The Threat of "Interest Arbitration" In the Employee Free Choice Act 

Although the Employee Free Choice Act failed to overcome a republican filibuster in the Senate last year, it will certainly be high on the agenda of the next congress, particularly if a democrat is elected president. The Act would dramatically alter both the legal landscape and the economic balance of power between labor and management on first labor contracts, as well as the effect of those contracts upon subsequent agreements.

By Mark M. Trapp

The Employee Free Choice Act ("EFCA"), which in 2007 passed the House, but stalled in the face of a filibuster in the Senate, is well known for its attempts to do away with the secret election ballot in union elections. The Act benignly refers to this as "Streamlining Union Certification," and it surely is, from the standpoint of the union. However, there is another provision in the EFCA that may be just as harmful to employers, and in connection with the "card check" elections called for therein, could significantly affect unionized and non-unionized companies across the country.

Under what the Act calls "Facilitating Initial Collective Bargaining Agreements," the EFCA provides for the use of binding arbitration to resolve bargaining impasses. Currently, negotiations on an initial contract following unionization are treated much the same as any other contract: the parties negotiate in good faith until they settle on terms. If they fail to do so, the union may call a strike, while the employer may implement its last offer or even lock out workers.

By way of contrast, the EFCA provides that if a union wins an election and the Arbitration can be a valuable method for resolving disputes and is frequently used in labor relations. Both management and labor have found it useful at times to bring in a trusted third party to evaluate and resolve grievances that might arise under an existing contract. Such a process allows the parties to avoid the costs and delays of litigation. In this sense, arbitration is a valuable alternative to the court system.

However, the arbitration imposed by the EFCA is not the mere interpretation of terms agreed upon by the parties. Instead, "interest arbitration" would allow a panel of arbitrators, with no oversight, to decide what the terms of the collective bargaining agreement should be. The tremendous power of arbitrators in these circumstances is obvious. Rather than interpreting a contract provision, they would be creating such provisions either on their own or by choosing one party's proposal over the other party's language. Arbitrators would decide what weight to place on factors such as the financial health of the employer, and could write their own economic and/or operational terms. To add to the concern of such a practice, arbitration decisions are entitled to very limited review in the courts. Employers would then be left in the hands of persons who may have no knowledge of their business or industry, and who certainly have no responsibility for the potentially frightening consequences of the economic or operating terms they have unilaterally imposed upon the company.

Employers should be aware that the EFCA reverses several of the most central aspects and philosophical underpinnings of the NLRA. Perhaps most importantly, under the so-called "interest arbitration" provisions, the EFCA substitutes the decision of an unaccountable third party regarding essential terms of the employment relationship rather than permitting free bargaining among the parties. As a result, employers should be very concerned about the far-reaching impact of the EFCA, not only on union elections, but on the terms of any collective bargaining agreement arising from a union victory.


Employees Have No Right To Use Employer E-Mail Systems For Union Organizing Or Mutual Aid And Protection.

By: Paul Rosenberg

The National Labor Relations Board (the "NLRB" or "Board") recently ruled that employees have no statutory rights to use employer e-mail systems to communicate with one another regarding union matters and other terms and conditions of employment.

In this case, the Company maintained a written communication policy which applied to the use of the Company's workplace communications systems, including telephones, message machines, computers, fax machines and photocopy machines. This policy provided that Company communication systems were not to be used to solicit for commercial ventures, religious or political causes, outside organizations, or other non¬job-related solicitations.

Despite being told that union-related e-mails were against the aforementioned policy, a Company employee, in her capacity as union president sent e-mails to her co-workers at their work addresses urging them to participate with the union in a local parade and requesting that they wear green in a gesture of solidarity in support of the union's efforts to gain a raise for employees. Consequently, during the next round of labor negotiations the Company proposed language expressly prohibiting employees from using electronic communications for union business. In response, the union accused the Company of insisting on an illegal proposal, and moreover, maintaining an overbroad policy which infringed upon the employees' rights to solicit and/or distribute information regarding the union.

The Board held that employees do not possess a legal right to use employer e-mail systems to communicate with one another regarding union matters. The Board majority analogized e-mail systems to other types of employer-owned communications equipment like bulletin boards, telephones, public address systems, and video equipment systems, for which it has long held employers may restrict employee use, so long as they do so in a non-discriminatory manner. As such, the Board announced a standard allowing employers to prohibit solicitations via e-mail for non-charitable, outside organizations including unions, while permitting e-mail use for charitable solicitations, invitations of a personal nature, and business related use, provided such rules were enforced non-discriminatorily.

Applying this standard to the case at hand, the Board found that since it had never previously allowed e-mails soliciting employees' support for non-charitable outside organizations, the Company could lawfully prohibit e-mails urging employees to wear green to support the union and to participate with the union in a parade. Conversely, the Board found that an e-mail simply clarifying the facts surrounding the union's rally the previous day was permissible since it not a solicitation and was more akin to personal e-mails of the type that the Company normally permitted.

Based on this decision employers should review and if appropriate revise relevant policies contained in their handbooks. Most importantly, to ensure that employees cannot use e-mail systems for union-related purposes, employers should refine their communications policies such that they can be reasonably and non-discriminatorily enforced.


Employee protests over a management personnel change are protected by the NLRA only if the protest concerns the actual terms and working conditions of employees, and only if the protest is reasonable.

By: Richard L. Sloane

The Fourth Circuit recently considered whether a walkout by a contractor's employees to protest the contractor's firing of a management employee was protected activity under Section 7 of the NLRA. The appeals court, in rejecting the NLRB's findings, ruled that the employee walkout under these circumstances was not protected by the Act. Employees are protected by the NLRA to protest their own terms and conditions of employment. This ruling confirms that employers retain discretion to make changes in management personnel without the fear that such decisions will trigger an employee walkout.

