Labor Pains: Because Being in a Union can be Painful

Playing Three-card Monte with EFCA

Center for Union Facts Executive Director Rick Berman-—my boss and all around good guy—-has an OpEd in today’s Washington Times discussing EFCA’s binding arbitration provision.

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Card check out, but binding arbitration stays

A group of six Democratic senators, led by Sen. Tom Harkin of Iowa, who recently “compromised” on the Employee Free Choice Act (EFCA) are playing some version of three-card Monte. They announced scuttling the so-called card-check provision that would eliminate secret-ballot elections in workplaces. What they didn’t mention is that the card left on the table still imposes binding arbitration. It’s an absurd provision that puts unaccountable government-paid arbiters in charge of writing labor contracts for private businesses. Translation: An appointed outsider sets pay rates, benefit levels, promotion and discharge procedures as well as a host of other issues.


Maybe the de facto nationalization of General Motors Corp. and Chrysler LLC has skewed our perception, but if you recall, it wasn’t long ago that government bureaucrats getting to appoint who runs companies was considered a bad thing.

While dropping card check will provoke whining from union organizers anticipating a new era of high-pressure worker “persuasion,” the real union leadership is only crying crocodile tears. Top union bosses know a compromise bill with binding arbitration will still give them plenty of leverage to bring any company to its knees.

When a union sends agents to convince workers to sign up, they generate visions of how great everything will be once the union is in charge. Despite the puffery, current law is designed to keep labor and management honest in their predictions. While there is no ban on over-promising, the rules don’t require companies to accept union marketing promises once the union is in place.

Today, after both sides sit down at the bargaining table, employers routinely reject contract proposals that would threaten to put it out of business. If both sides can’t agree, negotiations continue. At some point, the union can call a strike, but labor bosses know that isn’t what the employees signed up for. Rather than look impotent, the union keeps up the bargaining charade having stuck themselves between not backing down from unrealistic demands and not wanting to call for an unpopular walkout.

Under EFCA, however, after a few months of stalemate, an arbitrator steps in and unilaterally writes a contract. The default decision of an arbitrator, especially one who doesn’t understand the nuances and competitive pressures of a specific business, is to aim for a “fair” compromise. That often means splitting the difference between both sides’ positions. Consequently, union organizers will be encouraged to promise workers the moon, and then scapegoat the arbitrator when less than the total promise is delivered.

It’s a win-win situation: Whatever happens, the union wins. They collect union dues and blame any shortfall in delivering their package on the government. If employees quit in disgust, it matters little to the union. It is the job that has been unionized, not the worker, so any replacement is stuck paying dues.

Former Democratic presidential nominee George McGovern paints a worrisome picture of arbitration, describing it as an “outsider taking control of basic management decisions that determine success or failure.” That’s not a compromise, that’s a coup.

It’s no surprise that employers would oppose a bill that robs them of control over their own businesses. But binding arbitration hurts employees, too. By saddling businesses with new work rules and labor costs, a binding arbitration rule may well destroy jobs and delay any economic recovery.

Rick Berman is the executive director of the Center for Union Facts, a 501(c)3 non-profit organization dedicated to showing Americans the truth about today’s union leadership.

Categories: Center for Union FactsEFACEnding Secret Ballots