The Employee Free Choice Act (“EFCA”) was first introduced for consideration by the 110th Congress on March 27, 2007. In 2007 the House of Representatives passed the proposed law by an overwhelming majority. No action was taken by the Senate due to a Republican filibuster. EFCA has been endorsed and vigorously supported by every major labor union and the Democratic Party. President Obama and the Democratic leadership in Congress have stated that passage of EFCA is one of their legislative priorities. EFCA was reintroduced on March 10,2009 in both Houses of Congress.
EFCA has the potential to revolutionize the American economy and give the labor unions unprecedented power over employers. Employers who are unaware and unprepared for the EFCA are in for a rude awakening.
EFCA does away with the 70 year old process of conducting union representation elections by secret ballot and replacing it with a card check. Under EFCA a union will automatically and instantly gain the legal right to represent employees by simply collecting union authorization cards from 51% of employees in a bargaining unit. A bargaining unit can be composed of employees working in one part of an employer’s business such as office personnel, drivers, production workers or sales people. A bargaining unit can be composed of full-time or part-time employees. An employer need not be provided any notice of the unionizing effort. The first time an employer becomes aware of the union’s presence is likely to be the day the union announces it has obtained authorization cards from a majority of the employees.
If the union obtains authorization cards from a majority of the employees an employer has no choice but to negotiate a contract with the union. Employers may think they can bargain an agreement on terms that are acceptable to them if they are patient and are willing to hold fast to their position. They are wrong. EFCA provides that if an employer and union are engaged in bargaining for their first contract and are unable to reach agreement within 90 days; either party may refer the dispute to the Federal Mediation and Conciliation Service (FMCS) for mediation. It is very likely that the union will request mediation if they have not obtained a contract within 90 days.
If the FMCS is unable to bring the parties to agreement after 30 days of mediation, the dispute will be referred to arbitration and the results of the arbitration shall be binding on the parties for two years. If an employer does not agree to a union’s demands regarding wages, benefits and working conditions an arbitrator will set the wages, benefits and work rules for the employees.
A union will have no reason to moderate its demands during contract negotiations since they can force the issue to binding arbitration. Since the arbitrator will be setting your employment costs (wages, overtime rates, insurance benefits,pensions,401-k contributions, vacation, holidays, paid leave etc.) and working conditions (work rules, job classifications, disciplinary procedures etc.) employers will no longer be able to establish its profit margins or earnings. The arbitrator will decide how much of your income and profit you will be allowed to retain and how much will be shared with employees. The contract imposed by the arbitrator will remain in effect for two years and will form the basis for succeeding contracts.
EFCA substantially increases the penalties on employers who are judged to have violated the National Labor Relations Act (NLRA). The EFCA increases the amount an employer that violates the NLRA will be required to pay to three times the amount of the employee's back pay if an employee is discharged or discriminated against during an organizing campaign or first contract negotiation. The proposed law also provides for civil fines of up to $20,000 per violation against employers found to have willfully or repeatedly violated employees' rights during an organizing campaign or first contract drive.
Incidentally EFCA does not change the process for voting a union out of a workplace. A decertification vote will still be conducted by a secret ballot.
Employer’s cannot ignore EFCA and hope EFCA never becomes law. The time for action is now. Employers must prepare their organization to deal with the likelihood that it will be subject to a unionization effort shortly after EFCA becomes law.
Coleman J. Walsh Jr. has provided employers advice and representation on a wide range of employment matters including employee relations, performance management, contract negotiations, policies and procedures and every other aspect of the employment relationship for more than 25 years. He holds a Masters degree in Industrial and Labor Relations from Cornell University and a law degree from Suffolk University in Boston, Massachusetts.
Mr. Walsh can be reached at pacjw@aol.com or 610-608-4680.
Coping with the economic turmoil caused by the greatest financial crisis in 75 years has left many employers wondering what they should do about employee compensation in 2009.There are a wide range alternatives available for consideration. Each option has its positive and negative consequences. The following is a brief discussion of some of those options.
