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WebMemo #2764 on Economy, Jobs and Labor Policy and Labor

January 14, 2010

The Employee Free Choice Act: The Heritage Foundation 2010 Labor Boot Camp

By

What Does the Employee Free Choice Act Do?

  • The Employee Free Choice Act (EFCA) would alter the employee-employer relationship in three fundamental ways:
  • It authorizes government-appointed arbitrators to impose collective bargaining agreements on newly organized employees and employers.
  • It requires employers to recognize a union--without an election--once organizers collect cards from a majority of employees. The act states that once the union submits signatures from over 50 percent of the employees to the National Labor Relations Board, it must certify the union without an election.
  • It dramatically increases the penalties for unfair labor practices committed by employers during an organizing drive.

Government-Imposed Contracts End Collective Bargaining

  • With collective bargaining, both parties must be satisfied with the final result. No contract is signed unless the workers believe they have a fair deal and management believes the company will not go bankrupt.
  • With mandatory arbitration, a government arbitrator writes the contract for newly organized companies, and there is no guarantee that either the workers or management can live with the final result.
  • With mandatory arbitration, workers lose the right to vote on the contract or to go on strike. Management loses the right to lockout workers. Both must accept the contract with no recourse if the result is unacceptable.

Bureaucratic Central Planning

  • Arbitrators have little experience with the company or knowledge of its business practices but would dictate all wages and working conditions for two years.
  • The arbitrator is unaccountable for mistakes. The arbitrator is unaffected if he awards workers lower wages than they could have won otherwise or bankrupts the company with an unaffordable contract.
  • Binding arbitration decisions can take over a year to hand down, leaving both the company and the workers in limbo waiting for the contract.

Effectively Eliminates Secret Ballot Organizing Elections

  • EFCA replaces secret ballot elections--the method by which most workers join unions--with publicly signed union cards.
  • Under EFCA, workers have no say in union-organizing tactics: EFCA does not permit workers to sign cards that call for an election without also counting those signatures toward a card-check majority. Workers must decide whether to join a union publicly in front of union organizers.

Workers Hear Only One Side of the Story

  • Organizers have a job to do: recruit new dues-paying members to their union. They are not paid to inform workers of the downsides of unionizing. Instead, they use sales tactics to make the strongest case they can for joining a union and ask workers to sign their cards immediately.
  • Many workers make their choice after a high-pressure, one-sided sales pitch without hearing from both sides.

Workers Face Harassment and Pressure

  • Union organizers return again and again to the homes of workers who do not sign at first to pressure them to change their minds. With card check, "no" only means "not yet."
  • Workers who refuse to sign are subject to intimidation and threats because their choice does not remain private.

Public Cards Do Not Reflect Employee Preferences

  • Union organizing manuals caution that union cards do not reflect employee sentiment. Unions know card check does not reveal employees wishes but support it so they can recruit more members.

Less Investment and Jobs

  • EFCA would enable unions to pressure and intimidate millions of workers into joining unions. Unionized companies cut investment spending by 15-25 percent and create far fewer jobs than non-union companies. Passing EFCA means fewer jobs and less economic growth.[1]
  • Unionized companies are less flexible than non-union companies because they must collectively bargain any changes to their labor contract. They are less able to innovate and respond to competition.

James Sherk is Bradley Fellow in Labor Policy in the Center for Data Analysis at The Heritage Foundation.

Show references in this report

[1]James Sherk, "What Unions Do: How Labor Unions Affect Jobs and the Economy," Heritage Foundation Backgrounder No. 2275, May 21, 2009, at http://www.heritage.org/Research/Labor/bg2275.cfm.

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