Prospects for Labor Law Reform After the 2009 Election:
A Law Perspective
By William B. Gould IV

The year 2009 finds us on the brink of a bitter debate over labor law reform and the best ways in which to amend the National Labor Relations Act of 1935—the basic private sector labor law framework which has not been amended in major respects since 1947 and 1959 in the form of the Taft-Hartley and Landrum-Griffin amendments. The issues are not new. The overarching theme has always been the denial of justice through its delay. If 2009 is to be at the center of a stormy debate between labor and management and Democrats and Republicans, we can see that the clouds were already on the horizon in 1961 when I was a young lawyer with the United Auto Workers in Detroit, fresh out of Cornell Law School.

For it was just at that point that labor observers were beginning to comment upon the fact that a decline from labor’s zenith in 1955 had commenced. The intervening years have seen no appreciable reversal of this trend as it galloped onward in the Reagan 1980s and during the presidencies of Bill Clinton and both Bushes. With union representation now at a level of 12 percent in the public and private sector combined and almost down to 7 percent in the private sector, the goal of workplace democracy promised by the National Labor Relations Act seventy-four years ago is more distant than ever.

Of course, this isn’t to say that the law has been the primary factor in this trend—it hasn’t been. But the 1935 law has played a role, however subordinate it is when other factors are considered, and its creakiness and vulnerability to delays during which employers can engage in antiunion propaganda against union organizational efforts have created a disrespect for the rule of law in the workplace, which a democratic society can ill afford. Moreover, labor law reform could reenergize the labor movement as it has not been since the Great Depression when the union organizing slogan was “FDR wants you to join the union!”

Employee Free Choice
The labor law system is broken and badly in need of repair. Sixteen years ago I laid out a comprehensive agenda to accomplish this in a book entitled Agenda for Reform: The Future of Employment Relationships and the Law (MIT Press 1993). The principal question in 2009 is whether the Employee Free Choice Act (EFCA) provides the best answer—and the answer to that question is both yes and no.

It is “yes” because the delay in the administrative process that has given rise to employer antiunion campaigns, both lawful and unlawful, is fundamentally attributable to the lack of effective remedies. The traditional “cease and desist” order to remedy illegal behavior has been recognized as a mere “slap on the wrist” for decades and, almost a half century ago, back pay was seen by the Pucimski Committee as a “license fee” for misconduct, a problem exacerbated by frequently convoluted controversies about how much was to be deducted from back pay when there was a dispute about the employee’s “reasonable diligence” in seeking another job subsequent to unlawful dismissal.

The Employee Free Choice legislation will change this by providing for treble damages for statutory violations committed during union organizing campaigns and the period of first contract negotiations and civil fines not to exceed $20,000 for each violation. It will also mandate the National Labor Relations Board (NLRB) to seek prompt injunctive relief against these violations. I can tell you that the major law enforcement tool that my NLRB had in the 1990’s was the injunction—but the law, as now written, gives the Board discretion to take such action—in contrast to the NLRB’s obligation to address union unfair labor practices in the courts—and the number of such initiatives has diminished rapidly in the recent years of the Bush NLRB. EFCA will change this and this is very much to the good.

EFCA also provides—properly in my view—a system of so-called first contract arbitration to resolve differences between the parties when they are unable to do so through collective bargaining when the relationship is embryonic in the wake of an NLRB certification of the union as bargaining representative. In the main, this system has worked well in most of the Canadian provinces that have adopted this framework. Too many labor-management relationships perish under the status quo, which saddles unions with unsatisfactory and time consuming “duty to bargain” litigation leading all too frequently nowhere. But EFCA, as currently written, simply provides for automatic access to arbitration if bargaining is not successfully concluded in four months—and does not incorporate standards that the arbitrator is to follow. The former could undermine collective bargaining, encouraging the union simply to wait for a third party when they find the employer’s offer unsatisfactory. To this problem the Canadians have attempted to devise so-called “screens” to encourage bargaining before resort to arbitration by making the date of access to a third party uncertain. The latter could not only create constitutional infirmities but also, again, undermine bargaining if it is thought that the award will enshrine a pattern of contract terms. The employer’s ability to pay (and a consequent obligation to open the books) should be the dominant criterion. In any event, these matters can be addressed during the legislative debate through amendments, which can be designed to preserve an arbitration process so important because of the ineffectiveness and delay involved in disputes about so-called “surface” bargaining—and yet promote collective bargaining itself.

