Union issue offers overhang

Adding further uncertainty to the retail industry’s outlook this year, is the prospect of a protracted debate over union-related legislation, with the most recent example involving proposals from Republican lawmakers. Recently introduced legislation, called the Secret Ballot Protection Act, seeks to pre-empt the Employee Free Choice Act. Proponents of secret ballots, the system currently in place, contend that the system works well for all other forms of elections and should continue to be applied to the process by which workers determine whether they will be represented by unions. Proponents of the Employee Free Choice Act, typically unions and Democrats, want to eliminate the secret ballot and install a system that allows for the creation of a union, if labor organizers can secure a majority signatures from workers. Earlier versions of both pieces of legislation have failed to pass, but this year is different because Democrats control the White House, and Congress and labor organizers are salivating over the prospect of a new law that could simplify unionization efforts. Meanwhile, the prospect of widespread unionization throughout the retail industry could not come at a worse time, as operators can ill afford to pay higher wage rates or more generous benefits, especially as the pace of bankruptcy and liquidation activity during the past 18 months has highlighted just how tenuous existence can be in a sector of the economy characterized by slim margins.