James Sherk: The Employee Free Choice Act is probably the
most dramatic potential reshaping of American labor law since at
least the Taft-Hartley Act, which was passed in 1947. It would
dramatically reshape how employees, employers, and unions relate
with one another. And yet it's an act that few Americans know much
about beyond the fact that it takes away secure ballot elections
for union organizing elections, which is true and important, but
it's only a small part of what the act does.
The act replaces secret-ballot organizing elections with card
check. It would also take free collective bargaining out of the
hands of the unions and the employers and send it to a government
agency to impose a contract on workers for two years, and it would
dramatically increase penalties not just on illegal firings of
workers who want to join a union, but on all unfair labor practice
Unless you're an expert in labor law, describing these changes
is probably going to make your eyes glaze over. Interest
arbitration versus simply bargaining to an impasse--what does this
mean for me?
In order to answer that question, we've got two experts who have
worked in this field for quite some time. We have Homer Deakins,
who is the former managing shareholder and current shareholder of
Ogletree Deakins, one of America's most prominent labor law firms.
They have offices in over 34 states, and he has decades of
experience during union organizing campaigns and collective
bargaining, every aspect of labor law.
We're also joined by Rian Wathen, who brings 15 years of
experience in the union movement. He is a former director of
collective bargaining and a former organizing director of United
Food and Commercial Workers Local 700 in Indianapolis. He was in
this position until he uncovered some mismanagement of funds on the
part of the president of the local and tried to bring this to the
attention of the membership and distribute the financial documents
so they could see how their dues were being spent, and he was
promptly terminated without notice. He took a very principled stand
and paid for it, and he now has experience as a management
consultant in these union organizing campaigns, educating workers
about what they're not going to be told by the union organizers
about union organizing.
--James Sherk is Bradley Fellow in
Labor Policy in the Center for Data Analysis at The Heritage
Homer Deakins: I suppose most of you were in Washington
the other day when they had the big labor demonstration to talk
about the Employee Free Choice Act. I was watching TV that evening
and listening to one of the major networks, and the pundit that was
talking said, "The purpose of this law is to help employees
organize unions." I said to myself, what in the world is this guy
There is a tremendous amount of misunderstanding about what the
Employee Free Choice Act is, and I want to dwell for the next 10 or
15 minutes on trying to better understand exactly what this means
and what the results could be.
Objectives of the Employee Free Choice
This bill basically has two objectives. The first and main
objective is to deny employees a free choice. It's called the
Employee Free Choice Act; its major objective is to deny employees
a free choice and to substitute what has been a free choice by a
secret-ballot election to an employee voting in public in the
presence of a union organizer and no one else.
The second objective of this bill is to neutralize employers so
that employers do not have an opportunity to lay out their side of
the case so that employees can hear the union's side and the
management's side and then vote on which they prefer. That
objective is to make the process go so quickly and to penalize
employers so much that employers will be neutralized, and history
will tell us that in those cases where employers have agreed to be
neutral in union campaigns versus when they try to educate the
employees on the disadvantages of unionization, the result is that
unions win in far more cases.
The only group that is a beneficiary of this law is organized
labor; everyone else gives up rights. Employees give up the right
to a secret-ballot election; they also give up the right to vote on
whether to ratify a collective bargaining agreement if the union
wins the election and becomes the bargaining representative.
Employers lose the right to make their case to their employees, and
it also says to employers that they will be penalized for
misconduct during an organizing campaign in an effort to keep them
Finally, and I think most importantly, this bill would say to an
employer, once that employer is organized, that they will lose
control of labor cost in their workplace. That, I think, is
something that has perhaps been overlooked by many of the pundits,
but it's probably the most important aspect of this
This bill is clearly one-sided. It says that if employees want
to organize a union and a union comes in to organize employees,
there will be a card check. Then it turns around and says that if
employees want to get rid of a union, there must be a secret-ballot
election. So you get in on cards; you get out in a secret-ballot
election. It then says that employers will have punitive damages
assessed against them if they violate the law. But this law only is
designed to help unions, and it does not impose any more severe
penalties on unions even though they are the ones that are getting
the cards signed.
The Myth of Employer Intimidation of
As James was saying, this law we're operating under in union
organizing today was passed in 1947. We've had this law for over 60
years. So you ask the question, why do we want to change it now?
And the answer that's given by organized labor is that employers
have taken unfair advantage of the election process by intimidating
employees. That's the total pitch by organized labor as to why this
bill should pass. That is not true.
