Russell’s Ramblings

Those who do not hear the music might think the dancer mad

The Employee Free Choice Act – A Rising Tide Threatens Our Competitive Edge

A sweeping sea of change is set to change the course of labor relations across this nation that will have a dramatic impact on the Charlotte region and Lake Norman businesses.  A bill called The Employee Free Choice Act has been introduced in both Houses of Congress and President Obama has given strong support to this legislation. For non-union employers, the world is about to change.


Many of us with roots in the area may have family and friends that were employed in the once preeminent textile industry.  Both sets of my grandparents and many of our relatives worked at the various mills which dominated our local economy.  Then in the early to mid 1980’s, many of the textile companies lost the competitive edge to international markets which supplied products less expensively.  Strikes and labor negotiations between the unions and management broke down as plant after plant closed its doors leaving workers displaced and wondering where they would turn.  For many, their job at the local plant was the only position they had ever held leaving them with an uncertain future and limited skills. union


Over the last fifty years, unions have been in decline. For much of the time, total union membership grew, but not as fast as the workforce. So the percentage of union members in the workforce declined. In recent years, union membership has been declining in absolute terms as well. Unions are tired of losing elections or winning the election, but not getting a contract. Hence the Employee Free Choice Act. The bill contains the following provisions:


  • There would be no more secret ballot elections for union representation. When a union got more than half the employees in a workplace to sign union cards, the union would be recognized.
  • Penalties for employer unfair labor practices would be increased significantly.
  • If the parties cannot agree to a contract within 120 days, an arbitrator would write the parts of the contract about which the parties could not agree.

It is much easier to get employees to sign union cards than it is to get them to cast a secret ballot for the union. Peer pressure can get signatures. But peer pressure does not work as well when the employee is marking a secret ballot. Indeed, most unions require their organizers to get 65% of employees to sign cards before the union will petition the Labor Board for an election. Yet unions still lose lots of elections. So the card check provision of the law makes organizing easy.


But the arbitration of contract terms should be of equal concern to employers. Today, nothing goes in a contract unless the employer agrees. But under the EFCA, an arbitrator could impose terms on an employer that the employer would never agree to.


Do small business need to be concerned? Absolutely! Studies have shown that it is much easier for a union to organize a small business than a large one. One reason is that it is much easier to keep union activity a secret among a smaller group of people. Large companies are prepared for union activity. They have large sophisticated Human Resource departments to manage employee relations.


Much like the storm which swept away much of the textile industry many years ago, this legislation could be the last blow for many of our businesses that are already facing intense competition.  This could be the final straw that some companies may use to move their operations offshore to countries where unions are non-existent.  As we rebuild our struggling economy, we do not need to lose more jobs to international competition.  A major competitive advantage for North Carolina has been our status as a right to work state and low union activity.  If this bill passes, there will be a renewed emphasis by the AFL-CIO to change the face of our labor force in the Carolinas.  The Lake Norman Chamber of Commerce is strongly opposed to this proposed legislation and we encourage you to call or write your Senators and members of Congress and share your concerns as well.


March 23, 2009 - Posted by | Chamber of Commerce | , , ,

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