BuckeyeBlog

Unions and their allies in Congress have been pushing legislation for the past few years that would undermine a variety of worker and business owner protections currently in the law. The so-called “Employee Free Choice Act” would actually undermine employee free choice by making it much harder for workers to vote by secret ballot in unionizing votes (anyone see the potential for abuse there?).  It would also impose mandatory arbitration on workers and employers in the event of an impasse during contract negotiations. The only things that have stopped it from passing this year were President Bush’s opposition and the Republican miniority in the Senate. Next year Bush is gone and there are far fewer GOP Senators. It’s quite possible this legislation will become law.

University of Chicago law professor Richard Epstein discusses the problems with the law in the Wall Street Journal:

The National Labor Relations Act strips employers of basic common law rights, including the right to refuse to deal with the union. It imposes on employers (and unions) a duty to bargain in good faith toward a contract. But this duty does not force agreement. Either side is free to walk away from any deal it does not like. Unions can strike, and firms can lock out workers. Today’s law, accordingly, restricts arbitration to interpreting existing agreements, not to making agreements from whole cloth.

The EFCA takes away the employer’s right to walk. Now the successful union, backed by direct government power — i.e., mandatory arbitration — can force itself on the firm. Yet the proposed law does not let any court block the deal or ensure that the mandated terms offer a reasonable return on its invested capital. (Even modern rent control statutes require that much.)

The government-chosen panel could well impose terms that might cripple the firm competitively. Consider that the takings clause surely prevents the government from forcing any person to buy real estate for twice its market value from a seller. That same principle applies to this labor law: No government should be able to force a firm to hire labor at $50 per hour when the company is not willing to pay half that much.

The Columbus Business First recently published The Small Business Owner’s Guide to the Presidential Election, in which one of the sections deals with labor issues. While the war on terror and recent financial crisis are getting the most attention from the media and voters, small business owners – who create most of the jobs in today’s economy – are also concerned about the impact an Obama administration would have on labor activities. Specifically, they are concerned about the Employee Free Choice Act, which passed the House but died in the U.S. Senate, that would permit workplace unionization without a private vote by workers. Obama supports the Act, while McCain voted against it last year. In this Buckeye Institute viewpoint, I outlined the dangers of this “card check” system, which would allow union bosses to intimidate workers into supporting unionization of workplaces, jeopardize workers’ rights, and put American businesses at further competitive disadvantage in the global marketplace.

The Business First article states:

Giovanni Coratalo, executive director of the U.S. Chamber of Commerce’s small and midmarket business councils, said he has heard more concerns from businesses about the Employee Free Choice Act than any other issue besides the economy. ‘Small businesses should be afraid of this,’ Coratolo said.”

Based on recent polls showing Obama with a significant lead in the presidential race, small businesses and their employees may find themselves worse off next year.