Anyway, just so it’s not completely forgotten, here’s a little status update.  It has been referred to committee after being introduced in March, which means it is on step two of about six.  At this rate, it will be up for a vote in the House in March of 2011.  I know.  I’m on the edge of my seat too.

Specter’s proposal tweaks the original EFCA and incorporates an arbitration procedure which is more akin to that which is used in Major League Baseball, where both sides offer their last, best offer, and the arbitrator picks one or the other instead of trying to pick his own middle ground.  In effect, it forces both sides to come to the table with a reasonable offer, because each knows that if their proposal isn’t chosen, the other’s will be. 

In honor of his proposal, I thought I’d post a paper I had written about the history of arbitration in Major League Baseball, and how the process currently works, if you are really that interested…or that bored.

Balls and Strikes:  Arbitration in Sports and Salary Arbitration in Major League Baseball

            Sports and the law have had a long and intertwining history.  From the amateurs, to the pros, to the world stage, athletes, fans, and owners alike have jockeyed for position in the race to use the law to their benefit.  Today in particular, as marketing opportunities, licensing agreements, and lucrative player contracts pervade a flattening global marketplace, legal parameters for the business of sports play an increasingly important role.  And make no mistake:  sports are a business.  In fact, some of the most prominent owners in sports are worth anywhere from $600 million (Stephen Bisciotti, owner of the Baltimore Ravens) to $21 billion (Paul Allen, owner of the Seattle Seahawks and Portland Trail Blazers).[1]  Baseball in particular is an increasingly lucrative business as team values have increased to around $376 million[2], with the average player salary hovering around $3 million[3], as revenues continue to skyrocket.  All of baseball’s prosperity is not without its complications, though.  As Jim Bouton, author and former MLB player once said: “The reason baseball calls itself a game is because it’s too screwed up to be a business.” 

For this paper, we will examine more closely how player salaries in Major League Baseball have affected this business, and how the legal world has shaped that relationship.  Specifically, we will look at salary arbitration, the history of its development, the procedures governing salary arbitration, and whether or not the results of salary arbitration have had an effect across the board on player salaries in Major League Baseball.  Finally, there will be a brief discussion as to whether or not Major League Baseball’s salary arbitration method can be an example for other industries to follow in their arbitration proceedings.

To be able to gain a perspective on how salary arbitration in baseball morphed into its current iteration, it helps to look at the history of the labor relationship between Major League Baseball’s players and its owners.  Since 1922, baseball has had one giant, overarching legal anomaly that has helped to maintain the status quo:  the anti-trust exemption.  The Sherman Anti-Trust Act was passed by Congress in 1890 in order to limit the development of cartels and monopolies.  It reads: “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.”[4]

Reading this Act broadly, Major League Baseball would ordinarily, under its terms, be restricted from limiting its players’ activity and movement between teams.  However, in the case of Federal Baseball Club v. National League, 259 U.S. 200 (1922), the courts held otherwise.  The case came about because an old baseball league, the Federal League, had been competing with Major League Baseball for talented players, fan support, and, ultimately, money and power.  In 1915, the Federal League fell apart and owners of Federal Leagues teams, encompassing cities such as St. Louis, Chicago, and Indianapolis were left with failing franchises.  After the Federal League’s downfall, many of these cities’ teams’ owners were bought out by owners of Major League Baseball teams.  Others were offered the chance to purchase a stake in the Major League team in their city.

One group of owners, though, of the Baltimore Terrapins was denied the buyout offer so they decided to sue, alleging that the buyout was a violation of the Sherman Act.  The case went before Federal Judge Kenesaw Mountain Landis (who would end up going on to become the Commissioner of Major League baseball, not so coincidentally) who let the case sit for a great deal of time and encouraged the sides to negotiate.  Had it gone forward more quickly, baseball might not have gotten its exemption.  Ultimately, though, settlement failed, and after a lengthy appeals process, Justice Holmes and the Supreme Court held that baseball was “purely a state affair” and thus did not fall within the jurisdiction of the Sherman Act because of the Act’s requirement that anything which it covers be part of “commerce among the States.”[5]

So, since the Supreme Court held that Major League Baseball is not subject to federal anti-trust laws and is not a part of interstate commerce, players could not sue Major League Baseball or the owners for actions which it felt were a violation of that player’s right to offer his services around to other teams.  Players were also subject to Major League Baseball’s reserve clause.  Under the reserve clause, employed in all standard player contracts, after a player’s contract expired, the team he played for retained his services indefinitely into the future at their own discretion.  In part, Section 10A of the reserve clause itself read: “… the Club may tender to the Player a contract for the term of that year by mailing the same to the Player. If prior to the March 1 next succeeding said January 15, the Player and the Club have not agreed upon the terms of such contract, then on or before 10 days after said March 1, the Club shall have the right … to renew this contract for the period of one year.”  This meant that when his contract expired, even though the player no longer had to play for the team, and the team no longer had to pay him, the player was also not free to offer his services to another team. 

Although the players did not like the system, because of the Federal Baseball case, they had no legal recourse outside of negotiating a new contract to play with the same team, asking to be released or traded, or retiring.  The law stood this way for over fifty years until Curt Flood came along and sued the commissioner of Major League Baseball, Bowie Kuhn, in 1972.  Curt Flood was an elite Major Leaguer for the St. Louis Cardinals for twelve seasons.  After being traded to the Phillies by team ownership, Flood refused to report, claiming he didn’t want to move his family and also did not want to play in front of fans that were known for treating black players such as Flood with a great deal of derision.

So, Flood filed suit, and after some appeals, the case eventually found its way to the Supreme Court.  Flood was obviously upset with Major League Baseball’s reserve system, and even went so far as to claim that it was a form of involuntary servitude and thus in violation of the Thirteenth Amendment.  Justice Blackmun wrote the majority opinion, and refused to overrule Federal Baseball and thus upheld Major League Baseball’s anti-trust exemption.  Throughout the opinion, however, he does diverge from some of the principles in Federal Baseball by scoffing at the idea that baseball is not involved in interstate commerce.  Unfortunately for Flood, though, the Court cites Congress’s inaction on the subject, despite their myriad of opportunities to legislate over it, as a sign that they did not want to remove baseball’s anti-trust exemption.  So, Curt Flood lost his case.  However, his efforts did set the stage for the labor negotiations of 1973 between players and owners.  The results of these negotiations would ultimately grant players the right to have their salaries determined by an arbitrator.