Number one, there are fewer acts of misconduct on the part of
management in union elections today than there were back in the
days when labor was strong. Labor unions are winning more elections
today than they won in the '60s, the '70s, the '80s, or the '90s.
So there's less misconduct on the part of management than there
used to be; unions are winning elections at a higher rate today
than they have in decades past.
Unions are in fact declining as a part of the workforce, and
clearly unions are much weaker today than they've ever been since
the passage of the original act in 1935. But why is that?
There are a lot of reasons underlying that, but clearly one of
the reasons is that unions aren't organizing, and unions aren't
willing to spend the money to organize workers. That's the reason
that seven unions left the AFL-CIO; they said the AFL-CIO is not
spending money on organizing, and we're leaving the AFL-CIO because
we're going to spend the money we have on organizing. Those are the
unions that are growing today as a result of actually getting out
and organizing the workers.
If you look at what the law is today on organizing, it provides
for secret ballots. In a typical case, a union petitions for an
election, and an election is held within 42 days; on an average,
elections are held about 38 days after the petition is filed. Both
the union and the employer campaign, and the union ends up winning
between 55 and 65 percent of those elections. If the employer
engages in misconduct during the campaign that results in there not
being a fair election, then the union gets in based on the
That's the existing law. The law sets it up so that the
employees hear from both sides. They vote in secret. If the
employer engages in misconduct that prevents a free election, then
the union gets in based on the cards.
A License for Union Intimidation of
The Employee Free Choice Act says no secret ballot, period. If
the union signs up a majority of the employees on cards, the
National Labor Relations Board will certify the union with no
election. In doing so, this bill sets up no safeguards in dealing
with card signing, and it basically is a license for unions to
intimidate employees to sign union cards.
If a union organizer intimidates an employee to sign a union
card, what's going to happen? The employee who is intimidated is
unlikely to speak up. Management cannot interrogate the employee,
so the management has no right to question the employees as to why
they signed the cards or whether they were intimidated. The
National Labor Relations Board will not investigate the question
unless the employer can come forward and provide a prima
facie case that there was intimidation.
The result is that this is a license for unions to intimidate
employees to sign union cards, and yet there are no more serious
penalties for that than the posting of a notice at the union
The other thing that it invites is fraud. If a union is
organizing employees under this bill and it gets close and all they
need is a half-dozen more cards, why not forge the signatures and
turn them in and get the majority? It's unlikely that that will
ever be discovered, because the way the NLRB does this is, they get
a list of all the eligible voters from the company, they get the
cards with the signatures on them, and they compare the names on
the cards with the names on the list, and there's no process for
evaluating the authenticity of the signature. That's the way it
works today on card checks to see if they have the 30 percent
showing; that's the way it would work if this law was passed.
Now, that's the sexy portion of this bill: card check. That's
what's gotten all the publicity, and that's what is so unpopular
with workers, management, and everyone except the unions.
Interest Arbitration vs. Free
The more important provision in this bill to me is that if the
union wins, what happens? Today, the way the law works is, if a
union becomes the certified bargaining agent of employees, then the
employer and the union sit down and bargain in good faith. No one
is required to agree to anything; they simply are required to sit
down and reason together to see if they can come voluntarily to an
agreement. If they can't, the union can strike or the employer can
lock out. It's what we describe as free collective bargaining.
This bill replaces good-faith bargaining with interest
arbitration after 130 days, and it says that after bargaining
between the parties for 130 days, then an arbitration board is
assigned, and the arbitration board will decide what the terms of
the contract should be for a period of two years. This board of
arbitrators is not going to be a board with experience in that
industry. It's not going to be a group of people who have run a
business. It is more likely to be a college professor from some
university or some law professor at some university, and they are
going to set forth all the terms and conditions of employment. They
will decide in a contract what the starting and quitting times are,
what the layoff policy is, whether or not you should have any
restrictions on subcontracting, whether you should be able to use
temps, what your pension plan should be: Should you have a defined
benefit plan, or should you have a defined contribution plan, or
should you have a 401(k) plan? What should your retiree benefits
So, you are a foreign automobile manufacturer in the United
States and you lose an election to the UAW, and an arbitrator
decides what the terms of that contract are going to be. What do
you think he's going to say? He's going to say you ought to have
the contract of the Big Three. They're going broke, but that's the
contract that basically you ought to have. There are no standards,
and there is no right of appeal. This clearly is the worst thing in
this legislation because it basically says to management, "You no
longer control your labor costs; you no longer control the question
of whether you're competitive."
