Introduction

The Employee Free Choice Act (EFCA), a bill pending before U.S. Congress and supported by almost all Democratic legislators and President Obama, would amend the National Labor Relations Act (NLRA) to give unions representative status if they have obtained signed authorization cards from a majority of employees in “an appropriate unit.” This would, for all intents and purposes, eliminate the current use of government-run secret ballot elections to determine union support. EFCA also calls for binding “interest” arbitration in the negotiation of initial union contracts, increases the penalties for employers who violate the NLRA and provides for mandatory injunctions against employers who are accused of violating the NLRA. This White Paper addresses the EFCA’s potential effects on current labor law, presents theories employers may use in order to attack the validity of the cards (and thus, the union’s majority status) and proposes preventative measures employers should take to maintain a unionfree workplace despite the EFCA.

Summary of the Law Prior to 1969

In 1950, the U.S. Court of Appeals for the District of Columbia set forth what would become known as the Joy Silk Doctrine. According to Joy Silk Mills, Inc. v. NLRB, 185 F.2d 732, 741 (D.C. Cir. 1950), an employer was only able to challenge a union’s majority status and refuse to recognize the union (and negotiate a collective bargaining agreement) when the employer was “motivated by a good faith doubt as to that union’s majority status.” Accordingly, only an employer with a real doubt of a union’s majority status was able to initiate election proceedings under procedures outlined in the NLRA to determine whether a union had a majority.1

Summary of the Current Law: NLRB v. Gissel Packing Co.

In 1969, the Supreme Court of the United States’ decision in NLRB v. Gissel Packing Co., 395 U.S. 575 (1969) changed the face of labor law by answering a number of key questions, including whether the duty to bargain without a National Labor Relations Board (NLRB) secret ballot election was mandatory, and whether obtaining union authorization cards from a majority of employees would ever justify a bargaining order without a Board election.

In Gissel, the court determined that an employer generally has the right to refuse to recognize union representation of its employees when based only on a majority of employees having signed union cards. Instead, an employer could insist that a union seeking representation file a petition with the Board to have the Board conduct a secret-ballot election, with the union being “certified” only if it won that election. The court also held that union-obtained authorization cards could be reliable evidence that a union had attained majority status and could justify a bargaining obligation without an election, but generally only when an employer’s unfair labor practices had made a fair election impossible.2 Therefore, according to current law, generally only if a union is able to prove that an employer engaged in egregious unfair labor practices that makes a fair election impossible, may it seek a Board order to bargain without a secret ballot Board election.3

Summary of the Proposed Employee Free Choice Act, H.R.800

The EFCA, sponsored by Rep. George Miller, is being promoted as a bill that would “level the playing field and give workers the freedom to choose a union.”4 If passed, it would change the face of current labor law by amending the NLRA in four important ways.

First, whenever an employee or group of employees, in an “appropriate unit” or a labor organization (union) acting on their behalf, claims that a majority of employees in that unit wish to be represented by a labor organization, the Board will investigate the claim.6 If the Board determines that the labor organization has obtained signed valid authorization cards from a majority of the employees in a unit “appropriate for bargaining” (a grouping of employees with common interests), and no other labor organization is the current exclusive representative of any of the unit’s employees, the Board will certify the labor organization as the representative of that unit of employees, without any secret ballot election.

Second, within 10 days of receiving a written request for collective bargaining from a newly certified labor organization, the employer must meet with the labor organization to bargain collectively. The parties must make “every reasonable effort” to sign a collective bargaining agreement.7 If the parties have not reached an agreement within 90 days from the date on which they had begun bargaining, either party is permitted to notify the Federal Mediation and Conciliation Service to request mediation. The Service must then communicate with the parties and attempt to bring them to an agreement through mediation and conciliation. If the Service is not able to bring the parties to an agreement within 30 days from the date on which the request for mediation was made or within any additional time period agreed upon by the parties, the Service must refer the dispute to an arbitration panel established according to the Service’s regulations. This panel will decide the terms of a contract to be imposed on the parties. The arbitration panel’s decision will be binding upon the parties for two years, unless the agreement is amended by the parties during this two-year period. Thus, arbitrators will have the right to impose wage and benefit increases upon a company that is newly unionized. Under current law, all collective bargaining agreements are entered into voluntarily, subject to the obligation to “bargaining in good faith.” Also under current law, the Board cannot impose terms on the parties even as a remedy for “bad faith bargaining.”

