With Democrats just shy of the 60 votes they need to end a filibuster, the fate of the so-called Employee Free Choice Act remains in the balance in the Senate. While the current version of the bill seems unlikely to pass, EFCA supporters are likely to try alternative versions. One such option is EFCA without its controversial card check provision, which would allow unions to circumvent the secret ballot in organizing elections, and has been the bill’s most controversial provision to date.
However, EFCA-minus-card check would still be economically toxic. Specifically, its binding arbitration provision would put businesses at the mercy of the federal government. In today’s Wall Street Journal, former U.S. Senator and Democratic presidential candidate George McGovern, who recently has spoken out against EFCA’s card check provision, explains binding arbitration’s danger:
Currently, labor law maintains a careful balance between the rights of businesses, unions and individual employees. While bargaining power differs depending on individual circumstances, the rights of the parties are well balanced. When a union and a business enter negotiations, current law requires that both sides bargain “in good faith.”
In a contract negotiation, each party typically perceives the other as too demanding. But no one loses their right to contract willingly or suffers being forced to agree to anything. Employees can strike if they feel that they have been dealt with unfairly, but it is a costly option. Employers are free to reject labor demands they find to be too difficult to accept, but running a business without experienced employees is itself difficult. Both sides have an incentive to press their demands, but they also have compelling reasons not to press their demands too far. EFCA would disrupt that balance by enabling government-appointed lawyers to decide what they believe is fair or reasonable.
A federally appointed arbitrator cannot be expected to understand the nuances specific to each business dispute, the competitive market position of the business, or the plethora of other factors unique to each case. Yet fundamental decisions on wages and benefit costs, rules for promotions, or even rules for exiting an unprofitable line of business could fall to federal arbitrators under EFCA.