American Rights at Work recently issued a fact sheet that reinforces some of the widespread benefits of passing the Employee Free Choice Act (EFCA). The paper’s content follows.American Rights at Work is a nonprofit advocacy organization whose mission is to support workers’ rights to a free choice and a fair chance to join a union.
The Case for Arbitration in Labor Law Reform
Labor law reform must help create a level playing field that gives workers and employers incentives to reach an agreement on contracts. Arbitration will help break through the status quo, eliminating unfair delays and conflicts that too often occur during contract negotiations. The Employee Free Choice Act establishes strong rules and fair umpires that help workers and employers come to agreement, involving the process of arbitration as a last resort.
Arbitration Is Needed to Ensure that Workers and Companies Come Together to Agree on a Contract in a Reasonable Period of Time
One year after a successful union election, workers in 52 percent of workplaces still do not have a contract. According to Cornell University researcher Kate Bronfenbrenner, 52 percent of workplaces had no collective bargaining agreement one year after a successful election. Two years after an election, 37 percent of workers’ unions were still without a contract.
Arbitration Will Give Both Companies and Workers the Ability to Request a Mediator to Help Ensure a Contract is Reached
Arbitration works to encourage the voluntary settlement of contracts. Experience in the public sector shows that only a small minority of negotiations, in most cases well under 10 percent, end up requiring arbitration. In half of the states and the District of Columbia, public sector employees have the right to resolve collective bargaining conflicts through arbitration, and yet the vast majority of these contracts are still settled voluntarily rather than through arbitration.
Arbitration is widely available, yet rarely used in Canada. Arbitration is a method of last resort for the issues that employers and workers’ unions are unable to resolve on their own. In Ontario, there were 1,484 union contracts negotiated in the private sector between January 2000 and April 2009. Of these, 24 (1.62%) were settled through the arbitration process. In Saskatchewan, approximately 400 union contracts were negotiated in the public and private sector since 2000 and not a single case required an arbitrator resolve the contract dispute. In Quebec, 8,225 union contracts were negotiated in the public and private sector since 2000. Of these, only 124 (1.5%) were settled through the arbitration process.
Arbitrators Do Not Impose Unfair Terms in Contracts
Arbitration does not result in higher wage increases than contracts negotiated voluntarily. Data from Canada show there is little difference in wage increases between arbitrated contracts and those negotiated voluntarily. In Ontario, the median annual wage increase is three percent for arbitrated contracts and 2.7 percent for voluntary contracts.
Many Businesses that Oppose the Employee Free Choice Act Support Using Arbitration when it Works to Their Advantage
More than a dozen business groups praised arbitration as efficient and effective. In May 2008, more than a dozen business trade groups wrote a letter to Congress stating, “Arbitration is an efficient, effective, and less expensive means of resolving disputes for consumers, employers, investors, employees and franchisees, in addition to the many businesses that use the same system to resolve business disputes.”
Businesses that oppose the Employee Free Choice Act include binding arbitration in their consumer agreements. Many businesses that oppose labor law reform, including Home Depot, WalMart, Lowe’s, and Bank of America, have binding arbitration clauses in their credit card terms and other consumer agreements.
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