Third, the statute addresses situations where an employer has been charged with any of the following offenses:

  • Discharging or otherwise discriminating against an employee in violation of subsection 8(a)(3) of the NLRA8 (e.g., for engaging in union activity or supporting a union)
  • Threatening to discharge or to otherwise discriminate against an employee in violation of subsection 8(a)(1) of the NLRA9 (i.e., for engaging in other activity relating to common terms and conditions of employment)
  • Engaging in any other unfair labor practice within the meaning of subsection 8(a)(1) of the NLRA10 that significantly interferes with, restrains or coerces employees in their exercise of guaranteed rights under the NLRA, such as making certain anti-union statements that are considered “coercive”

If an employer has been charged with one of these three offenses while employees are seeking to be represented by a labor organization, or during the period after a labor organization is recognized until the first collective bargaining contract between the union and the employer is signed, and a regional director of the Board finds “probable cause” to believe a violation has occurred, the Board must petition a federal district court for an immediate and appropriate injunction. For example, regarding either of the first two offenses, the injunction would seek immediate rehiring of an employee who was allegedly fired for union activity.11

Finally, the EFCA adds new remedies for violations of the above prohibitions, including increasing monetary penalties for employers. Thus, if the Board determines that an employee was unlawfully fired during the time when employees were seeking to be represented by a labor organization or during the period after a labor organization was recognized until the first collective bargaining contract between the organization and the employer is signed, the Board “shall award the employee back pay and, in addition, two times that amount as liquidated damages.”12 Furthermore, employers who willfully or repeatedly commit unfair labor practices within the meaning of subsections 8(a)(1) or 8(a)(3) of the NLRA during this period will be subject to a civil penalty of up to $20,000 for each violation.13 To determine the proper amount to be awarded to the employee, the Board will consider “the gravity of the unfair labor practice and the impact of the unfair labor practice on the charging party, or other persons seeking to exercise rights guaranteed by this Act, or on the public interest.”14

The Effect of the Employee Free Choice Act on Union Organization Guidelines

Under Gissel, a union may use cards signed by a majority of employees to obtain a bargaining order if, and only if, it meets the precondition of showing that the employer has engaged in egregious unfair labor practices that would make a fair election impossible. The EFCA, on the other hand, removes this precondition and allows unions to obtain bargaining orders if the Board determines that the labor organization has obtained signed valid authorization cards from a majority of the employees in a unit appropriate for bargaining, and no other labor organization is the current exclusive representative of any of the unit’s employees. Therefore, even if the employer has not committed a single unfair labor practice or even if a fair secret ballot election is available, the Board would still certify the labor organization as the representative of an employee unit on the sole basis of signed authorization cards.

Additionally, the EFCA will change the way employers are punished for allegations of unfair labor practices. Under the EFCA, if an employer is alleged to have committed unfair labor practices and the allegation has any basis, the Board must petition a U.S. district court for injunctive relief.15 Currently, the Board has discretion to determine whether to petition a court in such instances, and it rarely does.16

Bases on Which Employers May Attack the Validity of Authorization Cards

Following Gissel, in cases where the Board sought bargaining orders based on signed union cards because the employer’s unfair labor practices made a fair election impossible, employers have still been able to attack the validity of authorization cards, thereby attempting to show that the union did not, in fact, ever have majority legitimate status. Presumably, although the EFCA would mandate bargaining orders solely on the basis of authorization cards even where the employer has done nothing wrong, employers would still have the option of showing that the cards were unlawfully obtained. The following discussion outlines several of the most common methods by which employers have historically attacked the validity of union cards, and thereby attacked a union’s majority status.

Misrepresentation

Courts and the Board will invalidate authorization cards if the union has misrepresented their purpose. The Board will only invalidate cards if the employer produces evidence of “clearly material misrepresentations.”17 For example, the “Cumberland Shoe Doctrine,” which was clarified and reaffirmed by the Supreme Court in Gissel, states that unambiguous authorization cards will only be invalidated due to misrepresentation if the employees were told or intentionally led to believe that the sole purpose of the cards was to commence an election.18 Furthermore, the Board’s holding in Bookland, Inc., 221 NLRB 35, 35-36 90 L.R.R.M. 1492 (1975) states that the Board may invalidate cards if an employee is specifically told that the card will not be used for purposes of organizing a union.

In Bookland, an employee testified that the union representative who solicited her signature on an authorization card told her that the card would be used for contact information only.19 When the employee asked whether the card would signify her desire for a union, the representative replied that it did not.20 Based on this evidence, the Board found that the employee’s card was invalid because the employee had relied on the misrepresentation.21 Similarly, in Serv-U-Stores, Inc., 234 NLRB 1143, 1145-46 (1978), the Board invalidated authorization cards where employees were told the cards would only be used to obtain a secret ballot election.

