December 19, 2013



  • Back in the 1950s, roughly one-third of the workforce was unionized. Today, that number has declined to 12.1%, with just 7.5% of the private sector workforce belonging to a union and the rest working in government jobs — the only segment where the unions' market share is growing.
  • Card Check (also known as the Employee Free Choice Act) has the potential to completely reverse this trend, and open up wide swaths of the economy to union organizing, especially small businesses.

Eliminating Secret Ballots

  • Under the secret ballot process, union organizers ask workers at a facility to sign cards indicating an interest in an election. Once 30% have signed cards, the union can petition the Federal National Labor Relations Board to hold a secret ballot election.
  • Both the union and the employer are given the opportunity to make their case, after which workers cast their votes in a federally supervised election. If the union gets more than 50% of the votes, they are certified by the National Labor Relations Board and the employer must begin collective bargaining.
  • Card Check essentially abolishes secret ballot elections and replaces them with a process that requires only signature cards.
  • Card Check allows unions to skip the time, expense — and potential risk of losing — that comes with secret ballot elections. Under Card Check, if union organizers can persuade more than 50% of workers at a facility to sign cards, they win.
  • Workers could be asked to sign a card almost anywhere, including at their homes at night. Union organizers could go back to any worker who declines to sign over and over again until they get the desired result. And once the union hits that 50% threshold, the National Labor Relations Board would have to certify the union and would be prohibited from holding a secret ballot election - even if many workers want one.
  • Under Card Check, a union has no obligation to tell an employer it is launching an organization drive. An employer may not find out an organizing campaign is underway until ordered by the Federal government to start collective bargaining. Likewise, not all workers might know about organizing efforts, and many of them might not get the opportunity to vote.

Binding Arbitration

  • Abolishing secret ballot elections is the part of Card Check that gathers the most attention, but other parts of the bill are equally harmful - in particular, Section Three, which deals with the collective bargaining process.
  • Under Section Three, an employer must start collective bargaining with a newly formed union within 10 days. Within 90 days, the parties are expected to have completed the first contract. If not, either side may refer the matter to the National Mediation and Conciliation Service. NMCS has exactly 30 days from the date of the request to strike a deal.
  • Should this fail, either side can refer the matter to a federal arbitration panel. The arbitration panel will hand down a contract that is binding on both sides for two years.
  • Section Three has the obvious flaw of forcing the complex negotiation of a contract into a compressed time frame. But it also brings the Federal government into contract talks, which was never intended under the National Labor Relations Act.
  • Moreover, the legislation does not specify who will sit on the arbitration panel, how they will be appointed, how many panels there should be, and what, if any, appeal rights will be established.
  • Far from leading to productive bargaining, as unions claim, binding arbitration is likely to cause just the opposite. If a union feels it's losing the edge in contract talks, it has every incentive to stonewall and wait for an arbitration panel to hand down a contract.
  • Binding arbitration would mean that both parties are likely to get stuck with a contract they don't like. From the union perspective, that's fine. They would prefer a bad contract to no contract. But for an employer, you could be stuck with a contract that is completely incompatible with your cost structure and your business model-and you would have to live with that contract for two years.
  • Even worse, from a worker's perspective, binding arbitration would deny them the ability to vote on the pay, benefits, and working conditions in their new contract. Since the contract handed down by the arbitrator is binding, workers would lose the opportunity to change provisions they thought were unfair.

New Penalties

  • Section four of the legislation also includes hefty new penalties — on employers only — during the negotiation of a first contract.
  • Penalties on employers for back pay violations are raised to back pay plus two times that amount as liquidated damages. Penalties for violating the National Labor Relations Act, not particularly difficult for the uninitiated, are raised to as much as $20,000 per violation, in addition to any make-whole remedy.