Results matching “card check”

New featured column: Richard Epstein on EFCA - PointOfLaw Forum

Our newest featured column is on what may be the hottest legislative topic of the next Congress: the peculiarly titled Employee Free Choice Act, which would abolish secret-ballot union elections in favor of a "card-check" system and would impose mandatory arbitration when employers failed to agree to an initial union contract, among other provisions. Chicago professor and Manhattan Institute adjunct fellow Richard Epstein sorts through the likely impacts.

A Labor Dilemma For President Bam - PointOfLaw Columns

By Richard A. Epstein

This piece was originally published by the New York Post, 10-21-08.

THE financial crisis has unfortunately deflected attention from our next major meltdown: ordinary labor markets. The early days of an Obama administration will likely see passage of the so-called Employer Free Choice Act—which will put a union noose around the neck of every US business, large and small.

Union membership has dropped relentlessly from about 35 percent of the PRIVATE work force in 1954 to about 8 percent today. The main factor is the massive attrition in failed unionized industries such as steel, automobiles and rubber. A chorus of labor advocates falsely attributes this collapse to management's alleged unfair labor practices of management in union elections, about half of which labor wins anyway.

The true explanation lies in a simple fact: Unions are a bad deal for most workers. They get some added bargaining leverage, but pay heavy dues, give up prospects for advancement in the firm and face higher odds of layoffs by hamstrung employers who can't compete in ever-more competitive global markets.

The false diagnosis leads to the bill's two-part "cure" to the nonexistent problem:

* It eliminates the need for a union to win an actual election to become the workers' representative. Instead, gaining a simple majority of the targeted work force—in the form of signatures on cards—would make the union the official bargaining agent for all workers, including those who had no knowledge of the union's activities.

* Worse still, the act lets a government-created arbitration panel impose the first two-year contract over the employer's objections if the two sides don't reach agreement within 130 days after union certification.

Barack Obama is a strong supporter of this effort to turn all US workers into civil-service employees. But he never admits how the law would wreck the small businesses he has sworn to promote.

EFCA allows aggressive unions like the Service Employees International Union to pick their targets and ambush them. E.g.: Imagine a new firm preoccupied with product development, credit arrangements, inventory control and marketing—suddenly approached with this chilling message: "Our signed cards let us represent for two years all your employees, including future hires."

The hard-pressed employer has to hire immediately professional legal counsel to steer it through a legal thicket that could end in work rules and layoff restrictions that make liquidation or bankruptcy the firm's only viable alternatives.

Why bother to go into business at all—if a few card checks, even when obtained by intimidation or misrepresentation, can make a union your involuntary partner at the most vulnerable time of your business?

The unions pooh-pooh these objections by claiming that card checks and compulsory arbitration work for public unions. Not so. The only sense in which these arrangements "work" is to substitute surrender for strikes.

In fact, mandatory arbitration dooms many public employers to offering the same wretched or overpaid service in the future that they have offered in the past. Innovation is out of the question, because a dominant union can veto any intelligent structural or wage reform.

And private businesses don't operate the same kinds of protected niches as public unions—they face real competition. The employer groups that I've represented know full well any private firm that succumbs to unionization won't be strong enough to survive adversity or nimble enough to advance. Yet EFCA would enable labor unions to muscle their way into an involuntary partnership with the firm's owners.

So a future President Obama will face a hard choice: Show abject fealty to the labor unions, which have done so much to promote his candidacy. Or avoid decimating the small businesses he has promised to help.

With the economy wobbly, we don't need a massive government intervention to disrupt the balance between management and labor.

Richard A. Epstein is a professor of law at the University of Chicago, a visiting professor at NYU Law School and a Manhattan Institute adjunct fellow.

'Free choice' versus binding arbitration - PointOfLaw Forum

Peter Kirsanow, a Cleveland attorney and member of the U.S. Commission on Civil Rights, has turned his attention recently to the Employee Free Choice Act, the legislation that would allow labor organizers to dragoon employees into a union bargaining unit via public collection of signature cards, eliminating a secret-ballot election supervised by the National Labor Relations Board.

