Monday, May 18, 2009

Congress Can Do Better Than the Employee Free Choice Act

Can We Have it Both Ways?

In a recent town hall meeting, President Obama confirmed his general support for labor unions, but called on teachers unions to agree on both merit-based compensation and prompt termination of teachers who do not meet performance standards. In my past experiences as a union negotiator on behalf of employers and as a former union member, national unions fight against those two issues with religious zeal. The unions I have both been in and negotiated against preferred compensation systems based on seniority and longevity that took away all connections between performance and compensation. Is that about to change?

First, A History Lesson

The National Labor Relations Act was passed in 1935 as part of the massive legislative response to the Great Depression. Sometimes called the Wagner Act or Wagner-Connery Act, after its primary sponsors in the Senate and House, the NLRA took away employer’s power to legally fire workers who unionized or withheld labor under certain situations. By the mid-1940s, labor union membership soared to as high as 35% of the total U.S. workforce.[1] Then the Taft-Hartley Act of 1947, a/k/a the Labor-Management Relations Act, sought to add limits to union power and prohibit some types of organized economic activities that employers felt amounted to economic terrorism. It was the first major revision of any New Deal legislation.

Later, with the Landrum-Griffin Act of 1959, Congress had completed the picture: Wagner-Connery protected the union, Taft-Hartley protected the employer and Landrum-Griffin protected the rights of union members.[2]

Now, the Employee Free Choice Act has been introduced once again, though its future looks murky in this Congress. One of its stated goals is to help employees form unions more easily and mandate employer recognition and bargaining immediately. A mandatory, binding arbitration would establish a two-year initial contract if there is no agreement within 90 days. Opponents cite the bill’s “fast track” membership mechanism (where signed intent cards can be used optionally in lieu of secret employee ballots) and the prohibition against employer counter-campaigns as major flaws. Supporters say it is needed because collective labor negotiations are more important now than anytime since the Great Depression.

Everyone is Partly Wrong--and Partly Right

While some employers have over-reached in their efforts to prevent unionization efforts from taking root, some union organizers have also gone too far in their efforts to build support. Both sides have good arguments as well as specious defenses. It is safe to say neither side is entirely in the right or entirely blameless. I think they are both fighting an old fight that ignores the real opportunity to actually improve the entire labor law system in the United States.

Here is a look at some of the issues that labor and management are either afraid to discuss or unable to do so dispassionately with an open mind for long-term reform:

1. Fair and balanced communication.
The NLRA protects the employee’s right to engage in union activities as well as to not engage in them. It also protects employees’ rights to engage in certain activities without even forming a union, such as collectively addressing working condition issues and pay with the employer or discussing their pay or working conditions among themselves. Employers may not interfere with, restrain or coerce employees engaged in unionizing activities and unions may not restrain or coerce employees into doing them. The NLRB decisions over the decades have been generally very strongly worded in finding even subtle comments as violations of the NLRA.

Today, labor groups and employers each accuse the other of intimidating employees. Unions scream about “union free” efforts while employers point to sometimes brutal actions by union members against employees who disagree with them. One thing is common to both camps: each is restrained by what the laws say they can and cannot communicate directly to employees.

So fix it. Clarify the statutes so that both sides are entitled to free, honest communication, subject to scrutiny and oversight by the NLRB. Whether you take a page from the Federal Election Commission’s regulations or the Federal Communication Commission’s, find a way to un-muzzle advocates on both sides. Today’s employees are much more mature and informed than those of the 1930s. They also are quite capable of blogging, Tweeting and YouTubing evidence of deceptive and false communications by one side or the other. Free speech is a fundamental American value and the guidance from Whitney v. California, 274 U.S. 357 (1927) is still sound:

"Fear of serious injury cannot alone justify suppression of free speech and assembly." Id. at 376.

"Those who won our independence by revolution were not cowards. They did not fear political change. They did not exalt order at the cost of liberty. To courageous, selfreliant men, with confidence in the power of free and fearless reasoning applied through the processes of popular government, no danger flowing from speech can be deemed clear and present, unless the incidence of the evil apprehended is so imminent that it may befall before there is opportunity for full discussion. If there be time to expose through discussion the falsehood and fallacies, to avert the evil by the processes of education, the remedy to be applied is more speech, not enforced silence. Only an emergency can justify repression. " Id. at 377.