Card Check
But the fundamental issue that has received most attention—particularly in the many newspaper editorials that have been written on this subject—is the substitute of card check or authorization cards as a basis for recognition of unions rather than secret ballot box elections, which are part of the current law. In my judgment, this is the substitution of one imperfect mechanism for another.

The status quo is unacceptable because employers have all too frequently undermined employee support for unions by delay—the best case scenario for conduct of an election is 50-60 days subsequent to the filing of a union representation petition—and have used that period of time to propagandize an antiunion message. But EFCA’s answer is also unacceptable because it promotes a form of recognition that is not always deliberative—I have previously advocated that the payment of dues or some monies to the union should be a prerequisite to the counting of the card—and because there have been numerous controversies about misrepresentation, coercion and the like prior to the cards’ signing. British Columbia, when it had card check legislation (most of the Canadian provinces have repudiated this approach in favor of the ballot box), provided that the union certification could be revoked for the falsification of one card! EFCA contains no similar safeguard or anything akin to it—though presumably the NLRB can address this and related issues through regulations pursuant to EFCA.

Thus, I have advocated that the flaws in the system can be fixed by a method other than card check. Representation elections can be conducted within five to ten days of the filing of the petition as both Ontario and British Columbia so provide. This will necessarily postpone the resolution of disputes about who is eligible to vote and sometimes even what unit in which the vote should be conducted. The NLRB adopted a similar approach under some circumstances in the 1990’s and the new statute could impose time limits upon the agency to resolve these matters after the vote so that the parties are able to get on with their own affairs promptly.

Beyond Card Check
Of course, it may be said that employers will simply respond with more virulent and expeditious antiunion behavior notwithstanding the short time frame for campaigning. But this highlights a penultimate deficiency in EFCA, i.e. its failure to address and to reform the existing system, which excludes non-employee organizers in practically all instances from company property. Union organizers ought to have carefully arranged periodic access to company property so as to carry their message and to be able to respond to employer “captive audience” presentations under which employees lawfully may be compelled to listen to the employer’s antiunion speeches and literature. If there is to be a market place of ideas in the workplace, that must exist for both sides.

EFCA has focused upon only some of the areas in need of reform. This makes sense because the perfect should not be the enemy of the good on issues such as the permanent replacement of strikers, lack of union and employee protection when a successor employer acquires or purchases another company, the ability of union members to resign membership without some form of reasonable limitation through union constitutions or bylaws, the narrow scope for collective bargaining over closures, relocations and the like, which are all postponed for another day.

But there are a few issues too critical to be postponed—though one of them will be caught up with the debate about immigration legislative reform. This relates to the rights of undocumented workers. In 1984 the Supreme Court said that such workers are employees within the meaning of the National Labor Relations Act, in part because a contrary ruling would create an incentive for employers to exploit them and all American workers. But in 2002 the Supreme Court reversed my Board’s 1995 precedent giving such employees the only significant remedy now available, i.e. the monetary one in the form of back pay. A recent editorial in The New York Times had it right: “If you ignore and undercut the rights of illegal immigrants, you encourage the exploitation that erodes working conditions and job security everywhere. In a time of economic darkness, the stability and dignity of the work force are especially vital” (December 26, 2008, page A24).

The NLRB
EFCA is underinclusive in other respects as well. It fails to address the vital issue of depoliticization of the NLRB, a reform so appropriate to the Obama Administration’s focus upon bipartisanship. This concern translates into two basic provisions that should be part of labor law reform. The first is the process of appointment of NLRB members and General Counsel, the need to include representatives of both political parties from diverse backgrounds from all over the country. Washington, D.C., New York and the eastern seaboard have no monopoly upon labor law expertise. And, in order to ensure that we get the very best people coming to Washington for the very best reasons, there should be a limit on the term of office to one term.

