EMPLOYERS NEED TO BE READY FOR SWEEPING PROPOSED CHANGES TO EXISTING LABOR LAWS
By Alfonso Kennard, Jr.
The landscape is changing; there is no question about that. The proposed upcoming sweeping changes to the current set of Labor laws are all over the news and everyone agrees that these changes are a top priority for the incoming President and Congress in 2009. Make no mistake about it—these changes, in some form, are coming. Employers need to be mindful of these proposed changes, as they will impact businesses both small and large. The most notable of these changes will be contained within the proposed Employee Free Choice Act (“EFCA”), which will make it easier than it has ever been before for unions to enter a workplace. It calls for (in its current form) the elimination of secret ballot elections and establishes mandatory collective bargaining deadlines. However, although EFCA is the most talked about, it is not the only legislation “coming down the pipe,” and it is worth discussing the other more notable proposed changes as well, in order to get the full picture. Each will be addressed, but let’s start with the most drastic proposed change.
Employee Free Choice Act
Employers are strongly encouraged to monitor EFCA, which will alter the laws that govern company-union relations for virtually all businesses (except airlines and railroads) when it gets passed, likely some time in 2009. As proposed, EFCA would eliminate a secret-ballot election, which is the current way that employees ultimately get to decide whether they truly want a union or not. An election would be replaced with what is commonly referred to as "card check.” Under this scheme, if fifty percent, plus one of employees signs union authorization cards, a union will become certified. That’s it. This makes it all too easy for a union to get into a workplace. Many times, employees are either unsure of what they are signing, have been coerced into doing so, or have been made false promises. These employees don’t typically find out the truth about what it means to be unionized until during the election process, since an employer is typically unaware of the organizing efforts the union had surreptitiously engaged their employees in until the day they are served with the petition from the government requesting an election.
Traditionally, once a company has realized the union is on the doorstep and an election is scheduled, employers can reveal the truth about unions, and employees can then ultimately make up their mind in the voting booth, armed with information from both sides. Before then, they were only getting one side of the story. It is not uncommon for employees that had initially signed union authorization cards prior to the election, to vote “no” to a union after they have all the facts. This will all change. There will not be time to give employees the other side of the story, especially if a company does not see it coming. The new proposed laws make it essential for employers to provide employees with the necessary facts now; well before the union comes knocking on the door, because once a union has engaged and enough cards are signed, it will be too late, and it cannot be undone with a vote as it could before.
In addition, EFCA would significantly change the process for negotiating a first-time contract when a union gets in. The proposed changes include mandatory arbitration monitored by the government if the parties do not come to terms within a short and specified time-frame. Also, heavy fines can be imposed on companies that violate terms of the new law. For business owners, it has never been more critical to understand pending legislation; legislation, that when passed, will constitute the most sweeping change to Labor laws in the last fifty years.
RESPECT Act
The RESPECT Act is another proposed piece of legislation that would further alter labor relations. As proposed, this Act would allow for front-line supervisors to become part of union efforts. These efforts include helping to form a union, soliciting signatures for union authorization cards, joining the union, and ultimately, going on strike if one is called. Supervisors could not do any of these things before. As the law reads now, supervisors owe a duty of loyalty to the employer and are not allowed to assist union efforts, be a part of the union, or go on strike. This could all change with the RESPECT Act.
Working Families Flexibility Act
As proposed, the Working Families Flexibility Act will allow for employees to request to modify their hours, schedule, or work location. Employees and employers would be required to engage in an interactive process to discuss the employee's needs and how to address them “with no or minimal disruption to the employer’s business.” The “minimal disruption” part sounds all well and good in theory, but given the title of this new Act, employers should be prepared to take any requests seriously to avoid litigation anytime an employee decides a company was not willing to be “flexible” enough.
Further, employers who deny a request must explain the grounds for the denial, and employees who make requests are protected from retaliation. As proposed, this will only affect larger companies, as small businesses are exempt from the law. The Department of Labor will be charged with developing regulations to administer the process, and it will be necessary to continue to monitor the landscape on what regulations are actually established.
Patriot Employers Act
This Act was proposed by the new President-Elect while he was still a United States Senator, so it is safe to assume this is high on his priority list. The legislation would provide a tax credit equal to one percent of taxable income to employers who fulfill the following conditions:
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The company does not decrease its ratio of full-time workers in the United States to full-time workers outside the United States and also maintains its corporate headquarters in the United States if it is already headquartered here.
- The company must pay a minimum hourly wage sufficient to “keep a family of three out of poverty” with a wage of at least $7.80 per hour.
- A company must provide a defined benefit retirement plan or a defined contribution retirement plan that fully matches at least five percent of each worker’s contribution, and pay at least sixty percent of each worker’s health care premiums.
- A company must pay the difference between a worker’s regular salary and military salary and continue to maintain health insurance for all National Guard and Reserve employees who are ultimately called for active duty.
- Finally, and here is arguably the most difficult, a company must remain neutral in any organizing campaigns by unions.
As you can see, there are many significant changes on their way in 2009. It is as important is at has ever been to monitor these changes as they are being proposed and implemented. However, we know these changes are coming in some form, and it is imperative that companies begin to evaluate and implement strategies now, before it is too late. Employees, supervisors, and managers all need to properly and lawfully be educated about the current and proposed laws and the impact unions can have on a business, their jobs, and ultimately, their families.
Alfonso Kennard, Jr. practices in the Labor and Employment team at Adams and Reese LLP and is based in the Houston, Texas office.
For more information, contact Alfonso Kennard, Jr. or Victoria Martin Phipps. |
