AFL-CIO Says Employee Free Choice Act Not about Franchises and Small Business
WASHINGTON - On Tuesday the U.S. House of Representatives and the Senate introduced the Employee Free Choice Act. Says AFL-CIO president John Sweeney, “We are confident the Employee Free Choice Act is going to become the law of the land.” But Laura Lee Blake, vice president of fair franchising & government affairs for the largest association of hotel owners in the country, the Asian American Hotel Owners Association (AAHOA), sounds a cry of warning, "I honestly believe that, if passed, this bill will devastate our members, the hotel industry, and the entire U.S. economy."
Presently it is employers who have the power to decide whether workers hold a secret-ballot election or check a card publicly to vote for unionization. If the new act passes, that power will pass to the workers.
Under the current system, but not generally known to the public, unions can be decertified at certain times if a majority of employees sign a card ("card check"). Or decertifying can be done by secret ballot if 30 percent of employees request that method.
But decertifying a union in a company by card check is not being raised as a problem by employers. Instead, the crux of the contention is that under the new bill, workers will have the right to use that same method, "card check," to mandate union recognition.
Opponents to card check cry foul and unfair. Employers maintain that this is an affront to the time-honored protection of the secret ballot, reasoning that workers often sign union authorization cards in public to avoid offending the person who asks them to sign. On the other hand, unions say that allowing workers to sign a card is important because employers now intimidate workers in the run-up period to secret-ballot elections for unionization.
Franchisor, franchise and small business lobbyists are passionately jumping into the fray.
“This legislation is a direct attack on the free speech rights of small businesses and the privacy rights of workers,” said David French, vice president of government relations of the International Franchise Association (IFA). “It replaces the law’s goal of fairness in union organizing with expediency, and it will deny employees their privacy and their opportunity for free choice during union organizing campaigns.”
Stressing that the union efforts are in no way targeted to small business owners, special assistant to the president of the AFL-CIO Stewart Acuff disagrees with Mr. French's assertions. In an interview with Blue MauMau, Mr. Acuff said, “The problem with the secret-ballot election is that the period between when employees file for an election and when the election is held is generally between six weeks to six months.” Acuff continues, “Workers are routinely fired, have their shifts changed, have their assignments changed, are moved to different departments, are threatened with plant closures, or are threatened with termination. Right now there are no effective penalties against employers who do this. Because of this we have had 25 years of wage stagnation and 8 years of wage decreases. So the median wage today is worth less than it was in the mid-70s.”
The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is the largest federation of unions in the United States. It is made up of 56 national and Canadian unions, representing more than 11 million workers.
Under the Bush administration, Congress came very close to passing such a bill. It passed overwhelmingly in the House, and received a 51-48 vote in the Senate for cloture (a move to bring debate to a quick end so that the measure can be voted on). A vote of 60 is needed for cloture, so the bill died. This time, with the new and more Democratic Senate, the bill could pass.
Unions Uninterested in Small Business
“If enacted, this bill will severely harm small businesses across the country at a time when they are struggling to stay afloat—entirely at the expense of employee privacy,” declares the IFA's Mr. French. “Franchised businesses will be in the cross hairs if this legislation passes, because franchising is where the jobs are.”
“This is just not true,” replies the AFL-CIO's Mr. Acuff in emphasizing that union efforts are focused on certain big corporations. “We are going to be focused on those firms and enterprises that employ large groups of workers,” he continues. “I'm not saying that no small business will be organized under this legislation: undoubtedly, there will be some, particularly where employees do it themselves, but what unions are going to be looking at is what we are looking at now, large firms in key industrial sectors – for instance, cable, telecoms, the manufacturing that is left, transportation, distribution, the service sector. Those are the sectors where unions will take the hardest look.”
Acuff continues that even if the union did change strategy to focus on the retail sector, “Why would we organize a union for a 6-person TrueValue hardware store when there is a 200-person Macy's [Department Store] five blocks away? If we were looking at retail, why would we use our efforts to organize a union for a 7-Eleven convenience store when there is a 200 or 300 non-union employee Publix corporate chain supermarket just down the street?”
