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| April 20th, 2007 |
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Media Contact(s): Peter Carr (202) 224-9854
Jared Whitley (202) 224-5251 |
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Printable Version |
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THE SO-CALLED EMPLOYEE FREE CHOICE ACT: AN OFFER WE CAN REFUSE
Speaking to Heritage Foundation, Hatch Highlights
Big Labor's Attempt to Take Away Workers' Rights |
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Remarks by Senator Orrin G. Hatch
for the
Heritage Foundation Lecture Series
“The So-Called Employee Free Choice Act: An Offer We Can Refuse”
Good afternoon. It’s always a pleasure to come to speak to my friends at the Heritage Foundation. For as long as I’ve been in this town representing Utah, I have appreciated the forum that Heritage provides for Americans to mingle and share their ideas with one another.
I know that there are many in America and in the media who are all ginned up for the 2008 Presidential campaign, but I appreciate think-tanks like Heritage who realize that there’s still a lot of governing that needs to be done in the next 19 months, and there are battles conservatives need to focus on this year, such as the fight against the Employee Free Choice Act, which I came here to discuss.
I do appreciate the invitation today to talk with you about S. 1041, the so-called Employee Free Choice Act. This has got to be the most horribly misnamed bill that I’ve seen in 31 years as a United States Senator. This is a bill that promises to savagely curtail the freedom and the choice of American workers.
I approach this debate from a unique set of life experiences. As many of you are already aware, I served as a card-carrying member of a labor union – the Metal Lathers – for 10 years. I hope that my conservative friends will forgive me. And, as I have already confessed I have yet one more sin to confess this afternoon – I used to be a Democrat! Of course, after becoming educated and repenting, it wasn’t long before I realized my youthful mistakes and I became a Republican. Having these experiences has allowed me – over the years – to understand better the arguments from the other side.
And my experience tells me that the so-called Employee Free Choice Act is the unions’ highest legislative priority. Passage of this act would most certainly guarantee the union movement more members and have a crippling effect on our nation’s economy.
It is also no surprise to me that Senator Kennedy is the Senate sponsor of this act. In preparing for our discussion this afternoon, I ran a quick review of the Senior Senator from Massachusetts’ campaign donations and found that, surprise – surprise, nearly one-third of his direct financial contributions come from – you guessed it – the union movement. And this, of course, doesn’t account for the millions of dollars that the unions give to the Democrats each year in get out the vote efforts and other in-kind campaign activities.
I am sure that, in the coming weeks, the Senate will have a full and robust debate over the merits of the so-called Employee Free Choice Act. But, as we kick off the debate over whether or not to deny private ballots to workers who wish to unionize, it is my hope that we will be able to at least hold fast and true to the facts.
And there should be full debate on these facts. There is ample evidence to indicate that we should be wary of amending the National Labor Relations Act in a way that would upset the balance in national labor policy between labor and management, and employer and employee. We must not rely on slogans, anecdotal stories, and questionable secretly-commissioned and selective statistics about alleged unfair labor practices.
The so-called Employee Free Choice Act is designed to increase union membership, which currently stands at 7.4 percent of the private sector workforce. The bill would accomplish that through an artificial, union-controlled "card check" certification procedure in place of the traditional NLRB-supervised, private ballot election.
In fact, the bill would radically upset the balance in labor and management and employer and employee relations by amending the National Labor Relations Act in three ways:
First, the bill would mandate union representation without a private ballot election among employees. The so-called Employee Free Choice Act mandates that the National Labor Relations Board certify a union as the exclusive collective bargaining representative of employees when the union has demonstrated that a majority of the employees – 50 percent plus one – have signed union authorization cards -- or, in other words, the "card check" system without a private ballot election among employees.
Not only would this deny employees the right of private, National Labor Relations Board (NLRB) protected ballot elections on the question of initial union representation, but through operation of the NLRB’s current certification bar doctrine, it would prevent employees from challenging the union’s majority status through a decertification election for the certification year.
