Card check may have been dropped from the so-called Employee Free Choice Act, but binding arbitration still lingers and it’s just as devastating as the effective elimination of the secret ballot. Binding arbitration would allow a federal bureaucrat to dictate the terms of how a company should be run if the employer and a union cannot reach first contract.

Business and labor are squaring off on this key provision in EFCA, leading some like Sen. Jim DeMint of South Carolina to speculate whether binding arbitration was labor’s end-game all along:

“We suspected from the beginning that the binding arbitration was packaged with the elimination of the secret ballot in order to create a straw man they could take down later,” said Sen. Jim DeMint, R-S.C.

The unions argue that there’s nothing wrong with binding arbitration since companies use arbitration to settle disputes. But there’s a difference between attempting to resolve a  specific dispute and having a bureaucrat decide the terms of a contract that would last for two years:

Business groups say arbitration would allow a federal official who knows nothing about a company to suddenly dictate workplace rules including salaries, benefits and vacations.

They also say there is a big difference between settling one dispute via arbitration, and settling an entire contract that way.

“Card check is the political poison in the bill, but forced arbitration is the real poison,” said Steven Law, general counsel of the U.S. Chamber of Commerce.

As I have discussed, perhaps one of the reasons why unions favor binding arbitration and desperately want EFCA to pass is to force employers to pay into the unions’ flailing pension funds:

“They are desperately trying to get more union members and more employers to help get them out of the red in their pension funds,” DeMint said. Mandatory arbitration could be used to force businesses to contribute to these funds.

Don’t be deceived – EFCA is still a no-go even if card check is no longer part of the equation. Binding arbitration is just as dangerous of a proposition. It is difficult to see the unions capitulating on this front, so expect to see them fighting to ensure this is included in any sort of “compromise” that emerges from the Senate.

Continuing our coverage of the SEIU-UNITE HERE war, here are a few excerpts from a letter written by a retired priest who has been involved with SEIU’s organizing efforts. Rev. Raymond G. Decker, who also happens to have a Ph.D., blasts the SEIU for its actions against UNITE HERE:

In recent months, I have been appalled by the outrageous actions of the SEIU in undermining the activities of UNITE HERE. I am deeply disappointed by the SEIU’s financing a disruptive attack on the leaders and members of UNITE HERE around the country.

Rev. Decker is shocked (!) that the SEIU would engage in such behavior, especially against another union:

I am dismayed by the reports (including the one in the New York Times of July 7, 2009) of the SEIU raiding UNITE HERE, and unjustly attacking its president, John Wilhelm. This kind of divisive and disruptive action could not come at a worse time. This is a complete departure from the SEIU that I have actively supported since 2001.

He goes onto say that such appalling behavior will force the religious community to withdraw its support from the SEIU:

If the SEIU is to continue its disruptive tactics, I can say without any degree of hesitation that it will lose a large portion of the religious community’s support that it has enjoyed over the past few years. If such tactics are to continue, then there will be a concerted effort on behalf of many of us in the religious community to withdraw our support of the SEIU.

And he closes by urging the SEIU to cease its attacks:

I urge you to immediately cease and desist your attacks on UNITE HERE. When you negotiate a fair and just settlement with UNITE HERE and reclaim SEIU’s proud legacy of progressive leadership, then we in the religious community can in clear conscience resume our support of its organizing efforts.

I don’t think Rev. Decker is aware but asking the SEIU to stop its tactical efforts against UNITE HERE, much less any of its actions against union and non-union individuals, is like asking a lion to give up hunting zebras. It’s just not going to happen.

The focus on binding arbitration continues with an op-ed by the California Chamber of Commerce outlining its opposition to the supposed ‘compromise’ on EFCA.

CalChamber expressed specific concern with having less communication time in light of possible “quickie” elections replacing card check:

The CalChamber is pointing out that the ability for employers to communicate directly with their employees is crucial to an informed decision. Anything that interferes with that—whether it is a direct prohibition or a virtual prohibition by reducing the time for an election—would be harmful to employees and unfair and costly to the business.

And of course, the CalChamber explains why binding arbitration is not a good proposition:

Current law enables the employer and the union to negotiate an agreement without government interference or intrusion into the process.