With members who own some 22,000 hotels in the U.S., the Asian American Hotel Owners Association disagrees that only big business will be impacted. Ms. Laura Lee Blake rebuts, "Based on the prior conduct of the unions and their attempts to gain increasing power, they will likely start with the big companies and then move to the smaller ones. Indeed, even the small hotels owned by AAHOA members are subject to unionization efforts, and there will be no way to stop such unionization if the bill is passed. The union organizers could show up at the door of a business on Friday afternoon, and if a majority of employees sign the cards, a union could be formed by Monday morning without the employer or the other employees even being aware of such a process."
Of course, workers have already been able to launch unionization efforts over the weekend in small businesses, but the fear is that if the bill passes, workers will not have to ask employers what method to use to begin the union process.
Still, union intimidation of franchise chains is not unheard of. Back in December, another union, an angry Service Employees International Union, targeted McDonald's for opposing the Employee's Free Choice Act (see photo above and poster) and then called for and helped organize protests at McDonald's restaurants (see blog).
When asked about the economics of pursuing small business franchises, with a chuckle Mr. Acuff observes, "franchise margins are veeery slim."
AAHOA has been working feverishly to defeat the bill. Ash Patel, the association's chairman, wrote to its members, “We cannot allow this bill to move forward.” After receiving Mr. Patel's letter to the 9,300 members urging them to contact their congressional delegates to oppose the bill, the association collected some 1,810 signatures within days, which were sent to the Senate committee overseeing the bill.
That's understandable. Marriott International has some 150,000 employees. Their franchisees often own the property but some sub-contract to Marriott to hire and manage staff. The Global Hyatt Corporation and affiliated companies has well over 100,000 employees. Those are large and enticing service sector corporations with their own labor issues that may interest unions.
Opponents of the bill, largely Republicans, tend to put the “Employee Free Choice Act” in quotes and call it the “card-check” legislation.
Last year, Dan Danner, executive vice president of federal public policy for the National Federation of Independent Business (NFIB), one of the leading lobbyists for small business, wrote about how this bill would greatly impact small businesses. “This 'card-check' legislation represents an effort by organized labor to seek union representation outside of the long protected private-ballot process,” he wrote. “Small businesses would be disproportionately vulnerable to the tactics typically associated with union authorization cards, and one-sided confrontations between union representatives and employees are prone to intimidation, threats and misinformation.”
Acuff replies, “What's happened here is what often happens. Organizations like the NFIB take a real issue for corporate giants and try to make it seem like it is a legitimate issue for small business when just the opposite is true. Small business owners have a much larger interest in the passage of this bill than they do in stopping the legislation because they need people spending money in their establishments.”
Still, the NFIB highlights one of the most troublesome parts of the new bill. Danner states, “If a 'card-check' organizing drive is successful, the small-business employer has only 120 days to accept the union’s contract offer. If they do not agree to a contract during this time period, the bill mandates that a government arbiter would then decide the terms of the contract"
The AFL-CIO says that employers often are able to postpone for years agreement on a union contract. This gives teeth to the wish of workers to unionize.
But Mr. Ash Patel of AAHOA replies that “the bill strips employers of their rightful ability to control the operations of their businesses” in mandating government-appointed arbitrators after 120 days have passed without employer agreement to a union contract.
The International Franchise Association also joins in to state that this is a bill that should be of the highest concern to its members. French declares, “This bill is a top legislative priority for IFA’s members. They are making their voices heard in letters and phone calls to members of Congress, all of whom were elected via private ballots. Congress should listen to their constituents.”
Acuff sees this legislation as a friend to small business. He says that the American middle class has been under attack for the past 30 years in the stripping of their wages. He feels strongly that the Employee Free Choice Act is really about an improved standard of living among American workers who in turn can better patronize and build small businesses.
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Related Reading:
- When It Comes to Card-Check, Don't Believe the AFL-CIO by Laura Lee Blake, AAHOA
- Franchising and the Real Threat of Employee Free Choice Act by David French, IFA
- Labor Bill Faces Threat in Senate
- The Union Decertification Process, The Association for Union Democracy
- Statement by AFL-CIO President John Sweeney on the Introduction of the Employee Free Choice Act in the House of Representatives and the Senate
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