Collective Bargaining and Unions and Indiana Chamber of Commerce and Employment and Government & Economic Development and Economic Development and Labor

Obama win buoys backers of pro-union measure

Elimination of secret ballots may give labor leverage

November 17, 2008
The election of Barack Obama is already resurrecting at least one old business battle: management vs. labor.

Hoosier executives are worried Obama will fast-track national legislation that greatly simplifies the unionization process. Labor leaders say everyday workers need it to regain the leverage they've lost.

Under the friendly moniker the Employee Free Choice Act, the legislation passed the U.S. House of Representatives in March 2007. But three months later, it failed to overcome a Republican Senate filibuster.

Political observers expect Democrats to revive it next year. They still control the House. If three disputed election recounts go their way, Democrats will also hold a filibuster-proof 60-seat Senate majority. And President George W. Bush's veto no longer will be a threat.

The current unionization process, spelled out in the Wagner Act of 1935, requires a lengthy secret ballot election overseen by the National Labor Relations Board.

The new legislation is known colloquially as "card check" because it would allow unions to represent employees of any business where a simple majority signed membership cards. Opponents of that public process say it would subject workers to undue pressure and harassment to unionize.

"That would be, we think, very devastating to business and very un-American," said Indiana Chamber of Commerce President Kevin Brinegar. "With card check, you could see employers become unionized and have to negotiate labor agreements in industries and sectors we would never have imagined before."

Union membership has cratered since its 1954 peak at 35 percent of the U.S. work force. According to the U.S. Department of Labor, just 333,000 Hoosiers, or 12 percent of the work force, now belong to unions.

Business organizations like the Indiana Chamber argue that's because the law now ensures everyone gets the safe workplace conditions and fair wages unions fought to secure in the first half of the 20th century. But Indiana State AFL-CIO President Kenneth Zeller said unions are still relevant, and good for business.

"A lot of good things happen when companies are unionized. We're not in business to put people out of business. Those are our jobs. We certainly don't want companies closing up simply because there's a union," Zeller said.

"If you look at history, when unions were strong and we had a good middle class, the economy was strong. Today, you see unions dwindling because of shutdowns and layoffs and chasing the lowest wage possible. A lot of that is greed."

To unionize under current law, if 30 percent of a company's employees sign union cards, the union can petition the NLRB for a secret-ballot election. A 51-percent majority allows unionization.

Indiana had 26 organizing-drive elections from October 2007 through September 2008, said Pat Nachand, assistant director of NLRB's Indiana. Of those, unions prevailed in 16 elections.

In addition to being simpler, the union card-check process gives unions more punch once they're in place, said Michael Padgett, a partner with local law firm Jackson Lewis LLP who represents management in labor issues.

Existing law sets no firm time frame for completion of a union's first collective bargaining agreement. The Employee Free Choice Act has a 90-day deadline. And if it isn't met, both sides are required to enter binding arbitration.

Padgett pointed out that, in the current process, employers have at least six weeks between the acceptance of a union petition and the secret-ballot election to make their case. Under card check, unions could stage membership drives without informing the business.

But Bill Groth, an attorney with locally based Fillenwarth Dennerline Groth and Towe LLP who often represents unions, argues that the current process gives companies too much power.

"We're getting very close to a situation like 1935, when the Wagner Act first passed. So few employees are organized in so few unions that employers are basically able to dictate economic conditions, and we see a ratcheting down of protections available to workers and ratcheting down of wages and benefits," he said. "This isn't good for the economy. It's not good for the nation, because it's creating an economic system of haves and have-nots."

Both sides agree there's a good chance the Employee Free Choice Act will get another national hearing, and that the likelihood it will be enacted has grown.

"We're recommending employers develop more comprehensive labor-relations plans for employees and to look at any potential areas that are susceptible to union organization," Padgett said.

"Understand the process and how the EFCA changes the playing field. We're advising clients to be proactive and to prepare accordingly, rather than sit back and wait."
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