Finally, the third thing that this bill does is to say that
employers will have punitive damages for violations of the act
during organizing. It doesn't do the same thing for organized
labor, but only management.
Those, basically, are the three things that this law does.
Rian Wathen: I would suspect that I'm probably the only
person in this room who's ever sat in a worker's living room and
signed them on a union authorization card. James and I have talked
about that. There's a transaction that takes place there. You have
three parts of the transaction. You have the union organizer, you
have the employee, and you have the union authorization card.
I think it's important to understand all three elements of that
transaction and what happens with all three elements, because the
fact is, unlike most transactions like a business transaction, you
have the union organizer sitting there. They are asking the
employee to give them something of value, something that they need
a lot. Yet it costs the employee nothing to give that to them
initially, does it? I think that's a bad transaction, because
you've got a person who really needs or wants something--the
signature on the authorization card-- and you've got an employee
who doesn't understand what they're signing, doesn't understand the
ramifications of that transaction, and yet it costs them nothing to
give that person that signature and get them to go away or leave
Union Organizer as Salesperson
Let's talk for just a minute about that. First of all, you need
to understand the union organizer is a salesperson. I'm not saying
anything bad about salespeople; my dad was 100 percent commission
sales for 23 years. But the fact is, they are not a member of a
benevolent organization out there trying to help workers. They are
a salesman; their job is to sign that worker up.
When I was a union organizer, Huthwaite Company trained us using
their SPIN Selling book. Employers come to me now and ask,
what's a good book to read to understand union organizing? And I
always tell them they should read SPIN Selling by Neil
Rackham, because it is a sales book that explains how to sell
people through a four-step emotional process, and this is the way
that union organizers are trained.
"SPIN" is an acronym; it stands for situation, problem,
implication, and need payoff. We were trained in that for days.
Every time we met with an employee, the union organizer goes back
out to their car and fills out a sheet. On that sheet, they track
what stage of those four emotions that employee is at and write
down a list of questions that they need to ask them the next time
in order to move them down that emotional scale to get them to that
point where you need to have them.
That's how intricate it becomes. Just to give you an example of
the training, what you're trying to do is to move people down that
emotional scale: It's not about the union. It's not about the card.
It's about getting them to understand that signing that card, or
voting for the union as it is under the current law, is what will
get them what they need to solve whatever problem they have. Let me
take you through the scenario.
If I'm a union organizer, I go into someone's home. First, I
have to find out the situation. So I'm going to make small talk
with them, and I'm going to talk with them about their family, and
I'm going to look around. Maybe on their mantle over their
fireplace I see a picture of their son in his baseball uniform.
Once I see that, I know their son plays baseball, so now I can talk
to them about their son's baseball. I find out that the plant that
he works at has mandatory overtime sometimes, and the fellow I'm
talking to is very upset because when they have mandatory overtime,
he misses his son's baseball games.
Now I've got the situation. I know what his problem is, and I
know what the implication is. The implication is he misses his
son's baseball games; the problem is the mandatory overtime. I move
him through that stage, and then I tell him how much I enjoy going
to my son's baseball games, and I pour salt in the wound. It's
called "building the pain." That's the phrase they use internally.
I may not get him to the point where I need to initially. It may
take a couple of visits. I'm even going to tell him about my son's
baseball games and tell him how much fun I had last weekend, and
I'm going to continue to build that pain.
Once I've built that pain long enough, then what's the need
payoff? The need payoff is if he signs a union card, or if he votes
for the union, he gets to go to his son's baseball games. It has
nothing to do with the mandatory overtime; it has nothing to do
with the problem. I've moved him beyond that stage, and I've got
him to the point where, if he were going through a free election
like they have now, when he goes in and the ballot says, "Do you
wish to vote for the union? Yes or no?" he doesn't see, "Do you
wish to vote for the union?" To him that ballot says, "Do you want
to go to your son's baseball games? Yes or no?" Who would vote
The Pressure to Produce
The union organizers are trained in that, and that's the
emotional process they're going to take people through. Understand
that the union organizer is under pressure to produce. They're a
salesperson. So every Friday they have to file a weekly report that
shows how many contacts they had, how many people signed cards, how
many people didn't sign cards. If you're in a large organizing
campaign, you have a morning meeting where all the organizers come
in and sit down, and you go around the room and see who has the
most cards. It's no different than any other sales organization.
You're under that pressure to produce.