Shortly after the players received the right to arbitrate, many threatened to take the meaning of the reserve clause in their contract to arbitration. They refused to sign contracts for the ensuing season, allowing their club to renew their contracts but asserting that upon the expiration of the renewal term, the club would have no right to their services. Sparky Lyle, for example, played unsigned for the entire 1974 season before signing a contract on the last day of the season; Bobby Tolan actually executed his 1974 contract after the season. None went to the full brink of holding out completely, though.  That all changed in 1975, when Andy Messersmith and Dave McNally refused to sign.[6]

Messersmith and McNally are crucial to the development of players’ rights for several reasons.  Curt Flood’s case made it clear that the courts were not going to usurp baseball’s power.  Congress made it clear by its inaction that it was not going to legislatively revoke baseball’s anti-trust exemption.  The growing national prestige of the game made it clear that the precedent from Federal Baseball, with its glowing deference to the sanctity of baseball, was not going away anytime soon.  Most baseball insiders who sympathized with players’ rights feared that their beloved athletes were stuck in a dire situation, as owners grew fat off increased profits due to revenue from radio and television and deflated player salaries.  These insiders, however, underestimated the power of the arbitration procedure which the players had gotten solidified via the 1973 strike.  In fact, some scholars have gone so far as to call arbitration the single greatest invention of the American labor movement.  Messersmith and McNally sought to use that invention to their advantage.

Andy Messersmith was an above average right-handed pitcher for the Los Angeles Dodgers who had a fantastic season in 1974, going twenty-and-six, throwing three shutouts, and posting a 2.59 ERA, while finishing 2^nd in the voting for the National League Cy Young Award, 16^th in the MVP race, and playing in the All-Star game.[7]  After such an outstanding season, Messersmith justifiably felt that he deserved a salary increase.  The Dodgers’ owner, Walter O’Malley, though, renewed his contract with only a very small salary increase that did not correspond with his increased production.  Messersmith, then, decided to refuse to sign his contract and played the entire 1975 season without one.  (Ironically enough, he ended up having what could be argued to be a better season in 1975, sporting a 2.29 ERA, 30 points lower than in 1974, throwing 29 more innings, throwing seven shutouts, and earning yet another National League All-Star nod.[8])

Since Messersmith did not sign his contract after it had been renewed by the team, he was in a position to test the waters and see if the team’s renewal rights lasted indefinitely or only for a single season.  His grievance specifically claimed that under the option clause of the negotiated uniform player’s contract, which stated that “the Club shall have the right…to renew this contract for the period of one year on the same terms,” a club could renew a player’s contract for one year only.  Management claimed to the contrary:  each renewal of “this contract” also renewed the one-year option clause, which the club could then renew again and again.[9]

So, needless to say, the entire baseball world watched the Messersmith arbitration hearing with a great deal of anticipation.  If it turned out well for Messersmith, the players could have a whole new weapon with which to attack the unfair reserve system:  free agency.  If not, it would have been hard to imagine the players having any other recourse outside of trying to get the owners to come back to the bargaining table to re-negotiate the CBA.  For the crucial hearing, the arbitration panel consisted of Marvin Miller, the then head of the Major League Baseball Players’ Association (MLBPA), John Gaherin, the director of the Player Relations Committee (a collective bargaining unit formed by the owners to deal with the increasingly powerful MLBPA), and Peter Seitz, Major League Baseball’s arbitrator.  Since Miller and Gaherin had their obvious leanings, the decision was Seitz’s and Setiz’s alone.

Arbitration in Major League Baseball is unique in several ways.  First of all, most current salary arbitration is interest arbitration and not grievance arbitration.  This means that in salary arbitration, both sides present their arguments to an impartial arbitrator and he or she creates a new agreement, as opposed to the Messersmith case of grievance arbitration where Seitz was called in as the neutral arbitrator to interpret the terms of an already existing agreement.  This paper will discuss later the intricacies of interest arbitration for salaries, but, for now we will focus on the grievance arbitration procedures which were applied to the Messersmith case by Peter Seitz.

Seitz was widely regarded as an extremely competent labor arbitrator.  He was a lawyer with two degrees from NYU and was a member of the National Academy of Arbitrators (and also served as their VP).  When grievance arbitration begins in Major League Baseball, the neutral arbitrator (Seitz here) the process goes just about how arbitration would go in any other unionized workplace.  Normally, grievance arbitration comes up because a company fired an employee for behaving inappropriately or because they denied someone their vacation benefits.  When you are dealing with a union of multi-millionaires, with the future of the game itself in limbo, the stakes are much higher and thus the procedures are much more scrutinized.

Typically, when an issue that can be resolved by grievance arbitration comes up, an employee will first discuss his or her grievance with their direct supervisor.  The majority of the time, the problem gets resolved there.  If not, management and union leadership try to come to terms.  If all else fails, then arbitration comes in.  In the Messersmith case, for the MLBPA, arbitration was really the only course.  The courts and the legislature had already shown their unwillingness to stand up for players’ right to shop their services around.

Since arbitration is the first time a third party becomes involved in the dispute, the method for selecting an arbitrator is explained in the collective bargaining agreement as well as the way in which the proceeding will be conducted.  Usually, labor and management can at least agree that they will use an arbitrator from either the nonprofit American Arbitration Association or the public Federal Mediation and Conciliation Service.  Both of these groups keep select rosters of acceptable arbitrators.  Since disputes between MLB and the MLBPA typically involve very large sums of money, the lists will typically only contain people with a great deal of experience in labor negotiations who have been shown to be relatively neutral with regards to labor and management disputes.  After requests from both sides come in, the parties in an MLB dispute get a list of seven arbitrators in their region.  The player and MLB will each take turns crossing parties off the list, with the last one standing deemed to be the most neutral.

Even though both the AAA and the FMCS have lists of over three-thousand arbitrators, only a few neutrals are regularly chosen for MLB cases.  Most arbitrators which are chosen have an average age of sixty-five and are trained in law or economics.[10] Some of the more established companies and unions often bypass the delay involved in this case-by-case process by having a permanent neutral arbitrator for their cases.  Although MLB owners and the MLBPA use a three-person panel in disputes, since two of the representatives are biased, as was the case with Messersmith’s hearing, Seitz once again became the crux, as he had been for some time prior to this case.

Sometimes, in sports arbitration, the collective bargaining agreement between the players and the league will explain in detail how the arbitrator should proceed to hear the dispute.  For example, they might require that a hearing be held within a specified number of days from the appointment of the neutral arbitrator, who must, in turn, issue a decision within a stipulated period after the hearing.[11] The parties can also narrow which issues will be heard in arbitration, which ended up being a key focus in the Messersmith hearing.  Furthermore, the two sides can either set their own rules for the procedure or adopt the model rules from the AAA.

The two sides also decide between them where the hearing will be held, which is usually at a neutral location that can be accessed fairly easily from the workplace.  It’s done privately and is usually finished well within a single day.  The two sides (often lawyers) present their evidence to the arbitrator through oral testimony and submit evidentiary documents.  However, the usual rules of evidence don’t apply here.  Arbitrators here are generally thought to be knowledgeable enough to know which evidence is questionable and which is legitimate.