In several posts at National Review's The Corner (one previously noted by Walter), Kirsanow focuses on the binding arbitration provisions of the law, which until recently have received much less scrutiny then the "card check" provisions. In short, if a new bargaining unit and employer cannot reach a first contract after 120 days, a federal arbitrator will impose contract terms on them for two years. Sometimes you can't even agree on the size of the negotiating table in that period of time, Kirsanow notes from his own experience. And is it really a contract?

Under EFCA, the terms set by the arbitrator will be the furthest thing from a "contract." It won't be an agreement between management and labor. Rather, wages, hours and terms and conditions of employment will be dictated by a government appointed arbitrator. The mandate will be binding on the parties for two years. Neither the company nor the employees can reject it...

Currently, if employees don't like the tentative agreement negotiated between union leaders and management the employees can vote it down and instruct their leaders to go back to the bargaining table to get a better deal. Not so under EFCA. If the employees don't like the arbitrator's decree of a 2% wage increase, they're stuck. Similarly, if the company can't afford the arbitrator's command to pyramid overtime, the company's stuck. The consequences aren't difficult to imagine.


Right. Imagine being in an industry where five or six businesses are engaged in fierce price competition, and where labor decides to organize you first. An arbitrator's terms could kill your operation altogether.

Kirsanow's posts, which also include some illuminating comparisons to Canadian employment law:

Law firms with major employment law practices have recently released analyses of the labor-backed Employee Free Choice Act, providing good info to their clients and the public prior to Election Day. We assume the preliminary publishing also sets a foundation for pitching an EFCA-specific practice if a Democratic Congress passes and a President Obama signs the card check bill.

May that day never come.

Anyway, here are some of the analyses that have crossed our screen.

Around the web, October 24 - PointOfLaw Forum

  • If you think the card check provisions in EFCA are outrageous, wait till you hear about the mandatory arbitration [Kirsanow, NRO Corner]
  • "Prohibition of Excessive Overtime in Health Care Act will Exacerbate Nursing Shortage" [Pennsylvania Labor and Employment Blog]
  • Suppose plaintiffs win Wyeth v. Levine and Vermont juries can second-guess FDA on medication's labeling for IV use. What then? [ER Stories]
  • Other pre-emption issues are bustin' out all over [Beck & Herrmann (U.S. Supreme Court, food regulation), NLJ (NHTSA, seat belts), Mundy/WSJ, Carter/ABA Journal (various federal agencies), Cal Biz Lit (autos, California court of appeal)]
  • Must be those awful deregulators at work: workplace injuries decline for sixth consecutive year [Henke, Next Right via Friedersdorf]
  • Emergence of Delaware as favored asbestos plaintiff's forum could dull the state's edge in corporate law, gee thanks Senator Biden [Bainbridge, WSJ edit, SE Texas Record]
  • Annulling credit default swaps as void: could this be Ben Stein's worst idea yet? [Salmon]

Card check and an Obama Administration - PointOfLaw Forum

Could, or would, Republican senators filibuster to block the scheme and thus preserve the secret union ballot? (scroll)(earlier).

Around the web, September 11 - PointOfLaw Forum

  • "Eight counties in New York State have no obstetricians: Essex, Greene, Seneca, Tioga, Washington, Yates, Schoharie, and Hamilton" [Barringer/Berkowitz, NY Sun via Common Good; more]
  • Card check proposal to dispense with union secret ballot might just be the most important domestic issue at stake in November's election [Rubin, Pajamas Media]
  • "A look at [AG and gubernatorial candidate Jay] Nixon's big-money donors starts and ends with Missouri's big-name lawyers, specifically personal injury attorneys." [St. Louis Post-Dispatch]
  • "Market doesn't work for EULAs". But in the case of Google Chrome maybe it did [Szoka, TechLiberation]
  • Early bird registration about to expire on U.S. Chamber's Legal Reform Summit, set for Oct. 29 in Washington [more]
  • Self-regulation effort by third-party litigation funders in the U.K. [Legal Week]
  • Short on cash? Earn money by blogging for trial lawyer causes [Tort Deform]

Lilly Ledbetter, the convention address - PointOfLaw Forum

(Note: Dan Schwartz anticipates the Ledbetter speech and examines pay issues and legislation at Walter Olson's other website, Overlawyered, here. The more light that shines, the better....)

