March 10 (Bloomberg) -- Senator Blanche Lincoln of Arkansas defied her state’s largest private employer, Wal-Mart Stores Inc., in 2007 by voting to make it easier for workers to join unions. This year, she may spurn organized labor.

Lincoln and fellow Democrats Mark Pryor of Arkansas and Mary Landrieu of Louisiana have expressed doubts about the so-called card-check legislation, threatening party unity that supporters need to overcome Republican opposition.

Labor has made the measure its top legislative goal after spending $100 million to help Democrats strengthen control of Congress and win the White House last year. The legislation, backed by President Barack Obama, is testing some Democrats’ loyalty to labor and the administration.

“Right now, my number one priority is strengthening our state’s economy and putting 90,000 jobless Arkansans back to work,” Lincoln said in a statement.

Wal-Mart,Starbucks Corp., Home Depot Inc. and Burger King Holdings Inc. are among companies that oppose the bill, as does billionaire investor Warren Buffett, an Obama supporter and adviser.

Deborah Weinswig, a Citigroup Inc. analyst in New York, today downgraded Wal-Mart to hold from buy, saying the retailer would be the primary target of union organizing efforts if the card-check measure passes. That would increase labor costs and may limit expansion, she said.

Wal-Mart rose $1.16, or 2.4 percent, to $48.67 at 4:15 p.m. in New York Stock Exchange composite trading. The shares fell 13 percent this year.

$200 Million

Card-check opponents, including the U.S. Chamber of Commerce and the National Federation of Independent Business, have said they will spend about $200 million on advertising and lobbying to block the measure. Unions are also running TV ads and are bringing members to Washington to lobby at the Capitol.

The measure would let workers form a union when a majority of company employees sign a card requesting one, rather than permitting their employer to require a secret-ballot election run by the National Labor Relations Board. The bill, formally called the Employee Free Choice Act, would amend the National Labor Relations Act of 1935, the Depression-era law that helped build the modern labor union movement in the U.S.

Landrieu questioned whether the rules for labor organizing should be changed during a recession. “I do have a concern about the impact on the economy,” she said in an interview.

‘Not Perfect’

Pryor, who co-sponsored the measure in the last Congress, described the legislation as “not perfect” and said he would prefer finding a compromise that business could accept. “Labor and the business community can find common ground on this issue,” he said.

Wal-Mart and other Arkansas businesses have raised concerns to him about the impact of measure, he said. “It is a different time, and the economy is in a much different situation now,” he said.

In the last Congress, the legislation fell 9 votes short of the 60 needed to end debate and act on the measure. Every Democrat present, two independents, and one Republican, Arlen Specter of Pennsylvania, voted to close debate.

Two Democratic lawmakers, Representative George Miller of California and Senator Tom Harkin of Iowa, introduced a new version of the legislation today.

Senate Majority Leader Harry Reid said his chamber may be able to consider it before the August recess, and there will be enough support to end debate and approve the measure. “We of course are looking for 60 votes,” he said. “I think, quite frankly, they’re there.”

Passage Not Assured

Democrats now have 58 votes in the Senate, and would have 59 should Al Franken win a disputed election in Minnesota. Still, Democrats acknowledge that passage isn’t assured.

Senator Claire McCaskill, a Missouri Democrat and a supporter of card-check, said on ABC’s “This Week” on March 8 that she is “not sure we have the votes.”

Democrats Evan Bayh of Indiana, Jeff Bingaman of New Mexico and Ben Nelson of Nebraska said in interviews that they are undecided.

Both sides argue it’s a matter of fairness. Labor says the existing secret-ballot system for establishing unions invites employer intimidation.

“The legislation simply lets workers, not their bosses, choose how to form a union,” said Mary Beth Maxwell, executive director of American Rights at Work, a Washington-based union advocacy group. “The bill wouldn’t eliminate the secret ballot as an option for workers.”

‘Direct Relationship’

Businesses say changing the law would allow union officials to pressure reluctant workers to sign cards.

“Everyone should have the right to make a private and informed decision regarding union representation that is free of intimidation and coercion,” said Daphne Moore, a spokeswoman for Bentonville, Arkansas-based Wal-Mart.

Seattle-based Starbucks is concerned about the bill “in its current form” because it “could have a detrimental impact on the open, direct relationship we have built with our” employees, according to spokeswoman Tara Darrow. Buffett, the chairman of Berkshire Hathaway Inc. of Omaha, Nebraska, said on CNBC yesterday that “the secret ballot is pretty important in the country.”

The economic crisis is helping business on the issue, said Randel Johnson, vice president for labor issues at the Chamber of Commerce, the nation’s largest business lobby.

“There is a hesitancy to foist new laws on employers when they are trying to dig themselves out of a hole,” he said.

A Decline

Labor unions represent about 7.6 percent of the U.S. private-sector workforce, a decline from about 35 percent at their peak in the 1950s, according to the U.S. Bureau of Labor Statistics.

Unions are making gains with the new administration. Obama has signed legislation making it easier to fight alleged pay discrimination, and has issued four presidential orders strengthening union rights with federal contractors.

Bill Samuel, the AFL-CIO’s legislative director, said on a conference call with reporters that he isn’t worried Democrats will defect on the card-check measure.

“There are some members who prefer to sort of stay behind the curtain, as it were, until the vote is closer,” he said. “We’re very confident.”

To contact the reporter on this story: Holly Rosenkrantz in Washington at hrosenkrantz@bloomberg.net

Last Updated: March 10, 2009 16:45 EDT