The Heritage Foundation - Leadership for America

Media Matters has taken it upon itself to criticize our recent video highlighting the problems with the government-imposed contracts that the misnamed Employee Free Choice Act (EFCA) forces on workers and businesses. You can see the video here:

In the video Rian Wathen, formerly of United Food and Commercial Workers (UFCW) local 700 in Indianapolis, explains how permitting the government to impose contracts would imbalance negotiations and give unions every incentive to send the contract to the government to write. He should know. After working as the local’s Organizing Director Wathen was promoted to the Director of Collective Bargaining. He used to negotiate these contracts.

Media Matters claims that the “Heritage Foundation Video Is Full Of Falsehoods About The Employee Free Choice Act,” but they ignore both what Wathen said and the text of the bill.

Media Matters claims that “Arbitration is not mandatory if both parties are negotiating in good faith.” But that is not true. Read the bill. It allows unions to call in government arbitrators to write the contract at any time 90 days after negotiations start – irrespective of whether or not the employer bargains in good faith. After 90 days unions can call in the government to impose a contract for any reason, including if they believe the government will give them a better deal than what they could get otherwise – exactly Wathen’s point.

Media Matters claims that “Arbitration Encourages Voluntary Settlements” and that it “Does Not Inflate Wages,” but ignores Wathen’s point that the possibility of government-imposed contracts give the union every incentive to demand the sun, the moon, and the stars and then send the dispute to the government, hoping Uncle Sam will “split the baby” and give them half of their extreme proposal.

To defend government-imposed contracts, Media Matters points to public sector binding arbitration. They essentially argue that the government imposing a contract on itself has not proved a disaster, so having the government impose contracts on workers and businesses will work out fine too. But this ignores the huge differences between government the private sector, and between public sector arbitration procedures and what EFCA forces on workers and employers.

Most public sector arbitration decisions decide disputes in renewing an existing contract – not in writing a new contract from scratch. Both parties have already settled fundamental issues such as the sort of seniority or promotion system that will be used, the job classifications for employees work, and the benefit types employees earn. The main issue in dispute is how much workers will earn, not how the department will be (re)structured. The arbitrators also have clear standards and guidelines they must use to make their decision.

This hardly work flawlessly. In many cases arbitrators make bad rulings that cities cannot afford. One arbitrator’s ruling nearly bankrupted Detroit in the late 1970s, forcing the city to lay off one fifth of the police force and igniting a crime spree. In other cases taxpayers must simply pay out because the government never goes bankrupt – it just raises taxes to cover higher costs.

EFCA, however, has none of the limited safeguards contained in public sector arbitration. Read the bill. It only applies to new contracts, before any issues like promotion procedures and work duties have been settled. The government arbitrator would impose those, without the benefit of a previous contract to look back on. And unlike public sector arbitration there are no standards for the arbitrator to use. None at all. Which is why Wathen explained that — if EFCA became law — collective bargaining negotiators like himself would make extreme demands and hope to get part of what they asked for.

Unfortunately businesses, unlike governments, do go bankrupt. A company like General Motors cannot tax Americans to cover the costs of a contract they cannot afford. To cut costs they lay off workers instead. With EFCA many American workers will find themselves without work, thanks to a government-imposed contract the arbitrator thought looked good on paper but proved unworkable in practice.