The Wall Street Journal (subscription) today reports, “Provision to Ease Unionization Likely to Drop Out of Bill.” The lead:

Senators are working on a compromise version of a labor-organizing bill that will likely drop a contentious card-signing provision in favor of a speedier union election process, according to people familiar with the talks.

And another key paragraph:

Compromise talks are being led by Sen. Tom Harkin (D., Iowa), the bill’s lead sponsor in the Senate. Kate Cyrul, a spokeswoman for Mr. Harkin, declined to comment on details of the compromise being discussed. But she said the senator “remains confident that we can address these issues without compromising the core provisions of the bill.”

Compromise talks with WHOM? Senator Kennedy? Bernie Sanders? The SEIU and AFL-CIO? The only other Senator mentioned in the story is Specter. The premise is faulty: Negotiations between two Democrats, the lead Senate sponsor of the bill (S. 560) and a past cosponsor of the bill, Senator Specter, hardly represent the makings of a compromise.

Especially if you retain the “core provisions of the bill,” which are designed to force unionization on employees and employers who do not want union representation.

• EFCA Report, “WSJ: Sen. Harkin Shopping EFCA Compromise; 21-Day Elections, More Mediation“
• Senator Specter’s March 24th floor statement outlining his objections to the Employee Free Choice Act.

UPDATE (11:25 a.m.): Much more detail in this New York Times story, “Lines Shift a Bit on a Senate Labor Bill.” Snap elections appears to be labor’s fall-back, i.e., depriving employers of an opportunity to make their case.

Sen. Russell Feingold (D-WI) last week introduced S. 931, the Arbitration Fairness Act, a bill that bans binding  (predispute) arbitration in business contracts with consumers. (Opening statement, text.) The bill came in with seven cosponsors.

Sen. Feingold and his cosponsors are also all sponsors of S. 560, the Employee Free Choice Act, a bill that mandates binding arbitration between business and outside unions that are trying to organize them.

The American Association for Justice, aka the trial lawyers’ trade association, has lobbied heavy to ban arbitration. Last week the AFL-CIO announced the AAJ’s support for the Employee Free Choice Act that mandates binding arbitration.

Mandate, ban, mandate, ban, mandate…The head spins.

Former House Speaker Newt Gingrich has a column in today’s Politico, “Arbitration the real threat in EFCA,” that raises important objections to the binding arbitration provisions in the Employee Free Choice Act. However, the Speaker repeats a mistake we’ve seen elsewhere, that is, that legislation would force politicized, National Labor Relations Board arbitrators into the employer-union negotiation process.

Here’s the relevant passage from the text of the bill, S. 560, specifically Sec. 3, “Facilitating Initial Collective Bargaining Agreements.” Our emphasis.

`(2) If after the expiration of the 90-day period beginning on the date on which bargaining is commenced, or such additional period as the parties may agree upon, the parties have failed to reach an agreement, either party may notify the Federal Mediation and Conciliation Service of the existence of a dispute and request mediation. Whenever such a request is received, it shall be the duty of the Service promptly to put itself in communication with the parties and to use its best efforts, by mediation and conciliation, to bring them to agreement.

`(3) If after the expiration of the 30-day period beginning on the date on which the request for mediation is made under paragraph (2), or such additional period as the parties may agree upon, the Service is not able to bring the parties to agreement by conciliation, the Service shall refer the dispute to an arbitration board established in accordance with such regulations as may be prescribed by the Service. The arbitration panel shall render a decision settling the dispute and such decision shall be binding upon the parties for a period of 2 years, unless amended during such period by written consent of the parties.’.

