A Horrid Idea

Understandably, the issue which has garnered the most attention in the card-check debate has been the elimination of the secret ballot in the workplace. Fundamental rights or American traditions are not wiped out everyday to satisfy a special interest group which happened to heavily finance one party. But equally pernicious is the mandatory arbitration provision. Two former National Labor Relations Board members explain:

Less publicized and arguably even worse, the EFCA injects government into collective bargaining. If a union and an employer cannot agree to their first contract in 120 days, the government will appoint a panel of arbitrators who will.

Mandatory arbitration is devastatingly bad policy — it throws a monkey wrench into the collective bargaining process. Nothing would more certainly make private bargaining a waste of time. Why make concessions at the bargaining table that would simply move the starting point for arbitration?

There are multiple reasons why this is simply terrible labor policy. For starters, it promotes labor instability as unions will hope to elicit from the government what they cannot achieve in negotiations. They have every incentive to stake out the most extreme position so as to set up acceptable final demands, whose satisfaction will depend on the whim of government arbitrators. Arbitrators who have no history in that workplace nor specialized knowledge of the business will be less inclined to “get it right” in devising a “fair” contract. Moreover, the cost, time, and uncertainty associated with a phalanx of government arbitrators poses another burden on the economy at a time we can least afford it.

But is it even Constitutional? Without the right of judicial review by Article III courts, it is an open question whether the government can impose contractual obligations on private firms. Where are the checks against abuse, bias, or outright error in arbitration decisions? And if you remedy the problem by providing judicial review, the process becomes unworkable, highly expensive, and attenuated, adding cases to  federal courts that have little if any expertise in this area.

At some point in the card-check debate Big Labor will want to strike a “deal.” But any “deal” including mandatory arbitration is a loser.