Does EFCA Give Workers a Free Choice?

As befits a vanguard organization, Espresso Workers Local One was well ahead of its time. It was a project of the Industrial Workers of the World (the IWW, or Wobblies), a bunch of colorful commies who took their class struggle fully caffeinated and with a healthy dose of sugar.

We organized the local in Santa Cruz in 1976, when Tom Scribner (pictured) still graced the Pacific Garden Mall with his musical saw and tales of the great Wobbly timber strikes. Local One did not last long. The employer busted the union faster than you could say iced macchiato. When he couldn’t figure out who the instigator was, he just fired everybody.

Since I had organized unions at several local restaurants for the hopelessly capitalist Hotel and Restaurant Workers union, I served as a clandestine adviser to the effort. It was not surprising that the employer could not finger the instigator — a Zonker Harris look-alike barista named Scott. The lockout and raucous picketing that followed gave the dozen workers more circus than bread – and quickly doubled the business of the tiny café behind Bookshop Santa Cruz.

Federal law then as now prohibits the boss from firing employees for trying to organize a union. The law has never been well-enforced — but it should be, even if every slacker about to get the sack would quickly start passing out union cards. Employers who thinkg themselves law-abiding flout the law outrageously and fire about one union organizer in four.

In traditionally nonunion industries, the odds of getting canned for organizing a union approach 100%. Unions are right to be outraged at this and to demand reform. Unfortunately, we need to reform more than the law — we need to reform what a union is and how it works in a modern economy.

Unions have long believed that they could start growing again if only they could protect sympathetic employees from being fired and get the government to impose a first contract with binding arbitration. Now that Democrats are running the federal government, the Employee Free Choice Act (EFCA) is working its way through the US Senate (it passed the House last March). During the next month, you are going to hear a LOT about EFCA – this will be a nasty political fight. Unfortunately, EFCA is a lousy solution to a real problem.

The politicized part of the business world has worked itself into a class fever over the legislation. Home Depot co-founder Bernie Marcus termed EFCA “the demise of a civilization”. (This from the guy who wrote a $210 million severance check to Home Depot CEO and Bush buddy Bob Nardelli, who then turned up as CEO at all-union Chrysler.)

As a union organizer who became a business guy, I start with a fundamental sympathy for EFCA because I dislike the growth of income inequality in the United States. Many social problems would be less acute if the bottom third of the income distribution made more money, got better benefits, and enjoyed more rights at work. Unions can arguably help achieve this.

But EFCA is deeply flawed. It gives workers less power, not more. It facilitates 20th century unionism but does nothing to promote or even reflect the reality of modern work. It gives unions no incentive to modernize. EFCA is a long way from the end of civilization, but we can and should do a lot better. Since most progressives favor EFCA, lemme ‘splain.

Although this bill is being voted on as a referendum on unions, that is not the issue for most Americans. Of course managers dislike labor unions just like the President wishes Congress and the courts would go away. Power, like dessert, is more enjoyable if you don’t have to share. That is an issue here, but it’s not the main issue.

EFCA tries to solve the problem of organizing unions without bothering to ask what sort of unions we need in the 21st century. EFCA makes 20th century unions less unfair, it does not do the much tougher work of creating an architecture for modern unions. Worse, by eliminating elections, it arguably makes old unions less democratic.

Instead of mandating elections free of employer interference, EFCA certifies unions by petition (or “card check”. Unions use cards so that workers cannot see who else has signed). But petitions are easy; elections are hard. A petition is no substitute for a secret ballot election. Once America tried the “Australian ballot”, as the secret ballot was called when first introduced, we never went back. Nobody ever does. Organizers get hundreds of people to sign union cards. I did this a quarter century ago and I am quite sure that I did not get as many votes as I got signatures. Nobody ever does.

EFCA actually eliminates not only certification elections, but ratification elections as well. After a union wins an election, today the union bargains a contract with the employer. If they get a contract, workers vote on it. Ratification votes are not trivial or simple. They keep the bargaining committee and the process honest.