The Employee Free Choice Act authorizes an arbitrator from the Federal Mediation and Conciliation Service to force a settlement if management and the newly certified union at a given work site aren’t able to come to terms after 90 days of bargaining and 30 days of mediation.

It would dictate all terms of a contract, from wages to work schedules to vacation time to health benefits. Decisions would be final, not subject to appeal.

At the end of its op-ed, CalChamber is urging employers to contact California Senator Dianne Feinstein, who was one of the few Democrats who expressed concern about including card check in EFCA.

The United Auto Workers did not appear before a congressional oversight panel, drawing the ire of  Rep. Jeb Hensnarling (R-Texas). The panel, which is in charge of reviewing how TARP funds have been spent to bailout General Motors and Chrysler, heard testimony from Ron Bloom, the head of the White House auto task force. Hensnarling also was upset at the absence of both GM and Chrysler’s CEOs, who sent their treasurers instead to testify. But it was UAW’s Ron Gettelfinger’s absence that provoked Hensnarling:

The UAW’s absence was a significant issue for Rep. Jeb Hensarling, R-Texas, who sits on the TARP oversight panel. Hensarling expressed concern that the decision to put the interests of the union-run retiree health care trust funds ahead of those companies’ secured lenders could have “chilling and far-reaching consequences” for commercial lending.

The lone member of Congress on the panel chastised UAW chief Ron Gettelfinger for ignoring the panel’s invitation to testify.

Besides his concerns about placing the union’s interests ahead of the auto companies’ secured lenders, Hensnarling ripped the union for pleading for a bailout but declining to show up to the inquiry:

Hensarling, who has urged the panel to include the UAW in its inquiry, said the union “came before Congress and pleaded for billions of taxpayer assistance. Their ownership stakes in Chrysler and GM look suspicious at best and like sweetheart deals at worst.”

After conceding so much to help keep General Motors and Chrysler afloat, I suppose it’s too much to ask for a modicum of accountability from the UAW.

Steve Forbes has an op-ed in today’s Politico discussing how an EFCA without card check is still not a viable option for both small business owners and employees.

Forbes points out that the so-called compromise of “quickie” elections unfairly favors union organizers:

Quicker elections give union bosses the opportunity to lobby workers — in many cases, without the knowledge of the employer or the majority of employees — while disallowing the small business the opportunity to communicate with its own employees about unionization.

Quick elections are simply another way for union bosses to force unionization on businesses and gain dues from workers with little regard for how increased costs and burdens will affect an employer’s ability to stay in business.

The perils of binding arbitration continue to remain in the legislation:

Another egregious provision in EFCA — and potentially the most detrimental — is mandatory, binding arbitration. This threatens employers with a federal government takeover of their small business and takes away a worker’s right to have a say on his or her own contract.

EFCA would allow federal bureaucrats to mandate contract terms on businesses and eliminate an employee’s right to vote on that contract. Those mandates on wages, benefits and workplace conditions would increase costs and burdens on employers resulting in massive layoffs and increased unemployment.

Another reason why EFCA is a bad proposition – and why union leaders are so eager for its passage – is because of how binding arbitration will force businesses into the fledgling pension plans that would  undermine their viability:

Even more troubling, government arbitrators would use forced arbitration as a means to place businesses into failing union pension plans without their consent.

In being forced to join pension plans that in many cases are not financially stable, small businesses would assume responsibility for the pensions of workers from other businesses and industries. The immense liabilities that would ensue would render many of these businesses insolvent.

In summary, EFCA is still problematic because the supposed “compromises” still favor union organizers, binding arbitration’s onerous obligations continue to remain in the bill, and businesses will be forced to assume the unsustainable obligations of unions’ pensions.

One of the less reported reasons why unions have been desperate to pass EFCA is because of their underfunded pensions. Changing the rules to facilitate union organization efforts would yield them more dues-paying members to prop up their fledgling pension plans. The Wall Street Journal takes the union pensions plans to task for their inadequate funding. Many of the major union pension plans are either at “endangered” or “critical” status:

In April, the SEIU National Industry Pension Fund—which covers some 101,000 rank-and-file members—announced that its pension has been put into what the feds call “critical status,” or “red zone.” In other words, it lacks the cash to pay promised benefits and may have to cut them. As of 2007, the last year for which it reported results to the government, the fund had 74.4% of the assets needed to pay its benefits.

