Proposed Labor Rules Would Give Government Power to Impose New Union Contracts

Washington, D.C.,
June 26, 2009—Legislation currently before Congress could rewrite the rules for
negotiating union contracts, giving the federal government power to
unilaterally impose a contract on an employer, according to a
new study
published by the Competitive Enterprise Institute. These
provisions, part of the misnamed “Employee Free Choice Act” (EFCA), would
fundamentally alter the relationship of organized labor and business while
dramatically expanding the power of the federal government to determine the
outcome of union negotiations.

Employee Free Choice Act’s compulsory arbitration provision would create a
major departure from the traditional role of arbitration in the private
sector,” said study author F.
Vincent Vernuccio
. “Perhaps its most fundamental problem is the fact that
it would impose government-mandated contracts and remove the right of one party
to negotiate if the other demands the government to intercede.”

the ongoing debate over EFCA,the
Act’s “card check” provision has received a great deal of attention. This
provision would effectively eliminate the secret ballot in union certification
elections. The Act’s section on collective bargaining, however, has not received
nearly as much attention, even though its legal and economic implications could
be enormous. It would significantly change the way businesses deal with their
employees and empower the federal government to impose mandatory binding
arbitration, whereby government representatives are empowered to create a fresh
contract from scratch.

one is better suited to run a business than the owners and workers who have
dedicated countless
hours of their lives toward making it a success,” said Vernuccio. “Allowing a
government-appointed arbitrator—who does not fully understand the intricacies
of a company that will be required to abide by his decision for years—to create
a binding contract would have devastating results not just for individual
companies, but for the economy at large.” 


CEI is a non-profit, non-partisan
public policy group dedicated to the principles of free enterprise and limited
government.  For more information about
CEI, please visit our website at