But EFCA removes the ratification vote by mandating binding arbitration after 90 days of bargaining and a bit of mediation. Then an arbitrator decides what is in the contract and what is not. This arbitration is not only arbitrary, it replaces a system built on a deal between private parties with a government-backed mandate from someone with no knowledge of the business or the workforce. Collective bargaining may be a shopworn tool, but it is built on mutual consent and a modicum of democracy. It never forces parties into a deal they find unworkable. Binding arbitration suffers no such constrain — and workers do not get to vote on the contract that results. They just live with it, as does the company.

EFCA is a flawed way to make flawed unions easier to organize. But the folks down at the union hall are right when they argue that the current system is broken and unfair. Here is a better short-term answer: create a truly level playing field. EFCA should mandate:

Fast elections. A secret ballot election would be held within two weeks of the filing of a certification petition with the NLRB (the government agency that oversees these things). Elections today take about eight weeks and some much longer. Mandate that the hearings that delay elections be held afterward. Making the election speedy means a lot less tension and divisiveness at work. Fast is not always fair, but slow is nearly always unfair. (By the way, when employees petition to decertify a union, the election would be handled just as quickly. What’s sauce for the goose…). Is this practical? Former NLRB Chair and Stanford Law professor Bill Gould says yes — and the Agricultural Labor Relations Board in California has achieved something similar.

Shared access to employees and information. All meetings on the subject of unionization – either group or a one-on-one meetings, would be attended by both union representatives and managers, who would get equal time. Worker contact information, phone numbers and emails would be shared and protected. We can and should mandate a level playing field.

Mediation, not arbitration. Collective bargaining needs to remain private and workers need to be able to vote to approve or reject their contract. Mediation is a proven approach to bridging differences (as are strikes or lockouts if it comes to that). Any solution agreed to by the two parties will be better over the long term than one imposed by an outsider (whether the outsider is public or private is not the issue).

Severe penalties for firing workers for supporting a union. EFCA gets this part right.

This modified EFCA would address union concerns and make it much easier for workers to organize traditional labor unions. Who would take advantage of this new law? Many managers assume that workers organize unions to improve their pay and benefits. But everybody wants more pay and not everybody organizes a union. Money plays a role, but my experience is that workers organize unions to punish arrogant managers. Norma Rae stood on her chair because her bosses were flaming jerks.

On the other hand, unions believe that but for lawbreaking bosses, workers would flock to join. But many workers do not buy what unions sell. If unions had won every certification election they petitioned for and bargained a successful contract, they would not have significantly increased their share of the US workforce (of course their share would not have declined as fast). Union leaders and Congressional Democrats often cite a 2005 Peter Hart survey commissioned by the AFL-CIO but never published that allegedly concluded that 53 percent of non-union workers would like to belong to a union. Another poll by Opinion Research Corp showed 82 percent of non-union workers do not want their workplace to be organized. Who is right?

My guess if demand for unions is the product of management arrogance, there is little danger that it will dry up but that unless unions modernize, they will be seen as a good solution by an ever smaller share of the US workforce. EFCA reinforces a model of unions born of industrial combat. And workers who are desperate enough to need a powerful weapon find that a strong union fits the bill nicely.

Unions, even conventional ones, can make a huge difference in low skill, low pay industries – even if most of those industries are shrinking and the lowest skill jobs are increasingly done by technology or immigrants. But why embrace an industrial relations framework that addresses the needs only of the desperate and the victimized? Why apply 1935 era collective bargaining to the 21st century world of work?

Collective bargaining was designed for an economy of large, stable, industrial enterprises in a world with hardly any local competition — much less competition that is intense and global. Collective action made sense when people rarely changed jobs, markets did not penalize lousy employers, and huge workforces had modest skills and little mobility. But the industries, jobs, skills, opportunities, and threats facing American workers today are radically different. EFCA does a poor job of preserving yesterday’s unions — and nothing at all to create the unions of tomorrow.