The Federal Mediation and Conciliation Service is NOT the National Labor Relations Board and it’s not the Department of Labor, it’s an independent agency within the Executive Branch. Its arbitrators are not permanent agency appointees. As the FMCS explains (in a 2006 publication):

The Federal Mediation and Conciliation Service (FMCS) maintains a roster of approximately 1,400 arbitrators, who are experienced practitioners with backgrounds in collective bargaining and who meet FMCS arbitration requirements. To be listed on the roster, FMCS will determine whether the applicant:

• Is experienced, competent and acceptable in decision-making roles in the resolution of labor relations disputes; or
• Has extensive and recent experience in relevant positions in collective bargaining; and
• Is capable of conducting an orderly hearing, can analyze testimony and exhibits and can prepare clear and concise findings and awards within reasonable time limits.

Binding arbitration is a terrible, terrible idea. But strong opposition to the binding arbitration provisions in the Employee Free Choice Act should not be interpreted as denigrating the current FMCS-appointed arbitrators. The FMCS’s arbitration process now occurs largely out of public eye and from what we can gather, appears to be effective.

Note how the service now emphasizes “voluntary arbitration” in its publications. The Employee Free Choice Act would make a company’s operations — wages, benefits, work rules — subject to binding arbitration, leading to a potentially life-or-death decision about those operations being made by a third party. That’s unacceptable.

(Edited at 4:42 p.m. for clarity.)

In addition to shouting “LIAR” everytime someone asserts, quite reasonably, that the Employee Free Choice Act eliminates secret-ballot organizing elections in the workplace, advocates of the “card check” legislation make all sorts of poisonous claims about business nefariousness. Employers abuse employees, therefore card check is needed, or so the argument goes.

For example, in an op-ed Thursday in the San Francisco Chronicle, “Why workers need the Employee Free Choice Act“:

It is illegal to fire a worker for union activity, but pro-union workers were fired in 30 percent of union-representation elections in 2007, according to the Center for Economic and Policy Research.

Our emphasis.

J. Justin Wilson of the Center for Union Facts looked at the available data from the National Labor Relations Board and disproved labor’s claim. From “An Analysis of Current NLRB Data on Unlawful Terminations During Union Organization Campaigns, 2007 to 2008“:

The facts do not support labor leadersʼ claims regarding employer misconduct during union organizing campaigns. The National Labor Relations Boardʼs data incontrovertibly demonstrates that very few employees are terminated during union organization campaigns due to employers firing pro-union employees.

A similar study of NLRB data, often cited by union advocates, largely confirms these findings. MIT graduate student John-Paul Ferguson examined the CATS database to determine the impact of ULP Charges during organizing campaigns. Ferguson found that between 1999 and 2003, unions filed just 914 meritorious ULPs in conjunction with more than 22,000 organizing campaigns, and only a fraction of those of those ULP Charges contained allegations of unlawful termination.

More than 96 percent of union organizing campaigns occur without an unlawfully terminated employee.

Read the whole thing.

There are studies and studies, and advocates of both sides of hotly fought issues will frame facts to suit their arguments. Comes with the territory.

But organized labor’s promoters of the Employee Free Choice Act routinely distort the facts in order to paint businesses as evil exploiters out to screw the worker. It’s tiresome, it poisons the public debate, and it’s not true.

An excellent example of the intellectual bankruptcy of the pro-Employee Free Choice Act camp is this Marketplace commentary from Robert Reich, former Secretary of Labor, “Time to enact Employee Free Choice Act.”

The sum of Reich’s argument: It’s good to be in the middle class, unions help put people in the middle class, and business treats unions badly.

No mention of the “card check” provisions undermining an employee’s ability to chose freely whether to join a union or not. No mention of binding arbitration, in which a government official would set an employee’s wages and benefits for two years, with no recourse for the employer or employee.

The ONLY mention Reich makes of the actual provisions of the legislation: “The most important feature of the Employee Free Choice Act toughens penalties against companies that violate their workers’ rights.”

And for that reason, “The sooner it’s enacted, the better — for American workers and for the American economy.”

Conscious evasion and boilerplate anti-business rhetoric from someone who supposedly provides an intellectual foundation for organized labor. Embarrassing.

