A solution to the coming 'card check' battle

A tad long but worth reading.

BOSTON (Fortune) -- Barack Obama comes to Washington carrying a load of hopes and dreams, none more ardent than organized labor's. Item No. 1 on the AFL-CIO's legislative agenda: the Employee Free Choice Act (EFCA), also known as the card-check bill. Simply put, EFCA would streamline the process by which employees could decide to join a union. In most cases, a simple majority of signed cards would suffice; no need for a full-blown election sanctioned by the National Labor Relations Board.

The bill's supporters (mostly Democrats) say it goes a long way toward restoring balance and fairness in an arena where employers routinely use bully tactics to crush unions. Opponents - mostly Republicans but also George McGovern, of all people, who came out against EFCA last summer in an op-ed piece for the Wall Street Journal - insist instead that it erodes democracy by discouraging secret-ballot elections.

Noble sentiments on both sides, but let's get real. EFCA is about power. Labor is determined to reverse decades of declining union membership. Management is determined to protect its gains. The stakes are high, the line is drawn. It's going to be a nasty fight.

But it doesn't have to be that way, according to two improbably coupled labor-war veterans with a bold idea for compromise. The two come from opposite sides of the divide. Richard Bensinger, former organizing director for the AFL-CIO, believes that EFCA would be a big improvement over current law. His friend, Dick Schubert, former president and vice chairman of Bethlehem Steel and general counsel for the Labor Department during the Nixon and Ford administrations, disagrees. Surprise, surprise.

But instead of butting heads, Schubert and Bensinger are pushing a fascinating alternative that they cooked up together - a third way that aims to "box everybody in a little bit," says Bensinger. "We're trying to create a space where maybe no one's really that comfortable. But isn't that maybe more fair?"

While Schubert's a management guy, he's not anti-union, which makes a difference. All four of his grandparents arrived in the U.S. from Eastern Europe with no English and no education. One grandmother worked in a cigar factory in Trenton, N.J., for $3 a week. "The fact that there was a union movement kept pressure on employers to treat them better," Schubert says during an interview in the paneled den of his townhouse in McLean, Va. (Dick Cheney used to live next door.) "I have a strong feeling that the union movement is relevant, even though at Bethlehem Steel I was negotiating against the union that was trying to break the company, frankly, in terms of their exorbitant demands." He pauses for a beat. "I just thought I'd throw that in."

"No comment," says Bensinger, smiling in the corner, looking kind of scruffy in his blue jeans and his purple union windbreaker. Bensinger is a cult figure in the labor movement, a skilled and passionate organizer who lost his big job at the AFL-CIO in 1998, many believe, only because he took it too seriously. He embarrassed union bosses by demanding they commit more resources to recruiting new members and fewer to featherbedding.

No one is accusing Bensinger of having mellowed since then. But over the last decade he has shown a growing willingness to talk to the other side. "I think there are CEOs - I've met some - who do want to do the right thing." One vehicle for such conversations is the Institute for Employee Choice, which he co-founded with Schubert in 2002.

It's not a new set of laws that Bensinger and Schubert are proposing, it's a code of conduct, strictly voluntary, by which both sides would agree to abide during the run-up to an election. Twelve principles, all deriving from the last one, which paraphrases the Golden Rule: "Unions and employers need to behave as they would like the other to behave." Sounds simple. But as you know if you've ever been part of a union organizing drive, on either side, it's a radical concept.

The first few principles cover the basics: No lying, no threats and no promises conditioned on support for your position. Some of that's already covered by current law, sort of. For example, employers are not allowed to promise raises in exchange for votes because that would be a bribe (although unions, for some reason, can promise whatever they want); and neither party is allowed to make explicit threats.

The problem with laws is that they're lousy at regulating ethical behavior. Over the years, employers (and to some extent unions, too) have gotten very good at walking right up to the line without crossing over. "There are a lot of things a company can do within the four corners of the law," says Washington labor lawyer David Fortney of Fortney Scott, who runs union-avoidance campaigns. The principles acknowledge that imbalance but call on both sides to straighten up and act right. Or as Bensinger puts it, "Behave in a way you wouldn't be embarrassed to explain to your kids."

Other principles address specific tactics that the law overlooks but which can interfere with employees' ability to make up their minds in a "free, fair and informed way." For the unions, that means no stuffing the payroll with union organizers in advance of an election, a practice known as salting. And no hardball corporate campaigns aimed at rousing public sympathy for the cause. ("Democratic principles require that employees be the ones to decide whether they want a union or not.")

Employers, for their part, must agree not to engage in delay tactics, which can postpone elections for years. Mandatory meetings on company time are out. ("The right of free speech does not include the right to force anyone to listen to you.") Debates are in. ("The most effective way for voters to make a clear choice is to hear both points of view at one event, where each side can respond to the other.") And when it comes time to choose? Card check is okay, as long as both parties agree. But the "better way," Bensinger and Schubert stress - assuming the campaign has been conducted ethically - is a secret-ballot election.

"The crux of the issue Richard and Dick face with their principles is the willingness of one side to step forward and endorse them ahead of the other side," says David Pace, former head of HR for Starbucks. Pace admires the principles, in theory. "Generally speaking, they hold up to ethical and moral review," he says. "The greater stumbling block becomes a willingness to expose a vulnerability that might have lasting implications." Besides, he adds, management has little incentive to depart from the status quo: "The reality is that the current approach, while, not perfect, allows management a greater degree of flexibility in managing campaigns."

Bensinger and Schubert have been honing their principles for years, searching all the while for a suitable test case. They thought they'd finally found one last spring in Catholic Healthcare Partners (CHP), a 47-facility hospital chain in central Ohio with 37,000 employees that had been locked in a bruising campaign with the Service Employees International Union (SEIU) since 2004. "We were going down the same old tired road of the acrimonious battles of they put out their information, we put out our information," says John Starcher, CHP's senior VP for human resources. "They make attacks on our reputation and motivations, we make attacks on their reputation, back and forth." Starcher says CHP had fought similar battles in the past ("tooth and nail, with help from consultants") but this time they asked themselves, "Is that the right thing for our employees, and is it the right thing for our ministry?"

Starcher found a willing partner in Scott Courtney, the union's lead organizer for the Catholic Healthcare campaign. Together they agreed to give a modified version of the principles a try. First, a small-scale experiment covering five bargaining units and 1,000 employees in Lorain, Ohio; management won three and the union won two. That set the stage for a much larger test in early March involving around 8,000 employees. But just before the vote, a rival union swept into town and accused SEIU, essentially, of sleeping with the enemy. The whole thing got called off.

"I think we found something that is smack in the middle," a hopeful Courtney had told Fortune a couple of weeks earlier. "That really does say we're both going to trust the employees to vote, we're going to live by the results, and we're going to hold ourselves to a standard much higher than and much greater than what the law says." Not yet, alas. Maybe some day.