EFCA’s First Contract Compulsory Arbitration Provisions Could Be Disastrous

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While most of the debate over the euphemistically titled Employee Free Choice Act initially centered on the use of card checks instead of secret ballot elections to determine whether employees want union representation, EFCA’s compulsory interest arbitration provisions for first contracts are finally getting the critical scrutiny that they deserve. On that score, EFCA is anything but free choice for either employees or employers.

In a recent article for Roll Call’s Mission Ahead, Thomas Kochan and Arnold Zack said that many of the arguments against EFCA’s first contract interest arbitration provisions could be easily fixed by setting forth the procedure for selecting the arbitrator and providing standards for arbitrators to follow in issuing binding awards. While adding such provisions would address some of the criticisms that have been leveled against EFCA, they would not overcome the fundamental public policy objections to mandating first contract interest arbitration.

Although Kochan and Zack argue to the contrary, as someone who has been involved in more than 60 public-sector interest arbitration cases over the past 40 years, I emphatically disagree with the notion that EFCA first contract arbitration is either necessary or good public policy.

But before getting to the heart of the matter, let me emphasize that I agree with their assessment of the critical role that mediation can play in the negotiation of first contracts. In my experience, however, where interest arbitration is mandated, mediation is, in most instances, doomed to failure. Instead, it becomes merely a weigh station on the road to arbitration.

Kochan and Zack argue that compulsory arbitration of first contracts is necessary because a recent study found that newly certified unions under the National Labor Relations Act were able to secure first contracts within one year only 56 percent of time. Quite frankly, I am surprised that the percentage is anywhere near that high.

Based on my experience in successfully negotiating more than 100 first contracts, it is relatively rare to complete such negotiations within one year for at least three reasons. First, it normally takes a union at least a couple of months or longer to put together its initial demands.

Second, because unions typically make unrealistic promises during the organizing drive, it takes time for them to temper employee expectations, if in fact they are prepared to do so.

Third, and most importantly, since the parties are negotiating a first contract, it is necessary to negotiate all the provisions normally found in a collective bargaining agreement, including seniority, management rights, grievance procedures, hours of work and overtime, leaves, as well as wages, insurance and other economic benefits.

As a result, it is not at all unusual for such negotiations to take well over a year. Indeed, it is not unusual for such negotiations to take several years to conclude. Thus, I reject the premise that first contract arbitration is necessary because less than a majority of newly certified unions are able to negotiate their first contract in one year or less. As one police union representative recently commented to a Chicago area newspaper on the negotiation of a first contract that took 20 months, “Under two years for a first contract is actually very good.”

Kochan and Zack then suggested that mandating first contract interest arbitration in the private sector is supported by the experience with compulsory interest arbitration in the public sector. While I disagree with their interpretation of this public-sector experience, it is important to point out that in almost all instances such legislation only covers employees who provide essential public services, such as police officers and firefighters, where strikes could have disastrous consequences. Thus, the principal rationale for mandating public-sector interest arbitration is, as the Illinois statute states, “to protect the public health and safety of the citizens ...” This rationale is simply not applicable to employees covered by the NLRA.

Even assuming that Kochan and Zack’s recommendations concerning the structure of first contract arbitration were accepted, EFCA’s compulsory arbitration provisions would still be a radical departure from the underlying premise of the NLRA, i.e., free collective bargaining. As the Supreme Court noted in a recent decision, “[t]he object of [the NLRA] was not to allow governmental regulation of the terms and conditions of employment, but rather to ensure that employers and their employees could work together to establish mutually satisfactory conditions.”