copyright: © 2009 jackson lewis llp preparing for the employee free choice act (“efca”) greater...

Copyright: © 2009 Jackson Lewis LLP

Preparing for the Employee Free Choice Act (“EFCA”)

GREATER VALLEY FORGEHUMAN RESOURCES ASSOCIATIONGOVERNMENTAL AND LEGISLATIVE

COMMITTEE

MAY 19, 2009

Maria L. Petrillo Brian P. KirbyJackson Lewis LLP Brian P. Kirby Law Offices

James A. Geier Michael GiantomasoHuman Capital Consulting Aker PhiladelphiaPartners LLC Shipyard

Today’s Program

The Perfect Storm

• Economy

• The resurgent labor movement

• Politics

The National Labor Relations Act Today

• Organizing process

• Free speech rights/restrictions

• “Make Whole” Unfair Labor Practice Remedies

The Employee Free Choice Act (“EFCA”)

• Revised Organizing Process: No Election or Election

Campaign

• Enhanced Unfair Labor Practice Penalties for Employers

• Collective Bargaining Timeframes and Mandatory

Arbitration

• Winners and Losers

Steps to Prepare for EFCA2

The Perfect Storm

The Economy• Market down

• Job insecurity up

“State of the Unions”• Steady decline in membership• Fewer NLRB supervised elections• “Change To Win” breaks from AFL-CIO (2006)

Political Environment• President Barack Obama

• Larger democratic majority in Senate

• Labor’s contributions and expectations

3

“State of the Unions”

Percentage of Unionized U.S. Workforce – Private Sector

0

5

10

15

20

25

30

35

40

1935 1945 1955 1965 1975 1985 1995 2007

4

THE NATIONAL

LABOR RELATIONS

ACT TODAY

National Labor Relations Act (NLRA) Today

Current “Road to Unionization” • Union solicitation of support (via signed cards)

• Petition for election filed with NLRB (30% or

more required; unions normally won’t file unless

50 - 75%)

• Employer communications under Section 8(c)

• Secret-ballot election

• Good faith negotiations

6

National Labor Relations Act (NLRA) Today

Union Certification

• Can occur voluntarily through “card check

recognition” (majority required)

7

The National Labor Relations Act (NLRA) Today

Union Certification (cont’d)

•NLRB-supervised secret

ballot election is the norm

•“Card check recognition”

optional/rare; employee

challenge can force election

8

National Labor Relations Act (NLRA) Today

Union Certification (Cont’d)

• National Labor Relations Board supervised secret ballot

election – private vote

9

10

Employer Free Speech Rights Under NLRA Today

Section 8(c)“The expressing of any views,

argument, or opinion, or the

dissemination thereof, whether in

written, printed, graphic or visual

form, shall not constitute or be

evidence of an unfair labor practice…”

---- National Labor Relations Act

11

Free Speech Rights Under NLRA

YOU MAY SHARE:

•Facts

•Opinions

•Examples/Experiences

• Okay to initiate conversation

• Not in management office

12

Company action

that is unlawful

And a Few Limitations:

•TT hreats

• II nterrogation

• PP romises/bribes

• SS pying/surveillance

National Labor Relations Act (NLRA) Today

Employer Penalties For

Unlawful Discharge

• Designed to restore status quo

• Notice posting

• Reinstatement with Back Pay

• No Fines

• Injunction

13

National Labor Relations Act (NLRA) Today

Collective Bargaining

• Mutual obligation to bargain in good

faith

• No obligation to agree; sometimes no

contract

• No time deadlines for “good faith”

negotiations; can be protracted

• Unit employees have right to vote upon

and ratify negotiated contract terms

14

EFCA:

What is it?

How does it

change things?

National Labor Relations Act (NLRA) After EFCA

National Labor Relations Act (NLRA) After EFCA

Certification WITHOUT Election!