Today is Women's Equality Day, the kind of observance that prompts a presidential proclamation and various didactic exercises among the political classes. Democrats are highlighting the day at the Denver convention with the theme, "Renewing America's Promise," with women union leaders, union activists, and elected officials speaking. On today's convention agenda for a prime evening speaking spot, right before the keynoter, Mark Warner, is Lilly Ledbetter. As the schedule describes her:

Lily Ledbetter

Her actions against Goodyear Tire led to the passage of the Fair Pay Restoration Act

Actually, it's spelled "Lilly Ledbetter." And while the Ledbetter Fair Pay Act, H.R. 2831, did pass the House by a 225-199 vote on July 31, 2007, it was stopped in the Senate in April on a failed cloture vote, 56-42.

Tonight's lead-up, Ledbetter's remarks and the media commentary will no doubt contain similar misrepresentations, with the errors serving the cause of bad legislation that will prevent discrimination claims from being resolved quickly, in the process prompting a new wave of litigation.

Walter Olson recently posted on key points made in an important article by George Krueger and Judd Serotta about cy pres settlements in the August 6, 2008 Wall Street Journal. In a nutshell, these "cy pres" proceedings represent a new species of legal activity whereby judges assign portions of lawsuit settlements or recoveries to non-party persons or entities chosen by them as somehow approximating the goal of the legal proceeding. (Long-time POL contributor Ted Frank has recently published a scholarly article on this new phenomenon.) These "approximation" awards are just one aspect of the larger problem created by regulation through litigation -- though a particularly alarming one. Point of Law has numerous contemporaneous prior posts on these developments. These cy pres practices are even more widespread and far-reaching than those attorneys report, and suffer from manifold constitutional and legal infirmities.

The good news? Any student in a high school civics class can recognize this racket.

Krueger and Serotta's central point is that these wealth transfers by judges of millions of dollars extracted from defendants in our state and federal courts given to institutions like legal aid societies or universities which were never injured, who possess no standing to sue, and who are chosen in an ad hoc and unreviewable process violate the federal Constitution's case and controversy clause. These ad hoc remedies additionally violate state and federal constitutions's due process clauses and that legal infirmity should be addressed before a case proceeds to settlement or trial, not at some much later date when a judge is trying to figure out what to do with millions of undistributable cash paid by a class action defendant. (I am indebted to Martin Newhouse, President of the New England Legal Foundation, for articulating this latter point.)

Kreuger and Serotta limited their discussion to private class action suits. But this practice of cy pres distribution is in widespread use by state and federal governmental officials, and represents an unconstitutional abuse of power. Consider a few examples:


  • In 2004, Mass. AG Thomas Reilly sued Walgreens, Home Depot and Wal-Mart for violations of state "item pricing" regulations" that arise when a shopper picks up an unmarked item or an item that is marked $3.19 but is charged $3.59 at the checkout. Rather than try to return such zero-to-trifling amounts of money per incident to the injured consumers, the state hired class action lawyers and richly compensated them. According to the Boston Globe, the proposed settlement involved the payment of $3.2 million to the private attorneys, $3.9 million to "an eclectic group of charitable, consumer, and nonprofit groups," and $425,000 to the AG's Office. The list of favored groups "includes $150,000 for the Massachusetts Bar Association, $120,000 each for the American Heart Association, the American Cancer Society, and the Juvenile Diabetes Research Foundation; $100,000 each for the National Consumer Law Center, the Roscoe Pound Institute of Washington, the New England Patients' Rights Group, and the attorney general's office; $50,000 for Public Citizen, and $40,000 for the Greater Boston Jewish Coalition for Literacy." (See earlier POL post by Mike DeBow) Meanwhile the overcharged consumers get nothing. (To add irony to idiocy, a recent detailed study shows that the item pricing laws themselves raise retail prices for consumers in states that have such laws.)
  • The U.S. attorney for New Jersey, Christopher J. Christie, entered into a deferred prosecution agreement ("DPA") with Bristol-Myers Squibb because of a potential securities violation for inflating its quarterly earnings by a business practice known as channel-stuffing. As an article in the Wall Street Journal noted, "[t}he naive reader might think that a DPA should prohibit the firm from engaging in future conduct of the sort that got it into hot water in the first place." (Richard Epstein, The Deferred Prosecution Racket, WSJ, 11/28/06). The "most striking evidence of the abuse of power is paragraph 20 of the agreement, which requires Bristol-Myers to endow a chair at Seton Hall University School of Law," Mr. Christie's alma mater, "for teaching business ethics."
  • West Virginia AG Darrell McGraw's office appointed special assistant attorneys general and outside counsel to sue pharmaceutical companies and software giant Microsoft, among others and received multi-million dollar recoveries. But the settlement dollars don't make their way into the state's treasury for the Legislature to disperse. Although an editorial from the Wheeling Intelligencer called it a "disturbing philosophy" that the AG's "office keeps the money - millions of dollars." The editorial stated. "He ought to turn the windfalls over to the state treasurer, of course ... McGraw seems to view the money as his own personal hole card in the popularity contest that politics can be."
    McGraw's free-wheeling exercise of the power of the purse has drawn the wrath not only of state legislators, but the federal government. Kim Strassel of the Wall Street Journal reports:
    Mr. McGraw had sued on behalf of state agencies (including the state's Medicaid program) -- yet his office kept the rest of the settlement money.The federal government, which pays a significant portion of the state's Medicaid bills, remains furious the program received none of the settlement, and is now threatening to withhold millions in Medicaid money. . . .[Nonetheless] Mr. McGraw remains relatively popular in the state, in part because one of his greatest innovations has been the art (as with the OxyContin suit) of turning settlement proceeds into political patronage. When the West Virginia attorney general crafts a settlement, he makes sure it goes to his own office, where he doles it out with great fanfare to universities, health-care centers and county commissions. In January, he grandly announced that a $12 million settlement he'd negotiated with Visa and MasterCard would be going to fund statewide sales-tax holidays.