Thirteen of the bigger plans operated for the Teamsters have, together, a mere 59.3% of reserves necessary to cover obligations. Or consider that 26 pension funds at the food workers union, the UFCW, are at 58.7%. Seven locals at the United Brotherhood of Carpenters fare better at 67%. As a rule of thumb the government considers a fund to be “endangered” at below 80%, and in “critical” status at below 65%, and requires them to come up with a plan to get off probation within a decade.

Just as troubling is the disparity between the performance of union officers’ pension plans and benefits versus those of dues-paying members:

An even bigger mystery is that the unions do a far better job with funds created for their officers and employees than for mere workers. The SEIU Affiliates, Officers and Employees Pension Plan—which covers the staff and bosses at its locals—was funded as of 2007 at 102.2%. The plan for the folks at SEIU international headquarters was funded at 84.8%.

Union officer benefits are also far more generous than anything dues-paying workers enjoy. Consider again the SEIU, probably the country’s most powerful union. Their officers and employees get a yearly 3% cost of living increase, but SEIU members get none; officers qualify for an early pension at 50 or after more than 30 years of service, but workers can’t retire early with a pension; officers qualify for disability retirement after a year’s service, but workers need 10 years. In the land of union retirement, some workers are more equal than others.

As the Journal concludes, there are many reasons why most Americans in the private sector workforce are not part of a union. Poor pension performance and disparate benefits are just two more reasons why most Americans don’t want to join a union or support EFCA.

The Press-Enterprise of Riverside, CA ran an article summarizing the current state of EFCA over the weekend. The most recent reports indicate that a compromise would drop card check, but may include other provisions that would speed up elections and give union organizers more access to company property and employees.

Binding arbitration continues to remain in the mix. A law professor and former labor board member actually commented for the story that proposals for binding arbitration would bring in an arbitrator too soon:

The arbitration clause infuriates many business leaders. John Raudabaugh, a Northwestern University law professor and a labor board member from 1991 to 1994, said under the proposed law, an arbitrator would be brought in way too soon. It may take 120 days just to get company and labor officials comfortable enough to have a productive conversation.

“If it truly is a first contract, it will be a new experience all the way around,” Raudabaugh said. “It simply takes longer than 120 days.”

But under the current terms of EFCA, if a company and union cannot reach first contract within 120 days, an arbitrator will be brought in to determine the terms. Raudabaugh’s comment validates criticism against binding arbitration.

The article also notes that there has been tepid support from Democrats in Congress and the White House:

Also, [UCLA professor Daniel] Mitchell said that President Obama has promised to sign the measure but the support “is pretty passive.” Obama has not spoken out in favor of it.

“If you can’t get Dianne Feinstein, then you have to look at how it was written,” Mitchell said.

The lukewarm response from both the White House and key Democrats like Senator Dianne Feinstein, generally regarded as a more centrist Democrat than her peers, may be attributed to labor overreaching:

[Tom] Lenz, a former staff lawyer for the labor board’s Los Angeles office, said the bill proposed in March was very broad.

“I think labor did overreach,” Lenz said. “They have an ambitious agenda and an aggressive PR approach. But they perhaps erred in gauging the support among Democrats for secret-ballot elections.”

I’m not going to take sides here as to who was right or wrong on the arrest incident, but the police unions’ criticism of President Obama’s remarks raised an interesting question.

Police nationwide are reeling from President Obama’s televised reprimand of Cambridge cops for “acting stupidly” in the arrest of Harvard Professor Henry Louis Gates Jr.

“My response is that this department is deeply pained,” said Cambridge Police Commissioner Robert Haas yesterday. “It deeply hurts the pride of this agency.”

Local union officials representing Cambridge Sgt. James Crowley, 42, would not rule out taking their outrage over Obama’s remarks to the picket line next month when the first family lands on Martha’s Vineyard for a vacation.

I seem to recall that it was only a few months ago that the Obama Administration refused to attend the U.S. Conference of Mayors in Providence, R.I. because of a local labor union dispute. Here’s what White House Press Secretary Robert Gibbs said:

“We have always respected picket lines, and administration officials will not cross this one.”

Obviously this begs the question: will the Obamas go on vacation if the police unions picket Martha’s Vineyard?