New White Paper Warns of Risks in Federal Union Contract Proposal

As Congress considers a bill that would impose the first-ever timetable for initial union contracts, a new white paper details how the legislation would create economic problems while also stripping employees of their democratic right to ratify contracts.

The document was published by the Coalition for a Democratic Workplace (CDW), an alliance of business groups and trade associations. Across 28 pages, CDW details the issues businesses have with the Faster Labor Contracts Act (FLCA), a proposed law that would allow the federal government to intervene directly in negotiations between employers and newly formed unions. The bill would give both sides 90 days to reach an agreement, after which federal mediators would step in to manage negotiations. If a contract is not agreed upon after 30 days of mediation, the law would allow a three-person arbitration panel to develop a two-year contract that employers and employees would have to abide by.

The CDW breaks down the issues with the FLCA into two sections: one focused on economic consequences and the other on non-economic issues such as the elimination of workers’ rights and constitutional conflicts. With the FLCA in place, CDW argued that unions would be incentivized to wait out the 120-day negotiating period in the hopes of achieving better initial contract terms through arbitration.

“In voluntary bargaining, unions are driven to obtain a timely agreement for their members, which provides incentives for the union to bargain in good faith and take reasonable positions,” the paper states. “Arbitration removes this incentive. Under the FLCA, the union's positions are no longer designed to achieve timely voluntary agreements; instead, the union will solely focus on positioning itself for the best possible outcome in arbitration — in other words, the FLCA incentivizes unions to make unreasonable demands.”

The process created by the FLCA would reward bad-faith bargaining and generate unchecked labor costs that could destroy jobs and shutter facilities, CDW warned. “The Faster Labor Contracts Act is big government at its worst,” CDW Chair Kristen Swearingen said in a statement. “As our white paper explains, mandatory arbitration crushes genuine labor-management negotiations and worker voice and replaces it with a system that rewards bad-faith tactics, expands the federal bureaucracy, and could result in economically ruinous contracts for businesses and employees alike.”

In May, a majority of House members signed a discharge petition to force the chamber to hold a vote on the bill. That vote is expected to come to the floor sometime in June.

The full white paper is available here.