Card Check: Many, Many Questions about Binding Arbitration

The Senate Republican Conference held a public forum yesterday to highlight the economic impact of the misnamed Employee Free Choice Act.  ( S. 560 and H.R. 1409) Among the witnesses was Eugene Scalia, former solicitor for the Department of Labor and now a partner with Gibson, Dunn & Crutcher.

Senator Orrin Hatch (R-UT) chaired the hearing and he had several questions for Scalia concerning the binding arbitration provisions of the Employee Free Choice Act. The bill requires binding arbitration if both sides are unable to reach a first contract within 120 days of staring negotiations (and after a 30-day attempt at mediation).

Senator Hatch asked Scalia how likely it was that the union and employer would reach that contract within the four months.

I think it’s very unlikely. It typically takes longer than that to reach an agreement. As you mentioned in your remarks, a collective bargaining agreement tends to cover a lot of subjects. That’s what unions want. It takes time to go through all those, particularly in a new contract.

One of the concerns that people who’ve been in negotiations have is once a union knows that ultimately an arbitrator, that it might have some role in selecting, is going to have the ability to cram down terms, the union might be even more difficult to work with during the negotiation period. They must really just be playing ultimately for the arbitrator rather than trying to reach an agreement during that short period.

Scalia added several important warnings about the binding arbitration provisions, responding to Hatch’s question whether the parties could change the arbitrator’s imposed terms:

If the parties themselves agree to change it, they can change it. That’s going to extremely unlikely. It’s going to be in place for two years.

One of the things that troubles me about this bill is it’s not clear that there’s any ability to go to court and say, “Your honor, the arbitrator wrote this new business plan for me. It doesn’t work. It’s confiscatory, and I need you to review it.” There’s no clear opportunity to do that. It’s not clear the standards the arbitrator or the court would apply. That raises constitutional questions, actually.

Our bolding. Important.

You can listen to the exchange between Hatch and Scalia here. Scalia’s opening statement is here.

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