Afterwards, the two sides submit written briefs and the arbitrator then issues a written award, along with an opinion explaining their position.  The CBA usually, as it did here, maintains that the award is “final and binding” on the two sides.  Grievance arbitration is used in a number of sports to resolve a myriad of disputes, including questions in basketball and football regarding whether or not a player has shown up as “fit to play” as required in his contract.  In 1997, for example, a major dispute occurred in the NBA surrounding the then Golden State Warriors’ guard Latrell Sprewell.  He attacked his coach P.J. Carlesimo during practice.  Carlesimo had yelled at Sprewell to make crisper passes and Sprewell responded that he wasn’t in the mood to for criticism and told the coach to stay away from him.  When Carlesimo got close, Sprewell threatened to kill him and dragged him to the ground by his throat, choking him for 10-15 seconds before his teammates could pull him off.  He then proceeded to return twenty minutes later to punch the coach before being dragged away again.  After being suspended for ten days without pay, the remainder of his contract was ultimately voided while the league suspended him for an entire 82-game season.  He took the case to arbitration as allowed in the CBA and the contract voiding was overturned, with the arbitrator reducing his suspension to 68 games.[12] 

Those critical of sports arbitration often point to this as a prime example of a flawed system which can allow an obviously violent and undeserving player to get back into the game.  However, despite its critics, arbitration has grown in importance over the years in all sports, particularly in Olympic and international sports in cases involving drug testing.  The Court of Arbitration for Sport, established in 1984 in Switzerland by the then president of the International Olympic Committee, is the most widely used international arbitration tribunal for sports disputes.  One of its most famous and most recent cases involved the dispute around cyclist Floyd Landis and his attempt to reclaim his revoked 2006 Tour de France title after he tested positive for banned substances.  The CAS denied Landis’s appeal and upheld his two-year suspension, costing him over $2 million on the appeal alone.[13]

However, that pales in comparison to the amount of money Landis would have had to spend on litigation and attorneys’ fees.  This low-cost, quick turnaround is one of arbitration’s major appeals (no pun intended).  Looking at the Messersmith case, his timeline illustrates this perfectly.  He filed his grievance on October 7, 1975, and the case was heard on November 21^st, 25^th, and December 1^st, 1975.  Seitz gave his opinion for a majority of the panel on December 23^rd.  Sports arbitration is also much less expensive than litigation because there is no prehearing discovery, depositions, or interrogatories.

In Messersmith’s case, MLBPA’s general counsel Richard Moss spoke for Messersmith and Dave McNally, another player who had joined Messersmith’s grievance.  Seitz was charged with interpreting the complex terms of the Major League Rules, the CBA, and the uniform player’s contract.  He first had to look at the owners’ claim that the arbitrator didn’t even have jurisdiction to hear the grievance.  The collective bargaining agreement had an arbitration clause that covered disputes about “the terms of the agreement” and those that were not about those terms couldn’t be heard by the arbitrator.  Article 15 of the 1973 collective bargaining agreement said specifically that the Agreement didn’t deal with the reserve system.  The owners argued that this clearly meant that Messersmith shouldn’t even be able to be heard from.

The parties’ contact was confusing, though, because the CBA was full of things that did deal with the reserve system, despite Article 15’s language.  The Major League Rules had a specific provision for reserve lists and did not allow teams to tamper with players which were placed on the reserve list.  Messersmith’s counsel said that the language came up during negotiations when the Curt Flood case was still pending, and the MLBPA was worried that it could have been held liable for an antitrust violation if the litigation had turned out differently as they thought it would.  The theory was that if the court found that the collective bargaining agreement sanctioned an antitrust violation, both parties to the agreement might be held responsible.[14] 

In fact, there was little basis for the Players Association’s antitrust concerns.  If anything, the fact that a player restraint was the product of collective bargaining would insulate the reserve system from antitrust liability.  Congress wanted to foster collective bargaining through the National Labor Relations Act.  Courts have given effect to this intention by exempting from the antitrust laws restraints negotiated through the collective bargaining process.[15]

Since these rules implemented the reserve system, Seitz eventually held that they therefore did “deal with” the reserve system.  He did not address the antitrust issue in his opinion, but did use the evidence on bargaining history to explain the paradox in the contract—an agreement filled with provisions that described the reserve system and a counterintuitive provision that said that it did not deal with the reserve system.  He held that both sides never meant to keep challenges to the reserve system out of arbitration and he therefore had the ability to decide the case.

The players’ union said that Messersmith had performed for the required one year under his contract and Seitz agreed.  He held that the one-year option clause was simply an option for one year and not one that lasted indefinitely.  This ruling was a major victory for the players.  The reserve system had still not been completely dismantled by Seitz at this point in his opinion, though.  Major League Rule 4-A(a) said that each club could have a reserve list only if that player was under contract.  Rule 3(g), however, seemed to offer protection for any reserved player, even if he wasn’t under contract.  To clarify this discrepancy, Seitz looked to the Cincinnati Peace Compact signed at the formation of Major League Baseball which Seitz called “probably the most important step in the evolution and development of the present Reserve System.”[16]  The agreement was signed where the American League and National League settled their differences and agreed not to raid each others’ “reserved” players.[17]  It read that: “A reserve rule shall be recognized by which each and every club may reserve players under contract…” [18]

Seitz then went on to say that the law did not smile upon perpetual contracts which could be renewed by one party indefinitely, and relied on New York law surrounding real estate transactions.  Despite the tenuousness of the relation to the law, in probably the single most important act in the history of the business and law of baseball, on December 23, 1975, Peter Setiz granted Messersmith’s grievance and ruled that the players were free of the reserve system.  Seitz claimed in his ruling that he was not looking at the reserve system on constitutional or moral grounds, but rather accused the commissioner and baseball of imposing their own personal brand of industrial justice on the parties.  (Ironically enough, this is the language the Supreme Court would later use to determine whether an arbitrator has overstepped his or her own bounds when making decisions.)  Seitz was also aware that the teams would fire him as their permanent arbitrator—which they did within five minutes of receiving the results of his award.

The owners, of course, then decided to bring suit in federal court to vacate the arbitration award.  In the case of Kansas City Royals Baseball Corporation v. Major League Baseball Players Association, 532 F.2d 615 (1976), one team brought suit on behalf of all the owners requesting the court to overrule the arbitration panel’s decision.  The District Court judge had ordered the award enforced.  The Court of Appeals judge held that the arbitration provision between MLBPA and the owners was broad enough to cover the dispute in question and that the history of negotiations in the instant contract “did not evince a sufficiently strong intent not to arbitrate grievances involving the reserve system as to overcome the presumption of arbitrability” and “the decree was not vague and indefinite” and thus the decision should be affirmed.[19]

The Eighth Circuit Court of Appeals applied well established law for deference to arbitrators’ decisions.  It first looked at whether or not the panel had jurisdiction in the first place, and held that Seitz correctly interpreted that the Collective Bargaining Agreement did “deal with” the reserve system and he thus could hear the case.  They reviewed the procedures surrounding the panel, held that it was neutral enough, and that they must sustain the arbitrator’s award so long as it “draws its essence from the collective bargaining agreement.”[20]  Although the court admitted it found the issue about the arbitrability of the reserve system more difficult than the District Court, it still held in favor of Messersmith and McNally and their right to be free from the confines of the reserve system.

Now that Messersmith had struck a major blow for players’ rights, salary arbitration became a more viable option when players and owners could not agree on the player’s salary for the upcoming season.  Salary arbitration is a form of interest arbitration, which means that the arbitrator, instead of interpreting and applying the terms of an already drafted agreement to decide a grievance, determines what provisions the parties are to have in their collective bargaining agreement.  Here, though, instead of deciding the provisions for a collective bargaining agreement, the arbitrator determines how much a player deserves to be paid for the upcoming season. 