Right now, you have an election process that somewhat filters
that out, because there are good union organizers and bad union
organizers. There are union organizers out there that are very
sincere and believe in what they're doing. They may be naïve
and misguided, but they believe in what they're doing. Then you
also have people who are out there who lie to people, who will
intimidate people, who will threaten people, who will do all the
bad stuff that we're talking about under the Employee Free Choice
The good union organizer knows that those people's cards will
not what we call "stick," because you're going through a 42-day
election process. If someone goes out and blatantly lies to an
employee in their home, sometime during that 42-day election
process the truth is going to come out, and when that truth comes
out, that employee is going to go into that voting booth and vote
against the union. That's why most unions do not sign 50 percent of
the people on cards before they file a petition for election. They
sign 70 or 80 percent, because they know they're going to lose at
least 20 to 30 percent during that process.
The election is the fire that tests that. The election process
is what makes sure, or tries to hold that organizer responsible for
telling people the truth and not blatantly lying to them. If you
take that process away, the organizer that wants to lie to them and
tell them blatant falsehoods gets the card signed and gets out the
door. Understand: There is no right of rescission on that card. You
can't get that card back. Once the union has it, there's no legal
obligation for them to bring it back.
What does that do to the union movement internally? People are
promoted in every sales organization based on bringing in revenue.
People are promoted based on bringing in members. That's how people
get promoted in the labor movement. The people that are promoted
into the higher-paying job--let's face it: I can tell you they're
not elected; they're promoted. It's a reward. It's a reward for
bringing in revenue and bringing in members.
So now we have no election process. We have no way to find out
whether they lied to people or not. The person that can bring in
the most cards, by hook or by crook, is the person who looks
productive, and they're the ones who get promoted.
What does that do? Doesn't that make the bad apples in the
organization rise to the top? I don't think it's good for the labor
movement internally, because I think it's going to destroy them
from within because you're going to have all your decision-makers
at the top of every union being the most unethical people out
there. They're going to be the ones that could get the most cards
signed even if they did it through bad means.
It will take away their interest in being truthful. There is
absolutely no incentive for the union organizer to tell the truth,
because it doesn't matter; the election process will not
Targeting the Uninformed Employee
What about the employee in that transaction? Let me explode a
myth for you: Employees do not contact unions and beg to be
organized; unions contact employees. If a union sat there and
waited for employees to find their name in the Yellow Pages and
call them and say, "Please come sign me on a card," unions would go
hungry. They target companies by getting a list of employees and
going and knocking on employees' doors.
The employees didn't research this decision. It's not like they
went to buy an automobile. Before you go out and buy an automobile,
maybe you look some things up online. You do some research, try to
figure out what's the best deal, look up safety records, all those
types of things that you would do before you made a serious
This is a serious financial decision that's going to have
implications for this worker and their family and their work
future, but they don't get the chance to research it because they
answer the door in their bathrobe and there's a union organizer
standing there, and the union organizer comes in and sits down and
starts to take them through that emotional process that we talked
about. So the worker is completely uninformed. They have absolutely
no idea what the implications are for them or their job. They don't
understand the risk or uncertainty.
The Employee Free Choice Act seems to assume that every worker
out there, every employee, has this depth of knowledge of the
National Labor Relations Act, and that's just simply not true. In
fact, I saw a poll last week where the Employment Law Alliance said
that 75 percent of the people in the United States don't even know
the Employee Free Choice Act exists, and that's after all the money
that's been spent on both sides.
So how can we assume that the workers understand the intricacies
and risk involved in collective bargaining under the National Labor
Relations Act? The fact is they don't. So that worker is completely
uninformed, they're surprised.
What if they're in an emotional state? Maybe their supervisor
yelled at them that day at work. Maybe they got a bad line
supervisor, and that line supervisor said something rude to them
that day. Are they going to sign just because they're mad at the
company? Absolutely. Is that a decision that maybe after a week or
so they would say, "I don't know whether I really wanted to do this
and put things at risk" and maybe go vote no? Sure, that's what
happens. But now, under the Employee Free Choice Act, when they
sign, that's it: It's over, no matter what their emotional state
Maybe the card is offered by a coworker, because a coworker can
offer cards too. There's nothing that says that the union organizer
has to be the one to do it, so maybe it's their coworker in the
break room offers them a card. They have no idea what it is, but
because they like that person, they sign it because they're asking
them to sign it. Or maybe the coworker just gives them blatantly
false information that they would find out later was untrue.
Again, the election process is what sorts all that out, and
without the election process, we have people making an uninformed
decision. That's the mindset, and that's why I think the employee's
really at a disadvantage.
