Unionizing, Arbitration Big Pending Federal Issues

Congress is attempting for a second time to pass legislation to change how workplaces can unionize and how disputes can be settled between employees and management. If signed into law, the Employee Free Choice Act would be a major shift in U.S. labor relations in that signing a pledge card would replace a secret ballot to bring collective bargaining to a workplace. The Arbitration Fairness Act, meanwhile, would prohibit mandatory agreements requiring workplace disputes be handled by an arbitrator even prior to there being a dispute. No longer could taking a job hinge on signing such a document. Both bills had been before Congress in 2007 without success. Now with a Democratic administration the bills have returned although have stalled as lawmakers concentrate instead on health care reform. While supporters portray the proposed legislation as benefitting employees, others point out there could be wider implications if they are enacted. In the arbitration bill, for instance, there is the potential for more lawsuits being filed in a state court system already strapped for cash and having to furlough employees to save money. “The practical matter is it would be a financial nightmare for the state with the increase in litigation,” said Karen Dinino, an employment law attorney with a practice in Westlake Village. Not just workplace The act would not apply just to the workplace. Doctor’s visits, accepting credit cards, and buying a new car bring with them forms containing small print about going to arbitration in the event of a disagreement. Critics say such agreements favor the employer (or company) and keep the aggrieved party from exercising their right to take a case before a jury. The collection of evidence (called discovery in a court setting) is less than that done for a lawsuit and there is no appeals process of an arbitrator’s ruling although California courts are making it easier. Arbitration is a quicker process and tends to be less costly for the employee because they don’t have to hire a lawyer or pay costs associated with the process. The trade-off is the result won’t be the same as when a jury is involved. “There are no arbitrators giving $15 million punitive damage awards,” Dinino said. Congress and President Obama signaled willingness to eliminate mandatory arbitration agreements in the $636 defense spending bill approved last year. Companies receiving Pentagon contracts of $1 million or more cannot require employees or independent contractors to arbitrate certain disputes. The California Supreme Court is expected to decide this year if mandatory arbitration agreements can have a shorter statute of limitation period than allowed under the Fair Employment and Housing Act. Union, yes? The Employee Free Choice Act has generated much more controversy than the arbitration bill and taken as a sign of labor’s re-emergence under a Democratic president. If it becomes law, the act requires 51 percent of eligible workers to sign a pledge card in order to start collective bargaining negotiations. If talks fail an arbitrator would step in to impose a contract. Finally, the act strengthens penalties against employers who engage in unfair labor practices. What gets eliminated is workers voting in a secret ballot to unionize, a concept central to labor relations policy since the 1930s and what has led to claims the act is anti-democratic. “If 51 percent is all you need the other 49 percent doesn’t get their say,” said Richard Rosenberg, an employment law attorney with Ballard, Rosenberg, Golper & Savitt in Glendale. Just as contentious is the provision to have an arbitrator set the standard of what pay and benefits a company should give, all matters that currently fall under negotiation. With the Free Choice Act there is now the threat of an outsider making that decision, Rosennberg said. “That is why business is all up in arms,” he added. Other pending federal legislation includes the Employment Non-Discrimination Act, of which California already has a similar law; and the Paycheck Fairness Act requiring employers to justify pay differences between the sexes. For the latter, Dinino recommended that employers document their objective reasons for pay differences. “You want to have back up for what you do,” Dinino said. “If you don’t back it up you might as well pay when they file a claim.”