According to the American Arbitration Association’s guide “Using Alternative Dispute Resolution to Settle Sports Disputes,” the Basic Agreement between the MLBPA and the owners provides for arbitration of salary disputes as basically a form of labor arbitration, yet an arbitrator is not permitted to fashion remedies or write opinions.  The Basic Agreement requires “last best offer” arbitration, or “final offer” arbitration, in which both the team and the player involved submit their last offers to an arbitrator, who must pick one of the submitted figures.  While this can at times produce what appear to be unusual results, the nature of this system induces the participants to bargain in good faith and results in a high percentage of settlements.

In fact, approximately 88 percent of the players filing for arbitration reach new agreements before a hearing, according to the MLBPA.[21]  Of those salary disputes that do go to an arbitrator, since 1974 and including 2006, arbitrators have ruled on behalf of the players 199 times and clubs 269 times, which means that the owners win these cases about 57% of the time.  The rules regarding who is eligible for arbitration in Major League Baseball are a little bit complicated.  Major League players who are eligible for salary arbitration are those with three or more years of service, but less than six years.  The only exception to this rule is if a player is classified as a “Super Two” player, which means that he has at least two years of service, but less than three, and has also accumulated at least 86 days of service during the immediately preceding season and he ranks in the top 17 percent in total service within that class.  It’s a minute loophole for the union which they lobbied for in 1990, and had added to the Collective Bargaining Agreement.  Teams can also offer arbitration to any player with at least three years of service when his contract has run out.  If that player is a free agent (meaning he has at least six years of service) he can choose to accept or decline the offer to go to arbitration.  If he’s not a free agent, he has to go to arbitration since that team still controls his rights.

Unfortunately for the arbitrator, there is no automatic formula for determining how much he or she can award to that player.  Keep in mind, when an arbitrator awards a player salary arbitration, that only determines his salary for the upcoming single season.  After that, the process resets itself.  During the actual hearing, the following criteria have been established as admissible evidence in hearings throughout the history of baseball arbitration:  (1) the player’s contribution during the past season, including overall performance and special qualities of leadership and public appeal; (2) length and consistency of career contribution; (3) the player’s past compensation; (4) comparative baseball salaries; (5) recent club performance; and (6) any physical or mental defects in the player.[22]

Just this past February, Philadelphia Phillies first baseman Ryan Howard set the record for arbitration awards when he received $10 million from an arbitration panel to play in 2008, after the team had offered him $7 million.  He made $900,000 in 2007 and $355,000 during 2006, a season where he won the National League MVP award.  He also won the National League Rookie of the Year award the year before that, in 2005.  So, although no transcript of the hearing was kept, the three-man panel of Stephen Goldberg, Robert Bailey, and Jack Clarke obviously noted Howard’s extremely high production was in stark contrast to his relatively extremely low level of monetary compensation.

When combined with salary arbitration, free agency led to a tenfold increase in player salaries over the next decade, from the mid 1970’s to the mid 1980’s.[23]  Then, the free agency market dried up and players’ salaries began to deflate again.  After the owners tried colluding to keep salaries down once again, and the players struck again in the 1990’s, high powered agents like Scott Boras stepped in for the players and the MLBPA, and used the powers of the free agent market to their advantage.  This caused salaries to skyrocket once again and added fuel to the fire for fans clamoring about overpaid, under-appreciative athletes.  On December 30, 2007, Alex Rodriguez signed a 10-year contract with the New York Yankees, reportedly worth $275 million, with an additional $30 million available if he breaks the all-time homerun set by Barry Bonds of 762.

Salaries such as Rodriguez’s have left free agency and arbitration up for criticism from fans and owners.  They claim that it is destroying the game and want the entire system to be revamped.  They believe that the practice of arbitration inflates salary levels above their market values despite the fact that owners win the majority of cases.  The Phillies, for example, were 7-0 in arbitration hearings prior to Ryan Howard’s record award.  The owners, however, claim that the results are misleading because the players are in a win-win situation.  They can make their offer substantially higher than they know they would get from the club and then put leverage on the club to increase its offer by making the team fear that the arbitrator will see their offer as extraordinarily low.  Even in the cases that settle, the players receive an increase ranging from 33% to 110% over the previous year’s salary.[24]

While owners and fans alike may deride the current system, it’s worth keeping in mind how the system used to be prior to Messersmith’s case.  Of course, in the monopsony situation prior to 1973, where owners had complete control of players’ salaries, they were going to remain low; arguably artificially low.  Any time free market forces come into play, and the bargaining power shifts, one side is going to benefit more than the other.  Prior to being able to file for arbitration or free agency, a player had no recourse.  He had to play for essentially whatever the owners wanted, and this kept salaries from inflating.

Fans who criticize arbitration should also keep in mind that just because a player files for arbitration does not mean that the team is required to renew his contract.  They have the option to participate in the process, but can also cut the player instead of paying him what he might receive in arbitration.  So, if we assume that the owners are looking out for their own economic interests, when they go into arbitration knowing that at worst the player could receive what he is asking from the arbitrator, we have to assume they feel the player is worth that to the team.

Finally, we also have to keep in mind that players’ salaries remain extremely low during their first three years in the league, regardless of how much they produce.  We saw in Ryan Howard’s case that he was earning approximately 1/10^th of the average player’s salary despite the fact that he was voted to be the single most valuable player in the entire league!  Albert Pujols of the St. Louis Cardinals is another example of a player who was essentially required to play for much less than his market worth during his first three years in the league.  Despite having the most productive first three years in the Major Leagues of any other player in baseball history, Pujols earned only $200,000, $600,000, and $900,000 respectively each of his first three years, just above the league minimum.  However, that was all rectified when he signed a seven-year, $100 million contract the day that his arbitration hearing was scheduled.

Although salary arbitration has been the source of many critics’ scorn, it is unfair to think of it as the only thing contributing to higher player salaries.  Since 1973, arbitration and free agency have been linked together, and, as mentioned, arbitrators often calibrate their decisions in reaction instead of pro-action, based on the value of that player when compared with what other players are earning on the open free agent market.  “Comparative baseball salaries” is one of the criteria which arbitrators examine in a hearing.

As for what the future holds for arbitration in sports, due to its speed, efficiency, and deference granted by the court system, I would guess that arbitration will grow to be increasingly more useful in sports.  I foresee the international Court of Arbitration for Sport having a more prominent role as the world becomes more globalized.  The CAS already has two additional locations in New York and Sydney, with ad-hoc courts created in Olympic host cities.  As our nations become more intertwined, and sports expand across borders (as cricket may do soon in spreading to America) arbitrators will be able to settle disputes that a court system may not have the ability to handle.

