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EFCA's Significance for HR

EFCA's Significance for HR | Human Resource Executive Online With the long, slow decline of unions over the past quarter-century, many HR leaders have little firsthand experience with the labor movement. The possible enactment of the Employee Free Choice Act could change that. But the end result for HR may not be what many in the profession think.

Monday, March 2, 2009
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I began my academic career when Industrial Relations was the big brother in Human Resources.

It was the most interesting and important HR topic and the key, not only to advancement within the field, but also one of the important developmental assignments that high-potential candidates had to do. In those days, labor law was second only to corporate law in salaries for lawyers.

The assumption through the 1970s was that unions would exist and that there was a public-policy purpose in helping unions and companies get along with each other better. The people who became secretaries of labor were union-management experts, even in Republican administrations (John Dunlop and George Schultz in particular).

Every important workforce commission or panel could be expected to have a union and a unionized employer represented on it.

There were two reasons I got out of studying unions and collective bargaining. The first was that the entire topic became partisan.

With the Reagan administration, the assumption that unions were an accepted part of the business landscape was rejected. Anyone who even studied union issues from that point on was suspect by at least some members of the business community, and the labor movement similarly had a kind of "Are you with us or are you against us?" view of students of industrial relations.

The second, and perhaps more important reason was that there was nothing left to say: Unions have been in decline since the early 1980s, and the only issue in each new round of negotiations has been how much they would give up.

The rise of the proposed Employee Free Choice Act is a reminder, as they like to say in Washington, that elections have consequences.

Republican administrations since Reagan, working on the view that unions restricted economic competitiveness by getting in the way of what business wanted to do, acted systematically through judicial and board appointments, executive orders and administrative interpretations, to shift power away from unions and to employers.

It is, therefore, not surprising that a Democratic administration, concerned with stagnating wages and working on the assumption that weak unions have worsened the ability of employees to secure better standards of living, will do the reverse.

The Employee Free Choice Act would institute a big change in the process through which unions are certified to represent employees. Because union issues have been absent for so long from the practice of most human resource professionals, experts will forgive me for a brief and highly simplified review of the steps involved.

The New Deal legislative framework sought to replace the strike-ridden process of forcing employers to recognize unions with an election process that began with a show of interest by employees -- a count of the number of employees who signed cards indicating they were interested in having a union. The National Labor Relations Board would then determine the process and procedures such as determining who gets to vote -- and eventually a secret ballot election would decide whether the union won.

Over time, the decline of consensus about the legitimacy of unions at the political level translated into conflicts at every step in this process, which went from something straight-forward to a full-employment plan for lawyers. And as both national mood and administrative rulings turned toward employers, unions found it more and more difficult to organize.

To illustrate, many unions now don't even bother seeking an election unless than have more than 90 percent of employees signing cards, and even then they lose almost half the elections.

Even when unions win the election, they are never able to get the employer to agree to a contract in about half the cases. That is what you'd expect when political support shifts from unions (Democrats) to management (Republicans). 

The Employee Free Choice Act says, "let's skip the election process altogether and just certify a union based on card counts." This model has been in place for some time in Canada.

In particular, supporters argue, this prevents employers from firing and otherwise intimidating employees during the election process, something that is illegal but the penalties for which are modest. With a Democratic House, a Democratic Senate, a Democratic President, and lots of co-signers, EFCA is a sure bet to be signed into law, right?

I watched a much stronger labor movement try to pass more modest labor-law reforms under the Carter administration when there was also a Democratic House, Senate, and President. It got nothing.

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EFCA has even less chance, in part because employers are much better organized politically now and in part, because the "visuals" associated with the Act are so negative: "Getting rid of secret ballot elections is un-American," as the management opposition has already begun to trumpet.

One view on this whole legislative process is that the labor movement knows all this and is just using the Employee Free Choice Act as a stalking horse to negotiate an attractive compromise.

The 1978 reforms might be one approach, putting more teeth into the enforcement of the existing protections on organizing. More attractive still for labor would be to hold "snap" elections that prevent management from having the time to mount a persuasive anti-union campaign.

And here the "visuals" are more on the union side: "The employees already know what management is about, why do employees need a period when they can be intimidated?"

I understand that most of the readers of this column are HR leaders with little memory of the period when unions were powerful and who are expected to oppose any changes that benefit unions.

So here's the little secret: Nothing would do more for the influence and prestige of human resources within companies than a resurgent labor movement.

While management lawyers across the country are warning employers of impending doom if EFCA passes, they are pinching themselves at their good fortune just to have legislation like it being considered because of the attention it gives them.

I remember in the mid-1980s hearing a table of labor-relations managers tell me that they really wished for a good organizing campaign at their plants because that was the only time senior management provided any resources to deal with bad supervisors and other workplace problems.

The high water mark for HR generally in the United States was in the 1950s and '60s when unions were strongest, and the fact that both declined together is no coincidence.

Want a "seat at the table?" Hope the labor movement gets something important out of this deal.

Peter Cappelli is the George W. Taylor Professor of Management and director of the Center for Human Resources at the Wharton School of Business.


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