NLRB is precluded from holding election if

union requests certification upon

achieving card majority

• No “pre-election” educational process

• No assurance that all employees

participate

• Risk of pressure tactics and

misrepresentations by organizers

17

National Labor Relations Act Under EFCA

Employer Penalties For Unlawful

Discharge

• Notice posting

• Reinstatement

• Treble back pay

• $20,000.00 Fines for

willful/repeated unfair labor

practices until negotiation of first

contract

• No corresponding fines for union

unfair labor practices18

National Labor Relations Act (NLRA) After EFCA

FIRST CONTRACT NEGOTIATIONS• 10 days to commence bargaining; 90 days to

reach agreement on all terms

• 30 days of mandated mediation; reduced

incentive for union negotiators to adopt

reasonable positions

• Arbitration – third party government appointed

arbitrator has power to impose contract terms for

two years

• Little or no risk of strike gives leverage to union

• Where contract terms imposed, unit employees

lose right to vote upon and ratify agreement

19

Winners and Losers in an

EFCA World

20

Practical Effects Of EFCA

Practical Effects Of EFCA

Unions would win . . . • Millions of new members

• Increased financial resources

• Effective elimination of secret ballot elections

and lawful employer communications in

opposition

• Leverage to offer less reasonable contract

demands

• Guaranteed initial contracts

• Intimidation of supervision via remedial

processes

21

Practical Effects Of EFCA

Employees could lose . . .• Secret ballot election, freedom from intimidation

• Ability to consider complete information before

making decision to unionize

• Opportunity to participate in decision (employees

not approached to sign cards left out)

• Ratification vote on contracts

• Chance to decertify the union for at least 24

months (and only through secret ballot election)

• Option/right to strike for better contract terms

22

Practical Effects Of EFCA

Employers . . . • Lose ability to communicate fully and effectively

with employees about union in timely manner

• Expect unreasonable/excessive contract

demands by union; Lose leverage in initial

negotiations

• Face arbitrator-imposed labor costs and

standards regardless of unique business

circumstances

• Add union/cards as an ongoing business

“agenda item”

• Anticipate increase in unfair labor practice

charges, and greater difficulty

preventing/defending them23

Likely Organizing Tactics

• Increased use of “salts” (union plants)

• First-time organizing of small and medium-sized employers

• Increased filing of unfair labor practice charges

• Organizing Incentive Programs

Practical Effects Of EFCA

Organizing incentive program…

$5.00 per authorization card obtained during the organizing campaign, paid to the person obtaining the authorization card

$10.00 per authorization card at the successful conclusion of a card check or the successful conclusion of an NLRB election…

Practical Effects Of EFCA

Practical Effects Of EFCA

Summary

• Effective elimination of secret ballot

elections• Increased union coercion and employee

peer pressure to get signed cards• Employer difficulty in effectively

communicating position on unionization• Less reasonable union contract demands • Big increases in union market share,

financial resources and political influence

26

EFCA Status

Report:

Where Does It

Stand Now?27

Practical Effects Of EFCA

Status of EFCA

28

STATUS

“Change is finally

having a President…

who will make the

Employee Free Choice

Act the law of the

land.” --- Barack

Obama

3/09: Obama and Biden both commit to support EFCA passage at AFL-CIO Convention5/09: Obama calls for reform to make it easier to join unions

• In 2007, passed House by vote of 241 – 185

• Senate cloture vote failed 51-48 (need 60) (Specter voted with Democrats)

• 2009: 8 likely supporters of EFCA have replaced Senators who opposed EFCA in the 111th Congress

EFCA Introduced March 10, 2009 following Obama and Biden speeches pledging EFCA support to AFL-CIO

H.R. 1409 (Rep. Miller, D-CA)

S.C. 560 (Sen. Harkin, D-IA)

29

Status of EFCA

EFCA – POLITICAL STATUS

The 111th Congress (2009-10)

House passage assured but Senate support a

problem. Some prior supporters not willing to

sponsor EFCA or vote for cloture

• Mobilization of business

lobbying groups

• Polls strongly against “card

check”

• Concerns re impact on weak

economy

• “Bigger fish to fry” 30

EFCA – POLITICAL STATUS

The 111th Congress (2009-10)

March 5, 2009: Rep. Sestak (D-PA) introduces compromise bill: National Labor Relations Modernization Act.

• Retains secret ballot election

April 8, 2009: Sen. Blanche Lincoln (D-Ark) announces inability to support EFCA in present form. “Nail in EFCA coffin.”

• Or is it?

31

EFCA – POLITICAL STATUS

The “Specter” of EFCA –

April 28, 2009: Sen. Arlen Specter

becomes a Democrat and declares

continued opposition to EFCA in present

form.

• Relies upon promises of Sen. Reid (D-

NV) to retain seniority on committees in

making switch.

