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Wal-Mart issue: Understanding the basics of labor law

Organized labor wants Congress to pass a law called the Employee Free Choice Act, which would make it easier for workers to form unions. Business groups such as the U.S. Chamber of Commerce are strongly opposed to the law

To understand the controversy, it helps to know a little about U.S. labor law.

Q.What's a union?

A. In a nutshell, a union is a group of employees who get together to negotiate wages and work rules with their employer. The goal of a union is a contract binding both sides on these matters.

Q. Aren't unions antiquated?

A. Unions started out in response to appalling wages and working conditions of the 19th and early 20th centuries. Since workplace deaths, for example, are no longer commonplace, many business people say unions are no longer needed. Unions reply that workers still should have a say in working conditions and pay rates.

Q. Don't unions make life difficult for management?

A. Yes, they certainly can. For one thing, evidence suggests union workers get paid more than their nonunion neighbors. Also, union contracts typically give workers "due process'' rights, meaning that employers can't discipline a worker without giving them a chance to contest it. These procedures may force managers to do more work -- for instance, to document employee misconduct.

In some cases, managers may not have time or willingness to do all this work, which leads to a phenomenon known as "dead weight," or workers who contribute little but manage not to get fired. Q. Can workers be forced to pay union dues if their workplace is unionized?

A. No. In some states, workers can be required to pay a "bargaining fee," to compensate the union for negotiating the workers' contract. This fee can be almost as much as union dues. But in Florida, such fees are illegal. Workers have the right to pay union dues or not, but get the same benefits as other workers either way.

Q. How can workers form a union?

A. If 30 percent of workers, not counting managers, sign authorization cards, the National Labor Relations Board can order an election. If more than half the workers vote yes, then the board certifies the union and the company must negotiate a contract.

Alternatively, if more than 50 percent of workers sign cards, the board can certify the union without an election. However, at the request of business groups, Congress amended the National Labor Relations Act in 1947 to allow employers to demand an election anyway.

Q. What are "unfair labor practices''?

A. These are actions prohibited by the National Labor Relations Act. For example. employers aren't allowed to fire or punish workers for supporting a union.

Q. What are the penalties for violating these rules?

A. Breaking the rules carries few penalties. For instance, a wrongly fired worker is entitled to back pay, but it could take years to collect.

Q. How would the Employee Free Choice Act change all this?

A. First, it would take away the employer's right to demand an election even if more than half of workers sign authorization cards.

Second, it would create larger penalties for companies that commit unfair labor practices.

And finally, it would provide for binding arbitration in cases where the union and management fail to reach an agreement in a given period of time.

Q. Why do business groups oppose the act?

A. They cite many reasons. For example, they say the arbitration provision could force a government-imposed contract nobody wants. They say the card-check provisions would encourage unions to go to workers' homes and harass them into signing cards. They say secret-ballot elections are a sacred right, and the law would effectively eliminate them.

What companies don't say so much, but are probably thinking, is that unions also mean higher wages for workers and cumbersome rules that will take up managers' time.

Q. Will the act make America less competitive?

A. That's hard to predict. Right now, the United States has some of the most union-unfriendly laws in the Free World. That can be seen as a competitive advantage for companies doing business here. In other western countries, businesses may face limits or restrictions on hiring and firing workers, for example. That makes it harder for companies to respond to changing market conditions. The EFCA could reduce this advantage and increase labor costs.

Q. Why does President Obama say he supports the act?

A. Obama and his advisors note that in recent years, American workers have become more productive -- that is, they generate more money per hour for their employers -- but their wages have not grown along with their productivity. Instead, businesses have pocketed this money. The president's administration figures the act would lead to higher rates of unionization, which in turn would lead to higher wages.

Critics would say he supports the law because he wants political and financial support from organized labor.

Q. What is a "right-to-work'' state?

A. "Right-to-work'' is an anti-union term for an open shop, meaning a workplace where employees can be covered by a union contract but pay nothing for it. In a right-to-work state, the government bars unions and employers from entering into any contract that requires employees to pay union dues or a bargaining fee in lieu of union dues. Business groups say this is a "right to work'' in that employees can earn a living without any requirement that they support a union they may not agree with. Of course, the law also has the effect of weakening unions.

In contrast, "union shop'' states allow unions and employers to sign contracts requiring workers to either join the union or pay a bargaining fee. "Closed shops," in which workers must be dues-paying union members, have been illegal in the United States since 1947.

Q. Would Florida be affected by EFCA?

A. The state could be seriously affected by EFCA. Unions would likely use the card-check provisions to organize workers before management had a chance to react. Hotels and large retailers would be likely targets.

Q. Would EFCA do away with secret-ballot elections?

A. Secret-ballot elections would still be allowed, but unions would likely try to avoid them because it would be easier to organize through card checks.

Q. Have any compromises been proposed?

A. Yes. For instance, U.S. Sen. Arlen Specter, R-Pa., has suggested strengthening the National Labor Relations Act in other ways without resorting to EFCA's card-check and binding-arbitration provisions.