How Authorization Cards Can Be
Last, let me talk about the authorization card itself. This is a
copy of a union authorization card. This is from United Food and
Commercial Workers, Local 700, where I worked, and it asks for your
name and all kinds of information. The fact is, it looks kind of
like a mortgage document because you've got to put all this
information on there. This is one version of the card.
There is nothing in the law and nothing under the Employee Free
Choice Act that says the card has to look like this. The card can
be any size, any color, and it can have any language on it as long
as it has one line on it, which is the suggested language from the
National Labor Relations Board that says, "I hereby authorize
[whatever the union is] to represent me for the purposes of
collective bargaining." That's the only line that has to be on it;
there can be a lot of other lines on it.
If you have a situation where only your signature is required to
bring in a union, how creative can unions be with the authorization
card? There's nothing under the law that restricts them; in fact,
they're already starting to do some things.
This is the authorization card for the Service Employees
International Union in California. I have a black and white copy
here, but it's a color pamphlet, and it has nice pictures on the
front and a bunch of fluff about SEIU and how they're going to get
better wages and benefits and all this wonderful stuff. Buried in
the middle of that paragraph on the front is the line off of this
authorization card that says, "I hereby authorize SEIU to represent
me for the purposes of collective bargaining." It's buried in a
paragraph. You could also bury it in two or three paragraphs at the
top of a petition.
But most interesting is the inside of the card. It's just a line
of signatures. Put your name, your address, your phone number. I
don't see anything on that page on the inside of this pamphlet that
says, "I hereby authorize SEIU to represent me for the purposes of
collective bargaining." So I have this pamphlet. I'm a union
organizer. I hold a meeting at the local pizza joint where I'm
buying pizza and beer, and I lay this down on the table like this
and say, "Here, sign in on our sign-in sheet." Not against the law.
This is the card that they're using right now in California.
How creative can they become with this? They can become very
creative with it. They can use it as a sign-in sheet for parties
like that. They can offer people rides to work if they'll sign the
card. What about a low-wage worker whose car is broken down but
they know that they need to get to work? That's great: "Get in the
car with me, and on the way you fill this out, and I'll be happy to
give you a ride to work." It saves you bus fare, doesn't it?
Those are the kinds of things that happen-- besides the
intimidation factor, besides the annoyance factor where they come
to their house every day and knock on their door until they sign
the card. But there's a lot of creative ways that they can get them
to sign the card. They can take them out and have a few drinks. So
what if they sign it under the influence of alcohol? It's a legal
document. If you signed a mortgage under the influence of alcohol,
what would happen? It probably wouldn't be valid, but this is.
There's no way to test it.
I'll give you something that union organizers did years ago.
They have what they call "red card/blue card." A union organizer
would carry two different colors of cards--one in each jacket
pocket, a red one and a blue one--and knock on your door and say,
"I'm Joe with the union. I want to sign you up for the union." You
say, "I don't want the union. I want no part of that." And he says,
"Great, that's what we were trying to find out. We were polling
workers. We're asking those who are opposed to the union to sign
the red one and those who are for the union to sign the blue one,
and then we're going to compare and see how many people want the
union." And workers would do it.
The election process itself would ferret that out, because the
worker would realize they'd been deceived. If you take away that
election process, I think it's going to bring all of that deception
and all of that creativity, if you will, back into it. UFCW Local 7
out of Denver, Colorado, has it right on their Web site. You can
Google their Web site and go to health care organizing and look at
it. They have it right on their Web site that if you sign your
coworkers on cards, they will pay you for every card you bring
Most people think that's against the law. It's not against the
law. So why couldn't a union pay someone who worked at a place $10
per card to bring them cards? You've got 300 people there. You
bring me their cards, and I'll pay you 10, 20 bucks a card. There's
nothing illegal about that. They've got it blatantly posted on
their Web site.
No Obligation to Tell the Truth
How many other unions will start doing things like that if it's
all about the cards? The union organizer, when they lay that card
out, is under no obligation to tell the person the truth. That's
shocking to people, but there is nothing in the law that requires
the union organizer to tell people the truth about the union
authorization card, to tell people the truth about the union; in
fact, they can blatantly lie to people.
The National Labor Relations Board has actually endorsed that to
a degree. I'll tell you what they said on the Shopping Kart food
market decision. The National Labor Relations Board said that it
will permit unions to issue misleading campaign propaganda because
it does not think that employees are naïve enough to believe
all that they are told during the course of a union election
campaign. That's the government's official position: that it is
okay for unions to lie to employees because the employees have 42
days to figure it out. Why should we take away that 42 days?
