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Sunday, Apr 21, 2024

“Free Choice” or “Forced Choice”

Although I normally focus on state issues, now and then a federal issue is so important that I cannot pass it by. Companion bills H.R 1409 and S. 560 have the potential of such significant negative impact on business that last week I led a VICA delegation of 21 to Washington D.C. to advocate for their defeat. These bills would create the so-called Employee Free Choice Act of 2009 (“the act”). The act would amend the National Labor Relations Act (“NRLA”) to accomplish three goals: to streamline union certification, to facilitate initial collective bargaining agreements and to strengthen enforcement. Here is how these goals would be accomplished: 1. Streamlining Union Certification: Currently, certification is accomplished through secret ballot elections overseen by the National Labor Relations Board (“NRLB”). The proposed amendment would eliminate the requirement for secret ballot elections and would allow unions to organize a workplace by asking workers to sign a card, in public, stating that they want a union. Since the signing would be in public, there is a greater potential for union organizers to intimidate any worker who is considering a “no” vote. Additionally, upon reaching a simple majority of “yes” votes on these cards, the union would be certified and it would be illegal to have a secret ballot election regardless of the number of workers that may want one. 2. Facilitation of Initial Collective Bargaining Agreements: Not later than 10 days after certification (unless both parties agree to a longer period) the parties must begin collective bargaining and make every effort to conclude and sign an agreement. If an agreement is not concluded and signed within 120 days after the initiation of the bargaining process, the matter will be referred to an arbitration board (established in accordance with regulations prescribed by the Federal Mediation and Conciliation Service). The arbitration board will render a decision that will be binding upon the parties for a two-year period unless amended by written consent of both parties. Thus, Government arbitrators would dictate a two-year binding contract including wages, benefits and work rules that could be incompatible with the employer’s cost structure and business model and workers would lose the ability to vote on ratifying the terms and conditions of their own jobs. This could result in driving employers out of business and the loss of many jobs. 3. Strengthening of Enforcement: To strengthen enforcement the act provides for substantially increased penalties for violations of the NLRA. These increased penalties apply only to employers, not unions. Additionally, the act states that employer violations will be given priority over all other cases. It seems inconsistent to call the act (which eliminates a secret ballot and provides for government to dictate the terms of contracts between employers and employees) the Employees Free Choice Act. “Forced Choice” may be more appropriate. With unionization rates having fallen from approximately 35% of the workforce in the 1950s to 12.1% of the workforce in 2007, it’s no wonder that unions want to take away the secret ballot. Businesses and the United States economy cannot afford to let this happen. On June 9, 2003 my “Capitol Punishment” column was born. My main goals were to bring to light legislation (primarily State level) that was bad for businesses and jobs and to provide a score card as to how our legislators voted on this legislation so that voters would have valuable information to utilize in evaluating candidates at election time. I believe that I have accomplished these goals and have decided that it is time to retire my column. Although I will no longer be writing on a regular basis, I will be submitting articles from time to time. I greatly appreciate the opportunity given to me by the San Fernando Valley Business Journal (special thanks to my good friends Jason Schaff, a great editor and Pegi Matsuda a terrific publisher). I am also grateful for all of the valuable knowledge I gained and the relationships I made while researching material for my column. Thank you to all of my readers for your loyalty and frequent praise. Goodbye for now. Gregory N. Lippe, CPA, is Managing Partner of the Woodland Hills-based CPA Firm of Lippe, Hellie, Hoffer & Allison, LLP, Chairman of the Valley Industry and Commerce Association (VICA) and a Director of First Commerce Bank

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