As for Major League Baseball specifically, I think the recent Barry Bonds collusion scandal has shown how salary arbitration is likely to expand in the sport as well.  The apparent collusion among the game’s owners to keep Bonds out of baseball was investigated thoroughly, and several owners were vilified for their alleged (by MLBPA) roles in keeping the homerun king away.  Since collusion didn’t work to keep salaries low in the late 1980’s, and it has been publicly scorned as a current means to keep high-paid players away, owners will likely have little recourse to steadily increasing player salaries.  The final offer arbitration procedure gives them a chance to shoot for a low salary for a player, and, at worst, keeps them from being locked into a long-term, high-priced contract with a superstar while incentivizing them to settle when it is in their interests.

I think this aspect of final-offer arbitration in Major League Baseball shows that it can, in fact, be a model for other labor organization systems where arbitration is an option.  The main goal of the National Labor Relations Act is the creation of labor peace.  Since final-offer arbitration has been shown to encourage settlement, labor lawyers on both sides who are trained in the ways of the NLRA would likely smile upon any method which avoids the arbitration process completely and allows them to craft their own contracts between disputing parties.  No matter what happens, in sports, as in business, there will be constant struggles between parties and thus the law will have to constantly evolve to adapt to those struggles.  Whether it’s through salary arbitration or grievance arbitration, a voice which is much more efficient and cost-effective than the court system is likely to help both sides reach an amicable agreement.

[2] Ozanian, Michael.  “The Business of Baseball.”  Forbes.com.  20 April 2006.  12 November 2008 <http://www.forbes.com/2006/04/17/06mlb_baseball-team-valuations-cx_mo_0420sports.html>.

[3] “MLBPA Info:  Frequently Asked Questions.”  MLBPlayers.com.  12 November 2008 <http://mlbplayers.mlb.com/pa/info/faq.jsp#average>.

[4] See 15 U.S.C. §1.

[5] Id. at 208.

[6] Pappas, Doug.  “A Contentious History:  Baseball’s Labor Fights.”  ESPN.com:  Major League Baseball.  (8 September 2008).  22 November 2008.  <http://espn.go.com/mlb/columns/bp/1427632.html>

[7] Andy Messersmith Career Statistics.  30 September 2007.  Baseball-reference.com.  23 November 2008  <http://www.baseball-reference.com/m/messean01.shtml>

[8] Id.

[9] Abrams, Roger I.  Legal Bases:  Baseball and the Law.  Philadelphia: Temple University Press, 1998.  118-119.

[10] Id. at 121.

[11] Id.

[12] “Report:  Sonics Set to Make Spurs Assistant Carlesimo Coach.”  CBS SportsLine.  3 July 2007.  24 November 2008.  <http://www.sportsline.com/nba/story/10245270>

[13] Lowe, Zach.  “Court of Arbitration for Sport Denies Cyclist Floyd Landis’s Appeal.”  The AM Law Daily.  30 June 2008.  24 November 2008 <http://amlawdaily.typepad.com/amlawdaily/2008/06/landis-appeal-d.html>.

[14] Abrams at 125.

[15] Id.

[16] Id. at 126.

[17] Dabscheck, Braham.  “The Unstable Oligopolies that are Professional Team Sports”.  Sporting Traditions.  Vol. 15, No. 2 (May 1999).  24 November 2008.  < http://www.la84foundation.org/SportsLibrary/SportingTraditions/1999/st1502/st1502j.pdf>.

[18] Abrams at 126.

[19] Kansas City Royals and Major League Baseball Clubs v. Major League Baseball Players Association, 532 F.2d 615 (1976).

[20] Id. citing United Steelworkers of America v. Enterprise Wheel & Car Corp, 363 US at 597.

[21] “MLBPA Info:  Frequently Asked Questions.”  MLB Players Association.  25 November 2008.  <http://mlbplayers.mlb.com/pa/info/faq.jsp#record>

[22] Marburger, Daniel and Paul Burgess.  “Can Prior Offers and Arbitration Outcomes be Used to Predict the Winners of Subsequent Final-Offer Arbitration Cases?”  Southern Economic Journal 71.1 (2004): 93-102.

[23] Abrams at 133.

[24] Aubut, Melanie.  “When Negotiations Fail:  An Analysis of Salary Arbitration and Salary Cap Systems.”  The Business of Sports.  Ed. Scott R. Rosner and Kenneth L. Shropshire.  Sudbury, MA:  Jones and Bartlett Publishers, 2004.  252-276.

In fact, in 2007, the total compensation of chief executives in large American corporations was 275 times that of the salary of the average worker, estimates the Economic Policy Institute in Washington.[2] In the late 1970s, chief executive pay was 35 times that of the average American worker.[3] As the potential for the big pay day in Wall Street finance recedes back to the median, however, many people will look to fields which have greater opportunities for sustained employment and don’t require as much of an investment in one’s education.  To fill this vacuum, the stimulus plan has pushed for the creation of more “green-collar” and “blue-collar” jobs:  jobs which are more labor-intensive.[4]

If the stimulus plan pans out as many anticipate, and jobs in these fields become more readily available, the potential for unionization will become more apparent to workers.  This new job market, combined with a Democratic majority in both houses of Congress, as well as a pervasive national attitude that America is in a crisis, could all open up the door for passage of the hotly debated, and highly divisive, Employee Free Choice Act.  It could behoove all of those in the legal community to examine the three main provisions of the Employee Free Choice Act, and the arguments on both sides of each of those provisions.

The Employee Free Choice Act (EFCA), or H.R. 800, was first passed on March 1, 2007, in a Democratically-controlled House of Representatives by a vote of 241 to 185.[5] The bill did not pass with a filibuster-proof majority in the Senate, though, getting just over half of the 99 votes which were cast.  However, many now think that the current composition of the Senate, with 57 Democrats, makes it more likely that they can obtain the requisite 60 votes to pass the bill without a filibuster.[6]

Critics and supporters of the bill alike have been increasingly vocal lately on almost every aspect of the bill.  As is so often the case in highly politicized issues such as this, there is no definitive economic research that an objective observer could point to which would end the argument.  So-called experts have offered data from both sides that skew towards the point they are trying to make.  For example, the Economic Policy Institute recently took out a full-page ad in the Washington Post putting forth a statement that thirty-nine well-established economists advocate the Employee Free Choice Act because it will help the overall state of the American economy.[7] The AFL-CIO, a federation of fifty-six national and international labor unions, also has consistently stated that joining a union is the best way for working people to get ahead.[8] However, the text of the ad even admits that the EFCA is not a sufficiently comprehensive panacea.

To counter this, Dr. Anne Layne-Farrar of the prominent economic consulting firm LECG put out a report doubting the effectiveness of the EFCA, arguing that unemployment would actually increase if it were to be passed, and stressing the importance of empirical data in making her points.[9] However, her data is amassed by looking at how unemployment has inversely correlated to unionization in years past.[10] Regardless of the amount of empirical data compiled, though, no one can actually predict how employment numbers will change in this economy versus previous years when the economy was much stronger.

Obviously, arguments on both sides of this debate could be criticized for standing on shaky ground.  For this paper, it seemed as though the best approach would be to critically examine the three main provisions of the EFCA (card-check, binding arbitration, and damages), consider compromises which have been put forward, and discuss the politics surrounding the legislation.

