George McGovern on the dangers of compulsory arbitration

George McGovern takes to the pages of the Wall Street Journal to warn against one aspect of the Employee Free Choice Act. While the effort to take away union workers' secret ballots has been getting all the attention, an equally dangerous element of the law would be to impose mandatory arbitration in disputes that aren't settled quickly between management and labor. McGovern rightly argues that such measures would be bad for both sides.

Currently, labor law maintains a careful balance between the rights of businesses, unions and individual employees. While bargaining power differs depending on individual circumstances, the rights of the parties are well balanced. When a union and a business enter negotiations, current law requires that both sides bargain "in good faith."

In a contract negotiation, each party typically perceives the other as too demanding. But no one loses their right to contract willingly or suffers being forced to agree to anything. Employees can strike if they feel that they have been dealt with unfairly, but it is a costly option. Employers are free to reject labor demands they find to be too difficult to accept, but running a business without experienced employees is itself difficult. Both sides have an incentive to press their demands, but they also have compelling reasons not to press their demands too far. EFCA would disrupt that balance by enabling government-appointed lawyers to decide what they believe is fair or reasonable.

A federally appointed arbitrator cannot be expected to understand the nuances specific to each business dispute, the competitive market position of the business, or the plethora of other factors unique to each case. Yet fundamental decisions on wages and benefit costs, rules for promotions, or even rules for exiting an unprofitable line of business could fall to federal arbitrators under EFCA.

Many labor contracts can run over 100 pages with their requirements of each party. Compulsory arbitration is, in one sense, government dictating to employees what they will win or lose in the deal, with no opportunity to approve the "agreement." Why should employees pay union dues to get such a contract?

And in an America where the President has tried to impose his own vision of a labor-owned company on Chrysler investors regardless of the rule of law, who would have any confidence in this government acting fairly towards management in any conflict with unions that have done so much to elect the government we have?