1. For employers in dire straits the options are simple and straight forward. In order to survive compensation will have to be frozen or reduced. Employees should be told that freezing or reducing compensation is absolutely essential to the survival of the business. While employees will not be happy with the decision they will accept it (perhaps grudgingly), if they are provided the business facts supporting the action. Reductions in compensation should be consistent with any contractual obligations and should not endanger any employee’s exempt status under overtime laws.
2. Compensation freezes for star performers should be avoided if possible. Even in the worst of time employees who have skills in high demand in the job market or are among the top performers in their field can find other employment. Providing those individuals with modest increases or greater incentive opportunities can keep them from quitting.
3. Due to the negative impact a wage freeze can have on morale it is prudent to announce that the freeze decision will be reevaluated within a reasonable time such as after 90 days or six months. A periodic review is less discouraging for employees and may keep top performers from quitting. The reassessment decision must be sincere and should be communicated to employees along with the facts supporting it.
4. Overall compensation costs can be reduced by suspending employer contributions to the company’s 401-k plan.
5. Employees may be paid a lump sum bonus in lieu of a permanent increase in salary. Lump sum payments have two benefits. First, paying a small salary increase such as a 1% or 2 % pay increase in a lump sum has a greater impact than spreading it over the regular pay schedule throughout the year. Second, providing a lump sum payment does not permanently increase an employee’s salary so when wages are revaluated in the future the next increase will be based on the 2008 salary rather than a higher salary in 2009.
6. Offer non-exempt employees (employees legally required to be paid overtime) an opportunity to work a reduced work week in return for a proportionate reduction in pay. Some employees may want to work less and can withstand the loss in pay. This option does not apply to exempt employees since the general rule is that they must be paid a fixed salary for any week in which they perform any work. Exempt employees may have their salary reduced on a permanent basis to save costs. Care should be taken to insure that the reduction does not endanger the employee’s exempt status.
7. Offer unpaid sabbaticals to employees. In such situations employees are usually allowed to maintain their health insurance benefits while on a sabbatical by paying some or the entire insurance premium. Employees are commonly guaranteed to be reinstated at the conclusion of the leave.
8. Put any money available for wage increases into absorbing any increases in health insurance premiums. Payment of health insurance premiums are not subject to wage related taxes such as social security contributions, unemployment taxes, and the calculation of workers’ compensation premiums. While this option offers only small savings even small savings matter in tough times.
9. Wherever possible offer two employees the opportunity to share one job with commensurate reductions in pay. There may be employees who are willing to give up their full-time jobs in order to share a single job. Allowing employees the leeway to decide how the job will be shared increases the chances for a successful job sharing arrangement.
10. Offer payments to employees who opt out of the employer’s sponsored health insurance plan. Any difference between the payment to the employee and the employer’s regular share of the insurance premium would be a savings for the employer.
Anyone of these options or a combination of several of them can help employer weather the current economic crisis. The pros and cons of each option should be carefully weighed before being implemented. Candid conversations with effected employees will increase the chances of the changes being understood and tolerated. As with all employment matters it would be prudent to obtain advice from a qualified human resources professional before taking any action.
Coleman J. Walsh Jr. has provided employers advice and representation on a wide range of employment matters including employee relations, performance management, contract negotiations, policies and procedures and every other aspect of the employment relationship for more than 25 years. He holds a Masters degree in Industrial and Labor Relations from Cornell University and a law degree from Suffolk University in Boston, Massachusetts.
Mr. Walsh can be reached at pacjw@aol.com or 610-608-4680
In terms of business, focusing on the outcome or result is all about leadership. In this article, I will discuss the Leadership aspect of any business. Every great leader starts by defining the culture of his or her company. The culture is determined by spending time thinking about the mission, vision, and values of the organization. Every leader must make time to do this!
The Vision is the "Strategic Intent" of the business owner or senior management - it should be considered the ultimate goal. It captures the essence of success, is stable over time and is deeply motivating to the organization at all levels.
The Mission is a realistic, credible, and attractive description of your ideal organization. It is a carefully formulated statement of intentions that defines why the business exits, how the business will maintain and increase its competitive advantage, and how the business will treat the other businesses and people that it comes in contact with.
