Stuart Buttrick: Stiffer Penalties Could Drive Small Businesses Out of Business

A new version of the Employee Free Choice Act that would eliminate the card-check provision is reportedly taking shape, but management-side lawyers say the pared-down bill still won't be palatable to employers, according to Law360 in its story, "Nixing Card-Check Could Shift, Not Quell, EFCA Debate."

Doing away with the card-check provision would mean more attention on other aspects of the EFCA that businesses find objectionable - like its binding arbitration provisions and its call for stiffer penalties for employers found to have engaged in unfair labor practices - the story reported.

Nixing card-check alone clearly won't endear the legislation to the business community. The EFCA's arbitration provisions are just as bad, if not worse, than the card-check provision, said Michael J. Eastman, the U.S. Chamber of Commerce's executive director of labor law policy.

If the card-check provision is truly out of the way, pro-business advocacy groups will likely focus on the arbitration provisions and put pressure on moderate Democrats, Stuart Buttrick of Baker & Daniels told Law360.

Even without a compromise bill on the table, it's not too early for employers to start thinking about strategies for dealing with a revised version of the EFCA, and how to get their message out to both supervisors and rank-and-file employees quickly and effectively under time constraints, Buttrick added.

Under the Employee Free Choice Act of 2009 (S. 560 in the 111th Congress), a newly recognized union and an employer have 90 days after bargaining commences to come to terms, after which either side can reach out to the Federal Mediation and Conciliation Service and request mediation, the story reported. If, 30 days after that request, the parties have yet to come to terms, the FMCS would refer the matter to an arbitration board, which would in turn render a decision that would be binding for two years unless amended during such period by written consent of the parties.

S. 560 also provides for stiffer monetary penalties for employers - but not unions - found to have engaged in unfair labor practices, penalties that could "easily drive a small business out of business," Buttrick told Law360.

The National Labor Relations Act is not a punitive statute. A discriminatory discharge or refusal-to-hire charge could leave an employer liable for back pay and possibly reinstatement, but under the EFCA, a repeated or willful unfair labor practice during an organizing drive or first contract negotiations could come with a price tag of up to $20,000, Buttrick said.