees (most often based on what a business can or can not afford), how the business will deal with employees who are not performing or are causing disruption in the workplace, and the rules for the workplace in general.  This strong-arms control away from your human resources department to the binding contract written by governmental hires who have no stake in your business, and usually no knowledge of how your business is successfully run or even what the financial abilities of your business are.  This will inevitably lead to lower profitability and less investment in many different operations.

Moreover, the business may be a liability to the business managers because of underperformance, when business managers have a fiduciary duty to maximize corporate profits.  Profits go down, investors lose money, and shareholders get angry.  They decide to file a class-action lawsuit against the board of directors who failed to stop passage of EFCA and the glaringly clear impact it will have.

The decline in profits is an utterly foreseeable consequence of passage of EFCA.  This should alarm you!  I’m talking about all businesses, not just ones in the hospitality industry.  However, most businesses have been silent, except for the few vocal ones.  Most business leaders are either in the dark about what EFCA really does, or they are unwilling to use their time and precious few resources (compliments of our current economic situation) to keep it from passing. 

An organized effort against EFCA is possible and necessary.  Keep in mind a few statistics:  more than 75% of American workers believe they should have and deserve a secret-ballot process, BUT union political expenditures are expected to surpass the billion dollar mark this election season, which in turn has resulted in a virtual strangle-hold on the Democratic party (the president-elect already indicated that he would support passage of EFCA).  A union-run government is not what businesses need in the current financial crisis, instead, businesses should be free to best determine how to stay in business and turn this econmony around themselves.  We’re a county of rugged individuals who pull ourselves up by our own bootstraps – we should remain that way.        

What do you think?

- Elizabeth