These cy pres arrangements represent a complete breakdown of the rule of law. In addition to violating the case and controversy and/or due process provisions of state and federal constitutions, they violate the doctrine of separation of powers. Recoveries in lawsuits brought by governmental entities belong to the state or federal treasury and may be expended only by the legislature.

McGovern on card check - PointOfLaw Forum

A well known Democrat warns against doing away with the secret ballot so as to make it easier to install unions at the workplace. More on card check here.

Around the web, June 10 - PointOfLaw Forum

  • Unanimous high court ruling in Allison Engine, the case raising question of whether bounty-hunting False Claims Act applies when government is an indirect payer of bills; ATRA thinks the Court's compromise is pretty good [its press release; Jurist; earlier here and here]
  • Ninth Circuit appoints special prosecutor, on top of high recommended monetary sanctions, to pursue prominent California toxic tort litigators Tom Girardi and Walter Lack in tangled Nicaraguan pesticide-injury case [Overlawyered]
  • That dreadful "ADA Restoration Act", overturning Supreme Court decisions that grafted some rationality onto the disabled-rights law, appears to be very much alive [Schwartz]
  • California trial lawyers had a good election night in Tuesday's primary [Cal Law "Legal Pad" and more]
  • Another round of credit card antitrust litigation: now Discover wants $6 billion from Visa and MasterCard [Bloomberg]
  • "In a wreck? Get a check!" TV-ad lawyer runs for West Virginia Supreme Court [Steve Cohen, Huntington Herald-Dispatch]

