Mandatory First Contract Arbitration: How the Faster Labor Contracts Act Would Reshape Federal Labor Law

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Jim Plunkett: Hello. Welcome to Ogletree Deakins’ podcast on the Faster Labor Contracts Act. My name is Jim Plunkett, and I’m a shareholder in Ogletree’s Washington, D.C. office where I chair the firm’s Government Affairs practice group. On today’s podcast, we are going to discuss something that doesn’t happen very often in the labor and employment policy space, movement in Congress of bipartisan legislation called the Faster Labor Contracts Act, or FLCA, that would make dramatic changes to federal labor law.

Joining me today is my good friend, Ed Egee. Ed is Vice President for Government Relations and Workforce Development at the National Retail Federation. In that role, Ed is responsible for NRF’s policy agenda on labor, employment, immigration, and healthcare. Ed previously served as director of the Office of Congressional and Public Affairs at the National Labor Relations Board, and he also worked as a staffer for the Senate Health Committee. That’s the Health, Education, Labor and Pensions Committee.

Ed and I have participated in many of these labor policy debates over the years and he is helping to lead the business community’s opposition to the FLCA. So, he is the perfect guest to help us understand what is going on with this bill. Ed, welcome. Thank you for being here.

Ed Egee: Jim, thank you so much for having me. Our partnership with Ogletree, it goes back years. NRF is just thrilled to work with Ogletree. You guys do a great job on all sorts of labor issues and it’s just a pleasure to join you on the podcast.

Jim Plunkett: Great. Well, yeah, thanks again for hopping in here, Ed. So, let’s cut to the chase, Ed. So, the Faster Labor Contracts Act passed the US House of Representatives a couple of weeks ago now, but let’s level set for our audience. And can you give them a brief description of what the Faster Labor Contracts Act is?

Ed Egee: Absolutely. This is unquestionably the most significant piece of legislation in the labor and employment space in years. The Faster Labor Contracts Act is part and parcel of a piece of legislation I know you know well, Ogletree’s worked on for years, which was the PRO Act. The PRO Act was Bernie Sanders’ laundry list of pro-union changes that he filed as an alternative to pro-business legislation, and he championed for years before that. This particular provision was in the Employee Free Choice Act. So, this is an old idea. This goes back to 2002, when it was a Senator Kennedy idea.

The idea is essentially mandatory binding arbitration of first contracts, which as many of your listeners will know, is a radical, radical change to labor policy. So, when a new entity, a new workplace is organized for the first time, under current law, of course, the National Labor Relations Board, where as you mentioned, I used to work, the NLRB oversees that entire process. They ensure that the worker’s voice is heard. They ensure that the employer is participating in the process, providing documentation, and that both sides are negotiating in good faith. The concept underlying all of this is voluntary agreement. Both sides have to voluntarily agree on the end contract.

This particular piece of legislation turns that whole concept on its head and instead of both sides coming to an agreement over the course of a period of time, it imposes what Senator Hawley, the lead sponsor of this legislation, would refer to as a shot clock. And so, under this legislation, both sides have 120 days to come to agreement on every facet of the workplace, dot every I, cross every T, whether it’s wage and hour, whether it’s safety, seniority, vacation, leave, benefits, retirement, all those things need to be worked out. And should they not be worked out, the government, through a tiny little federal agency called the Federal Mediation and Conciliation Service, would come in and dictate what they would refer to as a contract, but what really is a government and that neither side could change for two years.

Jim Plunkett: Right. So, Ed, I mentioned at the outset that you’re VP at the National Retail Federation. Obviously NRF represents the interests of retailers in Washington, D.C., but the FLCA is not just limited to retailers, right? This going to cover everyone, correct?

Ed Egee: Absolutely. Yeah. They usually talk about just one or two companies that they’re interested in targeting, but absolutely. Every employer in this country who’s in the private sector who has two employees would be covered by this particular piece of legislation.

Jim Plunkett: It’s just crazy to me, Ed, that you hear this phrase, one size fits all a lot when we talk about various bills or proposed regulations in Washington, D.C. and how whoever’s proposing the thing shouldn’t go forward with it because they don’t understand the nuances of the situation that it’s going to apply to. The FLCA is crazy to me in that it’s like, think of all the different kinds of employers there are out there from the small guys to employers with thousands of employees, multiple locations throughout the United States. It’s just bananas to me that they’re prescribing this shot clock for bargaining on every single sort of situation in which a first contract is going to arise. Right? What do you think about that?

