As you may already know, Professor Richard Epstein is not President Obama's biggest fan. Obama favors some economic regulations that Epstein does not. In his Chicago's Best Ideas talk on Tuesday, January 27, Professor Epstein spoke about three proposed laws in the area of labor relations: the Employee Free Choice Act, the Lilly Ledbetter Fair Pay Act, and the Paycheck Fairness Act. Epstein spent most of his time on the Employee Free Choice Act (EFCA), so my attention will focus on that law. (Epstein has a column about the Lilly Ledbetter Act on Forbes.com.) The EFCA is an amendment to the National Labor Relations Act (NLRA).
Epstein started with the word "free" in the EFCA's name. Back in the nineteenth century before the New Deal, "free" meant free for both sides of the labor relationship: employer and employee. An employer could not force the employee to accept a particular wage, and the employee could not, even if represented by a union, force the employer to hire him at a given wage. The NLRA was passed at the height of the New Deal in 1935. (Epstein is, not surprisingly, no fan of the New Deal.) The Act provides that unions can prompt a unionization vote by getting at least 30 percent of employees to show support by signing cards, called the card check. The vote is a simple majority vote by secret ballot. If the union is approved, the employer must negotiate with the union. Freedom under the NLRA is one-sided because employers must negotiate with a valid union.