Overstock.com CEO Jonathan Johnson warned of EFCA’s consequences on business, focusing on the harmful effects of binding arbitration:
“The government should make it easier for people to get hired, not harder,” Johnson said. “Binding arbitration says to me we are going to have federal agents come in and determine what the labor contracts are going to be.”
The end result of binding arbitration would be the “nationalization of small businesses by the federal government,” he said.
Johnson raises a troubling point with binding arbitration. And it’s entirely valid if you think it through. If federal bureaucrats are called repeatedly (which is likely since why would any union negotiate in good faith if they know they can get what they want through binding arbitration) to dictate the terms of how a business should be run, a standard will likely emerge, resulting in what Johnson refers to as the “nationalization of small businessed by the federal government.”
Johnson said draconian measures like EFCA weren’t necessary for businesses with good standing, citing his own employees as an example:
“We feel that by empowering employees and treating them well, they treat our customers well,” he said. “One example is last year my senior executives came to me and said they didn’t want a bonus so that rank and file employees could get a bonus.”
But Johnson warned that passing EFCA would do irreparable harm to the business climate and their operations, which could very well lead to increased outsourcing:
But if a law like card check were to pass, Overstock.com would probably begin to outsource as much work as possible.
“From our experience dealing with unions is not a deal worth doing and I’d rather deal with a third party in a business relationship, rather than a union that’s in a strong arm position.”