Business leaders say a Democratic sweep of the presidency and key Senate contests this fall could lead to major changes in U.S. labor law.

Business has viewed the Senate as a bulwark to bills backed by the AFL-CIO and other labor groups since Democrats took over Congress in 2006. Measures making it easier to form unions and strengthening the rights of workers to sue for discriminatory pay practices have passed the House. But they have not been able to win the votes necessary to move forward in the Senate.

Next year, however, the dynamics could change dramatically if Sen. Barack Obama (D-Ill.) wins the presidency and Democrats edge closer to the 60 votes necessary to break a Senate filibuster.

“This is one of the most important elections the business community faces,” said Bill Miller, a senior vice president at the U.S. Chamber of Commerce.

“If the Republicans lose four or five seats [in the Senate] some of the labor measures probably will succeed over the minority’s wishes,” said Jade West, senior vice president of government relations at the National Association of Wholesalers-Distributors.

West mentioned the Lilly Ledbetter Act, which would allow workers to sue employers over past payment discrimination, and the Paycheck Fairness Act, which increases penalties for employers found to have discriminated against women by paying them less than male workers, as examples.

But the issue business leaders most often mention in worried tones is the Employee Free Choice Act (EFCA), which would make it easier for workers to form unions by eliminating a requirement that unions be launched via a secret ballot vote.

A business coalition is already running ads in Maine and Minnesota, where it touts Sen. Norm Coleman’s (R-Minn.) opposition to the bill. Coleman is in a tough contest with Democrat Al Franken, who, like most Democratic Senate candidates, is supporting EFCA.

Even Democratic senatorial candidates in more conservative states, such as Gov. Ronnie Musgrove (Miss.) and Bill Lunsford (Ky.), are supporting EFCA. Their campaigns took in $55,000 and $93,500 respectively from unions over the last five months.

Many observers think winning four or five Senate seats is reachable for Democrats this fall. West, a longtime GOP operative active in Republican campaigns, said Democrats would have to do even better than that to move EFCA next year. West predicts they would need to win eight or nine seats.

Only GOP Sen. Arlen Specter (Pa.) sided with Democrats in the Senate last year on EFCA, also known as card-check legislation because union members would only have to check a card saying they want to form a union for one to be launched. But other Republicans might face pressure to switch sides if their opposition were seen as the only hurdle to a president signing the bill into law.

“It’s not always the case that we need 60 [Democratic] votes; we often get support from a handful of Republicans,” said Bill Samuel, the AFL-CIO’s director of government relations.

The AFL-CIO recently announced a massive grassroots political mobilization, in which the coalition’s unions will spend more than $200 million on the 2008 elections. The statement said the AFL-CIO will “be engaged in every viable Senate race” during the cycle.

According to Samuel, those races will include the open seats in Virginia, Colorado and New Mexico, along with competitive contests in New Hampshire, Maine, Minnesota and Oregon, where Democrats hope to unseat sitting Republicans. Senate GOP leader Mitch McConnell (Ky.) and Sen. Elizabeth Dole (R-N.C.) are seen as tougher candidates, but Samuel said both states could also be in play.

Samuel said that grassroots efforts, such as neighborhood canvassing and local labor meetings, would focus on the presidential election as well, particularly in the battleground states of Ohio, Pennsylvania and Michigan.

“It’s key to have a president who wants to sign these bills,” Samuel said. “We’ve had just the opposite the past eight years.”

Business groups, meanwhile, are spending millions of dollars on anti-card check coalitions to build grassroots opposition to labor’s push, and are targeting donations in a few key races.

The wholesalers’ political action committee (PAC), for example, has given nearly $100,000 in hard-dollar contributions to GOP candidates, with much of it going to Republicans running for Senate. This includes more than $7,000 to Coleman and more than $6,500 to Bob Schaffer, a Republican running for an open seat in Colorado.

The International Franchise Association, which also opposes EFCA, has given more than $228,000 through its PAC to Republicans in this cycle, compared to just $47,500 to Democrats.

And the Coalition for a Democratic Workplace (CDW), an alliance of pro-business groups backed by the Chamber and the National Association of Manufacturers, is running ads about EFCA in Minnesota and Maine.

“We are absolutely concerned what the 111th Congress would do about issues like the Employee Free Choice Act,” Miller said.

The Chamber and CDW are conducting town hall meetings, conference calls and media buys to get out their message about the candidates’ positions on labor legislation, Miller said.

Business and labor groups justified their efforts, saying that these issues, especially EFCA, resonate with voters outside the Beltway. “It’s one of those issues that’s a wedge issue,” West said. “There’s no gray area.”

Both groups tout polls supporting their positions. According to a business poll, 79 percent of likely voters oppose card-check, including 78 percent of Democrats. Business contends its polls show the measure is unpopular in union households and among independents.

An AFL-CIO poll concludes that 69 percent of likely voters support EFCA. It finds that 65 percent of those polled in right-to-work states support EFCA.

“Voters are becoming increasingly aware about the economy. People want to remain comfortably in the middle class,” Samuel said.