Ed Egee: I mean, I think that’s exactly right. The former director of the Federal Mediation and Conciliation Service actually testified on the Hill on this issue gosh, almost 20 years ago.

Jim Plunkett: Oh, Peter Harkin. Yeah.

Ed Egee: Yeah. Thank you. Peter Harkin. Yeah, that’s who I was trying to think of. Yeah. Peter Harkin testified on this. Again, Harkin was both on the National Labor Relations Board and led the Federal Mediation and Conciliation Service. And he said it so much better than I can. He said, “Solomon isn’t available. No one has the knowledge to come into a work site of any sort, whether it’s a dentist office, whether it’s a construction site, whether it’s one of my stores. Nobody has the ability to walk into that situation and immediately understand all the concerns of all the individuals involved and then dictate that edict.”

And I think that’s incredibly important that this is essentially asking these federal mediators to do the impossible. And it’s going to lead to a situation where the mediators who have no knowledge of that particular situation, they’re just going to start dropping in cookie cutter, to use your phrase, one size fits all solutions. And it’s going to be incredibly harmful to the American economy.

Jim Plunkett: And proponents of the bill, Ed, would say, “Oh, well, we’ve got examples of…” They’ll cherry-pick some examples of situations in where the bargaining can take a little while or they’ll say, “Well, they’re a bad actor employers who try to frustrate the bargaining process.” But you know from your time at the NLRB, right? There’s federal law and processes already in place to address those situations where the employer is not bargaining in good faith, correct?

Ed Egee: Absolutely. The National Labor Relations Board currently oversees this. And to take it out of that federal agency and to put it into the Federal Mediation and Conciliation Service, a tiny little federal agency that parenthetically I’d like to point out, Trump has completely gutted. It’s an empty building right now. So, these arbiters have just so little ability to dictate the terms and conditions of a workplace. It’s going to lead to something that looks like sectoral bargaining.

Jim Plunkett: So clearly a bad bill for employers. Can you talk a little bit about how this bill would disenfranchise the workers that it purports to help?

Ed Egee: Well, that’s exactly right. It’s worse for the workers than it is for the employers. The workers lose their entire voice. In fact, a few months ago, Senator Cassidy held a hearing on this issue, on a lot of different union topics. And they had a union member, a union steward actually testifying to the help committee. And Senator Cassidy put this question directly to the union steward and said, “Look, under a situation where you no longer have the ability to go up or down on a contract, how would that affect you as a union steward?” And he said, “That would destroy workplace democracy.”

And he’s exactly right. Jim, you know this too. We see all the time, we see evidence that when a deal is struck at a high level between an employer and a union, and then it is put to the union members for a vote, it’s not uncommon to see the union members through a private ballot, reject that first contract. This removes their ability. They don’t even get an up or down vote on what the government dictates and they have to live with it for two years. It absolutely destroys workplace democracy. We just saw the other day, I don’t know if you noticed this, the SEIU’s own employees up in New York voted down a contract 90% to 8%.

Jim Plunkett: Of course.

Ed Egee: It’s not uncommon for workers to look at an agreement and say, “This is not good enough. This is not what we want.” But at least under current law, they can go back to the bargaining table. They would lose that ability under this legislature.

Jim Plunkett: All right. Last question before we move into the topic of sort of next steps and what our listeners can do. You mentioned Ed, the PRO Act, the Employee Free Choice Act. These are bills that have failed to pass Congress. The Employee Free Choice Act famously failed to pass a Congress that had 60 Democrats there in the Senate. So, it was a filibuster proof vote, couldn’t even pass that Congress. And I know that there’s a phrase in Washington DC that bad ideas never completely go away, but why are we seeing this bad idea sort of being resuscitated and being brought back from the dead this time around?