Around the web, May 13 - PointOfLaw Forum

Around the Web, May 4 - PointOfLaw Forum

  • The May issue of "Trial," the monthly magazine of the American Association for Justice, includes an article on In re Seroquel Prods. Liab. Litig., 2008 WL 215707 (M.D. Fla. Jan. 24, 2008). While the magazine is reserved for members, a summary of the article has been posted online: "The U.S. district court overseeing multidistrict litigation against the manufacturer of the atypical antipsychotic drug Seroquel held that documents reviewed by witnesses in preparation for depositions are not protected by the work-product privilege." Here's an article on the litigation last year at Law.com.
  • Apropos the AAJ, the trial lawyers group is sponsoring is a teleseminar Wednesday, "Using the McKinsey Documents in Your Bad Faith Case." The reference is to management consultant McKinsey & Co.'s documents recommending how Allstate Corp should challenge automotive insurance claims. One of the AAJ presenters is David Berardinelli, Santa Fe trial lawyers and author of the book, "From Good Hands to Boxing Gloves." Business Week covered Berardinelli and his book in May 2006.
  • Last month, All State decided to post the McKinsey documents online in response to a judge's order and fines. The 150,000 pages are available here. The decision prompted news reports, including this New Orleans Times-Picayune story, which notes that the documents do not include information about catastrophic claims, of potential use in Hurricane Katrina litigation. David Rossmiller at the Insurance Coverage Blog has more.
  • This line in the registration materials for the AAJ teleseminar caught our eye. "Note: Eastern Indiana and parts of Arizona--no daylight savings -- Please be sure to note correct time for the teleseminar you register for." Nope. Indiana went all Daylight Saving Time effective April 2006, an initiative of Gov. Mitch Daniels. So if you miss the seminar because of bad info, can you sue?
  • Via The Volokh Conspiracy comes news of the action by Swiss Federal Ethics Committee on Non-Human Biotechnology. Finding: Plants have rights. "The Committee members unanimously consider an arbitrary harm caused to plants to be morally impermissible. This kind of treatment would include, e.g. decapitation of wild flowers at the roadside without rational reason."
  • From the Wall Street Journal's Law Blog: "Just days before the first Bextra trial was to begin, Pfizer has struck tentative settlements with some plaintiffs who alleged that painkillers Celebrex and Bextra caused heart attacks, according to lawyers at three plaintiff firms involved in the litigation." More from Bloomberg.
  • A column by Ken Connor, Chairman of the Center for a Just Society in Washington, D.C., challenging the U.S. Chamber of Commerce's "Lawsuit Climate 2008: Ranking the States." By its sample -- corporate attorneys -- the survey is inherently biased and does not reflect a good knowledge of the court system, Connor argues: "As a trial lawyer for thirty-five years, I am among the first to admit that the civil justice is imperfect. But access to the court system is a constitutionally protected right, and at a time of rampant corporate misconduct it is a right that needs to be zealously defended. Conservatives who believe in the Constitution and the need for checks and balances in our public life should agree." Connor's column is a rebuttal to a pro-survey column by Lindsay Boyd of Townhall.com
  • Three-hundred-and-twenty five new laws go into effect in Utah on Monday. The Deseret News has a round-up. Many new opportunities for litigation. Here's one: The estate of a person killed by illegal drugs can sue the person who provided or administered the lethal drugs.
  • A post mortem in the Orlando Sentinel of the Central Florida commuter train debacle in the Legislature: "TALLAHASSEE - Central Florida's commuter-rail project failed in the Florida Legislature because its backers didn't heed a cardinal rule of politics: Know your enemy...They thought their main opponents were residents of Lakeland, angry that the state's deal with CSX Corp. would run more freight trains through their city. They didn't realize until too late that the state's trial lawyers were grimly determined to defeat the deal."

Ledbetter: No Limitations, Just Litigation - PointOfLaw Forum

Cross-posted at Shopfloor.org. Walter has also written on the Ledbetter court ruling and legislation here, here and here.

Senate Majority Leader Harry Reid filed cloture Monday on H.R. 2831, the Lilly Ledbetter Fair Pay Act of 2007, which supporters claim restores the ability of employees to sue for pay discrimination, supposedly abrogated by the Supreme Court's ruling in Ledbetter v. Goodyear Tire & Rubber Co. (U.S. Supreme Court 2007).

As the NAM summary of the case explains, what the court actually did was uphold the law that set a 180-day statute of limations for filing employment discrimination actions with the EEOC. Congress knew what it was doing when it wrote the law, the court said: "Congress clearly intended to encourage the prompt processing of all charges of discrimination." Eliminating a statute of limitations would open up employers to potentially decades of increasingly difficult-to-defend litigation. Memories fade, people die, and yet the lawsuits carry on....and on....

Just as importantly, the 180-day requirement also compels employers and employees both to address real discrimination with a sense of urgency. Sometimes it takes an EEOC complaint to make management aware of a problem.

The legislation goes too far in other ways. The NAM sent a "Key Vote" letter (text here) to the Senate today, which notes, "[The bill] would grant standing for the first time to not just employees but those potentially 'affected by' discrimination. It would also broaden the bill's reach to cover unintentional (disparate impact) discrimination suits and allow retirees to file claims over actions that took place decades earlier." Wow. "Affected by" discrimination -- bet that would be creatively interpreted.

