For years, employers have heard predictions of sweeping labor law reform. Indeed, past legislation has been a compelling talking point in presidential elections. Who doesn’t remember the Employee Free Choice Act (EFCA) which never became law? Or more recently, the PRO Act, which generated headlines but repeatedly stalled in the Senate. As a result, many business leaders have grown accustomed to viewing labor law reform as more of a political talking point than a practical reality.
Continuing to do so may be a mistake.
Earlier this week, the House passed the Faster Labor Contracts Act (FLCA) after supporters successfully utilized a discharge petition, a rarely used procedural tool that allows legislation to reach the House floor despite leadership opposition, to call for a vote. The FLCA would fundamentally alter how first union contracts are negotiated. Under the bill, employers and newly certified unions must commence negotiations within ten days of certification. They then would have just 90 days to negotiate an initial collective bargaining agreement.
(For context, the typical first contract takes approximately 465 days to ratify; for employers in the healthcare industry, it can take nearly twice as long due to the complex issues related to staffing, scheduling, patient care concerns, etc.)
If the parties do not reach an agreement in the first three months, the legislation requires the dispute proceed to mediation. If mediation fails after 30 days, a federal arbitration panel is empowered to impose the terms of a binding contract on the parties for a two-year period.
Unlike EFCA and the PRO Act, this legislation has demonstrated an ability to garner support beyond traditional partisan lines, both in the House and the Senate. Seven Republicans broke ranks with leadership to pass the bill in Congress. Republican Senator Josh Hawley of Missouri and Democrat Senator Cory Booker (D-NJ) have introduced a similar bill in the Senate, which has been cosponsored by Republican Senators Roger Marshall (Kansas) and Bernie Moreno (Ohio). Senator Hawley, who has a well-publicized collaborative relationship with Teamsters International President Sean O’Brien, celebrated the bill’s passage in the House, stating:
We need real labor reform that puts workers first. For too long, mega corporations have denied workers’ rights and refused to meet them in good faith at the bargaining table. I’m glad to see the House has done the right thing for working-class Americans. The Senate needs to pass my bill and get this done
Unsurprisingly, organized labor is championing this legislation, while the U.S. Chamber of Commerce and National Association of Manufacturers, among other trade and business associations, have opposed it. Whether one supports or opposes the legislation is beside the point. The practical implication is clear: once a union is elected, employers will be under an extreme time crunch to agree to the terms of a first contract before the intervention of a tribunal who will be allowed to settle any and all disputed terms and conditions of employment according to what it believes is fair.
The Bottom Line
For now, the FLCA may not have enough support in the Senate to survive a filibuster; while all Democrats likely will support it, there are still not enough Republican senators, on record, who will vote in favor of it. Notwithstanding, it is imperative that employers take steps to establish good workplace cultures such that their employees do not feel the need to turn to organized labor. That means that companies should consider regularly conducting engagement surveys, pulse checks, and other assessments. And when receiving the results, they should meaningfully address them. Employees notice the difference between being asked for feedback and seeing action taken on that feedback. Organizations that fail to address recurring issues involving compensation, staffing, communication, scheduling, career development, or workplace culture could find themselves facing a union campaign—and potentially a binding first contract—on an accelerated timetable.
And if Congress continues moving this legislation forward, employers who are not paying attention today may wish they had been tomorrow.
If you have any questions regarding this Alert or other labor or employment issues, please contact the author, Rob Entin, Partner in our Chicago office and member of our Labor Relations practice group at rentin@fordharrison.com. Of course, you can also contact the FordHarrison attorney with whom you usually work.