Ed Egee: Yeah. So really it goes back to the speech that Sean O’Brien, the president of the Teamsters, gave to the Republican Convention in 2024. He really started working with Republicans for the first time. Obviously, unions and the Democratic Party go way back. They’re very closely connected. But the Teamsters under Sean O’Brien’s leadership really started reaching out to Republicans. And one of the first Republicans they started talking to was Josh Hawley, Senator from Missouri. And this was a concept…again, you and I know this goes back to the early 2000s with Senator Kennedy, but this was a concept that just didn’t get a lot of attention. Joint employer, captive audience, secret ballot, card check, all of that got a lot of attention. There was litigation, there was legislation, there was hearings.

This idea of mandatory binding arbitration of first contracts was really something that never really got the attention. A lot of us in the business community, and I know you remember this, you and I were both at the chamber and we worked on this. A lot of us always thought this was one of the most pernicious, dangerous pieces of both the PRO Act and the Employee Free Choice Act.

Jim Plunkett: Yeah.

Ed Egee: Hawley and the Teamsters sat down and they said, “No, no, no. We’re going to introduce this freestanding.” They immediately got Bernie Marino, Senator from Ohio to co-sponsor along with a handful of Democrats. And it just sort of sat for about a year. So that was early 2025. It just sort of sat. They introduced the House version. And behind the scenes for a good year, the Teamsters had to lobby the rest of the Union Movement to get them to sign off on this as an individual freestanding legislative fix. The Union Movement, of course, still prefers the entire laundry list that is Senator Sanders’ PRO Act.

The FLCIO on April 20th sent a letter up to Capitol Hill essentially changing their mind. And they said, “Yes, we need the faster labor contracts. We’re going to support it now.” And they got every Democrat minus one to sign onto what is referred to as a discharge petition, which essentially overrides both the committee chair and the House leadership to force a vote on the floor. Seven Republicans on the House side signed onto that discharge petition and they were able to force a vote.

At that point, we in the business community did our best to lobby against the bill. And in the end, they got 20 Republicans to support this piece of legislation. It is now rolling over to the Senate side, and the Teamsters claim they have eight votes over there amongst Republicans. They certainly have three co-sponsors. I would say the huge sea change here where all of a sudden we now have a minority of the Republican Party, which is so interested in overhauling labor policy, to tailor labor policy and to make it something that the Teamsters can support is really a new, new concept for us.

That being said, it’s still a minority, right, Jim? I mean, you’re talking the vote on the House side amongst the Republican caucus was 193 to 20 against this. It’s not a new direction for the party as much as there are people who want to say that it is. It is still a very, very small minority. So now we are on the Senate side. Senator Hawley under Rule 14 on the Senate side, has held the bill at the desk. It could come up at any time.

Jim Plunkett: Okay. What does that mean? You’re going back to your Senate days. What does that mean that the bill’s at the desk?

Ed Egee: Yeah. It can come up for a vote at any time. It’s still going to be a 60-vote threshold. So, we expect that at some point, Senator Hawley is going to ask for a vote on this piece of legislation. Again, it might be just taking the House bill up or it might be his attempt to amend some other piece of legislation with this.

Senator Cassidy, who chairs the Senate Health Committee, has been very clear this is nothing he favors, and he is not going to move it through committee. So, we expect it to come up on the floor. Again, they’re claiming that they have eight Republicans. They’re going to need 13. And so, I would really love if you’re hearing this and this is a concern for you as an employer, please do engage your trade associations. Please do contact your senators, arrange a meeting out in the local office where you are. It doesn’t matter if it’s a Democrat or a Republican. They need to know how dangerous this piece of legislation is because it’s getting pitched to these members of the Senate as a narrow bipartisan tweak to federal labor law. But as you and I know, it’s nothing of the sort. It’s a massive, massive overhaul.

Jim Plunkett: So, Ed, the hope is that you just said that they need 13 votes on the Senate floor and that if they bring this up on its own that enough Republicans would come to their senses and make sure that this bill doesn’t pass. But can you talk a little bit about what might happen if there’s one of these must pass bills that the Senate is doing, say funding the military or authorizing funding for the military? Or we’ve had our fair share of government funding policy debates, but what if there’s some bill like that where that’s got strong bipartisan support that really must pass? Is there a way that proponents of the bill could try to attach this onto that as an amendment? And if so, would they still need 60 votes to get that amendment pass?