I guess the last thing I would say to you is, if the unions have
the right to mislead people and lie about signing that card and the
government's official position is that we're going to give that
employee 42 days to figure it out, I think that employee deserves
that 42 days. And what we're talking about is taking that time
period away from them.
Questions & Answers
James Sherk: I have one question for both of you. On the
binding arbitration provision, how will that affect how management
and unions approach the collective bargaining process for these
Homer Deakins: The way it's set up, you have to begin
bargaining in 10 days; then you have bargaining for 60 days or so;
and then, if you don't reach an agreement in that period, there is
a mediation. It all amounts to about 130 days from the day you
Just think about that from a realistic standpoint. Why would
anyone have the idea that they should go through that process and
not ask for the most outrageous thing that they could think of,
thinking that whatever an arbitrator resolves is going to be
something less than that?
There's really no practical collective bargaining that's going
to occur during that period of time. It's going to be strictly a
matter of posturing. Management's going to posture its best
position; unions are going to say something that's exaggerated,
thinking that something in the middle is where they're going to end
up in the arbitration process because most arbitrators like to
split the baby. They want that arbitration case the next time, and
when their name appears on that list that comes from the Federal
Mediation and Conciliation Service, they don't want either side
striking on them. Most arbitrators think that the way to do that is
to do something in the middle.
So the reality is that, for all practical purposes, this bill
would eliminate good-faith bargaining and would substitute interest
arbitration. There is no interest arbitration that I'm aware of
today that is either not involving government employees who do not
have the right to strike or in the private sector where the parties
have agreed to interest arbitration, and that's very, very seldom.
If they do, then parameters are set within which that arbitrator
Under this bill, there are no parameters. An arbitrator is wide
open in deciding whatever he or she thinks that collective
bargaining agreement should say.
Rian Wathen: I would add that the one positive for our
economy will be that the FMCS will be hiring, and they'll probably
need enough arbitrators that it will take care of most unemployment
situations. With what Homer has said, why would every collective
bargaining agreement in the United States not end up in interest
arbitration? Why would the union have any incentive to settle at
all? They simply go in, ask for the moon, and then hope that they
get a little bit of it. They have no incentive to be realistic or
practical at all.
So if this passes, they better hire a bunch of arbitrators,
because that's what they're going to need.
Homer Deakins: The difficulty is that this part of the
bill isn't getting much attention. This is described as "the card
check bill," and there are a lot of people that think that
ultimately the unions will back away from card check and will say,
"We'll have quickie elections in five days," or whatever. That
permits some of these Congressmen to say "Oh, we got rid of card
check; we got rid of the bad part. We're still going to have
More emphasis has got to be placed on the total loss by
management of the right to control labor costs. That is just as
un-American as you can get, and it's certainly opposed to free
enterprise. There is a question as to whether that portion of the
bill is unconstitutional. It may very well be a deprivation of the
right of contract, which is a constitutionally protected right. But
that is a right that they have carved down pretty narrowly, and I
don't think it's anything that management can rely upon.
Q: I want to follow up on that. I know during the New
Deal period there was a lot more mediation and arbitration, kind of
a corporatist thing going on with the unions and the government,
and I wonder, under this bill, whether there would be any
possibility that it could get taken over by government in that
I know what FDR did a lot of times was influence the way that
decisions would come out rather than actually impose wages and
prices. So I wonder, if there was a lot more arbitration, even if
it was done by a private lawyer or something like that, whether it
could be politically influenced and, instead of splitting the baby
in half, whether it would end up getting politically influenced
towards always giving the unions what they want.
Homer Deakins: You start with the proposition that the
arbitrators that would be assigned to determine these contracts are
coming through the Federal Mediation and Conciliation Service and
that the director of the Federal Mediation and Conciliation
Service, who is a government person, is going to be deciding who's
on that panel that the parties strike from. So even initially, you
have the government in a position to really influence where the bad
I don't know long-term whether I can envision the government
simply coming in and taking over unless it's in a bailout situation
like we're going through right now, in which clearly they will take
control. They're going to be, to some very large extent,
controlling two of the big three automakers as a result of the
bailout. Certainly, if it goes that far it could happen.
Q: My question deals with the FMCS and their
jurisdictional enforcement capabilities. They were formed under the
Labor Management Relations Act, and it specifically says that the
FMCS has to take cases that have a significant contact with
interstate commerce, and after that it says specifically that if
the contract does not have a specific contact with interstate
commerce, then they can't take it.