The case involved a hog-slaughtering plant in North Carolina, employing approximately 6,000 workers on two shifts. A sanitation company — with a staff of 250 to 300 workers — worked in the pork producing plant at night, and was responsible for cleaning the facility before production resumed the following morning. Each day, U.S. Department of Agriculture inspectors were required to certify that the plant was clean before the pork producer's employees began their morning production schedule.

Several of the sanitation company's employees complained about their treatment by the sanitation company's safety personnel. Certain supervisors were sympathetic to these complaints. In one instance, a safety manager instructed one of the supervisors to discipline one of the sanitation employees. The supervisor refused to carry out this order, concluding that the safety violation was minor. In response, the safety manager complained to the sanitation company's division manager about the supervisor's refusal to carry out the discipline request. Likewise, the supervisor was accused of other acts of insubordination. This prompted the division manager to give orders that the supervisor should be fired and removed from the plant.

The supervisor, believing that he was about to be terminated, ran through the plant shouting that sanitation employees should stage a walkout. Though the ensuing events were "hotly disputed", a large number of sanitation employees left their work sites. (After some time, some employees returned to work while others went home.) The walkout prevented the sanitation company from cleaning the slaughtering plant, the USDA denied the pork producer permission to run its first or second shifts, and the company lost a full day of food production.

The Union brought a charge against the pork producer and the sanitation company, alleging that the employees' walkout was protected under the NLRA. The Board ruled in favor of the employees.

The three-judge appeals court panel reversed the NLRB's ruling, explaining that Section 7 of the Act protects employees who protest their own terms and conditions of employment. Importantly, the Fourth Circuit confirmed that the protections afforded to employees under Section 7 do not extend to supervisors who are explicitly excluded by virtue of the Taft-Hartley Act. As the management decision under scrutiny solely involved the planned termination of a supervisor's employment — and not the terms and conditions of the sanitation workers' employment — the employees were not protected by the Act to walk off the job in protest. In short, while Section 7 of the Act is a "shield" to protect employees who seek to engage in protected activities, it cannot be used as a "sword" to prevent or discourage an employer from making managerial decisions that do not implicate employees' terms and conditions of employment.

The Fourth Circuit's decision — in line with other circuits — is an important victory for employers, as it sends the message that employers have discretion to make decisions that affect management personnel, and that these decisions are protected from the threat of an employee walkout. The appeals court, in rejecting the NLRB's prior analysis, concluded that the implicated employees "strayed into the realm of unprotected activity" by walking off the job. In so finding, the court appropriately underscored the limitations on protections afforded to employees under the NLRA.


The Steelworkers Union and several other members of the AFL-CIO have petitioned the NLRB to permit collective bargaining from groups that lack majority support in the workplace. After years of declining membership, unions are hoping minority bargaining rights will be the ultimate panacea to their membership woes.

By: Evan Rosen

In an effort to enhance their ability to effectively organize employees, several unions recently filed a petition with the National Labor Relations Board ("NLRB") seeking the ability to collectively bargain, even if lacking support from a majority of the workforce. This effort at achieving minority-union bargaining represents a major new initiative by the unions that has far reaching implications for employers in all industries. It is especially important for partially unionized facilities that have other dissatisfied employees in other non-unionized departments.

Under current law, unions may not represent a unit of employees unless a majority of the employees support the union. Indeed, majority support is a pillar of labor law. It requires unions to actively recruit members and obtain authorization cards from at least 30% of the workforce. Once the union has obtained the appropriate number of authorization cards it may file a petition with the NLRB seeking a secret ballot election requiring an up or down vote on the question of union representation. The ensuing campaign gives both the union and the employer the opportunity to share its opinions about whether a labor organization would serve the employees' best interests.

This framework has been the primary method of union organizing for decades. But union membership has severely declined from its height 50 years ago and election campaigns have become increasingly unsuccessful for unions. Consequently, in recent years unions have explored alternative strategies to circumvent the NLRB process. For example, unions have put political and economic pressure on employers in an effort to convince them to sign neutrality agreements. Such agreements require employers to permit union access to its premises, refrain from voicing its opinions about union representation of its employees, and submit to a card check procedure whereby the employer will voluntarily recognize the union if a certain number of authorization cards are signed.

Now seeking yet another, more convenient and less burdensome, method of organizing, unions have seized on an antiquated portion of the National Labor Relations Act in an effort to permit union recognition even if they do not have majority support from the workforce. According to proponents of this petition minority-union bargaining was commonplace during the New Deal. However, unions abandoned the practice because in the early days of the NLRB they could grow faster by winning majority recognition (at that time unions won a majority of elections).

These proponents contend that the pro-business composition of the NLRB requires unions to return to the historical practices of minority-bargaining and rediscover the original intention of the law. Further, they argue that the law allows employees to fight to protect themselves as long as they are taking collective action about wages, hours and working conditions.

It is unlikely minority bargaining will become an accepted form of organizing. Nonetheless, there are several important actions employers can take to protect themselves. As the old saying goes, the best defense is a good offense. Act first to ensure that employees remain loyal to management and would not want a union to represent them. For example, cultivate relationships between managers and employees and improve the lines of communication. Ensure that employees feel respected in the workforce and have access to their managers. Furthermore, identify and effectively address key employee concerns.. Indeed, implementing a pro-employee workforce environment where the employees feel respected and appreciated will make it difficult for unions to successfully organize the workforce.

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