Turning to the text of the EFCA itself, one of the provisions which has given the most fodder for argument on both sides of the debate, and has also created the most media cache surrounding the Act, is the card check provision.  According to the text of H.R. 800, the National Labor Relations Board would have to certify a union as the bargaining representative without an election if over fifty percent of a company’s employees sign cards which support the union.  After formal certification, that union can then require the employer to bargain with it within ten days.[11]

The EFCA’s supporters’ main argument here seems to be this:  speed.  They contend that the more quickly and efficiently that unions are organized, the better position they will be in to collectively bargain.  And, they say, the quickest way to organize is to bypass the traditional certification method of an election where employees cast their votes either in support of or against the union, in secret.  Under the current NLRA, a union first has to show that they have thirty percent support via cards to obtain an NLRB-supervised election, which usually occurs 39 days after receipt of the cards.[12] Union supporters can also organize if they have over fifty percent of support, but, an employer has the option to refuse acknowledgement and require secret ballot elections.  Supporters argue it takes far too long to complete the process of first getting enough ballots to support an election, setting up the election process, and then waiting for election results to come back in.

In an op-ed piece for The Portland Oregonian, Washington Post writer Marie Cocco outlines their basic argument in relatively straightforward terms.  She points out that most of the foul play occurs during this interim period, after cards have been signed but before an election has taken place.  According to her, “Academic research has demonstrated that much of the illicit anti-union activity is conducted after employees have signed cards indicating they want a union, but before a formal election is held. This is what [the EFCA] aims to eliminate: a waiting period during which three-quarters of companies hire consultants to thwart the organizing drive and engage in a variety of pressure tactics to keep employees from ultimately voting ‘yes.’”[13] Unfortunately, she does not give any reference to the academic research on which her entire argument is based.  However, her opinion seems to be shared by a number of prominent scholars across the board.

Critics of the card-check provision seem to couch their disdain for an expedited card-check process by championing the idea that secret ballots ensure just that:  secrecy.  The Act’s opponents’ biggest claim is that the EFCA is not on the workers’ side, but rather the EFCA’s opponents are the ones looking out for workers’ rights instead, by guaranteeing that workers won’t be bullied by their peers into publicly voting for a union that they don’t actually support and would have voted against in private.  An article published by the conservative think tank The Heritage Foundation entitled, “How the Employee Free Choice Act Takes Away Workers’ Rights,” matter-of-factly gives reasons why employees would be better served without the expedited card check process put forth in the EFCA.[14]

First, the Heritage Foundation article claims that workers have a fundamental, democratic right to vote in privacy.  The authors write, “A private vote is more than a fundamental democratic right; it also protects workers and ensures that they can express their true views.”  However, what they don’t manage to cite is a study which quantifiably shows how many people would actually vote differently if they did have the chance to vote privately versus having to fill out a card.  The article as a whole is very fact-driven, but, their claims that a private ballot is the true indication of an employee’s intentions seem somewhat subjective.

Furthermore, critics of the act contend that the current time lapse between a card-check proposal and an actual election “gives employees time to reflect” and “allows them to hear both sides of the issue”.  They argue that a private election and an intervening time period prior to certification protect employees from threats and intimidation since employees’ names are not attached to specific ballots in a private election, while they are in a card check.  They point out that with a card check both employers and union organizers are liable to threaten workers, and they cite the financial stake unions have in convincing employees to organize.

However, what the article fails to discuss is the financial stake employers have in convincing employees to not organize.  Just as unions collect dues from employees who organize, they are also able to push for higher wages for their workers.  This, of course, creates consternation among management and corporate executives.  When employees organize, employers feel that they lose in the worst way.  For example, workers who belong to unions earn 28 percent more than nonunion workers, are 52 percent more likely to have employer-provided health coverage, and are nearly three times more likely to have guaranteed pensions:  all of this costs employers vast sums of money.  So, while the article is correct in noting that a card check provision of the EFCA could leave employees open to threats, employers have just as much, if not sometimes more financial incentive to intimidate employees into voting in their favor.  They might want to know the names of those voting either way in an election even more than a union organizer would.  This is where the EFCA’s supporters’ arguments in favor of speed might get an extra boost.  By expediting the process, there is less of a chance that employees’ names will be used by either side for intimidation purposes.

Moving to the second major aspect of the EFCA, assuming a union has been formed and recognized, the issue then becomes what the bargaining process will look like.  Under the current iteration of the NLRA, the parties are required to bargain in good faith until an agreement has been reached.  If bargaining reaches an impasse, employees have the right to strike, or, if there is action taken in bad faith, either side can be subject to penalties for violating the NLRA.  Obviously, a subjective term like “good faith”, as those in the legal field know, leaves the floodgates open to a deluge of litigation.

However, if no agreement has been reached under the EFCA, the parties would first advise FMCS (Federal Mediation and Conciliation Services) that they have not reached a collective bargaining agreement after 90 days.  If this is the case, FMCS will offer to mediate to help the parties come to an agreement. If no agreement is still reached 30 days after FMCS was notified of this, then FMCS will refer it to arbitration.  The arbitrator can then make a decision which will become legally final and binding on the parties to the dispute.

Opponents of the compulsory interest arbitration claim that the EFCA gives the arbitrator far too much discretion, and imposes terms which last two years on unwilling employers.  Of course, both parties can, during that two-year period, mutually agree to amend any agreement.  However, critics also worry about gaps in the statute regarding what happens when one party fails to strictly comply with the time frame requirements.  They point out that binding arbitration does not always go as smoothly and efficiently as arbitrators would have us believe.

For example, the Heritage Foundation article points to Michigan as a guiding example of how binding arbitration could fail in labor and employment law.  Michigan crafted its statutes to create a process which moves fairly quickly.  Hearings are to be started within 15 days and completed within 30 days.[15] However, they note that “29 binding arbitration cases resolved in 2005 and 2006 showed that only seven–fewer than one out of four–were resolved within 300 days. On average, binding arbitration takes almost 15 months from the date that a request is filed to the date that a decision is reached.”[16]

However, supporters of the EFCA would point out that any timelines imposed by the act can be extended by mutual agreement of the parties involved.  They claim that interest arbitration actually brings the parties closer together since neither party has any incentive to make far-reaching demands that could reflect poorly upon them in front of an arbitrator.[17] Supporters would also note the reliability and neutrality of mediators which are appointed during those contentious first thirty days by FMCS.  Critics, however, worry that an FMCS mediator might not be neutral and that the mediator could be more prone to sympathy for the plight of workers rather than the business interests of large corporations.  In fact, Bob Gilson, a prominent author regarding federal mediation issues has said:  “Next to ending strikes, the most significant aspect of the [EFCA] may be its effect on perceptions of FMCS’ ‘neutrality.’”[18] Some also fear that implementation of the arbitration system would occur too rapidly since the EFCA does not allow for a transitional period while both management and unions adjust their strategies to adapt to the arbitration provision.  Critics’ main issue, though, seems to be that both sides would be left to deal with the whims of “unpredictable” arbitrators.