So my first question is: What happens if there is a small shop
that's trying to get unionized, they get unionized, then they want
to go to this binding arbitration, but it doesn't have a specific
interstate commerce connection? After that, even if they do, the
FMCS has no enforcement capabilities; in fact, the statute that
created the FMCS specifically says that there will be no
enforcement capabilities. So what if the employer just says no?
Homer Deakins: You're telling me something about that
federal mediation statute I really hadn't looked at, but I think
that would probably be interpreted to mean affecting interstate
commerce, and if it affects interstate commerce--
Q: But we're not talking about affecting sales in another
state, and if it doesn't, they have to kick it to another state or
Homer Deakins: This bill would specifically apply to
employers that are covered by the National Labor Relations Act,
which is a much broader definition. Once you're covered by the
National Labor Relations Act, then the statute itself says that the
FMCS will assign a panel of arbitrators. So I think that would
override any limiting language in the act authorizing federal
Q: Historically, how long has this card check idea been
around? Was it around from the very beginning in 1947 and they just
were not at that time able to get it into the bill? I know
McGovern's quotes are 30 years old or so; how far back does the
Rian Wathen: I honestly don't know. I started with the
labor movement in 1990, and at that time, obviously, we had the
card checks where we could get an employer to voluntarily agree to
a card check, and I know that there was some thought within the
labor movement that management was cheating in the elections. We
didn't lose elections because we had a bad product; we lost
elections because they cheated.
So there was always some idea germinating inside the labor
movement about how to rebalance the playing field, and I know the
card check like this was always talked about, or the utopian idea
of completely eliminating the election process was always talked
about. When it actually became formalized I don't know, but that
talk was always there.
Q: I'd like to ask Homer: You made reference to punitive
damages that could be awarded under this new act. Who gets to
decide whether punitive damages are awarded? Do you get a right to
a jury of your peers, or how exactly is that decided?
Homer Deakins: The NLRB would decide on the punitive
damage issues, and that's a five-member board. Three of the members
are appointed by the party that holds the presidency and two others
by the opposition. So the NLRB would decide all issues of punitive
damages, and that includes treble damages for back-pay cases and
fines of up to $20,000 per violation for other violations that
occur during an organizing campaign.
So we're putting all of those severe penalties on management
under this act, and we're not putting any additional penalties on
organizers who are licensed to intimidate and to engage in fraud
under this act. If a union turns in fraudulent cards, there is no
remedy for that. If they intimidate workers, then they might have
to post a notice at the union hall. That's the only remedy for
those types of violations.
Q: If card check has been available for years, and if the
unions are winning more votes, if there are some other individuals
such as Rian who are friendly to your situation within some
unions-- particularly in California--I was wondering if it might
not behoove you to try to organize a certain vineyard in a certain
hotel in the San Francisco area with someone whom I'm sure would be
willing to have her husband's labor forces organize by use of a
card check, and possibly go on offense in this situation by showing
a certain powerful lady in the Congress of the United States to be
somewhat hypocritical on the issue, since her husband's facilities
Rian Wathen: Let me layer on a little bit more hypocrisy
there. I have a collection of petitions that were filed by union
staff people who signed authorization cards to be organized. A
union is an employer, and I was a member of a union when I worked
for the union. We had our own internal organization, and we
collectively bargained just like we did with any other
I have a collection of petitions where union staff people have
signed cards, and the union leadership has forced them to go
through the electing process, refused to grant them a card check.
In fact, we have board charges where they actually broke the law
and threatened them. But what's good for the goose is good for the
gander, right? How can you say that your union employees that sign
up have to go through an election process but you want the employer
to give you a card check?
Homer Deakins: It's also interesting that the Colombia
Free Trade Act is so focused on the fact that they've done this
terrible job in the way that they treat union organizers, and yet
the Congress said that in Colombia, there needs to be secret-ballot
elections where these employees can decide whether to unionize.
Rian Wathen: To protect the rights of workers.
Q: Maybe you can speak to the uncertainty that this adds
to businesses. I don't understand how it works in current law, but
after a union secret-ballot election, is there a period of time
before a union can try again, and does this in essence sort of have
open-ended uncertainty as to whether or not your employees are
going to be unionized? Or are employers under current law protected
after a failed union attempt for a certain period of time, and does
that change under this proposed law?
Homer Deakins: Under the existing law, if there is an
election, there cannot be another election for one year from the
date of that election. The union could come back and begin
organizing; there's no restriction on organizing. You simply can't
file a petition again for one year. If a union tries to organize
workers and files a petition asking for an election and then
withdraws the position, then they're barred for six months; but if
they go through the election, they're barred for a full year.
