Executive Summary: Unions have targeted foreign-owned companies to convince their workers to join unions. The Presidential and Congressional elections have now occurred. Barack Obama will be the new President and the Democratic Party has made significant gains in the Congress. Both the United States Senate and House of Representatives have a majority of members who are Democrats. Therefore, Congress will be considering important new laws that will have a profound impact on companies in the United States. One of the most important changes is the Employee Free Choice Act (“EFCA”). On November 5, 2008, Leo Gerard, the International President of the United Steelworkers Union stated that he wanted to put the proposed law on the “fast track.” If the EFCA becomes the law, unions will be better able to convince employees to permit the union to represent their interests in a company. Companies will have a more difficulty when fighting against unions. At the same time, unions will be spending large sums of money on professional organizers. Therefore, companies need to take action to determine the risks and remain “union-free.”

All companies in the United States are vulnerable to unions. Companies with manufacturing and warehouse employees are most vulnerable. The United Auto Workers, the Steelworkers and the Teamsters all want new members and want to organize employees at companies do not have a union. The difference between companies is the extent of their vulnerability. If employees are angry, they are able to find a union in a large city in Michigan or Illinois or in a small town in Alabama or Georgia. A company is less vulnerable if it has policies, supervision and methods of operations that create and maintain a “union-free workplace.” However, to help employees form unions, unions are supporting significant changes in the law enforced by the United States Government.

The Current Law

The National Labor Relations Act (“NLRA”) is the law that establishes the rules and procedures for the relationship between unions and companies. The new Congress will consider important changes to that law. The most significant proposal is the Employee Free Choice Act (“EFCA”), which would amend the NLRA. The NLRA gives employees the right to join a union, but it also gives employees the right not to be a member of a union. Employees exercise their rights by signing membership cards. If 30% + 1 of the employees sign membership cards, the union can ask the National Labor Relations Board (“Board”) to hold an election. During the election, each employee votes in a private voting booth and uses a secret ballot that does not reveal his name. The union never knows which employees voted for or against the union. The union wins the election if 50% + 1 of the voters select the union. After a union becomes the representative of the employees, the union and company bargain, and a contract includes the wages, benefits and working conditions to which the union and company agreed.

The Employee Free Choice Act (“EFCA”)

Since the 1960’s, the number of employees represented by unions has been declining year after year. In addition, companies have become more sophisticated when fighting unions, with attorneys and consultants helping the companies. Therefore, unions want to make profound changes about the method by which employees decide whether a union will represent them at a company. The EFCA adds a new way for a union to become the representative of the employees.

If Congress approves the EFCA and the President signs it, no election will take place. Instead, if 50% + 1 of the employees sign membership cards, the union can ask the Board to issue a legal certificate stating that the union represents the employees. The employees will not vote in a private voting booth with a secret ballot. Instead, the union will ask the employees in public to become members. Employees may feel pressured by the union and their fellow employees to become members of the union, and the union will use the signatures to become the representative of the employees. Many employees will not understand the meaning of the membership cards. The Government will force the union on employees who do not have knowledge about unions and the impact of a union on their lives and the operations of the company. After the Board issues the legal certificate, the company must bargain with the union for a contract. The bargaining must begin within 10 days. If the company and union do not reach agreement, an arbitrator from the United States Government will decide the wages, benefits and working conditions after a hearing. The new contract will be in effect for two years and the union will represent the employees for two years. At the end of the two-year period, the employees would have the opportunity to decide that they no longer want to be represented by the union.

The Status of the EFCA

The United States House of Representatives has already approved the EFCA, but the Senate has not yet approved the EFCA. As Congress considers the EFCA, the unions and business organizations will be presenting their views. The politicians will debate and may propose amendments to the EFCA. The unions may agree to these amendments. These amendments may allow the unions and the companies the right to talk with the employees in the company’s facility. In addition, the amendments may increase the right of unions to picket.

While Congress debates the amendments in EFCA, the unions will continue to contact employees and convince them to join the union. Companies should expect that unions will spend considerable financial resources to find and talk with employees. For example, the President of the United Auto Workers Union has stated that his goal is to target Japanese subsidiaries. Most of the Japanese subsidiaries in the automobile industry are not unionized and their goal is to maintain a “union-free workplace.”