The EFCA Problem For Retailers
(Retail Industry Update, Fall 2008)
The EFCA Problem For Retailers
Gallons of ink have been spilled by lawyers and journalists concerning the Employee Free Choice Act (EFCA). But this law is likely to have a particular effect on retailers, and retailers – more so than other employers – should start planning for the worst now.
EFCA would greatly simplify unions' task in organizing workplaces. As it currently stands, the law provides for "card check" recognition of the union. A union only has to have a majority of a workforce's employees sign a card seeking recognition. The obvious fear is that those signatures will be coerced or obtained through deception. EFCA has been passed by the House, and it's likely the Obama administration will support the law.
EFCA entirely does away with the present system of secret-ballot elections, and it requires mandatory arbitration over a first contract if the parties cannot agree within 120 days.
Why Should Retailers be Especially Concerned?
Most retailers are presently non-unionized, so they present an attractive target.
It's a truism among labor lawyers that it is easier for a union to organize a small workforce than a large workforce. Of course, many "small box" or "mid-box" chain stores often are lightly staffed. Under EFCA, obtaining only a handful of cards in such a store could trigger union representation.
Small and mid-box stores may operate at times without exempt managers being on-site. This complicates the employer's ability to detect union organizing in its early stages, when it is most likely to be able to respond appropriately to a union drive.
Unlike many kinds of businesses, retail operations cannot be outsourced or moved overseas. In the manufacturing sector, for example, unions have found themselves frequently thwarted because companies have either relocated operations, or used the specter of being unable to compete globally, as a tool to defeat unions. That, of course, is not the case with retailers, which must locate where the customers are.
Many retail workforces have high turn-over. These high-turn over employees are more likely to focus on the short-term (i.e., a union's promise of higher pay) and more likely to discount the long-term (higher costs could eventually cause the store to become non-competitive or even close).
What To Do?
You can decide to be reactive or proactive.
The reactive: front-line, in-store management has to be on board to be able to timely spot union activity. Regional managers can't do it; district managers can't do it. In larger stores, it's likely that upper-level store management can't do it. These managers simply don't have enough day-to-day contact with employees to spot card-gathering. Front-line management has to be trained to detect the signs of incipient union activity and alert the proper people.
The proactive: As noted above, retailers are especially vulnerable under EFCA. If EFCA passes, it likely will completely change the way retailers approach the task of remaining non-union. Presently, companies generally don't communicate with their employees about unions unless there's a clear and present danger. Under EFCA, when the danger becomes apparent, it may be too late.
Our advice to retailers is to develop a union-free communication program that begins when an employee is hired and continues throughout employment. If you need help designing such a program, we can help.
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