If President Barack Obama and a Democratic congress have their way, the Employee Free Choice Act stands on the verge of reality, which could be ‘disastrous’ news for hoteliers. Commonly called ‘Card Check,’ the legislative proposal would eliminate the secret-ballot election and make unionizing much easier.

The bill, which easily passed the House of Representatives in 2007, stalled last year in the Senate despite majority support. An original co-sponsor of the legislation, Obama has vowed to see it through, unlike his predecessor, who promised to veto the bill. The recent re-election of Republican Senator Saxby Chambliss in Georgia denied Democrats a filibuster-proof majority, which could continue to stymie Card Check.

The legislation would amend the National Labor Relations Act by allowing a majority signature drive to form a union without secret-ballot election. Simply put, if over 50 percent of workers sign a card expressing support, a union would be formed. The bill would guarantee workers a contract in the first 120 days or the dispute would be sent to binding arbitration. Company violations would also be penalized more severely.

Under current law, if union organizers collect signatures from 30 percent of workers, the National Labor Relations Board is brought in to supervise a secret-ballot election. If the majority votes to organize, the union is certified.

“I've got no problem as long as people have the right to vote and say that's what they want,” Choice Hotels CEO Steve Joyce said at Lodging Hospitality's Summit at the International Hotel/Motel & Restaurant Show in November. “The reality is Obama says he's going to sign that in the first 100 days, and it is the most disastrous thing to GDP in this country in 40 years. If you unionize big and small shops across the board…it is a 20-percent drop in profitability and six to seven points off the bottom line.”

Dave Heath, the principal of Heath & Company Hospitality Advisors, a labor management consultancy company, says the legislation would make organizing much easier and cheaper. Smaller hotels would take the brunt financially: No longer would they fly under the radar of unions, and if workers did organize, hotels would have to hire legal representation to negotiate a contract. On top of that, Heath says, unions would extract more favorable terms because of the ominous and unknown binding arbitration at the end of stalled negotiations.

Heath believes the bill could be crippling in this economy. He says hoteliers should prepare for the possibility by educating managers and employees on how Card Check works; by auditing their benefit packages to see how their property compares to nearby union hotels; and by reorganizing and simplifying staff and structure to create more flexibility in case of unionization.