• Likely seating of Al Franken (D-MN)

gives Democrats potential 60-seat,

filibuster-proof majority.32

EFCA – POLITICAL STATUS

The “Specter” of EFCA (cont’d):

May 5, 2009: Specter is stripped of seniority. Nowmost junior Democrat on 4 out of 5 committees onwhich he serves. • Gives Democrats tremendous leverage. Spectermust go along with party leaders to regain seniorityafter 2010 elections

- Seating of Franken could provide 60 votesneeded to pass EFCA in present form.

May 14, 2009: Obama says he wants to correct the “monkey business” affecting union organizing

33

The Myths Behind EFCA

MYTH REALITY

Employers coerce employees to vote “No”

Employer violations occur in 2% of election cases

Unions can’t win elections under the current system

Unions won 59% of NLRB elections in 2007

Labor Board conducted elections take too long

94% of NLRB elections held within 56 days

A card check is best way to gauge employee support

The secret ballot is universally validated by federal courts

Employers have unlimited access to employees

Unions get employee names/addresses within seven days

Pre-election proceedings are contentious

Election agreements reached in 85% of cases

34

Union Win Rates in Representation Elections

»2000 – 53%

»2001 – 55%

»2002 – 57%

»2003 – 58%

»2004 – 59%

»2005 – 61.4%

»2006 – 61.5%

»2007 – 59%

»2008 – 66% as of June 30,

2008 35

EFCA Action Plan

What to

Consider Now?

36

6 Legal Steps to Insulate Your Business

Legal Musts!• Create a union-free philosophy statement /

issue-free philosophy statement

• Identify your supervisors

• Train your supervisors on lawful

communications with employees

• Conduct a bargaining unit analysis

• Lock down your facility to minimize union

access

• Educate all employees about EFCA and the risks

of signing a union authorization card

37

Who is a Supervisor under the NLRA?

Section 2(11) of the NLRA defines the term

supervisor:

The term "supervisor" means any individual having

authority, in the interest of the employer, to hire,

transfer, suspend, lay off, recall, promote,

discharge, assign, reward, or discipline other

employees, or responsibly to direct them, or to

adjust their grievances, or effectively to

recommend such action, if in connection with

[these activities] the exercise of such authority is

not of a merely routine or clerical nature, but

requires the use of independent judgment.

38

12 Steps to Neutralize EFCA

Step 1 Understand the various components of the Employee Free Choice Act (EFCA) and its likelihood of passage

Step 2 Advise your senior management on EFCA and its possible impact on your organization

Step 3 Identify your organization’s business strategy, mission and values and plan to communicate this to employees

12 Steps to Neutralize EFCA

Step 4 Evaluate your organization’s human resources or “people strategy”

Step 5 Review your employee policies and procedures for legal compliance and enhancing communication

Step 6 Analyze your compensation systems and processes

12 Steps to Neutralize EFCA

Step 7 Coach and advise supervisors and managers on improving communication and being better leaders

Step 8 Teach all employees about the importance of annual performance reviews

Step 9 Take the pulse of your employee population

12 Steps to Neutralize EFCA

Step 10 Hire, retain and develop the “right people”

Step 11 Insure all employees understand their job responsibilities and accountabilities

Step 12 Communicate, Communicate, Communicate

EFCA Timetable

• Passage once expected by spring

or early summer 2009

• Compromise bill is being drafted

now

• Projected debate and passage-

perhaps fall 2009

43

Therefore…

• Employers need to very

seriously consider taking

action now in the time

available before EFCA, in

some form, becomes law.

44

Questions?

45

Our Presenters

Maria L. Petrillo, Esquire Brian P. Kirby, EsquireJackson Lewis LLP Attorney at Law Three Parkway 171 W. Lancaster Avenue1601 Cherry Street, Ste 1350 Suite 100Philadelphia, PA 19102 Paoli, PA 19301Tel: (267) 319-7806 Tel (610) 578-9050petrillom@jacksonlewis.com bpkirby@earthlink.net

Jim Geier Michael GiantomasoPresident and Founder Vice President,Human Capital Consulting Human ResourcesPartners LLC Aker Philadelphia ShipyardThree Neshaminy Interplex 2100 Kittyhawk AvenueSuite 301 Philadelphia, PA 19112Trevose, PA 19053 Tel: (215) 244-8110 Tel: (215) 875-2615Jim.geier@hcpartners.com

mike.giantomaso@phillyshipyard.com

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