"Sunlight," Justice Brandeis later wrote in Other People's Money, "is said to be the best of disinfectants; electric light the most efficient policeman."[3]

2. Merit Pay and individual performance incentives.

Just because there is subjectivity in an action does not mean it cannot be fair. Performance-based compensation has tremendous value for the employee and the employer. At least it does for employees who want to get more for doing more. No one should still cling to the old notion that people will simply work harder than they have to for personal reward or satisfaction. Positive reinforcement is valuable, whether in non-profit, for-profit or government jobs.
National union leadership would say they do not attempt to protect incompetent workers. Managers and executives would also say they do not attempt to arbitrarily and capriciously terminate staff. It all happens anyway from time to time.

Tying or maintaining a connection between compensation and performance also means that the rating system is more likely to be fair and consistent AND that employer and employee will use it appropriately. Union and management can work out acceptable systems that meet the goal of (a) identifying areas of exceptional performance, (b) identifying areas of substandard performance, (c) calculating the pay adjustments based on the review and (d) setting performance expectations for the next review (as well as any curative measures the employee needs to take). They can even agree—dare I suggest it?—on guidelines for individualized compensation plans that incentivize excellent results with accountability and realistic criteria. It works in non-unionized businesses and with non-bargaining unit staff every day.

One size does not have to fit all. Most workers today are not employed in mass-production industrial shops. The vast majority are in information and or service sector jobs. It is time to dump the industrial-society labor concepts and craft something fresh and relevant. Workers today are better trained and more knowledgeable than their grandparents. Change the statutes that constrain innovation in the labor-management relationship so labor and management can actually have a modern relationship.

3. Employee participation in TQM-style efforts.

Likewise, unshackle innovation among the ranks of employees. Take off the blinders, folks. We are in a very different world than in the 1930s. American business has to be able to encourage innovation, excellence and ingenuity among the ranks to maintain or regain its competitive edge in the global marketplace without fear of charges alleging an “employer-sponsored union.” Employees want to participate. They like having input and influence over the solutions. Past generations may have preferred to be taken care of by paternalistic bosses, but younger workers want to be involved in finding solutions.

Collective Bargaining Agreements (CBAs) are unique to every situation, but affiliates of national labor organizations tend to get a lot of suggestions and encouragement from the national representatives. Kill off the “hot button” issues and make every CBA a “local” CBA. Union leadership is certainly capable of customization that has the local employees’ best interests first. Employers are likewise capable of localized CBA provisions that take into account the unique needs and goals of work groups in each location.

Just because an employer retains the right to implement, modify or decline an employee's recommendations or suggestions for improving the way work is done or enhancing working conditions, does not mean that such a "quality assurance committee" is a labor group dominated by the employer, and thus violative of the NLRA. Let the CBAs permit joint employer-employee work groups that fit the needs of the local work site as well as address overall business process improvement.

Either Lead, Follow, or Get Out of the Way

It is easy to be against something. You let the other side define the discussion then sit back and tear it apart. It is much more difficult to propose viable alternatives and compromise. A lot of water has gone by under the NLRA bridge since 1935. Many honorable people on both sides have come and gone. There are plenty of scars to go around.

Get over them. We are humans working for humans. Some people are greedy, others lazy. Some are power-hungry and hyper-competitive, others opportunistic profiteers—on both sides. None of those is reason enough to impose communism or socialism and very few really want that for themselves.

What is really broken is the whole “zero-sum” labor-management relationship concept. It is time for a better plan entirely. One with flexibility, collaboration, transparency and fair advocacy on both sides. To get buy-in from both camps, Congress should truly draft a “Free Choice” act that seeks to address the short-comings of the outdated system we now have, not just shift power to labor union leaders who lack vision of a future work force that is so valuable, effective and efficient it cannot be replaced with off-shore competition.

No more "it cannot be done" excuses. This is the "Yes, we can!" generation.

[1] Kusnet, David, “UNION ADVANTAGE: The Case for Organized Labor and Democracy in the Workplace,” United Professions AFT Vermont Website,

[2] My research was much easier because so many labor union web sites contain the full text of these statutes. While there may be many employer sites that also display them, I did not find one.

[3] Excerpt from online text at Louis D. Brandeis School of Law,; Chapter V: What Publicity Can Do.

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