Second, the bill would guarantee union contracts where the government would impose the wages, terms and conditions of employment for two years if the parties fail to agree after 90 days of bargaining and 30 days of mediation. That is because the so-called Employee Free Choice Act requires compulsory, binding arbitration of initial union contracts.
Specifically, under the so-called Employee Free Choice Act, an employer must begin bargaining within 10 days of the union’s demand. And, if the union and the employer cannot reach an agreement within 90 days, the contract terms must be submitted to the Federal Mediation and Conciliation Service (FMCS) for a 30-day period of mediation.
If FMCS is unable to mediate an agreement between the parties, then it must refer the initial contract to an FMCS arbitration panel with the authority to issue a decision that is binding on the employer and union for a two-year period.
Added to current law, the effect would be to deny employees the opportunity to approve, or ratify, the terms of the contact. And, they would be prevented by the National Labor Relations Board’s contract bar from initiating a private ballot decertification election challenging the union’s continuing majority status for the two year term of the contract.
Finally, the bill would impose new anti-employer penalties. These include prioritizing NLRB investigations of unfair labor practice charges alleged to have been committed by an employer during an organizing campaign, and possibly pursuing injunctive remedial action in federal court.
I am confident that many of you are already aware of the draconian way that this bill denies an employee the right to an NLRB-supervised and protected private ballot vote on whether or not to be represented by a union. This afternoon, however, I want to spend time focusing on a particularly pernicious provision of the bill: compulsory binding arbitration of initial union contracts.
One of the most radical and disturbing provisions of the so-called Employee Free Choice Act, would require the federal government, through an arbitration panel named by the Federal Mediation and Conciliation Service, to dictate the wages, benefits, and other terms and conditions of employment that private sector workers must receive, and private employers must provide, when a union and an employer cannot agree on a first contract after 90 days of collective bargaining and 30 days of mediation.
The so-called Employee Free Choice Act provides three onerous provisions. First, the bill mandates that following certification of the union, an employer must begin collective bargaining for a first contract within 10 days from the union’s demand: Second, the bill demands that after 90 days of bargaining, if the parties have not reached agreement on a first contract, the matter is referred for mediation before the FMCS. And third, the bill directs that if after 30 days of mediation the parties have not reached agreement, the matter is referred to a government arbitration panel for compulsory interest arbitration which will impose the terms of a first contract binding on the employer, the union, and the employees for two years.
It is interesting to note that the so-called Employee Free Choice Act is, however, silent on several key points on binding arbitration that would surely become very real and very harmful as a result of the bill being injected into current labor law. As I see it, these consequences are:
First, because the first contract imposed by the federal government through compulsory arbitration is binding on the parties, the employees who are subject to the government’s imposed wages, benefits, and other terms and conditions of employment will have no right to a ratification vote to approve or reject the contract as they would under current law if the contract were freely negotiated without government interference. In other words, it doesn’t matter what the employees think or want, the federal government has spoken and the contract is binding for two years like it or not.
Second, and of course, because the government-imposed contract is binding on the parties, the employees will not be allowed to strike for the duration of the contract. They may even lose their right to strike to enforce their contract demands.
And finally, since the government-imposed contract would be binding for two years, under the contract bar doctrine neither the employer nor the employees would be permitted to challenge the union’s continuing majority status through an NLRB-supervised private ballot decertification or deauthorization election for the term of the contract. This will lead to an additional two-year denial of the right of workers to a private ballot election to express their views on the union.
To summarize, under compulsory binding interest arbitration, workers would be disenfranchised, losing their right to approve the contract which would govern their wages, benefits, and other terms and conditions of employment. And, they would lose their right to a private ballot election if they were dissatisfied with the union.
There’s nothing free about the choices workers would have under the compulsory, binding interest arbitration of first contracts in the so-called Employee Free Choice Act.
What’s more, there is no free collective bargaining under compulsory binding first contract interest arbitration. Even the most basic law school textbook, Elkouri’s How Arbitration Works, teaches that: “Compulsory arbitration is the antithesis of free collective bargaining.”
The basic Elkouri text lists several reasons against compulsory arbitration: “Broadly stated, that: first, it is incompatible with free collective bargaining; second, it will not produce satisfactory solutions to disputes; third, it may involve great enforcement problems, and fourth, it will have damaging effects on the economic structure.”
