NTF Issue Paper: efca3.doc. 3-09.

NEBRASKA TAXPAYERS FOR FREEDOM ISSUE PAPER:

PROTECT OUR STATE RIGHT TO WORK LAW.

BACKGROUND. It is important for Nebraska breadwinners that our Capitol Hill delegation opposes the misnamed Employee Free Choice Act, S.1041 and HR 800. These bills would amend the National Labor Relations Act by ending the process of secret balloting during union organizing activities. Voting in America we have always accepted as a right and privilege in our democracy. A secret ballot is the most reliable way to ensure an election free from peer pressure or coercion. EFCA would thwart democracy by instituting a prejudicial card check system that gives unfair advantage to union organizers. Our elected representatives must understand that this bill violates employee rights and emboldens unions to lock a stranglehold on employees and businesses for which they work. Big Labor has made this legislation its highest legislative priority.

HARM TO WORKERS. Employees no longer could engage in private balloting but become subject to publicly signed cards, making it easier for union organizers to intimidate workers. Under the EFCA system, new employee contract negotiations begin after a union becomes recognized. The bill requires the National Labor Relations Board (NLRB) to certify a union, after a majority of company employees sign union cards, thus ending almost all organizing campaigns prior to a monitored election. The board instead certifies the union. Abolishing union elections deprives employees of a fundamental right, a guarantee that they all can express their opinions. Under card check, workers not contacted by union organizers have no voice in deciding if their workplace joins a union. If organizers collect cards from a majority, all workers must join the union without a vote. Workers would have no option to sign a card calling for an election that does not also count toward a card check majority. Card checks force employees to decide in a high-pressure sales situation. Under guaranteed certification with card check, union organizers would never call for a private election once they had obtained sufficient signatures. Card check would allow both business and union to know how workers voted, exposing them to retaliation from either side. Threats are illegal but nonetheless occur. This system would require an arbitrary negotiation of 90 days, and, if no agreement reached, a federal mediator with no distinct knowledge of the employees or business would decide what pay, benefits, and working environment employees would receive. This system does not facilitate collective bargaining but forces a decision by arbitration on both sides, a decision that neither may want, rather than prodding them to find a mutually satisfactory contract. Card check would impose the educated guess of an unaccountable government bureaucrat who does not have to experience his decision, leaving company and employees to deal with the adverse consequences. Companies and employees could not appeal an arbitrator ruling, and workers would have no final vote on the contract, as mandated by present statute. The new contract would endure for 2 yrs. A company cannot raise taxes or beg a higher level of government for financial assistance, if an arbitrator decision impinges on its profitability. Competition in the free marketplace means that if an arbitrator miscalculates and raises wages too high, a business cannot raise its prices to compensate without the risk of losing customers. A lopsided arbitrator ruling can lead to financial insolvency or layoffs. If binding arbitration process proceeds slowly, business management must prepare for retroactive back pay awards, tying up monies that it cannot use to invest in new equipment or as incentives to attract new employees. A decision could force a business to participate in multi-employer union pension plans, many of which have dived during the recession, guarantee no layoffs despite productivity problems, and adopt uncompetitive work rules and production quotas, crippling a firm. In states that have no right to work provision, a bureaucrat ruling most likely will result in a provision of forced dues payments, because such is very common in collective bargaining agreements. Unions have a big financial stake in the outcome of an organizing campaign, because they collect 2-3% of wages in dues. HR 800 drastically would increase monetary penalties for alleged unfair labor practices committed by employers but not unions during a union drive.

THUGGERY. One card check campaign investigated by the NLRB verified that a pro-union employee intimidated a co-worker who refused to sign a union card by threatening violence against her kids and property.[1] In another campaign, a union posted fliers around the workplace with home address, phone number, and a map to the home of someone opposed to unionization. Forcing card check leaves employees vulnerable to threats like the above and makes such voting very unreliable in tabulating employee opinions. Groups of union guys visit employee homes and pressure them to sign a union authorization card. They not only present legitimate arguments for joining a union but use psychological pressure. Organizers avoid subjects like dues hikes and strike histories. They brag about benefits unionization can bring but fail to mention huge salaries paid union bosses from membership dues. No mention of hundreds of union officials taken to jail after racketeering convictions or of union intransigence that has driven companies into bankruptcy. The card check process permits union organizers to know who has not signed a card, allowing them to repeatedly approach and pressure reluctant workers who refused to sign after a first visit. Hotel workers in L.A. got an injunction against organizers, after large groups of them harassed employees at their homes late at night.[2] Union organizers can contact employees at home or by phone to state their case, but employers cannot do so. Card check campaigns that see workers buckle under union threats, harassment, and other pressure do not reflect “employee free choice.” Such campaigns would permit union activists to organize companies in which a majority of workers oppose unionization. Unions often submit publicly signed authorization cards from a majority of company employees but see workers reject the union in the privacy of a voting booth.[3]

LEFTIST SUPPORT. The leftwing NAACP and Human Rights Watch strongly support the EFCA and are spending millions on lobbyists and advertising to push this legislation. Pres. Obama has enthused the union labor movement by promising to make these bills his priority; he was one original sponsor of the House bill.

