Myths and Realities about the Employee Free Choice Act

Supporters of the Employee Free Choice Act had hoped that, after Al Franken took his seat in the Senate, Arlen Specter would cast the decisive 60th vote for the bill. But in late March, Specter announced that he would vote with the Republican minority and the big business lobby to uphold the filibuster on the legislation, and he reiterated his opposition reform after switching his party affiliation on Tuesday. Specter was a co-sponsor of the bill the last time it came before Congress and when it was first introduced in 2003, and he has consistently been one of the few Republicans in the Senate to support workers’ rights. So why did he do it?

The answer is depressingly predictable – in U.S. politics, despite all the scandals and failures of the past six months, corporate money talks.

For more than a year, the most powerful corporations and banks in the country have engaged in a massive campaign of misinformation concerning the Employee Free Choice Act. Supported by Bank of America, Citigroup and others, the corporate lobby has spent hundreds of millions of dollars spreading distortions and half-truths about legislation that is designed to restore to working Americans the freedom to bargain for better wages, healthcare and pensions. Below are the principal lies about the bill’s three main provisions: union certification through majority-sign up or elections, mediation and arbitration of first-contract disputes, and tougher penalties for employers who commit illegal practices during organizing and first contract campaigns.

Myth No. 1: The Employee Free Choice Act Eliminates Secret Ballots

No, it doesn’t. Under the National Labor Relations Act, unions have always been able to be recognized as exclusive bargaining agents through a majority of signed authorization cards or through National Labor Relations Board (NLRB) elections. Under the current system, most employers refuse to recognize workers’ choice based on signed authorization cards, and instead force them to go through aggressive, and often illegal, anti-union campaigns orchestrated by highly paid consultants and lawyers. Why should employers decide how workers exercise their rights? Under the Employee Free Choice Act, workers make that choice. If they prefer an alternative, non-confrontational, route to choosing a union, which majority sign-up provides, that can do that. But the current election process stays for those who want it.

Myth No. 2: The Employee Free Choice Act would expose workers to intimidation by unscrupulous union organizers

All reliable evidence suggests otherwise. Since the enactment of the National Labor Relations Act in 1935, the NLRB has found 42 cases (or about one case every 2 years) involving intimidation and fraud in the collection of authorization cards. This contrasts with the epidemic of corporate lawlessness under the current system of union recognition in the United States. Every year for the past two decades, according to National Labor Relations Board data, over 20,000 workers have been awarded back pay because employers have interfered with their freedom to choose a union and bargain collectively. Workers are fired for choosing unions in one quarter of all organizing campaigns. In contrast with corporate scaremongering, the empirical evidence demonstrates that coercion is a problem when workers try to choose a union and bargain for better wages and benefits – employer coercion.

Myth No. 3: First contract arbitration would be a “job killer”

Once again, the empirical evidence suggests otherwise. Over one third of new unions are unable to negotiate a first contract because employer opposition continues beyond an organizing campaign. First contract arbitration would provide those employers with a real incentive to bargain in good faith, and contrary to corporations’ claims, there is no evidence that it would put firms at a competitive disadvantage. In Canada, the labor laws in seven out of ten provinces have first arbitration provisions. What does the Canadian experience tell us? Academic studies have found that first contract arbitration in Canada has promoted bargaining and reduced by half disputes over initial agreements. Workers do not hold out for better deals from arbitrators, but employers who would otherwise refuse to bargain in good faith have an incentive to do so.
There’s no evidence of firms being driven out of business by unreasonable arbitration awards. At almost 30 percent, collective bargaining coverage in Canada is over double the rate of the United States, but unemployment levels north of the border are below those in the US.

Myth No. 4: Unions Hurts the Economy and Results in Higher Unemployment

This is a variation on the previous distortion but extends it to cover not only the Employee Free Choice Act, but also unions and collective bargaining in general. If it were true, the logical position, from a public policy standpoint, would be to repeal the National Labor Relations Act and deny American workers the right to form unions and engage in collective bargaining. Thankfully, it is completely untrue. Almost all of the most competitive nations in the world have levels of unionization far higher than US levels. Employers in these countries cooperate with unions and compete on the basis of quality, innovation, capital investment and productivity, not on the basis of low wages and weak labor rights. The U.S. cannot compete with countries like China on the basis of cheap labor; it must compete on the basis of quality and innovation, and it can only do this by modernizing and protecting workers’ rights.

Myth No. 5: The current system works well, so tougher penalties for illegal employer practices are unnecessary.

The current corporate-dominated system is fundamentally broken, but opponents of the Employee Free Choice Act have gone to great lengths to defend the status quo. The reason they do so is that anti-union corporations and their high paid lawyers and consultants have corrupted the law and transformed it into an effective vehicle for denying workers their fundamental right to bargain for better wages and benefits. Listen to the current chair of the National Labor Relations Board, Wilma Liebman:

"Various commentators describe the National Labor Relations Act... as dead, dying ... a doomed legal dinosaur.... The Board's case intake has plummeted. Increasingly disillusioned with the law's inability to protect worker rights, labor unions have turned away from the Board.” The head of the National Labor Relations Board says that the current system of union elections is broken, while the CEOs of Bank of America and Citigroup think that it works well. Who would you believe?

It is fitting that failing financial giants such as Bank of America and Citigroup have been so active in the corporate misinformation campaign against this landmark effort to restore fundamental rights at work, and to make sure that the economic stimulus benefits the vast majority of Americans, not just CEOs and bank executives. Just as the nation’s financial system is fundamentally broken and in urgent need of re-regulation, so too is the system for allowing workers to exercise their freedom to bargain for wages, healthcare and pensions. It is time to stop listening to the propaganda of the bank and corporate leaders whose free-market and de-regulation dogma brought us the current economic crisis and start promoting the interests of the vast majority of working Americans. Enacting the meaningful labor law reform would be a good first step in that direction.

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John Logan is Research Director at the Labor Center, Institute for Research on Labor and Employment University of California, Berkeley