While critics of the arbitration provision have cited Michigan as an example of the lengthy, protracted delays which could occur, supporters of the provision have looked north to Canada as a model for how first contract mediation and binding arbitration can work advantageously for all involved.  First contract mediation and arbitration laws were passed in several provinces in Canada in the early part of the 1990’s and many Canadian workers are now covered by those laws.  The group American Rights at Work claims that first contract arbitration “has been an incentive for management and labor to bargain productively, and has improved labor-management relationships.”[19] They seem to imply that in Canada, arbitration hasn’t been used much, but rather that the mere specter of it pushes employees and employers into settling either independently or via mediation.

Finally, with regards to damages, the EFCA would allow an employee to collect three times his/her back pay for damages resulting from unlawful termination if that employee was pro-union and was fired because of his/her pro-union stance.  The Act would also create a $20,000 penalty for employers every time they violate the EFCA if either the NLRB or a court holds that the violation was willful or repetitive.  Under the current NLRA, if an employer commits a violation and discriminates against a union-supporting employee, that employee is entitled to collection of simply back pay.  Union leaders, however, if they engage in similar tactics, are not subject to the same treble damages as employers.  This differentiation between employers and union organizers for the same action has been one of the main focal points regarding the damages section for the EFCA’s critics.

Supporters of the tripling of damages, in addition to the $20,000 penalty for employers, make the basic case that similar damages are not necessary for union organizers because of how many relatively fewer cases there are of union discrimination versus employer discrimination.  In fact, Nancy Schiffer, Associate General Counsel for the AFL-CIO points out that there have been only 42 cases where coercion was found on the part of union organizers in the signing of authorization cards.  This averages out to less than one case per year since the inception of the most recent form of the NLRA came into existence in 1959 with the passage of the Landrum-Griffin Act.

Opponents, though, have picked apart the flaws in arguments such as this one.  Looking again at the Heritage Foundation article, they note that “that does not mean that there have been only 42 cases of union coercion over the past 60 years. It means only that the HR Policy Association referenced 42 National Labor Relations Board decisions that concerned forgery or intimidation in the obtaining of union cards during that time. These are two very different things.”[20] They analogize it to the Supreme Court, and note that citing a statistic like this is akin to citing a statistic which might say that since the Supreme Court has only made 42 rulings in the last 60 years on something like rape, and therefore there have only been 42 rape cases in the last 60 years.

The authors go on to tear down the general notion that coercion by union leaders is an extremely rare occurrence.  They cite statistics which indicate that, in the last nine years, over 3,500 unfair labor cases have been filed against unions.  They do concede that many of these didn’t involve union campaigns, and that the unions weren’t always found guilty.  However, during my research, this statistic stood out to me more than any other.  It seems that Democrats and those that support the EFCA push for public support by making corporations out to be the evil Goliath, while unions are the timid David, crouched nervously in a corner.  Now, regardless of which way one’s emotions and political inclinations lean, the fact that there have been so many claims filed against unions has to be somewhat surprising.

Those on both sides of the EFCA argument have a great deal invested in it, which makes it understandable as to why each camp argues so vehemently for its position.  As our country has seen too often in the past, when ideological differences become infused with emotion (sometimes at the expense of reason), chaos all too often ensues.   The ideological underpinnings of the EFCA, and the political parties attached to those ideologies, explains why the vote on the act has been so markedly split among party lines.  Before getting into that, it could help to look at an alternative version of the Employee Free Choice Act offered up in a University of San Francisco law review article by Professor William Gould, a prolific scholar of labor and discrimination law and chairman of the NLRB from 1994 to 1998, which pulls the good elements from both sides and creates a compromise solution.

Professor Gould argues, just as many advocates of the EFCA card check provision continue to argue, that the biggest problem with the current NLRA and, by extension, the NLRB, is speed, or rather a lack of it.  He points out that nearly everything that goes on in labor relations now takes far too much time and either inflames or diffuses passions on both the labor and the employer side.  Of course, when passion overtakes reason in these situations where so much is at stake, the results can be devastating.

Gould feels that the current iteration of the EFCA takes some steps to remedy the speed issue but doesn’t go far enough.  Basically, in his view, it is substituting one broken system for another.  The first issue he addresses is the card check provision and says that a new EFCA should incorporate elements of both sides’ proposals.  He doesn’t want authorization cards but he also doesn’t want elections to continue as they do.  Instead, Gould says we should embrace the privacy that elections offer, but just do them more quickly.  He follows the same route that the group American Rights at Work does and looks north to Canada for a possible solution.

So, to address the issue of speed while still keeping in mind the concerns addressed by opponents of card check recognition of unions (specifically peer-pressuring and bullying by either side), Gould has made a simple proposition.  He still thinks card-check recognition is better than an election when it comes to union authorization, but, he has proposed that instead of a simple majority (50% plus one), a union would need to have a  supermajority (three-fifths or two-thirds) to win an election.  If that weren’t enough, he has also suggested having employees pay a small amount of union dues money if they sign an authorization card.[21] This would ensure that an employee is not merely signing a card as a result of peer pressure or to get a union organizer off of his/her back.

As for the arbitration provision of the EFCA, Gould agrees with most of the timelines which would be imposed (90 days of negotiation, 30 days of mediation, then binding arbitration).  He, like supporters of the provision, looks north to Canada as well for examples of how well arbitration can work.  However, he once again offers an idea which could bridge the differences between the two sides of the argument about arbitration.  Gould says we should keep the timeline as it is, but just create more stringent standards which the arbitrator would be required to follow.[22] That way, the EFCA’s supporters have their binding arbitration to force employers to negotiate, and employers have their stricter standards for arbitrators so they are not burdened by what they might see as an unfair decision from a labor-sympathetic arbitrator.

As for the damages provision of the EFCA which gives triple back pay to improperly terminated employees and fines of $20,000 for each employer violation, it strangely enough doesn’t appear that there is much opposition out there to it;  there have also been no substantive alternative compromise proposals.  In fact, even in the more recently introduced National Labor Relations Modernization Act (NLRMA), which purports to be alternative legislation to the EFCA should it fail, the damages provision remains the same in that it increases damages for employers who commit unfair labor practices.[23] So, although the EFCA’s critics have lobbied against increased employer damages, their energy seems to be focused mostly on the card check provision and the binding arbitration.

Ultimately, it appears as though the passage of the Employee Free Choice Act will come down to a classic chess game of politics.  The bill has more than enough support to pass easily in the house; so, everyone’s focus is on how it will move through the Senate.  Although this is a constantly changing situation, with many Senators giving a different indication every day as to how they’ll vote, the vote on the EFCA breaks down pretty conclusively.

The EFCA has 40 co-sponsors (38 Democrats, 2 independents), all of whom should end up voting for the most recent version of the bill.  Another four Democrats (Franken, Dorgan, Hagan, and McCaskill) have strongly indicated they will support it.  Meanwhile, thirty-six Republicans are staunchly opposed to the EFCA.  Therefore, fifteen Democrats, and five Republicans, have sent mixed messages about their support for the EFCA.

