Magazine

Big Labor's Big Chance


Union-empowering legislation is likely in the offing if the Democrats take over in Washington

Big Labor, long written off as a spent force in the U.S. economy, seems to be regaining some of its old swagger. For one thing, Democratic Party Presidential hopeful Barack Obama has staked his political credibility on improving the lot of working-class Americans. On top of that, labor groups have high hopes that a new piece of legislation, dubbed the Employee Free Choice Act (EFCA), will help halt a several-decade run of declining union membership.

The bill has a good shot at passage if the Democrats can both gain control of the White House and win more congressional seats in November. It would allow workers to unionize if a simple majority sign authorization cards. Currently, employers can require an election using a secret ballot, and the results need to be certified by the U.S. National Labor Relations Board (NLRB)—a far more time-consuming practice. The system, dubbed "card check," also calls for unresolved conflicts to be adjudicated by a federal mediator who would issue binding arbitration if the sides can't agree.

Companies would also face hefty fines for illegal acts in union drives, causing them to tread more carefully. Home Depot (HD) co-founder Bernie Marcus says he is shocked at how little business leaders know about EFCA. "This bill is going to create France in the U.S.," Marcus said on July 22 on CNBC.

This being an election year, the legislation has become the central issue between labor and business. Labor groups hope passage of the bill could halt the long slide of union membership in America. Today, just 7.5% of U.S. private sector workers are in unions, vs. more than 20% in the mid-'70s.

Plenty of companies would like to keep it that way. Almost two years ago, Cathy Curran, a driver for FedEx (FDX) Home Delivery, and some co-workers felt management was ignoring their concerns about long shifts and unexplained deductions from paychecks. She sought to join the International Brotherhood of Teamsters to gain leverage. In October 2006, a majority of workers at a FedEx terminal in Wilmington, Mass., voted to join the union.

But even though the NLRB certified the election and told FedEx to bargain, the company won't recognize the union and is appealing the decision in federal court. "FedEx refused to bargain because these workers are contractors, not employees," company spokesman Maury Lane says. "It's not against the law to work for yourself, which is why more than 10 million Americans pursue that work lifestyle every day."

Business is extremely wary, seeing in "card check" a path toward more unions and expensive new contracts. Additionally, employers found to have unlawfully fired pro-union employees would be fined three times the amount of the back pay owed workers. Current penalties are minimal. Unions—which plan to spend some $300 million to help Democrats—are battling employer-backed lobbying groups such as the Center for Union Facts and Coalition for a Democratic Workplace.

Research shows that fear of employer retaliation is one of the main reasons workers don't join a union, so EFCA's protections could clear the way for more union wins. "There are always eulogies about the labor movement," says Clete Daniel, a Cornell University history professor. "But while it's been battered, the idea of workplace democracy has not been drained of its last ounce of vitality."

Herbst is a reporter for BusinessWeek.com in New York.

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