THE RIGHT WAY. The best defense by employees against harassment and intimidation by a union or employer is a secret ballot election that protects employee privacy during organizing drives and guarantees each worker the right to vote. Employees can listen to each side during the drive and have time to consider choices in order to make an informed and educated decision. Both employer and employee would have the right to bargain without federal officials imposing contracts on them. Current law protects workers from retaliation when deciding to join or reject a union.[4] Unions do not need card check, because they win 61% of all organization elections now.[5] Publicly-published polls done by professional pollsters prove that few non-union employees want to join a union, a Zogby Poll revealed a 3-1 statistic.[6] Another Zogby Poll revealed that 71% of union members feel that the current private ballot process is equitable. 78% of them want to maintain the present system rather than replace it with a card check.[7] In a recent publication, U. of Chicago law professor Richard Epstein analyzed the statistics in NLRB elections since 2000 against the loss in union jobs because of attrition. He concluded that the loss of union membership stemmed from lack of demand for union representation and not from defects in the election process. The percentage of private sector workers represented by labor unions has dropped below 10% in the last 20 yrs., because employers have left union organizers with few grievances to exploit. A McLaughlin poll indicates that 79% of Americans oppose national card check legislation to replace private balloting.[8]

EFCA CONSTITUTIONALLY FLAWED. The EFCA would face legal challenge if passed. There exists no legitimate government interest in promoting unionization that justifies a secret organizing campaign that denies all free speech 1^st Amendment rights to union opponents. The mandatory bureaucratic arbitration provisions of the bills also are constitutionally suspect. The takings clause of the 5^th Amendment imposes a hard duty to compensate someone whose property becomes subject to a government arbitration decree. The U.S. Supreme Court ruled that a company subject to rate regulation, like a transportation business, may raise a judicial challenge to obtain a reasonable rate of return on invested capital. Such 5^th Amendment rights also apply to labor markets by protecting employers from forced agreements by arbitrators. Employer or union can leave the table if disliking a deal. Unions can strike. Companies can lock out workers. Present law restricts arbitration to interpreting current agreements, not establishing original pacts. The EFCA does not allow a court to block a deal or ensure that the mandated terms give a reasonable return on invested capital. A federal arbitrator could impose harsh terms that could cripple a business competitively, a violation of the takings clause. The EFCA allowing such arbitrator to remove from an employer all standard management prerogatives, from subcontract- ting to promotions, and denying an employer the right to leave the bargaining table, also constitute violation.[9]

UNION RATIONALE. The real intention of the union card check initiative is to reverse the long decline in union membership. Union ranks have dropped steadily since 1950, and unions lost an additional 326,000 members in 2006. Only 12% of the American work force belongs to unions. People are more sophisticated today. Modern employment requires skills and talents unknown in the old manufacturing economy. Workers now do not believe that union representation provides benefits worth the 2-3% of their salary paid in dues.

EMPLOYER SANCTIONS. Section 4 of HR 800 greatly increases penalties against employers that allegedly engage in unfair labor practices during an organizing campaign. Businesses would face paying triple back pay, instead of full back pay, plus a civil penalty of $20,000. NLRB investigation would become a priority. This section would not increase penalties for unfair labor practices committed by unions however.[10] Retailers and small businesses would suffer most, because they could not move their operations to foreign countries and have fewer financial resources to match well-funded union organizing.

CONCLUSION. The U.S. Supreme Court in NLRB v. Gissel Packing Co. (1969) declared that publicly signed cards are unreliable. Private balloting ensures that all employees can express their views without fear of alienating fellow workers or facing retribution. We have the right to vote for elected officials privately, so American workers should have the same right in their workplaces. Nebraska workers deserve to retain their rights to vote and privacy, and our elected officials should guarantee these historic rights. Nebraska is a right to work state, and these bills would erase this labor legislation that has protected our workers for decades. Passage of this legislation will encourage companies to relocate plants overseas, leading to increased unemployment. Contact your congressman and 2 senators today to vote NO on HR 800 and S. 1041. See next page for Capitol Hill contact information. For a free tool kit to fight the EFCA, log onto http://www.lrionline.com/efca/employee_free_choice_act.htm at the Labor Relations Institute.

Research and documentation for this issue paper done by Nebraska Taxpayers for Freedom. This material copyrighted and notarized by Nebraska Taxpayers for Freedom, with express prior permission for its use by Citizens for Local Control, Cherry County Taxpayers, Dawes County Taxpayers, and other groups in the Tax Freedom Network. 3-09 C

[2] Testimony before Subcommittee on Workforce Protections, U.S. House of Representatives, July 23, 2002.

[3] NLRB “An Outline of Law and Procedure,” Chapter 24, Section 321.

[8] McLaughlin & Associates poll, January, 2007.

[9] R. Epstein, professor of law at the U. of Chicago and senior fellow at the Hoover Institution.