California Democratic Senator Dianne Feinstein is withdrawing her support for the so-called Employee Free Choice Act (EFCA), organized labor’s top legislative priority, reports a California news station. She joins two Democratic colleagues, Blanche Lincoln (Ark.) and party switcher Arlen Specter (Penn.), in opposing the bill. (Log-in required to view KHTS news story.)
While this is a serious blow to EFCA in its current form, Democratic leaders are working on devising a “compromise” that would likely not include the current bill’s card-check provision, which would effectively do away with secret ballots in union orgaizing elections, while keeping EFCA’s other harmful features.
Chief among these is EFCA’s binding arbitration provision, which would enjoin a federally appointed arbitrator to impose a contract on newly unionized companies if the company’s management and the union do not reach an agreement after 120 days. Needless to say, the arbitrator is unlikely to have any knowledge of the company’s operations.
Thus, a newly unionized company could find itself burdened with millions in new liabilities in the form of obligations to pay into union a pension fund, as required in the new arbitrator-imposed contract. As Diana Furchtgott-Roth of the Hudson Institute found, many such funds are severely underfunded, especially in comparison to private company funds. It is for this reason that the Teamsters are currently threatening to shut down the Minneapolis Star-Tribune.
Sen. Feinstein’s switch is very good news, but it is not the end of this fight. Card check may have receded, but binding arbitration still looms on the horizon as a threat to economic recovery.
UPDATE: Indeed, the Huffington Post’s Sam Stein quotes a “confidant of the senator” as saying: “She is looking for a compromise. And anyone who says otherwise is engaging in some wishful thinking.”
I’d call this strategic fence-sitting.
For more on EFCA, see here.