Employee Free Choice Act: Ontario experiences and potential economic impact.

Author:Sherrard, Michael G.
Position:UNBLJ Forum: Recent Developments in Canadian Labour and Employment Law

"Democracy" is government by the people in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system.

The Employee Free Choice Act (the "EFCA") is bipartisan legislation that would, among other provisions, eliminate the requirement of a secret ballot vote during a union organizing campaign, and instead, require the certification of a union that is able to demonstrate that it has the support of a simple majority of employees in a workplace. During the 2008 United States presidential campaign, Barack Obama pledged his support for the EFCA and declared that its passage was a matter of "when", not "if". President Obama's ardent support of these fundamental changes to the National Labor Relations Act (the "NLRA") has led policy makers, labour practitioners, and lawyers to contemplate the impact that these amendments could have on workplaces across the United States.

Numerous papers and articles have commented on the effect the implementation of a "card check" certification process and resulting loss of a secret ballot certification vote will have on the rights of employees to freely choose representation within their workplace. Others have attempted to compare the situation the passage of the EFCA would create to that of a number of Canadian jurisdictions which have adopted a card check union certification system. In this paper, we will approach the issue from a different angle, considering the labour relations climate in Ontario over the past twenty years and identifying potential relationships between the legislation in place at specific times and the health of the provincial economy.

After reviewing the EFCA as it has been proposed and various labour relations provisions in place in Ontario over the past twenty years, we will contrast the increases in union density rates under a card check system with union density rates under a secret ballot system. We will then explore research indicating that unionized businesses are linked to stagnated or decreased productivity, profits, innovation, investment, and employment growth. Finally, we will review and analyze the possible economic impacts of one of the other notable provisions in the EFCA, which guarantees expedited and automatic access to first contract arbitration. The paper will conclude by reinforcing the point that legislation such as the EFCA can have deleterious effects on the economy--particularly during uncertain economic times.


The EFCA is bipartisan legislation that was first introduced by Senator Edward Kennedy and House Representatives George Miller and Peter King in 2007. Proponents of the EFCA claim that it is important remedial legislation that will help to strengthen the depleted American middle class by removing barriers to unionization and collective bargaining. The EFCA purports to accomplish these goals through three key amendments to the NLRA including:

* Eliminating the requirement of a secret ballot vote by mandating certification of a union that is able to demonstrate, through signed authorization cards, that it has the support of a simple majority of employees in the proposed bargaining unit.

* Ensuring that a newly certified union is able to achieve a first collective agreement by permitting either party (union or employer) to request mandatory federal mediation if a collective agreement cannot be reached within ninety days of the commencement of negotiations. If after thirty days of mediation the parties have failed to reach an agreement the dispute is referred to binding first contract arbitration.

* Establishing harsh penalties for employers that are found to have engaged in anti-union tactics intended to thwart unionization efforts during the organizing campaigns and first contract negotiations, including triple damages in certain unfair labour practice cases.

In the spring of 2007, despite passing in the U.S. House of Representatives and enjoying majority support in the Senate, the EFCA was blocked by a Republican filibuster. Labour law reformers renewed their hopes when then-Senator Obama promised during the 2008 Presidential campaign that he would include the EFCA as a fundamental part of his economic stimulus plan. However, since the election it has appeared that President Obama's enthusiasm for the bill is waning. (1) Some commentators have speculated that President Obama is reluctant to push legislation that promises to be deeply divisive early in his presidency, particularly in light of his stated desire to heal the partisan rift that grew during his predecessor's term. Others have cited the lack of a Democratic supermajority in the Senate and the current economic crisis in the United States as reasons the new administration appears to be placing a lower priority on the passage of the EFCA than was initially planned.

We suggest that it is this last reason, the current economic crisis, that is the most compelling explanation for the reduced urgency in pushing the legislation forward. To illustrate the impact that legislation similar to the EFCA can have on an economy, we will now review labour laws in Ontario over a twenty-year period as well as the economic performance of the province during that period.


Ontario's experience with the secret ballot vote and card check systems between 1986 and 2005 can be broken into three discrete periods in which three discrete certification systems were use& the traditional card check system from 1986 until 1993, a modified card check system from 1993 until 1996, and a certification vote system from 1996 until 2005.

The details and effects of each of these systems will be further explained below but will make reference to the information found in Figure 1 and Charts 1 and 2.



Traditional Card Check System (1986 to 1992) (5)

From 1986 until 1992, the Ontario Labour Relations Act (the "Act") provided for a card check certification process without the requirement of a secret ballot vote. Under this version of the Act, a trade union could apply to be certified without a vote if it supplied the Ontario Labour Relations Board (the "Board") with authorization cards signed within the previous six months on behalf of more than 55 percent of employees in an appropriate bargaining unit. Alternatively, if the union had authorization cards signed within the previous year on behalf of at least 35 percent of employees in an appropriate bargaining unit, it would be entitled to request a secret ballot vote.

This period of labour relations regulations also had the following significant provisions:

* A fifteen-day period after an application for certification was filed during which an employee or employees could submit a "petition" which would negate their previously signed authorization card;

* The Board had the discretion to order a secret ballot vote even if the union exhibited membership support on behalf of more than 55 percent of employees,

* Remedial certification where an employer violated the Act such that the true wishes of employees were not likely to be ascertained in a vote and the union exhibited card-based support adequate for the purposes of collective bargaining;

* Access to first contract arbitration where collective bargaining had been unsuccessful because of; (a) the refusal of the employer to recognize the bargaining authority of the trade union; (b) the uncompromising nature of any bargaining position adopted by the respondent without reasonable justification; (c) the failure of the respondent to make reasonable or expeditious efforts to conclude a collective agreement, or (d) any other reason the Board considered relevant; and

* Mandatory union dues deductions if requested by the union.

Given the availability of the card check certification process, it is not surprising that the Board certified the applicant trade union in approximately 80.6 percent of the applications it disposed of during this period. It is notable, however, that during this period, trade union support across the province was dropping and the Board considered a steadily decreasing number of applications for certification each year (655 in fiscal 1986-1987 dropping to 461 in fiscal 1992-1993).

Modified Card Check System (1993 to 1996) (6)

In 1990, a provincial election radically changed the ideological orientation of the government of Ontario as a left-wing political party, the New Democratic Party (the "NDP"), came into power. The NDP has historical roots in the former Cooperative Commonwealth Federation, which was based on a commitment to a "planned system of social economy for the production, distribution and exchange of all goods and services" and "social ownership, development, operation and control of utilities and natural rcsources". (7) Simply put, the NDP platform was based on a commitment to democratic socialism and providing a voice for workers within the province.

Shortly after entering office, the government proposed Bill 40, legislation which would radically change Ontario's Act. (8) This legislation was passed in late 1992 and came into force on 1 January 1993. The Bill 40 amendments maintained the card check certification process already in the Act and added the following significant amendments:

* The purpose of the Act was amended to read:

  1. To ensure that workers can freely exercise the right to organize by protecting the...

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