Senator Arlen Specter (R- Pennsylvania) has ostensibly spoken out against the passage of the Employee Free Choice Act (EFCA); yet, one can infer from his words, that a compromise might be acceptable.
Senator Specter started out by saying that “the bill’s requirement for compulsory arbitration if an agreement is not reached within 120 days may subject the employer to a deal he or she cannot live with. Such arbitration runs contrary to the basic tenet of the Wagner Act for collective bargaining, which makes the employer liable only for a deal he or she agrees to.” He added that “the problems of the recession make this a particularly bad time to enact [the] Employees’ Free Choice legislation. If [however] efforts are unsuccessful to give labor sufficient bargaining power through amendments to the NLRA, then I would be willing to reconsider [the] Employees’ Free Choice legislation when the economy returns to normalcy.”
The Senator emphasized that his decision was “a close call” and that “labor has a valid point that they have suffered greatly from outsourcing of jobs to foreign countries and losses in pension and health benefits.” Again, he suggested revisions to the National Labor Relations Act, which further indicates that a compromise may be in the offing
The make-up of the Senate, which would be 59 to 40 if Al Franken is seated, would make Senator Specter’s vote the one that could deicide passage of the EFCA, which at this point will sail through a Democratically controlled House of Representatives.
At this time, Corporate America must not only keep up the pressure on its elected representatives to defeat the probable passage of even a watered-down EFCA, but it must also prepare for its possible passage by initiating effective pro-management strategies.
In a recent interview on CNBC, Warren Buffet categorically came out against card checks. He said that he is in favor of secret ballot elections, for it has been a traditional aspect of our American democracy.
Now, Berkshire Hathaway, Mr. Buffet’s multifaceted enterprise, owns many companies that are unionized. Though he claims that unions play an important role in Corporate America, a position with which I have serious disagreements, Mr. Buffet nevertheless understands the damage that would occur if the Employee Free Choice Act (EFCA) becomes law.
Indeed, the EFCA would result in significantly increased labor costs, thus reducing corporate profitability, which would be reflected in the diminished value of the stocks of companies unionized under the undemocratic rules imposed by the EFCA.
Should the Employee Free Choice Act (EFCA) become law, and it seems to be headed in that direction, then Corporate America will be deprived of the kind of collective bargaining that has been an integral part of the labor relations formula since 1935.
The EFCA not only does away with secret ballot elections, but it also mandates binding arbitration when collective bargaining does not produce an accepted in result for a first contract after 120 days of negotiating.
Unions will have no incentive to make concessions during collective bargaining if they can play out the clock and know that an arbitration panel will take over and produce a result favorable to its interests. For example, an arbitration panel could dictate that companies pay salaries that they can not afford; it can also mandate the amount of union dues and impose stiff penalties for non-payment.
Collective bargaining has always been a process of give and take, where a balance is achieved between competing interests.
There are sufficient laws in place that address the interests of both management and labor. Binding arbitration will obviate those laws and open the door for unions to achieve injurious results that will eat away at the substance of Corporate America.
It has been reported that Vice President Biden is meeting with officials from the AFL-CIO to plan strategy for the passage of the Employee Free Choice Act (EFCA). They are allegedly intent on getting the EFCA passed as rapidly as possible. It has been further reported that Congressman George Miller (D-CA) is planning on introducing the EFCA bill within the next few weeks.
As previously reported in this blog, the EFCA will do away with secret ballot elections and permit union organizers to pressure employees into joining unions. In addition, it will make Corporate America vulnerable to steep fines for any violations of the National Labor Relations Act and mandate binding arbitration for collective bargaining if first contract negotiations fail.
Increased unionization will drive up labor costs, thus worsening an already dire recession. In addition, the millions of dollars that unions will accumulate from the dues of new members will be spent to advance organized labors’ political agenda, thus helping to ensure that unions maintain a powerful voice in congress.
If Corporate America is going to defend itself from the anti-management effects of the EFCA, it is essential that it develop an effective strategy now.