Labor Will Give Up Card Check, But What About The Rest?

Originally appeared in the San Francisco Examiner on August 24th, 2009 and can be viewed at the Alliance for Worker Freedom’s website.

Labor officials and Democratic members of the Senate have agreed the provision of the Employee Free Choice Act, which eliminates secret ballot voting on union membership, is out. Senate Democrats are rumored to be drafting a new version of the controversial bill.

Sens. Sherrod Brown, D-Ohio, Thomas Carper, D-Del., Tom Harkin, D-Iowa, Mark Pryor, D-Ark., Chuck Schumer, D-N.Y., and Arlen Specter, D-Pa., are the main forces rumored to be working on this “card-check-lite” version of the bill. However, there is one provision that labor will never give up: binding arbitration.

Arbitration, in its most basic form, is a tool used by two parties (in this case unions and employers) to resolve disagreements on contracts, benefits, responsibilities or any number of issues. Usually, arbitration is reserved as a means to resolve disputes between two previously contracted parties outside a formal courtroom.

The rumored new version of the bill — EFCA-Plus — will fundamentally change the arbitration process, shifting the power from private businesses and workers to a partial governmental entity (i.e., a government-appointed arbitrator).

Current arbitration legislation is founded on the principle of mutual consent. Section 8 of the National Labor Relations Act requires employer and employee representatives to meet and bargain “in good faith with respect to wages, hours, and other terms and conditions of employment,” correctly encouraging negotiating members to compromise.

“Good-faith bargaining” that occurs during present-day arbitration is preferred by both parties. This prevents each side from making unreasonable demands.

It saves both parties time and money by encouraging a good-faith effort outside the courtroom. Mandating government intervention changes the rules of the game, and thus how negotiations will take place.

Under EFCA-Plus, negotiations between labor and business parties cannot exceed 120 days. If they do, a government-appointed arbitrator enters the dispute and imposes a binding ruling on both parties.

Current negotiations last approximately 10 months. The majority of labor disputes will end up being resolved by the government, a noninterested third party who has no stake in either side. Employees’ hands will be tied.

The threat of government arbitrators under EFCA-Plus creates faulty incentives that deter consent among negotiating parties. With this power, labor unions will have no reason not to propose radical conditions.

By making it impossible for employers to accept their terms, they can reach forcing binding arbitration. Many employers, knowing they will be forced by government-appointed arbitrators to accept terms that may have disastrous negative economic effects, will simply choose to shut down. In fact, that decision has already been made by companies all across America.

EFCA-Plus leaves too many questions about arbitrators unanswered while simultaneously giving them unprecedented power. There is no provision that lays out how arbitrators will be chosen, leaving questions about qualifications and bias.

Government is increasing its influence in every part of your life, from what car you can buy to your health insurance. Now they want to dictate to employees and employers the terms of negotiation. Go figure.