New Labor Law Reform Variations on an Old Theme: Is the Employee Free Choice Act the Answer?

• Author: William B. Gould, IV
• Position: Charles A. Beardsley Professor of Law, Emeritus, at the Stanford University Law School
• Pages: 1-46

Charles A. Beardsley Professor of Law, Emeritus, at the Stanford University Law School; Chairman of the National Labor Relations Board, 1994- 98; Member of the National Academy of Arbitrators, 1970-; Independent Monitor, FirstGroup America, Freedom of Association Complaints, 2008-.

The Author is indebted to Zac Cox, Stanford Law School 2011, and Mike Scanlon, Stanford Law School 2010, who provided valuable research for this Article. I would also like to thank Tom Archibald of Heenan Blaikie for providing me with background material on the evolution of Canadian labor law and Kate Dowling, Counsel to the National Mediation Board, for providing me with background on NMB voting procedures.

Page 1

Modern American labor law emerged alongside of the spectacular growth of industrial unions in the form of the Congress of Industrial Organizations during the Great Depression, long after the American Federation of Labor, representing skilled tradesmen and craftsmen, had come to the fore in the previous century.¹ The National Labor Relations Act (NLRA) of 1935 promoted the public policy of freedom of association and collective bargaining that remains with us today, and it did so through creating a system of secret ballot box elections to resolve disputes about representation and an unfair labor practice system, a kind of "code of conduct" initially applicable exclusively to employers. The Act-then and today-contains a trinity of principles, i.e., the concept of exclusive bargaining representative status, which imposed an obligation upon the employer to bargain with the single union chosen by a majority of employees; the concept of an appropriate unit, or grouping of employees, who would be represented by a labor organization of their own choosing; and the principle of majority rule itself.

In the 1940s and '50s the trade union movement grew dramatically, its growth fueled in substantial part by the War Labor Board during the crisis of World War II,² and ultimately the merging of CIO and AFL in 1955 at the time of the trade union movement's zenith-a position of strength that at that point seemed to be substantially unaffected by the Taft-Hartley Page 2 amendments of 1947, which put new restrictions upon organized labor.³

After the 1935 legislation, the statute was amended not only in 1947 but again through the Landrum-Griffin amendments in 1959, which both provided for a bill of rights for individual union members vis-à-vis their unions and, more relevant to the issues discussed in this Article, the new union unfair labor practices restricting picketing and certain types of clauses in collective bargaining agreements.⁴ For the past half century, except for some extension of jurisdiction in 1974, there have been no substantial amendments affecting labor-management relations.

In Part I of this Article, I discuss some of the ways in which labor law got off the track from the 1960s and early '70s onward and the form that law reform proposals took. Part II analyzes the recognition machinery and the debate about it that emerged with some focus upon the Employee Free Choice Act (EFCA or the "Proposed Bill") of 2007 and proposals discussed subsequent to that time. Part III examines proposals about so-called first contract arbitration as a means to resolve differences in negotiating contracts in the wake of a union's certification as exclusive bargaining representative. Part IV discusses the proposals relating to remedies for violations of the NLRA and the difficulties with them today. Part V deals with other labor law reform proposals, particularly concerning the method of appointment of National Labor Relations Board (NLRB or the "Board") members. Part VI examines some new voluntary initiatives, particularly those of the British multinational FirstGroup America dealing with promoting freedom of association on a private basis and the implications of such for public law. Part VII analyzes the NLRA jurisdiction and the fact that today's law has expanded considerably the breadth of the NLRA and proposes that state regulation could provide for the expansion of state law over employers that federal law should not cover. Part VIII addresses the need for rulemaking in lieu of adjudication, which has been the only method for NLRB case dispute resolution. Page 3