Elkouri’s basic law school textbook explains the arguments against compulsory arbitration in some detail: “Compulsory arbitration is a dictatorial and imitative process rather than a democratic and creative one.”
Elkouri further summarizes the arguments against compulsory arbitration as follows: “Compulsory arbitration means governmental – politically influenced – determination of wages and will inevitably lead to governmental regulation of prices, production, and profits; it threatens not only free collective bargaining, but also the free market and enterprise system.”
In fact, common sense and experience teach us about some of the practical flaws in compulsory arbitration as the Elkouri text continues: “Each party will be reluctant to offer compromises in bargaining for fear that they may prejudice its position in arbitration. Elimination of the strike from collective bargaining will eliminate the strongest incentive the parties may have to reach agreement. One or both of the parties may make only a pretense at bargaining in the belief that more desirable terms may be obtained through the arbitration that is assured if bargaining fails. Because compulsory arbitration will be used to resolve unknown future disputes, both sides may list many demands and drop few in bargaining, believing that little will be lost if some of the ‘chaff’ is denied by an arbitrator.”
Let me say one more time and more simply just so everyone understands how radical this provision really is.
It’s the federal government through a federally-appointed arbitrator dictating economic terms of private-sector employment. It mandates that after a short period of bargaining, just 90 days, between a union and an employer for an initial contract, the federal government will first step in to mediate for 30 days, and then the federal government through a federally-appointed arbitrator will set private sector wages, benefits and terms of employment binding for two years – enough time to ruin a company financially, or force it to relocate in order to compete.
What does compulsory, binding arbitration have to do with anyone’s free choice? Employers? Workers? Unions and union negotiators?
I have heard that this provision has not met with universal support among unions. After all, it takes negotiations out of their hands. They will be assured a first contract, but on what terms?
Proponents of the bill will point to the fact that first contracts sometimes take a long time to negotiate, and in some instances the parties bargain to impasse giving employers the right to implement their final terms and the union the right to strike to enforce their contract demands.
But why is that? Many times it’s because the unions have over-promised during the organizing process and then cannot convince the employer to agree to those terms. Also, by definition first contract negotiations involve parties who are bargaining together for the first time, and it takes longer as a result. Other times, the parties are truly at “impasse” on a particular issue.
Of course, the so-called Employee Free Choice Act removes the labor law concept of impasse. Under the proposed legislation, impasse is, in effect, defined as 90 days of bargaining, regardless of whether the parties actually are at impasse.
There is another extremely troubling question about the bill’s compulsory interest arbitration provision. What is the scope of the government’s authority, through a federally-appointed arbitrator, to set wages, benefits, and other terms and conditions of employment?
For example, I ask you, since nowhere does the bill clarify the issue, would the arbitrator have the authority to place an employer in a multiemployer pension plan? The union may be seeking that, and the employer may disagree, especially if the plan is under funded and at risk. Could the arbitrator force the employer to agree?
What about a contract provision not to contract out, or subcontract work? Or not to open a new facility without applying the terms of the union contract? Or to guarantee certain benefits?
For those unfamiliar with labor law, that is the distinction between grievance arbitration and interest arbitration. In grievance arbitration the answers are to be found within the four corners of the pre-existing contract. The arbitrator’s job is interpreting and applying what the parties have agreed to.
Interest arbitration, on the other hand, is an arbitrator’s judgment, imposed on the parties in the absence of a contract, as to what in his opinion the parties should have agreed to or would have agreed to absent arbitration. Such determinations imposed on the parties will be affected by the arbitrator’s own economic or social theories, often without the benefit or understanding of practical, competitive economic forces. It is for that reason that most employers shudder at the thought of an outside government arbitrator with the power of the company’s economic life and death in the balance.
Workers should be justifiably concerned as well that they will lose control over the wages, benefits, and other terms and conditions of employment. Those terms will be imposed and binding for two years, without the workers ever having an opportunity to vote on approving those terms as they would if the contract were negotiated between the employer and the union.
