Big Labor And Small Business What Every Small Business Owner Should Know

Feb 20, 2009


You may think as a small business owner that the resurrection of the "Employee Free Choice Act" (which passed the U.S House of Representatives in 2007, but was defeated in the Senate) would not affect you--think again. Unions spent record amounts during the 2007 election season to elect more allies in Congress and are now looking for a return on their investment, passage of the Employee Free Choice Act. At the heart of this Act is the so-called "card-check" legislation which would make it much easier to organize and unionize your workforce.

Under the card-check method, a union collects "authorization" cards from employees and independent contractors in any manner it sees fit for as long as it takes to get 50% plus one. Obviously, the possibility of harrassment, misinformation and intimidation to get these signatures is present. Under current law, employers may voluntarily recognize the card-check method, but they also have the option of choosing a secret-ballot election overseen by the National Labor Relations Board (NLRB). Under the proposed legislation, the choice would rest only with the unions. With unions winning about half of all private ballot elections while successful on 90% of all card-check campaigns, there is not much doubt which election method they would use.

How would the Employee Free Choice Act affect your business? According to a recent article in  National Federation of Independent Business (NFIB) publication My Business, small business owners should be aware of the following:

1. There are no size exemptions for small business - Small businesses are less likely to have labor counsel, making them possibly better targets for unions. The NLRB's statistics for the fiscal year ending September 30, 2005 reveals that 20% of the private-ballot elections they conducted that year involved organizations with fewer than 10 employees and 70% involved organizations with fewer than 50 employees.

2. There is no time limit on card collection - The union can hold cards until they get 50% plus one, regardless of how long it takes.

3. You may never know your business is being organized until it's over - The organization effort could be conducted completely underground without your knowledge. Even if you did find out, employers would be under major restrictions about what they could say during the union organization drive.

4. Right-to-work states offer no protection from card checks - The Employee Free Choice Act would preempt state law.

5. Independent contractors are fair game in card collection - Under the proposed legislation, independent contractors can count toward a majority of workers necessary to unionize a business.

Business owners should stay abreast of the developments in this legislation and contact their legislators regarding their opinions.

More from Kevin Campbell…

About the Author

Kevin is an entrepreneurial senior-level executive with over 30 years of broad based financial experience, working primarily with small and medium sized businesses in the private sector. Kevin also has public accounting experience, obtaining his CPA credentials while working for Ernst & Whinney (now Ernst & Young) as an auditor and he also operated his own accounting/tax practice specializing in professional services for small businesses and individuals.

View Kevin’s Personal Website


A collection of books from B2B CFO® to help any business succeed. Read the first chapter from books, including the Wall Street Journal’s book, for free.