However, mere “puffery” by solicitors will not suffice to invalidate authorization cards.22 Thus, unions are allowed to promise wage increases and benefits even though they have no ability to unilaterally fulfill these promises. Furthermore, even cards written in a language other than the language spoken and understood by the employee may be deemed valid.23 In American Map Co., 219 NLRB 1174, 1183, 90 L.R.R.M. 1242 at **45-46 (1975), the Board upheld as valid a card signed by an employee who only spoke “some English” because the Board was “not convinced in all the circumstances that [it was] sufficient to invalidate an otherwise certain designation.”

Dual Purpose Cards

Claiming that authorization cards have dual purposes is another avenue available to employers who wish to attack the validity of authorization cards. Two types of cards have traditionally been used in the union authorization process, one simply asking for a secret ballot election, and the other authorizing union representation without an election. Questions arise, however, over dual purpose cards used by unions. Where cards are ambiguous, the Board will look to the solicitations that union representatives presented to employees to determine whether such comments removed the ambiguity from the cards.24 If the employer can show that the solicitations did not make the employees aware that the cards had two definitive purposes, the cards may be invalidated.25

For these reasons, in Nissan Research & Dev’t., Inc., 296 NLRB 598, 599, 132 L.R.R.M. 1169 at **5-9 (1989), authorization cards were invalid because, although the union claimed they were used for purposes of obtaining a majority, the language on the card stated that “[t]he purpose of signing” the card was only to commence a Board-conducted election.26

Coercion and Related Interference

Employers may attack the validity of authorization cards if the union obtained employee signatures through coercion or related interference.27 For example, the Supreme Court has held that a union’s offer to waive initiation fees in return for an employee’s agreement to sign an authorization card is grounds for invalidating cards obtained in this manner.28 The Supreme Court reasoned that this method of obtaining cards “(1) [] allows a union to buy endorsements and paint a false portrait of employee support during its election campaign, and (2) [] might foster a sense of obligation in some employees to carry through on their stated intention.”29 Therefore, in NLRB v. Masonic Homes of CA, Inc., 624 F.2d 88 (1980), an authorization card was invalidated because the solicitor told the employee that she would not have to pay an initiation fee if she signed the card immediately. Similarly, in Paul Distributing Co., Inc., 264 NLRB 1378, 1392-94, 112 L.R.R.M. 1094 **76-84 (1982), an employee’s authorization card was invalidated because, when he asked the union representative whether his fee would be waived, the representative responded affirmatively, and this was a material factor in the employee’s decision to sign the card.

Additionally, threatening job loss is a form of coercion that may serve to invalidate authorization cards.30 In Pope Maintenance Corp., 228 NLRB 326, 347 (1977), the Board invalidated an employee’s authorization card because the union threatened that, if the union “got in” despite the employee’s refusal to sign a card, the union would make sure that employee would lose his job.

Supervisory Interference

Another way employers may attack the validity of authorization cards is by alleging that supervisors of rank-and-file employees solicited the signatures of their subordinates.31 Although a minimal amount of interference is permissible (i.e. providing access to the premises for union campaigning), the Board will refuse to accept cards obtained through excessive supervisory involvement to make the cards counted toward the necessary majority of employees.32 Therefore, in Glomac Plastics, Inc., 194 NLRB 406, 409- 10, 78 L.R.R.M. 1662 at *21-23 (1971), the Board invalidated authorization cards where two supervisors made a “vital and excessive contribution to the success of the union’s promotional and card signing activity” by obtaining signatures from employees, exhibiting behavior suggesting their pro-union attitudes and joining strikers on a picket line. Similarly, in Lyman Steel Co., 249 NLRB No. 296, 311 (1980), supervisory interference in inducing employees to sign authorization cards was sufficient to invalidate the cards.

However, in addition to having a managerial title, the employees must also consider the supervisor to hold supervisory status at the time.33 Thus, in American Map Co., 219 NLRB 1174, 1183, 90 L.R.R.M. 1242 at **45-46, the Board upheld the validity of cards signed during a meeting at which a supervisor participated because the employees did not perceive her as a supervisor at the time the cards were signed.

Improper Card Formalities

Finally, employers may attack cards for failing to comply with formalities. First, cards may be attacked if the card is not current (e.g., cards are invalidated if over a year old).34 To be included in the count for the union’s majority status determination, cards must be signed and dated.35 In A. Werman & Sons, Inc., 114 N.L.R.B. 629, 629-30, 37 L.R.R.M. 1021 at **1-3 (1955), the Board dismissed a union’s petition because it had failed to meet the Board’s requirements that the authorization cards be dated and current.

