EFCA Update
July 2009

Not long after the 111th Congress began its first legislative session, the Employee Free Choice Act (EFCA) (S.560,H.R. 1409) was introduced for consideration. During the 2008 campaign, this act received substantial support from organized labor, a significant majority of the Democratic members of Congress, and now-President Barack Obama. Thus, it is no surprise that the EFCA has become a top legislative priority for the new administration and the Democrat controlled Congress. Despite this support, the EFCA, at least in its current form, is no closer to passing now than it was when first introduced on March 10, 2009.

As currently drafted, the EFCA would represent the most fundamental change in American labor law since the original National Labor Relations Act (NLRA) was passed in 1935. The EFCA would drastically alter more than half a century of labor law in three primary ways: (1) union recognition and certification; (2) government involvement in negotiation of contracts; and (3) an expansion of the National Labor Relations Board’s (NLRB) remedial powers. Taken as a whole, these changes would likely result in a significant increase in unionization.

Practical Elimination of Secret Ballot Election

Under current law, employees can request a secret ballot election, monitored by the NLRB, upon a showing of interest of at least 30 percent of an appropriate unit of employees, to determine union representation. The EFCA, however, would make such representation automatic and mandatory if more than 50 percent of the employees in an appropriate bargaining unit signed union authorization cards. There would be no vote. Thus, the EFCA allows unions to skirt the democratic process currently guaranteed to workers, thereby effectively eliminating an employer’s ability to engage in a free exchange of information with their employees prior to a secret ballot election.


Currently, first contracts between an employer and a newly certified union, if attained at all, typically take up to two years to achieve. During this process, the NLRA requires only that the parties negotiate in good faith and the NLRB becomes involved only in limited situations. The EFCA completely alters this process—the parties have only 90 days to negotiate a first contract before the Federal Mediation & Conciliation Service (FMCS) is called upon by one of the parties in an attempt to resolve the contract through non-binding mediation. If FMCS mediation is unsuccessful, then a federal arbitration panel will determine the terms of the parties’ collective bargaining agreement; this decision would bind both parties for at least two years. Under the EFCA, a union will be able to guarantee employees who it is trying to convince to sign union cards that they will in fact get a labor contract. Such guarantee undermines the collective bargaining process, as the terms of the contract will, more often that not, be determined by the government, not the parties.

Punitive Penalties for Employers

Currently, the remedial purpose of the NLRA is to restore the parties to the way things were before a violation of the act occurred—e.g., reinstatement, back pay and notice postings. Under the EFCA, in certain circumstances, an employer can be fined up to $20,000 per violation and be forced to pay triple the amount of back pay damages actually caused by the violation. And under the EFCA, these punitive provisions would not apply to unions. This change in particular may create incentives for unions to file frivolous, unfair labor practice charges against employers and places employers’ conduct on a different level than union conduct.

These changes fly in the face of the original tenants of the NLRA. The NLRA was intended to regulate labor relations in a neutral manner by ensuring that employees, and not union bosses or employers, made decisions about union representation in an open, non-coercive environment. As for bargaining, the NLRA provided for government intrusion only in limited situations. The EFCA has replaced the NLRA’s neutrality with union-friendly provisions and potentially unconstitutional, mandatory government involvement and determination of contract terms.

EFCA Faces Challenge from Both Parties 

The first indication that the EFCA faced significant challenges in Congress came on March 25,2009, when then-Republican Sen. Arlen Specter from Pennsylvania announced that he would not vote for the bill, effectively making it impossible for the Democrats to reach the 60-vote threshold required to move the bill through the Senate and avoid a Republican filibuster. Since Specter’s announcement, seven Democrats— Sen. Mark Udall (D-Colo.), Sen. Michael Bennet (D-Colo.), Sen. Blanche Lincoln (D-Ark.), Sen. Mark Pryor (D-Ark.), Sen. Ben Nelson (D-Neb.), Sen. Thomas Carper (D-Del.) and Sen. Dianne Feinstein (D-Calif.)—have publicly indicated that they have concerns with the bill or are otherwise not fully supportive of the EFCA in its current form. Though Specter switched his party affiliation in late April, he remains opposed to the EFCA.

While it appears that the EFCA as currently written will not become law, Sen. Tom Harkin (D-Iowa), who originally introduced the bill, has stated that he believes the EFCA can be amended in away that will lead to its passage. Democrats, as a whole, appear to be in agreement that the EFCA will not pass without a compromise. At this point, however, it is nearly impossible to predict the exact form the final bill might take. Numerous proposals have been forwarded by lawmakers on both sides of the aisle, but at the time of this writing, none of these proposals seems to have gained any real traction.