Under this statute, there is a one-year protection for unions if
they win, but it's unimportant. You're going to have a contract in
place before that year is up, and that contract is going to extend
for two years. So the result is, if the union gets a majority
signed up, that's the end date right there, and the union's in for
at least 120 days plus two years.
Rian Wathen: I'll add that, from a practical standpoint,
again, the union organizer is under pressure to produce, and they
go out and sign cards at a workplace. Let's say that they hit a
wall. Let's say they get 45 percent of the people in that workplace
signed up, but they can't get over that 50 percent. Understanding
that election process, they normally would try to sign up 70 or 80
percent in order to go through with the election. If they hit a
wall at 45 percent, they know that they're never going to get to
where they need to go, and it becomes a futile exercise. They're
under pressure each week to produce, so they move on to a new
Now, if you have a situation where they only have to get the
legal majority 50 percent plus 1, they are going to grind and grind
and grind to try to get those last few cards, and that really
becomes important when you look at the numbers. Almost 70 percent
of the elections under the National Labor Relations Board involve
50 employees or less. So we're not talking about large units here;
we're talking about small units where they may be within one or two
cards of needing to sign. Do they continue to harass those
employees to try to get them to sign, hoping maybe one of them
quits and a union-friendly person gets hired, or a person gets
tired of having their door knocked on three times a day so they
finally say, "Give it here, I'll sign it, go away"?
I didn't mention this, but employees never know where that
number is. The union organizer never tells them, "We have 39
percent of the cards" or "We have 52 percent of the cards." The
union organizer controls that and keeps that internally. The
employee that signs that card may sign the one card that pushes
them over, and they did it just to get that organizer to go away,
but they don't realize it because it's not a public number. No one
knows. That organizer has those cards in the pocket, and they don't
So I think it does provide incentive for the organizer to stay
there and continue to grind away, and there's no time limit on
that. They can continue to harass those employees as long as they
Homer Deakins: The employer that is the most affected
adversely by this is the small employer with a small unit of
employees who can be organized before management even knows what's
happening. I don't know how many times in my long career I have
answered the telephone for some small employer that said, "I just
got these papers from the NLRB; what does this mean?" I start off
by saying it means that probably 70 percent of your people have
already signed union cards.
In that situation, it's over for that small employer. If you've
got an automobile assembly plant with 5,000 employees in it, you're
going to find out that something's going on, and you're going to
have the opportunity to respond. It's the small employer, the small
shop, that's not going to, and that's where most of the jobs are
being created today.
James Sherk: We hear so much about the employers
intimidating workers, and that's what all these unfair labor
practice charges are. Since you've both had experience in union
organizing campaigns, how much reality is there to those claims of
widespread intimidation and firings?
Rian Wathen: There just isn't. That's not been my
experience, both in union organizing campaigns or working as a
management consultant. In a union organizing campaign, what would
normally happen is you would go out and sign these people up
because you would tell them that everything was going to get
better. The union organizer's going to paint one side of it, this
positive side, and the company comes back and put up one NLRB
decision that says that you can lose wages and benefits in
collective bargaining, and half the people stop coming to union
Did management intimidate them at that point? No. They didn't
intimidate them; they didn't threaten them; they didn't fire them.
They gave them a fact. They gave them a fact that those people
didn't know when they signed the card.
And that's what the unions want to do: They want to eliminate
that process. They don't want management to be able to give them
the facts, because the union organizer didn't tell them those
things. Frankly, in most cases, the union is trying to portray the
employer as a bad guy because they want to create this wedge
between the employees and the employer. If the employer at the
company fires somebody, wouldn't that play right into the union's
hands? Wouldn't that paint the employer out to be this bad
I did not have any organizing campaigns where a person was fired
for union activity that I can remember. And from the management
side, working as a management consultant, what I have found is that
most companies and their attorneys are very conservative and err on
the side of caution. They don't want to do anything, because you
want to go through the election and win it, and win it correctly
and win it in the right way as a company. You want to win it
because your employees believe in you. You want to win it because
you've given them the facts.
If you fire someone or if you commit any egregious violation of
the law like that, you know what the remedy normally is? It could
be a bargaining order where they force you to bargain with the
union even though the union didn't win the election. Or it's a
rerun election, and you have to go through that whole 42-day
No employer, no company wants to do that, and I have not seen it
happen on either side. I think they've really distorted the numbers
on that. That is probably the biggest falsehood out there.