Politically, it looks as though the next vote on the EFCA will not come until Al Franken, Democratic winner of the contentious Minnesota senate race, is officially seated.  As one blogger notes, though, “many Senators will be motivated by electoral considerations. Those who are up for re-election in a conservative state in 2010 might be less willing to take a strong stance in favor of [the] EFCA.”[24] Some senators who oppose the bill have said they will only vote for it if it is “watered down” enough for their liking:  i.e., they want either the card-check provision and/or the binding arbitration provision removed.  However, if this is done, then Democrats which currently support the bill may be forced to oppose it.

Continuing his penchant for bucking trends, the most recent, and perhaps most intriguing, change of heart regarding the EFCA has come from Arlen Specter, the former Republican and now Democratic senator from Pennsylvania.  He has recently said that he opposes the bill, which would mean the loss of a crucial vote for Democrats trying to get the EFCA passed.  So, the war to win his vote has started, with the AFL-CIO, a major proponent of the EFCA, starting a plan to flood Specter’s office with letters.  Those trying to convince Specter to stay his current course then resorted to none other than the infamous Joe the Plumber who made a name for himself during the Presidential campaign of 2008 by acting as the face of Joe Everyman in his opposition to Barack Obama.

In the end, every group involved here (employers, unions, Democrats, Republicans, etc.) is going to use its own forms of propaganda to try and persuade all who disagree with their views, from the public to the elected officials to the media.  That’s what politics and lobbying are all about.  Regardless of one’s political inclination, it is up to us as informed citizens to view this legislation as we should view all legislation:  with a skeptical and questioning eye.  As much debate as there is about the particulars of the Employee Free Choice Act, there is no debate about its importance to our economy and the future of labor law in America.

[2] Id.

[3] Id.

[4] Zappala, Jenny Lynn, Stimulus Plan Provides Boost to Green Jobs, available at http://www.msnbc.msn.com/id/30482313/ (last visited May 2, 2009).

[5] Silver, Nate, In Employee Free Choice Act, a Numbers Game for Labor, available at http://www.fivethirtyeight.com/2008/12/in-employee-free-choice-act-numbers.html (last visited April 26, 2009).

[6] H.R. 800:  Employee Free Choice Act of 2007, available at http://www.govtrack.us/congress/bill.xpd?bill=h110-800 (last visited May 13, 2009).

[7] EFCA Report, EPI Lobbies for EFCA in Full Page Washington Post Ad, available at http://www.efcareport.com/2009/02/articles/special-interests/epi-lobbies-for-efca-in-full-page-washington-post-ad (last visited March 10, 2009).

[8] AFL-CIO, About Us, available at http://www.aflcio.org/aboutus/ (last visited May 13, 2009).

[9] Layne-Farrar, Anne, An Empirical Assessment of the Employee Free Choice Act: The Economic Implications, available at http://ssrn.com/abstract=1353305 (last visited March 3, 2009).

[10] Id.

[11] The Library of Congress: THOMAS, H.R. 800, available at http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.800: (last visited May 13, 2009).

[12] National Labor Relations Board, Full Text of the National Labor Relations Act, available at http://www.nlrb.gov/about_us/overview/national_labor_relations_act.aspx (last visited May 13, 2009).

[13] Cocco, Marie.  Editorial.  “The Employee Free Choice Act:  Tipping the Scales Back Toward Organized Labor,” The Portland Oregonian, December 17, 2008 at B04.

[14] Sherk, James and Paul Kersey.  How the Employee Free Choice Act Takes Away Workers’ Rights, available at http://www.heritage.org/research/Labor/bg2027.cfm (last visited March 11, 2009).

[15] Michigan Comp. Laws, Section 423.326.

[16] Sherk, op. cit.

[17] Miller, George.  How the Employee Free Choice Act Works:  The First Contract Mediation and Arbitration Provision, available at http://edlabor.house.gov/how-the-employee-free-choice-act-works-the-first-contract-mediation-and-arbitration-provision/index.shtml (last visited March 12, 2009).

[18] Gilson, Robert, Employee Free Choice Act:  Candidate Obama’s Achilles Heel?, available at http://www.fedsmith.com/article/1689/ (last visited March 13, 2009).

[19] American Rights at Work, Why Mediation & Arbitration Rules are Needed, available at http://www.americanrightsatwork.org/employee-free-choice-act/resource-library/why-mediation–arbitration-rules-are-needed.html (last visited March 13, 2009).

[20] See supra footnote 5

[21] Gould, William B. IV, The Employee Free Choice Act of 2009, Labor Law Reform, and What Can Be Done about the Broken System of Labor-Management Relations Law in the United States, 43 U.S.F.L. Rev. 291, 311 (2008).

[22] Id., page 328.

[23] Underwood, Mike, Employee Free Choice Act Introduced in Congress; Potential Compromise Legislation Also Introduced, available at http://www.employerlawreport.com/2009/03/articles/labor-relations/employee-free-choice-act-introduced-in-congress-potential-compromise-legislation-also-introduced/ (last visited May 13, 2009.)

[24] Nichanian, Daniel, EFCA:  Counting the Votes, available at http://campaigndiaries.com/2009/03/12/efca-counting/#individual (last visited April 12, 2009).

In the late 1970’s, union membership in the United States neared 25%.  However, it has steadily declined to its current rate of around 12%.  What has caused this decrease?  Robert Hunter, regional director of the Federal Labor Relations Authority in Washington, D.C., and senior fellow in labor policy for the Mackinac Center for Public Policy, lists four primary reasons.  First, he points out that global competition and deregulation in traditionally unionized industries have brought greater competition in these industries.  He notes that the U.S. is no longer immune from global economic pressures as the world has “flattened”, to use Thomas Friedman’s verbiage.  Second, he writes that as we shift from a labor-based economy to a knowledge-based one, workers are intrinsically more difficult to organize.  Third, he looks to Washington and the flood of laws that make unionization less necessary than in previous decades, including those which seek to stem discrimination and also those that try to establish safe and healthy workplaces, provide family and medical leave, give workers notice for plant closings, and numerous others.  Finally, he points out that attitudes have simply changed and people are simply less interested in labor organizations.  People today are better educated, more mobile, and more concerned with perks such as day care and quality of life than purely with wages.

It is precisely these attitudes and this environment which has made it so difficult to pass legislation which would make it easier for workers to organize.  The Employee Free Choice Act, which I will describe in much more detail tomorrow, is the most important piece of legislation for labor lawyers across the nation.  Whether you represent management or labor, you should keep yourself updated on this important bill which could be up for a vote at any time.  It contains three major provisions relating to a card-check election process, an arbitration process, and a punitive process for labor violations.  Can such a law get passed in this “me”-based economic climate?  It is a story that remains to be told, but it’s one that is definitely worth keeping an eye on.

Sources

Hunter, Robert P.  Four Reasons for the Decrease in Union Membership, available at: http://www.mackinac.org/article.aspx?ID=2325 (last visited September 7, 2009)

“Union Membership and Coverage Database from the Current Population  Survey,”February 2008, Unionstats.com