Gaming Employers Should Prepare Now

Regardless of the form that the EFCA eventually takes, or whether it passes at all, employers, including gaming employers, should be prepared for increased organizational efforts by unions. Though the percentage of the American workforce that has been unionized has steadily declined for decades, the EFCA, in almost any form, will result in a marked increase in union activity. And even if the EFCA does not pass, the publicity it has generated for unions and other labor organizations alone is likely to bolster the recent groundswell in organizational activity around the country.

Being prepared for increased union organizing efforts is particularly important for gaming employers, including tribal casinos, because they employ so many classifications of employees, from janitorial services to restaurant and gaming personnel to the drivers that deliver the supplies necessary to keep the casino operating on a daily basis. Each of these groups could represent separate and distinct bargaining units that could be targeted for organizing. Under the EFCA, it will be extremely difficult for a casino to prevent the unionization of these groups unless they are proactive and takes steps to prepare themselves before the EFCA becomes law. This means casinos need to audit their internal policies, procedures and pay practices and, perhaps more importantly, ensure that the employer employee relationship is a healthy one. Below is a synopsis of the various personnel issues all employers should begin to address now.

Audit Pay and Benefits

A critical evaluation of pay practices and employee satisfaction with these practices can go a long way in maintaining a satisfied, non-union workforce. Thus, casinos need to audit the pay and benefit programs for each potential bargaining unit, paying particular attention to the pay and benefits provided by competitors and other employers of similar size in the surrounding areas.

Audit Management Practices

This should be done with a particular focus on management style and management-employee relations as management inconsistency, favoritism and unfairness more often prompt employees to seek out a union than wage and benefit issues. Employers should conduct a survey of their supervisors/managers to determine how they perceive their relationship with their employees and how they treat their employees, paying special attention to how they address employee concerns and complaints. Truly, respect and fair treatment of employees cannot be emphasized enough by a casino seeking to avoid unionization.

Audit Work Rules, Policies and Practices

Casinos need to implement and understand the rules and procedures they will need to fight the EFCA in the future, now. If a casino does not already have rules limiting solicitation and distribution by employees, and regulating third-party visitors on company premises, they need to be adopted; for those that do have such rules in place, they should be reviewed to ensure they comply with applicable law.

Determine which Supervisors are Exempt

Because the NLRA exempts supervisors from its coverage, it is critically important that casinos determine which of their management personnel have sufficient authority to be considered true “supervisors” under the NLRA. Since true NLRA supervisors are not able to unionize, they can be important resources as the “eyes and ears” and spokespersons for the casino. However, under the NLRA, an employer can be liable for, and will be bound by, the actions of its supervisors.

Educate Employees about Authorization Cards

Casinos need to inform their employees that when they sign a union authorization card, they are entering into a contract to give up their authority to speak and act for themselves. It is critically important that employees have this information before they are approached by union organizers and before they sign cards.

Train Management and Create a Response Team

Casinos should engage in proactive preparedness and response training of their supervisors and management. Management at all levels need to be educated about the NLRA and the EFCA, about how to recognize signs of organizing of its workforce, and how to avoid unlawful, albeit unintended, threats, coercion and intimidation of employees. Establishing a rapid response team and initial response plan(s) are invaluable tools that will allow an employer to “hit the ground running” when it becomes aware of union activity.

Decide Bargaining Units

Under certain circumstances, a casino can create or modify its bargaining units. Where this is possible, bargaining units should be formed in away that will best withstand organizing or unionization given the particular business needs and constraints of the business operation.

Establish Employee Involvement Committees

One of the best ways to prevent employees from signing union authorization cards is to establish a lawful structure for employee input on company policies, and wages and benefits. By giving employees a way to candidly address their concerns with the casino themselves, an employee is less likely to sign a union authorization card requiring them to give up that right. However, casinos must be vigilant when establishing employee committees, because certain types of employer involvement in these committees are considered a violation of the NLRA.

Regardless of the EFCA’s fate, unionization is likely to increase. Gaming employers need to prepare now for the coming unionization efforts on the horizon. Employers that make an immediate investment in preparation and commit to being proactive will reduce the risk of workforce unionization and the significant financial burden a unionized workforce will likely impose.

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