Expect a vote Wednesday, which allows a full day of rallies and fulminating today, Equal Pay Day -- the day that women supposedly have to work into 2008 to equal men's 2007 pay. Organized labor is observing the day, as are the National Organization for Women and other activists who want government to set wages.

The last time Senator Kennedy orchestrated a big vote to coincide with rallies and other observances was in June, when he brought H.R. 800 to the floor. That was the Employee Free Choice Act, labor's No. 1 priority, which would replace secret ballots in union representation elections with the intimidation-inviting card-check process. No one expected the measure to gain cloture -- and it didn't, falling short by a 51-48 vote -- but the Senator maximized the PR value with his timing. Same thing this week with the Ledbetter legislation.

So consider Senate action on this terrible bill to be the raising of a flag as organized labor and a band of employment lawyers watch, marking on their checklists who salutes -- and who will be rewarded and punished accordingly.

Around the web, April 18 - PointOfLaw Forum


Lawrence Lindsey asks in the Washington Post: now that Bill Clinton has spoken of the voter intimidation by unions he saw at the Nevada caucus, perhaps Hillary Clinton should rethink her opposition to secret-ballot unionization votes? Earlier on Point of Law: other card-check posts.

George Will on card check - PointOfLaw Forum

On the "Orwellian-titled" Employee Free Choice Act, which would abolish employees' rights to a secret ballot on whether or not to accept union representation:

Failing unions, like failing industries, turn to government for protection in the form of coercion. Failing industries have traditionally sought corporate welfare in the form of tariffs (coercion of consumers). Unions seek laws to confer what their persuasiveness cannot convince people to consent to.

Obama's troubling economic proposals - PointOfLaw Forum

Mickey Kaus:

There's a pattern here--namely an interest-group-pleasing willingness to see the economy permeated by a legalistic adversarialism ("comparable worth" lawsuits, union-management negotiations) that might not trouble a president of the Harvard Law Review as much as the rest of us.

Earlier: Point of Law on comparable worth and card-check and Obama.

"Card check" in Canada - PointOfLaw Forum

Some of the proposals now popular in Congress for promoting workplace unionization (and cutting down on those pesky secret ballots with their potential for union defeats) have been in effect in Canada for many years. For a glimpse at some of the results, check out this website ("Free the Lively Seven"). Earlier: here, here and here.

The card-check "travesty" - PointOfLaw Forum

Former UNITE HERE organizer Jennifer Jason, in House testimony Feb. 8 (PDF)(via Cleary):

Frankly, it isn't difficult to agitate someone in a short period of time, work them up to the point where they are feeling very upset, tell them that I have the solution, and that if they simply sign a card, the union will solve all of their problems. I know many workers who later, upon reflection, knew that they had been manipulated and asked for their card to be returned to them. The union's strategy, of course, was never to return or destroy such cards, but to include them in the official count towards the majority.

Michael Fox at Employer's Lawyer describes the bill's title ("Employee Free Choice Act") as "deceptive advertising":

How else can you describe a proposed statute whose principal, although not only, significant restructuring of the National Labor Relations Act is to eliminate secret elections...? ... Let there be no mistake, this portion of the bill exists for one reason only - unions have been spectacularly unsuccessful in convincing voters, i.e. the employees they seek to represent in collective bargaining, that the employees would be better off with a union than without it.

And Fox asks:

It is with some irony that more than 230 members of the U.S. House of Representatives elected by secret ballot are rushing to remove that right in the workplace from the voters who elected them. How many do you think would vote to abolish elections for their own Congressional seat if another candidate could produce a petition signed by a majority of voters?

The Examiner editorializes: "Abuses of workers' true wishes not only are potential, they are guaranteed. There is no 'free choice' in this travesty".

It says a lot about the new House of Representatives, none of it favorable, that it is expected to approve the measure easily. Earlier coverage here and here.

P.S. And here's George Will:

Tellingly, the act would forbid employers from trying to influence -- pressure? -- employees by improving their lot: It would fine employers who, to reduce the incentive to unionize, give workers "unilateral'' -- not negotiated -- improvements in compensation or working conditions. Clearly, the act aims less to help workers than to herd them as dues-payers into unions.

Yet more: What does sponsoring Rep. George Miller (D-Calif.) think of the idea, anyway? And Ivan Osorio at Capital Research Center's Labor Watch offers some historical background (PDF) on why union organizers regard card-check as their great hope.

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