Interest Arbitration Under the Employee Free Choice Act: What Could This Mean for Employers?
Morgan Lewis Title
by:Labor and Employment Practice
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A wave of change is approaching in federal labor law. The Employee Free Choice Act (EFCA), a bill that enjoyed the almost unanimous support of Democrats in the 110th Congress, will likely be among the first bills debated in the new Congress in 2009. President Obama was a cosponsor of EFCA in the Senate in 2007, and therefore he is expected to sign EFCA into law if it is passed by the new Congress.
If enacted, EFCA would dramatically change federal labor law in two key areas: (1) the process through which a union becomes certified as the exclusive bargaining representative of a group of employees and (2) the process by which a first contract is negotiated between an employer and a newly certified union. The first aspect of EFCA, which would replace secret ballot elections with certification through signed authorization cards (i.e., a "card check"), has received far more attention than the second. The purpose of this paper is to focus on the second aspect of EFCA as it could potentially have a more significant impact on employers than the "card check" provision.
When a union is certified, EFCA would guarantee that a first contract is reached either voluntarily or by government mandate. Specifically, EFCA provides that if the parties do not reach a voluntary agreement after 120 days of negotiations and mediation-which is usually not a sufficient amount of time to negotiate a first contract-the government "shall" refer the dispute to binding interest arbitration. The interest arbitrator would determine the terms of the parties' first contract, including wage rates, benefits, and many other terms and conditions of employment. The contract imposed through interest arbitration would bind the parties for two years.
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