Further, the union must have a majority at the time when it applies for a bargaining order.36 Therefore, if the request is made after enough employees have withdrawn their authorizations, the union may no longer have a majority.37 In Struthers-Dunn, Inc. v. NLRB, 574 F.2d 796, 801 (3d Cir. 1978), an employee’s withdrawal was valid when the employee notified the Board of his or her desire to withdraw his or her card.

The Real Danger in the EFCA

While public focus has been on how the EFCA would make union organization easier, scant attention has been paid to its most dangerous provision: mandatory arbitration to determine the terms of an initial collective bargaining agreement, if one is not agreed upon voluntarily. Thus, government arbitrators could impose wage and benefit increases, and new burdensome terms, upon newly unionized employers. Currently, no law requires employers to do anything other than “bargain in good faith,” and no law imposes a union contract on an employer. Thus, not only does the EFCA make unionization easier, but the implications for businesses that are newly unionized are frightening. There have been critics of the EFCA who question the constitutionality of the mandatory arbitration provision, and if the EFCA passes in its current form there will no doubt be legal challenges to the arbitration provision.

What Employers Must Do to Maintain a Union-Free Workplace if the EFCA Becomes Law

Under current Board law, even if every employee in a company signs a union authorization card, the employer still will have the right to insist on a secret ballot election to be conducted by the Board. The process then involves the union filing a petition for an election with the Board,38 which conducts a hearing to determine what is “an appropriate unit” of employees (e.g., all employees in a facility, all production employees, all clerical employees, all professionals). The period from the filing of the petition to the date of the actual election (usually held on the employer’s premises) is one to two months. During that time, employers are allowed to campaign against unionization (providing they do not commit “unfair labor practices,” such as threatening employees with job loss if the union wins the election or promising wage or benefit increases if the union loses the election). Unions are usually at their peak level of support when they file petitions for elections. It is not difficult to understand why. At that point, employees who have signed union cards (usually outside the workplace) have only heard the union’s assertions of why unionization will help them, how a union will give them job security, etc. Once the unionization campaign becomes public (at the filing of the election petition), the employer gets to set the record straight, point out the downside of unionization and explain what destructive things unions have done in the past. At that point, union support invariably diminishes and employers win at least 50 percent of the Board-held secret ballot elections.

The real object behind the EFCA is to eliminate employers’ ability to campaign against unionization—which now can be done legally, so long as it is without threats or coercion. The effect is to eliminate employers’ opportunities to utilize the rights of “free speech” they currently have under the terms of the NLRA.

Thus, if the EFCA becomes law, employers must be vigilant in learning of union organizing efforts at their infancy, when cards are first being signed, and must campaign against unionization at the earliest possible stage—before the union obtains a “card majority.” Supervisors must be trained to detect unionization efforts at an early stage and to avoid committing unfair labor practices in the process of getting information about the union campaign. Second, employers who learn of card signings should immediately notify employees of their right to “revoke” their cards (and why unionization is not in their interest). In so doing, employers cannot coerce employees into revoking their cards. Third, the issue of whether the “unit” of employees the union seeks is “appropriate” remains an issue that employers can use. Thus, the employer will be in a position to argue to the Board that the union’s proposed unit is too small or too big or is simply gerrymandered. The ultimate determination of who is in the “bargaining unit” may well determine whether or not a majority of the “unit” signed cards.

Moreover, employers will need to get information as to whether cards were signed under union coercion or misrepresentation. Again, there is longstanding law to define how employers can legally try to obtain this information without committing an unfair labor practice.

Open Questions Under the EFCA

There are many open questions under the EFCA, for example: When will a “revocation” by an employee be effective? Must it come before the union seeks Board certification?

The NLRA forbids the certification of professionals and non-professionals in the same unit without a separate election in which the professionals indicate their wish to be in the same unit as non-professionals. The NLRA also forbids certification of a unit of security guards being represented by a union which also represents non-security guards. How will these issues be affected by the EFCA?

Most importantly, at what point is the union’s majority support through cards considered? When it makes a demand for recognition from the employer? When the union files for certification with the Board? When the Board resolves the issue of the appropriateness of the unit? Workforces can undergo attrition, additions, promotions and transfers that can change the identity of the unit in a matter of weeks or even days. At what point is the identity of the eligible employees determined for purposes of identifying whether a “majority” wants union representation? The answer may determine the outcome of an organizing effort.

Conclusion

The EFCA will significantly change the law in the area of union organizing, making it much easier for unions to organize. Most significantly, the EFCA will allow government officials to decide what will be in the first union contract, with the potential for the government to impose wage and benefit increases and restrictive work rules on newly unionized companies. Given the probability of this sea change in the law, employers who wish to remain non-union need to adopt new strategies and training immediately to maintain non-union status.