Arbitration the Real Threat in EFCA

Most of the criticism of the outlandishly misnamed Employee Free Choice Act has centered on the card check provision, which would eliminate the right of Americans to vote in privacy and without fear of intimidation and reprisal when deciding to join a union.

However, it is another component of this legislation that could prove to be the most damaging to our economy and our freedoms.

If passed, EFCA would impose mandatory, binding arbitration by government bureaucrats in the National Labor Relations Board if employers and union organizers cannot reach an agreement.

Once a worksite is unionized through the elimination of the secret ballot, if the employer and union don't agree to terms in just over three months, a federally appointed arbitrator would impose wages, benefits, hours of work, and other terms and conditions of employment on both the employees and employer.

And what about the rights of the worker? Workers, who didn't vote on the formation of the union to begin with and lost their right to participate in a secret-ballot election, would now have a contract thrust upon them without their vote or consent.

And the employer? Within days of the union's formation, the small-business owner would need to find and hire a labor lawyer to attend to the contract negotiations, whether he or she can afford it or not.

Worse, the NLRB is staffed by political appointees, who in this administration will naturally favor union leaders. If the union negotiators know that NLRB will have a bias toward their viewpoint, there will be little to no incentive for them to negotiate with the business in good faith. They will make unreasonable demands as a tool for forcing the decision to be made by the government, instead of through negotiation.

In the history of this country, government has never proved its capacity or capability to exceed the performance and productivity of those engaged in private enterprise.

The effect this would have on our economy and job producers would be devastating. Simply stated, many businesses would close, millions of jobs would be lost and unemployment would rise significantly. A study by noted economist Anne Layne-Farrar estimates that EFCA would cost America at least 600,000 jobs.

In the history of this country, government has never proved its capacity or capability to exceed the performance and productivity of those engaged in private enterprise. Why, then, should we trust government to know enough about the nuances and market forces at play in a particular industry to set wages and benefits for workers?

The sad truth is that EFCA is being moved only as part of an effort to reward union bosses who have invested billions of dollars into the coffers of politicians. These same bosses--who almost exclusively stand to gain from this power grab--have bankrupted the industries they represent, most notably the auto industry, and have proved completely incapable of complying with the pension and benefit promises they have made to their own members.

EFCA's imposed binding arbitration would irreparably wound one of the most extraordinary features in American society, the willingness to take risk to build an enterprise that generates prosperity for one's family and community. It must never be allowed to be signed into law.

Newt Gingrich is a senior fellow at AEI.

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