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On June 9, 2026, the U.S. House of Representatives passed the Faster Labor Contracts Act (H.R.5408) (FLCA) by a vote of 230-193. If passed by the Senate (60 votes required) and signed by the President, this bill will constitute two of the most significant overhauls to the National Labor Relations Act (NLRA) in over eight decades. First, the FLCA allows a private arbitration panel to impose the terms of a first-time labor contract where the union and employer cannot reach agreement with the assistance of the Federal Mediation and Conciliation Service (FMCS). Second, the FLCA appears to remove the longstanding right of all employers to unilaterally implement a last, best, and final contract proposal when the parties reach a good faith impasse.
Initial Labor Contracts Can Be Written by Private Arbitration Panels
Currently, the NLRA requires that parties negotiate in good faith to reach a labor contract but does not impose contract terms or set time deadlines for reaching an agreement on a first contract. This is important because first contracts often require 12 to 18 months to conclude due to the numerous and complicated issues presented. However, absent agreement between the parties, the FLCA would change this long-standing legal process by imposing the following strict, and quite impracticable, timeline for negotiations:
- After a bargaining request from a newly certified union, the parties have no more than 10 days to meet and begin the collective bargaining process.
- The parties then have a 90-day bargaining period to reach agreement on the entire contract.
- If no agreement is reached after 90 days, either party may request mediation through the FMCS.
- Upon a request for FMCS mediation, the parties have 30 days to resolve the dispute in mediation.
- If FMCS mediation is unsuccessful after 30 days, FMCS shall refer the contract dispute to a three-person arbitration panel consisting of one member selected by the union, one member selected by the employer, and one neutral member mutually agreed upon by both parties.
- The arbitration panel must be selected within 14 days of the FMCS referral; if this deadline is not met, FMCS shall designate any panel arbitrators not selected by the parties.
Under the FLCA, the arbitration panel, by majority vote, can settle the contract dispute and impose all of the terms of a binding first contract that will remain in effect for two years. As a practical matter, those initial contract terms determined by the private arbitration panel would set the standard for all future contracts because of the difficulty of unwinding the many complex provisions that go into a collective bargaining agreement.
In writing the parties’ labor agreement, the arbitration panel is directed to consider the following: (1) the employer’s financial status and prospects; (2) the size and type of the employer’s operations and business; (3) the employees’ cost of living; (4) the employees’ ability to sustain themselves, their families, and their dependents on the wages and benefits they earn from the employer; and (5) the wages and benefits other employers in the same business provide their employees.
To summarize, the FLCA would compress first contract traditional bargaining into slightly over 4 months; after that, the parties lose control to interest arbitration.
Employers Can No Longer Implement Last, Best, and Final Offers at Impasse
The FLCA’s second major change to the law of collective bargaining is the removal of the employer’s right to unilaterally implement its last, best, and final offer when the parties reach a good faith impasse. To effect this change, the FLCA modifies Section 8(d) of the NLRA by adding an employer obligation “to maintain current wages, hours, and terms and conditions of employment pending an agreement.” This employer obligation to maintain all current terms and conditions of employment extends indefinitely beyond the point when the parties reach a good faith impasse to the date the parties reach agreement. Significantly, this obligation to maintain current terms and conditions of employment applies not just to first contracts, but rather to all employers and all contracts.
Parting Thoughts
The FLCA creates a number of practical problems for both employers and unions. Those include the following.
- Under current law, with neither side compelled to agree to any particular proposal, the possibility of strikes, boycotts, lockouts, striker replacements, and implementation at impasse creates bargaining leverage for the parties which normally leads to agreement. Under the FLCA, however, this leverage is replaced by negotiation deadlines followed by binding arbitration. Potentially, employers and unions will be less likely to compromise if they believe they can do better in arbitration. Further, both sides may stick to extreme positions, believing that the arbitration panel may split the differences.
- Panel arbitrators may not understand the business (staffing levels; production methods; incentive compensation; etc.), yet they are empowered to bind the parties on all issues for two years. Even worse, if the panel imposes a bad first contract, that contract will likely serve as a problematic baseline for many years to come.
- The FMCS is understaffed, which increases the likelihood that mediations will be unsuccessful, and more disputes will be submitted to binding arbitration.
- Litigation is likely to ensue. Courts will be asked to interpret the new statute and define the limits of the arbitrators’ authority. If either the NLRB or FMCS adopts regulations implementing the new statute, there may be challenges under the Administrative Procedures Act. Arbitration awards may be challenged. Unfair labor practice charges may be filed. And, it is likely that there will be constitutional challenges to the FLCA. This litigation will take years to resolve, and in the meantime, employers and labor unions will be forced to operate in a legally uncertain environment, as opposed to the present negotiation environment that has been in effect for over 80 years.
One must ask if the perceived gains of the FLCA are really worth the upheaval which will result. The present system may not be perfect, but it is stable.
At Steptoe & Johnson, we have a team of labor attorneys who are ready to help you navigate union campaigns and contract negotiations — and to navigate even seismic shifts in the law. Please reach out to a member of our Labor Relations team if you have any questions or need any assistance.
The author thanks Alexis Geary, Summer Associate, for her contributions to this article. |
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