Too much of labor law’s delay is attributable to the NLRB itself—what Ninth Circuit Judge John Noonan called the “dilatory virus!” One term will encourage Board Members to focus on the processing of cases before them rather than the prospects for reappointment in a second term. Like Cincinnatus, they can depart the trappings of Washington when their work is done.

The statute should also be altered so that the one term is longer than the present one, i.e. eight years rather than five years. In this way, the public gets the benefit of accumulated knowledge of the member, in contrast to the status quo which requires new appointees to reinvent the wheel with each appointment over a relatively brief period of time.

Rulemaking, Timeliness and Private Procedures
The second way the objective of depoliticization can be realized is through the use of rulemaking. Not only is rulemaking—in contrast to adjudication—desirable in that it garners more public input beyond the immediate parties, but, even more important, it exalts the principle of stare decisis, i.e. adherence to principles that can guide the parties and, as a consequence, avoid the sharp swings from one side to the other each time a new White House occupant appears on the scene with a new group of appointees.

And there should be timelines not only for the handling of representation–i.e. a ballot within five or ten days as the Canadians do and a time period for resolving problems arising out of the election—but also for the Board’s handling of a wide variety of unfair labor practice issues. EFCA has already recognized the importance of speed in case resolution by mandating the Board to go directly to federal court for an injunction. Congress can and should impose time limits for case handling by the agency itself.

Finally, Congress ought to allow, let alone promote, the adoption of private procedures such as those employed by First Group America to attempt to resolve controversies about union organizational disputes before they get to the NLRB. In the case of First Group America, the parties have established an Independent Monitor system wherein such matters can be addressed and resolved through public recommendations to the parties within thirty to sixty days of the filing of the complaint—with the parties free to pursue their NLRB options. A revised EFCA could promote or allow the parties to have their cases resolved by administrative law judges—as we did in the 1990s by creating settlement judges who could mediate disputes—or private citizens who have experience as arbitrators, mediators or fact-finders. If the process works well, then the dispute can be immediately resolved rather than opening up the wounds inevitably associated with lingering litigation. And if either party finds the system unsatisfactory, then it may proceed to a newly constituted Obama NLRB just as the parties may do under the First Group America Program.

Promises Redeemed
To sum up, EFCA contains many badly needed reforms that have been proposed since the 1960s. The emergence of a Democratic president with a Democratic majority in the Congress—the first time that has been a feature of American government since January 1995—presents a great opportunity for reform. My sense is that amendments to the National Labor Relations Act involving recognition and protection of the collective bargaining process in its most fragile first contract form are so vital that we must be sure to get this done correctly. I am of the view that a failure to properly address the recognition piece will inevitably impose excessive strains on collective bargaining subsequent to recognition, even with the availability of first contract arbitration. Failure to address the recognition process sensibly will create an incentive for employers to test the representative nature of unions as bargaining proceeds and suspicions remain that employee sentiment is not supportive of their exclusive bargaining representative.

My sense is that the White House will prefer a bipartisan approach now that the Democrats have close to the sixty votes needed to making legislation filibuster-proof in the Senate and that substantial revisions in the secret ballot box process are more likely to attract moderate Republicans from Pennsylvania and Maine, as well as some of the more conservative Democrats.

The great reforms of our country of which Title VII of the Civil Rights Act of 1964 is a major one, have had the support of both Democrats and Republicans. Contrarily, the Taft-Hartley amendments of 1947 exacerbated a “them and us” divisiveness, which has harmed our labor-management relations and our competitive status as a nation.

This time we must get it right. A variation on the EFCA theme such as that outlined above can realize that goal and, as a consequence, redeem the promises of the 1935 legislation.1

Note
1. For an extended discussion of the issues addressed in this article, with full bibliographic references, see William B. Gould IV, “The Employee Free Choice Act of 2009, Labor Law Reform, and What Can Be Done About the Broken System of Labor-Management Relations Law in the United States?” University of San Francisco Law Review, Volume 43, Number 2 (Fall 2008), 291-345.

William B. Gould IV is Charles A. Beardsley Professor of Law, Emeritus at Stanford Law School. He served as Chairman of the National Labor Relations Board in the Clinton Administration (1994-1998). He has been a member of the National Academy of Arbitrators since 1970 and an Independent Monitor for Freedom of Association Complaints, First Group America since 2008.

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