Business may be down for some law firm practice groups. But labor law is a gold mine these days. It's all because of fear generated by legislation that hasn't even passed Congress: the Employee Free Choice Act (EFCA), which would make it much easier for unions to organize and then to get a contract favorable to them.

EFCA has bounced around Congress since 2003, always blocked by Republicans. But President Obama made its passage a campaign priority, appointed as Labor Secretary Rep. Hilda Solis, a staunch EFCA supporter, and has Democrats in control of both houses of Congress. So many people on both sides of the union-management divide think it's only a matter of time–quite possibly a very short time–until EFCA becomes law, although the country's economic crisis might impact that.

“I've sat in meetings with unions and been in arbitrations with union lawyers, and they tell me they intend to see this issue pushed in the first 100 days [of the Obama Administration],” says Jonathan Keselenko, a partner at Foley Hoag. “But it is a legitimate question whether this is the right time to cause employers to face more economic pressure.”

EFCA as currently proposed would eliminate the National Labor Relations Board-supervised secret ballot elections that determine whether a bargaining unit will be formed. Instead, a union would be approved when a majority of employees simply sign cards indicating their support. In anticipation of the change, unions already have stepped up organizing efforts. So labor-law experts have been on the road since Election Day, providing counsel to nervous employers, training supervisors and sending messages to employees that unionization carries risks.

“I have been nonstop training for clients because it's our belief that various unions are gathering cards now,” says Eric Baisden, a partner at Calfee Halter & Griswold. He points out that getting cards signed is a win-win for unions: If EFCA passes, they will have cards ready to submit for union recognition. If not, they can use the cards to petition for an election. “People who don't recognize the danger of that are being more wishful than realistic,” he adds.

Coercion Concerns

Unions say they need EFCA, claiming that employers use the typical 42-day campaign period preceding secret ballot elections to intimidate employees from voting for unionization. But employers say it would not be fair to make employees decide based only on what they hear from the union, which could conduct its card-check campaign offsite, without the employer's knowledge. “By the time the employer finds out, it could be game over,” Keselenko says.

Employers say the current system works, citing recent statistics showing unions won two-thirds of the elections conducted in the first half of 2008 (see “Winning Streak”). They also contend that unions will use coercive tactics to get cards signed, such as going to the employee's home to pressure him or her in front of family members.

“One of the problems I have with the act is that there is no safeguard to assure cards are being signed through free will by people who know exactly what they are signing,” Baisden says. “I've seen situations where people sign cards just to get the organizers to leave them alone.”

The most recent EFCA draft provides that cards gathered through coercion can be challenged, but it offers no clear guidelines about what constitutes coercion. “That will be a heavily litigated area,” Baisden adds.

Contract Constraints

Even more troubling to employers and their labor lawyers is EFCA's mandatory arbitration provision. It calls for a limit of 90 days of negotiation on a first contract, followed by a 30-day period during which a federal mediator would seek agreement on terms. Failing that, the contract would go to an independent arbitrator empowered to impose a contract on the parties.

“The arbitration provision should concern employers more than anything else,” Baisden says. He notes that the legislation does not define who the arbitrator will be. “But that person would decide rates of pay and benefits forced on the employer for two years. Like the automakers now, they could be forced to pay more than they have.”

Other contract issues also could be decided by the arbitrator.

“There are critical issues in the first contract negotiation having to do with management rights and whether employees will be required to pay union dues or be fired,” says Ken Yerkes, a partner at Barnes & Thornburg. “To turn those issues over to a third party who will tell the company what its rights are should be very concerning.”

The mandatory arbitration provision also will help unions win support from employees, according to Keselenko. Currently unions can't promise employees what they will win in their first contract because they can't impose any contract terms that the employer doesn't want to give them. “Under EFCA, the union will be able to say to employees that the contract can go to an independent person who has the power to raise their wages and benefits,” he says.

A third provision of EFCA would vastly increase penalties for firing an employee due to union activity. Currently the penalty is back pay, less whatever the employee earned at a new employer. EFCA would award treble back pay plus a $20,000 fine.

Playing Offense

Of course, a Republican filibuster could stymie passage of EFCA, or it could be watered down in negotiations prior to passage. If it does pass, court challenges are a virtual certainty. But regardless of EFCA's fate, Keselenko notes that Obama has three vacancies to fill on the five-member National Labor Relations Board. The new board could shorten the timetable for union elections and make other decisions favorable to unions.

So prudent employers are looking for ways to increase employee satisfaction and trying to address problem areas to mitigate the appeal of a union.

“Where unions succeed, it usually starts over issues that are isolated–things employers can proactively address,” Keselenko says. “Companies with good business practices often can thwart union organizing.”

Yerkes recommends communicating with employees about union organizing tactics so they are prepared if someone shows up on their doorstep with a card to sign. He also advises educating employees on the potential risks of joining a union: having to pay union dues; giving up the opportunity to have an individual voice in the workplace; losing wages if a strike is called. And he advises doing it now.

“To wait and see is risky,” he says.

Baisden adds that supervisors and managers should be trained on what they can and can't legally do when faced with an organizing activity.

“You don't need to violate the law to win an election,” he says. “You only need to provide information and usually employees will reject the union.”