Collective bargaining is not perfect and not all parties enter into negotiations in good faith, but the best private sector labor-management contracts are those that are negotiated through collective bargaining without outside assistance – especially from the federal government.
I haven’t even touched on the two other provisions in this bill this afternoon – which are equally bad. Let me again say to all who are listening in the most clear and unequivocal way that I can, there is absolutely NO provision in the so-called Employee Free Choice Act that is acceptable.
It is important to note that this bill is especially bad for small businesses. Can you imagine small businesses surviving when their employees are railroaded into unions without a private ballot vote, and without the opportunity of being fully informed on the issues? And can you imagine small businesses surviving when the federal government-appointed arbitrators then write the wages, benefits and other terms and conditions of employment instead of the parties themselves?
Those on the other side of this debate have advanced - with fervor - several misleading arguments about the so-called Employee Free Choice Act. Let me just take a few more minutes to explore these fabrications. As I said at the beginning of my remarks this afternoon – I look forward to the debate on the FACTS of this legislation. We should debate.
Let each side be passionate. And of course we will disagree. But let us be respectful. Most importantly, let’s make sure that this is an honest debate.
As we enter this debate we should not be fooled by the misinformation from the other side:
THEY CLAIM that employers coerce employees to vote NO on unionization . . .THE TRUTH is that in less than two percent of cases is it found that an employer has inappropriately interfered in a union organizing election.
THEY CLAIM that under the current system unions are not able to win. . .THE TRUTH is that unions won 62% of THE NATIONAL LABOR RELATIONS BOARD elections in 2005 – the last year where a complete set of statistics exists.
THEY CLAIM that the use of a Card-Check system is the best, most reliable and fair way of judging employees’ true intentions of unionizing . . .THE TRUTH is that the use of a Card-Check system is an inherently unreliable indicator of an employee’s true sentiments which lead me to a few other truths on their misleading reliability claim . . .
THE TRUTH is that the card acquisition process is unregulated, meaning there is no check on potential undue influence when gathering cards;
THE TRUTH is that we have found that intimidation, coercion, and pressure tactics can be – and usually are – used to obtain signatures;
THE TRUTH is that often, bounties and financial incentives are paid to union organizers to obtain signatures on cards;
THE TRUTH is that intentional deception and misrepresentation are often used by unions when obtaining cards; and
THE TRUTH is that employees are often induced to sign cards by promises of higher pay, better benefits, and waivers of fees – of course the same employees are not made aware of the potential risks and costs of unionization.
And finally, THEY CLAIM that American workers want to form unions using a card check system. . .THE TRUTH is that according to a recent poll 79% of Americans oppose the elimination of private ballots when voting in union organizing elections.
In closing, many of you know that President Bush has issued a Statement of Administration Policy that he would veto the so-called Employee Free Choice Act if it reached his desk. That should not make any of us complacent.
Even if a veto were necessary, Senate passage of the so-called Employee Free Choice Act would put members on record in future congresses as being against private ballot elections for workers in union representation decisions and in support of government-imposed wages, benefits, and other terms and conditions of employment through union contracts, where workers themselves will be denied a ratification vote. Is that where we want to be a year or two from now?
I, for one, do not think that we as a Nation should head in that direction. We in the United States must resist any attempt to force unionization on the American workforce.
Senator Enzi and I are drawing a line in the sand against the so-called Employee Free Choice Act, but we need your help in winning the war of public opinion, so we’re that much stronger the next time liberals try to ramrod this down the American people’s throat.
We need to get our friends on talk radio covering this. We need to convince the mainstream media what a bad idea this is. We need bloggers to ensure that every time this bill is talked about, the other side’s deceptive arguments don’t go unchecked. We need to support politicians who are on the right side of this issue. We need to persuade workers that union bosses are not looking out for their best interests, but for their own.
So, this year, we need to defeat the horribly misnamed Employee Free Choice Act in a way to ensure that it will not be reintroduced in the next congress. You’ll excuse me from borrowing a line from The Godfather, but union bosses have made us all an offer we can refuse. And with your help that is exactly what we are going to do!
Thank you.
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