Employee Free Choice Act: Labor vs. Business

As unionizing law, would EFCA help workers or hurt U.S. competitiveness? Home Depot co-founder Bernie Marcus and lawmaker George Miller offer different views

Home Depot co-founder Bernard Marcus.

Representative George Miller (D-Calif.), co-author of the Employee Free Choice Act.

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The Employee Free Choice Act (EFCA) (BusinessWeek.com, 8/28/08) would make it easier for workers to unionize in the U.S., and is causing a stir as the Presidential election approaches. The bill would allow workers to skip the lengthy process of a National Labor Relations Board election and unionize if a simple majority sign authorization cards, a process called "card check." If Democrats win more congressional seats and the White House, most observers say, the legislation is likely to pass.

That's why, as Nov. 4 approaches, business groups such as the U.S. Chamber of Commerce are battling labor groups and their supporters through lobbying and public-relations campaigns. Labor supporters argue the bill would help unions reverse their decades-long decline. Business leaders say such a dramatic change would harm companies and kill jobs. Here, Home Depot (HD) co-founder Bernie Marcus and U.S. Representative George Miller (D-Calif.), a co-author of the proposed law and chairman of the House Education & Labor Committee, present their differing views on the legislation.

A Hostile Takeover of American Business
Taking away an employee's right to vote by secret ballot in union elections would be the betrayal of a bedrock principle of U.S. democracy

By Bernard Marcus

Most CEOs in America are unaware of a planned hostile takeover of their human resources. And yet it's right under their noses. The takeover idea is simple—labor unions and their supporters in Congress want to change federal labor laws to virtually guarantee that every company, large or small, becomes unionized.

The act, deceptively named the Employee Free Choice Act, eviscerates traditional democratic principles by effectively taking away an employee's right to vote by secret ballot in union elections. Worse, EFCA would give unions the option to have federal arbitrators write the terms of a binding contract, setting wages, benefits, hours, work rules, and all other terms of employment if negotiations between the employer and union fail. And this contract has the force of law for two years.

I'm not opposed to unions, but I am opposed to this act because it will make American companies uncompetitive in the global marketplace and ultimately send jobs offshore. I'm also opposed to the dishonesty of some EFCA supporters who claim that worker coercion by employers in union elections is "the norm." No data published by the National Labor Relations Board support this wild accusation. In fact, NLRB data prove the opposite. It is troubling that some in the media and perhaps in Congress continue to rely upon discredited studies. Their readers and constituents deserve better.

CEOs in the Dark

Also troubling is the lack of awareness by many in business about the act. You would think that any legislation giving a federal arbitrator who has never managed a business the power to say how a business will be run would get the attention of chief executives. Speaking to approximately 100 executives this summer, I raised the issue of this hostile takeover by organized labor that would place millions of currently nonunion employees under restrictive union work rules. When I asked CEOs if they had heard of this attack on principles that form the bedrock of our democracy—secret ballots in elections—only 7 out of 100 raised their hands. And yet, this plan has the potential to redraw the political and economic landscape of America.

CEOs, and for that matter all Americans, need to know how this legislation would jeopardize our system of free enterprise. In most union organization drives under current law, union organizers convince 60%-70% of the targeted employees to sign union authorization cards. These cards are used to trigger an election. Even unions acknowledge that many of these signatures are given to "get the union off my back." So the organizers give themselves a cushion of votes before the government-supervised election. This cushion often disappears when employees vote by secret ballot. In fact, unions lost more than 4,000 government-supervised elections over the last several years.