UPDATE (11:45 a.m.): Acknowledging that a Wall Street Journal op-ed allows more detailed arguments than does a brief radio commentary, it’s still worth comparing the intellectual quality of Reich’s commentary with this piece by former Department of Labor solicitor Eugene Scalia, “Secret Ballots Are Free Choice“:

Unions and their supporters in Congress claim that when employees vote on whether to unionize, the elections are tainted by employer intimidation. They’re wrong. And worse than their diagnosis is their cure: Since elections are being abused, they argue, let’s eliminate them. That’s the goal of the Employee Free Choice Act (EFCA), which was introduced in the House and Senate on Tuesday.

From the D.C. Examiner, “Card Check could also mean wage and price control.”

The editorial is about the binding arbitration provisions in the Employee Free Choice Act, the “card check” legislation introduced Tuesday. Section 3 of the bill (H.R. 1409, S. 560) requires a government board to come in and set wages and benefits and what normally would be contract terms if an employer and newly recognized union do not reach a first contract within 120 days. Those terms apply for two years.

As the editorial notes, binding arbitration gives unions little incentive to bargain in good faith. If you’re a union representative, just set your demands high and hope the arbitrator splits the difference. What’s to lose?

Which brings us to the matter of terminology. Here in NAM-HQ a few of us were kicking around wording yesterday: Is the best way to describe the effect of binding arbitration, “government wage and price controls?” After all, government IS controlling wages and the “price” of labor. Pretty ominous.

But we say no, better apply a term like “government-mandated pay” or a phrase, “the government will set everyone’s salary.” You can then argue, “We don’t want a government official deciding that John should get $20 an hour and Mary just $18.”

The trouble with “wage and price controls” is that the term has a history and generally understood meaning. Wage and price controls is what the Nixon Administration did in response to inflation in the 1970s, freezing or capping employee wages and the prices of goods (following the example of government controls in WWII and the Korean War).

Wage and price controls are traditionally supposed to keep prices DOWN, but binding arbitration under the Employee Free Choice Act will introduce government mandated wages that go UP.

So let’s find another way to talk about the effects of binding arbitration.

Besides, we’ll need to use the term “wage and price controls” in the usual sense soon enough, as part of the public debate over the Great Inflation of 2014.

UPDATE (9:45 a.m.): The Examiner’s editorial concludes:

Wage and benefit packages with no relation to market realities have brought Chrysler and General Motors to the brink of bankruptcy. Card Check would force a similarly ludicrous system on many more still-healthy American businesses. If President Barack Obama – who vigorously supports Card Check – and Congress truly want to get America’s economy moving again, defeating Card Check and its compulsory arbitration provision is a must.

Senator Edward Kennedy (D-MA), who did not take part in the introduction Tuesday of the Employee Free Choice Act, had his statement on S. 560 entered into the Congressional Record. You can read it here.

Senator Kennedy has a vision of how the binding arbitration provisions would work:

In the rare instance when the mediation process fails, the bill provides for binding arbitration, which will be handled by a panel of highly qualified arbitrators who have long experience in developing contract provisions that are fair to both sides. This type of arbitration is a tried-and-true method of resolving contract disputes that is already used in the rail and airline industries, and for public sector workers in at least 25 States. 

But the bill’s text:

 `(3) If after the expiration of the 30-day period beginning on the date on which the request for mediation is made under paragraph (2), or such additional period as the parties may agree upon, the Service is not able to bring the parties to agreement by conciliation, the Service shall refer the dispute to an arbitration board established in accordance with such regulations as may be prescribed by the Service. The arbitration panel shall render a decision settling the dispute and such decision shall be binding upon the parties for a period of 2 years, unless amended during such period by written consent of the parties.’.

There’s no reference in the legislation to “highly qualified arbitrators who have long experience in developing contract provisions that are fair to both sides.” That’s a good hope, even a reasonable expectation, but we have no way of knowing how the Federal Mediation and Conciliation Service will handle binding arbitration, AKA government-mandated wages and benefits.

The House bill is H.R. 1409.