I Introduction

The need for reform in the basic labor law of the United States has been recognized, discussed, and debated for the past half century, beginning with the Pucinski Committee report in the 1960s.⁵ Even prior to that development, the alarm had been sounded by scholars and journalists who focused upon the decline of labor from its zenith in 1955 when approximately thirty-five percent of employees belonged to trade unions. The numerical decline accelerated over the years, particularly in the hostile decades of the 1980s and 2000s. Simultaneously, the problem of deficiencies in the creaky administrative processes of the NLRB- through which justice delayed is so often justice denied-has grown worse over the years. This provided an unfolding drama in the form of the statute's inadequate remedies as defined by both the NLRB itself⁶ and the Supreme Court!⁷

Along the way, the debate at times has been confused and has wandered off course. The most recent of many reform efforts has emerged in the form of EFCA-a bill passed by the House of Representatives in 2007.⁸ The Proposed Bill, as currently written, provides for (1) a system of recognition in which the ballot box Page 4 will be displaced by authorization cards as a means to determine union majority support; (2) arbitration to resolve first-contract disputes where labor and management are unable to voluntarily negotiate a collective bargaining agreement within a four month period; and (3) new procedures for law enforcement.

The suggestion has been made-and it has been fueled by considerable rhetoric⁹-that reform in the law can both substantially reverse the membership decline of organized labor and promote a more middle-class America. But, of course, this overlooks the fact that many other factors are responsible for the decline of the unions and that the law, while relevant, is subordinate to most of them. And the decline, which is so often measured in international terms, fails to take into account the fact that it is Continental Europe that has possessed relatively centralized systems unrestrained by the American individual exceptionalism and the prominence of antitrust law since the turn of the previous century.¹⁰ The difference between the systems lies in principal part between the coverage of employees through trade union initiatives, which includes nonmembers by virtue of various extension systems in Germany, the Netherlands, and France. (France provides the most dramatic example with ten percent union membership at a lower level than the Americans, but with eighty percent of employees in the workforce covered by trade union negotiations!¹¹) The decentralized American system, which Page 5 in its sophisticated and detailed dispute resolution machinery is the product of comprehensive plant level bargaining, does not apply beyond the plant, or to a lesser extent the company, and infrequently across corporate lines through multiemployer association bargaining.

Thus, institutionally the American system starts at a disadvantage in acquiring union membership and influence, and this, along with other factors, makes the law a secondary factor in any process of change. It is possible that law reform-particularly if unions can obtain compulsory recognition for collective bargaining purposes on the basis of employee-executed authorization cards, as EFCA proposed until recently¹²-can produce more union members. But more than this is needed to alter the membership terrain. One obvious matter that needs redress is immigration law and the status of undocumented workers, addressed already fairly unsuccessfully by labor law.¹³ Only immigration law can address the actual status of such employees, as the current status places such workers effectively beyond union organizational efforts with or without labor law reform.¹⁴

Nonetheless, millions are being spent by both labor and management in the battle of labor law reform. Neither side shows any interest in a sensible or moderate compromise at this juncture, though it seems obvious from the merits of the debate as well as the political composition of the members of the United States Senate-in which a filibuster will have to be broken by sixty Page 6 votes-that some kind of intermediate position is the only one that can be obtained.¹⁵

The debate in 2009 has taken a number of confusing turns. In the first place, frequent reference is made to Canada by many of the relatively sophisticated, who apparently believe that the Canadian experience contains a model that supports the card check approach to recognition. This is not so. Indeed, the Canadian experience is precisely to the contrary. Though all jurisdictions at both the federal and provincial level-Canadian labor law in contrast to American is principally provincial law,¹⁶ not federal law¹⁷-adhered to a card check system in the 1960s, the majority of jurisdictions have switched to secret ballot box elections, and the trend is in that direction.¹⁸

Today, only the federal jurisdiction (which covers industries like transportation and banking) and the provinces of Quebec, Prince Edward Island, New Brunswick, and Manitoba have a card check system. What is particularly important is that a majority of provinces have not only gone over to the secret ballot box as a basis for recognition, but also a consensus in favor of the...