Impact on Employers
Card-Check (the so-called Employee Free Choice Act) presents a variety of negative implications for small business owners.
As it is currently drafted, this legislation applies to businesses with two or more employees and has the ability to enact the most drastic change in employment law in 70 years. It is important to note that many employers do not feel they need to be concerned with unionization because they have not “heard” anything around their place of business regarding the possibility of union representation. However, the reality of the matter is this: union organizers are paid to be discrete and once you “hear” that union organization is something your staff is discussing, it’s probably too late. Therefore, it is important to take note of this legislation and the impact it can have on your business.
Additional costs
- Employees must pay union dues and often times make contributions to political action committees.
- Employers are responsible for bearing the administrative costs of making the payroll deductions. Together, these two categories create per-employee after tax costs of $800 per year.
- A company with 50 employees would pay $40,000 for employee dues and PAC charges plus payroll service to set up fees and per pay costs.
- In addition, employers will be subject to lost executive time and legal costs associated with the determination of bargaining units, negotiations with the union and preparation for and conduct of the arbitration hearing.
- Using the average number of days in arbitration and typical attorney’s fees, an employer could stand to pay a range of $46,000 to $116,000 of expense in without giving any of it directly to the employees.
- Limited ability to communicate with employees - With the elimination of the private voting process, employers will lose the ability to communicate the facts about a union with their staff. Currently, there is a time period of approximately 39 days before the vote takes place when an employer has the opportunity to effectively communicate with his/her employees about the impact unionization would have on the business. This “campaign” time is a crucial time for employers as it is their only opportunity to discuss the personal and financial implications a union would have on the workplace. In a study done on union and non-union workers, 69% of union members do not support card check once they are educated on the implications and 84% of non-union workers do not support EFCA once they receive education as well. As such, union organizers are seeking to eliminate an employer’s ability to communicate with their staff in hopes that an uneducated workforce will sign the cards.
- Mandatory arbitration and non-negotiable contracts and terms - Card Check also imposes mandatory arbitration and imposed contract times. Currently, parties participate in good-faith bargaining. There is no time limit and, in the end, no one can compel either party to agree to a proposal. If passed, card check would require parties to meet and bargain collectively after a union demand. If an agreement is not made within 90 days, either party can request mediation. If no agreement has been made within 120 days, it is submitted to an arbitration panel. Currently, the make-up of the arbitration panel is unknown – meaning that it could result in favor for the employer, employee or a combination of both. Regardless, the contract developed by the arbitration panel is binding for 2 years – without the opportunity for further appeal or negotiation by both employees and employers.
- Enhanced financial penalties – Card-Check subjects employers to enhanced penalties for interfering with unionization within their workplace. Currently, the National Labor Relations Board is only authorized to order reinstatement and back pay for employer harassment, interference, etc. during a period of union organization. If passed, card check would authorize the Board to impose penalties of up to $20,000 for each violation of 8(a)(1) – harassing an employee during bargaining time or negotiation of a contract; $20,000 for willful or repeated violations of 8(a)(1) and treble damages for 8(a)(3) violations during organizational campaigns or first contracts.