Your Uniqueness is what makes you different from everyone else, and is often used as a slogan. It is the point of difference that you want to shout from the rooftops for all to hear and, once you "own" it - it will be associated with you whenever others hear your name.
The Culture are the "rules" of the Game, and clearly demonstrate to everyone in your organization the core and fundamental values that they are to bring to the other employees, customers, vendors, and everyone else that they will come in contact with while working for your business.
The right Vision, Mission, Uniqueness, and Culture - when combined are so powerful that they can literally jumpstart the future of an organization. Creating a clear focus and calling forth energies, talents and resources that will make great things happen. Then attract commitment, and energize people by providing a significant challenge worthy of their very best efforts. In future editions we will begin to develop a 5-Year Vision for your business, a Company Mission Statement, and create the core values that drive your company.
Visualize this thing that you want. See it, feel it, believe in it.
"Make your mental blueprint and begin to build "
Robert Collier
By Frank Felsburg, Principal, Cogent Training and Consulting LLC
You see them at every major sporting event you attend. You hear them, too. “Who needs tickets?” they say. And then, before you’ve even passed them and averted their gaze, they change gears and say “Who’s selling tickets?” You ask yourself , “Are they selling or buying?” And then you realize the answer is both. Not only are they selling, but they’re also buying or receiving free tickets to sell at a higher price.
Even though this activity, scalping, is illegal, it goes on all the time. In many ways, it’s a microcosm of the “Big Board,” the New York Stock Exchange, and the world we live in. Supply meets demand, and a transaction takes place. But did you ever stop and negotiate with one of these scalpers? As soon as you ask “How much?” even if just to test the waters, the negotiation begins. You think they only have two or three tickets but it turns out they have a whole inventory. And they know their inventory well.
“What do ya need?” they ask quickly, probing effectively. An excellent opening salvo, if I do say so myself. A good open-ended question, used to gather information. The ball is now in your court. How do you respond? Depending on the event, you could go right for the primo seats. But, if you do, you can expect to pay big bucks, and they sure don’t take checks or credit cards. “What’ve you got?” you ask inquisitively, eyes wide open, like a kid in a candy store. A good retort, keeping the dialogue going and getting the seller to put his cards, or in this case tickets, on the table.
Often, what you hear next almost makes you want to cry (either in amazement or from disappointment). The scalper rattles off a whole panoply of different seats or sections, some you would give your eyeteeth for, others that have more to do with your nose than any other part of your body. Seeing your eyes light up when he mentions he has seats “on the fifty-yard line,” “mid-court,” “right behind the penalty box” or “on the first base line right behind the insert your favorite team here’s dugout,” he now has you doing mental gymnastics. Emotion has taken over. It has trumped rationale and, for a moment, you’re back at the office reliving every single play with your colleagues, bragging about where you sat for the big game.
“How much?,” you ask, as if rationale had anything to do with buying game tickets. The price is high (you knew it would be) but because the scalper has shown you the value, despite the cost, the deal is consummated (as surreptitiously in front of 10,000 other people as is possible). Then, the thought occurs to you,”What do I do with the cheap seat tickets I came with?” So, you decide, you try to sell them to the person you just bought the tickets from, but it’s like selling ice cubes to eskimos. Sure, he may give you a few bucks for them, but he already has a supply that will last him halfway through the game.
It didn’t take this “salesman” long to realize the 5 main rules of closing sales: 1) establish a recognized need, 2) have a viable solution, 3) the value must justify the cost, 4) create a sense of urgency for the product, and 5) the prospect should have the authority to buy. Then, as soon as he rings up your sale, he’s back at it. “Who needs tickets? Any extra tickets?” he asks confidently, knowing that, with the anticipation of the game at hand, the sense of urgency is increasing every second.
Frank Felsburg is a sales trainer with Cogent Training and Consulting LLC. He can be reached at 610-938-2616, via email: ffelsburg@comcast.net or on his website: www.cogenttraining.com.
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