Ed Egee: Yeah, that’s exactly right. Under that scenario, which is if not likely, very, very possible, they would still need 60 votes. Again, we don’t think they have 60 right now. They don’t even claim they have 60. I’m skeptical they have the eight they have amongst Republicans. They certainly have 47 Democrats. There’s no question about that. So, then the question is, can they get the remaining 13 Republicans to vote for cloture, to end debate on that particular amendment and proceed to attach it to, like you say, some must pass piece of legislation. Whether it’s the Defense Authorization Act, whether it’s service transportation, we just don’t know.

Look, I think that’s really, really possible. And again, that’s why this is a serious, serious challenge for us as employers. We need to convince 13 Republicans. Well, I should say we need to convince the vast majority of the Republican caucus they need to stick with the business community on this. We’ve had great conversations with a group of coalitions amongst the conservative movement who know that if this goes through under a Democratic administration, there’s absolutely nothing that mediator can’t force the employer to do.

So, a couple examples, Jim. In our industry, we’ve had requests at the bargaining table from the unions to make our stores sanctuary stores where ICE cannot enter. And obviously we have no ability to do that, but that’s the kind of request that if that was made to an arbiter, maybe the arbiter says yes. And so, we’ve had a series of conversations with conservative groups. There’s no way that this is a piece of legislation that anybody in the right of center should support, but we are where we are. They got 20 Republicans on the House side. They have at least three on the Senate side.

And particularly if you are in any of those three states, Hawley’s state of Missouri, Moreno’s state of Ohio, or Roger Marshall’s state of Kansas, please do let them know that this is nothing that is not good for your business and your operations.

Jim Plunkett: So, let’s talk about timeframe, Ed. We’ve got some milestones coming up in terms of the Senate calendar. Anything can happen. The leadership can change the schedule at any moment, but with an election year, at least right now, it’s looking like there’s going to be the traditional August recess. So, where the Senate isn’t in Washington, D.C., then they come back a little bit in September. Then they go back in October to campaign, cut ribbons and kiss babies and shake hands. And then they come back after the election for the lame duck period.

Is there particular flashpoints when you look at the calendar or that stick out to you? Is the lame duck session particularly worrisome? Or is there a time when the proponents are like, “Hey, we really got to try to get this done in July before August recess.” Is any of that sort of the timeframe working through your mind as you are lobbying against the bill?

Ed Egee: Yeah. I mean, I don’t know for sure. I would say the lame duck would be the most likely scenario, but we’re not going to give up. We have had conversations with…we’re already starting to talk to members on both sides of the aisle. There are Democrats we can talk to and try to explain why this is bad for workers.

Look, they are not in a lot. They are about to leave today. Again, we’re talking here in late June. They’re going to go out for July 4th recess. They’re going to come back for a couple weeks. They’re gone for a month and a half. They come back September 11th. And then to your point, they have to fund the government at that point. And then they’re gone to campaign. So, I do think this is going to be something we’re going to be fighting for the rest of the calendar year.

Jim Plunkett: Okay. So, before we sign off, how about one last message for the employer community? What can they be doing to make sure that the Faster Labor Contracts Act doesn’t pass the Senate?

Ed Egee: Yes, please do reach out to your Senator. Every Senator has multiple offices across their states. You don’t have to fly to Washington to make a pitch. You can go straight to your local office there and explain how many employees you have, what you do in that area, how you try to serve your customers, how you try to do your best to maintain effective labor relations with your employees. Make the case.

If you need arguments about exactly what the Faster Labor Contracts does and why it’s dangerous, our coalition, the Coalition for a Democratic Workplace, if you just pull up our website, we have plenty of information on there about what that does to workers and what the bill would eventually do to employers as well. So yeah, Coalition for a Democratic Workplace, NRF has long been a member. Ogletree has been involved for years. We have numerous, numerous members of our coalition from across the country. It’s very broad.

To your earlier point, we’ve worked with construction lobbying. We’ve worked with manufacturers, hotels, you name it. We’re all part of that larger coalition. There is plenty of information on that website to give you the ammunition to go in and have a conversation with the district rep. Let them know and that can be incredibly effective. It only takes 20, 30 minutes. And again, you probably don’t have to go even that far. There’s probably an office really, really close to you.

Jim Plunkett: Right. Right. Ed Egee from the National Retail Federation, thank you for joining us today.

Ed Egee: Hey, thanks so much for having me. Really appreciate everything that Ogletree does for me. Thanks so much, Jim.

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