As the DC rumor-mill has it, EFCA proponents realize that taking away the secret-ballot isn’t too popular and is hurting their hopes for passage. However, the other main component of the job-destroying bill is equally dangerous for employers and their employees: Binding arbitration.
What is binding arbitration?
It’s a process that, under EFCA, allows for a federally-appointed arbitrator to dictate what would be spelled out in a union contract. This would include things like forced union dues (where legal) from employees, super-seniority for shop stewards, restrictive work rules, management rights, as well as wages and benefits.
Now, you might be wondering: What’s so bad about binding arbitration? I mean, arbitrators are pretty reasonable people, right? They don’t make bad decisions, do they?
A federal judge has ordered Illinois Central Railroad Co. to reinstate a conductor who spent 16 months in federal prison for embezzling union funds (United Transp. Union v. Illinois Central R.R. Co., N.D. Ill., No. 08 CV 4001, 3/16/10). Enforcing an earlier arbitration award under the Railway Labor Act, Judge Samuel Der-Yeghiayan’s ruling also determined that the company has no obligation to provide back pay for the period of William Miller’s imprisonment.
Miller began work as a machinist for Illinois Central and was represented by the International Association of Machinists (IAM) Local 498. During a two-year term as secretary-treasurer of the IAM local union, Miller embezzled $63,000 from treasury funds. In November 2005, he pled guilty to charges of embezzlement and obstruction of justice. Miller claimed that he notified his supervisor of his felony conviction, in accordance with company “Rule H.” The railroad asserted that it had received no notification and fired Miller for violating the company rule. He entered prison in July 2006.
By this time Miller was working as a conductor represented by the United Transportation Union (UTU). His claim for reinstatement with back pay went to arbitration before the Public Law Board (PLB). The PLB draft decision, dated July 18, 2007, ordered his reinstatement with back pay. Illinois Central sent a reinstatement letter in August 2007 ordering Miller to report to work within 15 days. However, since the conductor was not released from prison until early November 2007, he failed to meet the company’s deadline and was refused reinstatement. The UTU filed suit to enforce the arbitration award.
The effective date of the PLB award was central to the case. Although the draft decision was issued in July 2007, Judge Der-Yeghiayan found that the PLB award was not effective until it had been signed by two of the three board members. The award received the required two signatures on November 30, 2007 – a date when Miller was out of prison and available to work. Upholding the arbitration award, the judge ordered the conductor’s reinstatement with back pay for the period following his release from prison. Der-Yeghiayan rejected the UTU’s argument that the award intended Miller to receive back pay for the period of his incarceration when he was unavailable to work.
Hmmm. Let’s see if we can summarize this: 1) Union boss steals money from union (IAM), 2) claims to have told supervisor of conviction, but was fired anyway; 3) goes to prison, 4) wins arbitration ordering reinstatement with backpay, 5) fails to make it back by reinstatement date (because he was still in prison), 6) UTU sues to enforce the arbitration award and argues that back pay should include the time in prison and (drumroll please)… 7) guy gets job back, with back pay (except for the time in prison).
Now, under EFCA, imagine federally-appointed arbitrators controlling private enterprise.
Would you trust an arbitrator with your business?
We think not.
“I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776
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