Peter Lareau on Employment Law Backgrounder: Financial Crisis and Employment Law

The United States is facing an enormous financial crisis. This devastating decline in the nation's economy, and the election of Barack Obama and the strong gains made, generally, by the Democratic Party in national elections foreshadows changes in labor and employment law and a surge in employment-related litigation. In this article, attorney/author Peter Lareau seeks to ferret out areas where change is most likely and, therefore, worth noting for the practitioner.

“The Employee Free Choice Act (‘EFCA’) would amend the National Labor Relations Act and effect fundamental changes in the way a collective bargaining relationship is established,” Mr. Lareau writes.  “Currently, an employer's obligation to bargain with a union generally arises only after the employees have had an opportunity to vote in a secret ballot election conducted by the National Labor Relations Board (‘Board’) as to whether or not they wish a union to represent them. . . . EFCA, which was first introduced in Congress in 2003 and passed the House in 2007 (See H.R. 800) would eliminate the secret ballot election. Instead, the Board would be required to issue its certification of representative if, after conducting an investigation as to the validity of authorization cards presented to it by a union, the Board concludes that a majority of the employees in an appropriate unit has signed authorizations designating the union as the employees' representative. EFCA specifically states that in such circumstances ‘the Board shall not direct an election . . . .’

“Senator (now President-Elect) Obama was a co-sponsor of the bill when it was introduced in the Senate (see S. 1041) and has promised to sign it if passed by Congress. As indicated above, the bill has already passed the House. As of this writing the Democrats have secured at least 58 seats in the Senate, only 2 votes shy of the 60 votes necessary to defeat a Republican filibuster. Even if they do not ultimately obtain 60 seats, it is almost certain that EFCA will pass and be signed into law in its present or only slightly modified form. Here's what to expect when EFCA becomes law:

  • Employer opposition will be fierce and it can be anticipated that litigation will ensue challenging the substantive provisions of the bill as well as any procedures eventually adopted by the Board to implement the bill's certification by authorization card provisions
  • With lots of new dues-paying members ripe for the picking under the EFCA's procedures facilitating easy organization of employee units, Change to Win and the AFL-CIO can be expected to engage in pitched battles to organize the same employees, reminiscent of the slugfests between the AFL and CIO that predated the 1955 merger of those two groups.

Mr. Labreau notes that only two members of the five-member Board are seated, and one of President-Elect Obama’s first priorities will be to fill the three vacancies, most likely giving organized labor and Democrats a voting majority to reverse pro-employer cases decided by the board during the Bush administration.”

Mr. Labreau discusses the issues an Obama-appointed Board can be expected to revisit as soon as the opportunity presents itself.  He also takes a look at other labor and employment law issues related to layoffs, the ADEA, the FMLA, the Pension protection Act of 2006 and health benefits.

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