Congress may be on the cusp of passing legislation that would transform labor law in dramatic ways. This proposed law has potentially dire consequences for private-sector employers nationwide.
The Protecting the Right to Organize Act (the PRO Act) would essentially rewrite the National Labor Relations Act (NLRA) to favor unions and employees seeking to organize unions, while rolling back important employer protections. If passed, this legislation is likely to trigger a wave of union organizing and launch a wave of lawsuits affecting employers of all sizes and industries.
Breathtakingly broad in scope, the PRO Act targets several longstanding features of existing law perceived by unions and labor activists to be unfair to labor and too favorable to employers. The proposed legislation is essentially a grab-bag of grievances that the labor movement has compiled over decades and sought to change through legislation and before the National Labor Relations Board (NLRB) without success in the past.
Among other things, the PRO Act would make the following structural changes to the NLRA:
- Expand the available penalties for employers for violations of the NLRA, including civil penalties against employers with individual liability for officers and directors.
- Impose interest arbitration, which would foist an initial collective bargaining agreement on employers if initial discussions failed to produce a contract within only 90 days of a union victory in an election.
- Expand “joint employer” status by applying labor law to multiple employers who share control over employees, even if the control is indirect or reserved in contractual arrangements.
- Allow employees to engage in disruptive intermittent “hit-and-run” strikes of short duration.
- Override “right-to-work” laws, which are currently permitted under the NLRA to allow states to prohibit conditioning employment on the payment of union dues.
- Overturn the decades-long prohibition on secondary boycotts, meaning that unions would be able to pressure neutral employers and ensnare them in labor disputes with unrelated companies.
- Include contractors as employees covered by the NLRA unless they meet a strict “ABC” test that excludes only individuals who have their own business, which is separate from the employer’s business, and are not controlled by the employer.
- Include supervisors who assign and direct work to other employees as employees covered by the NLRA. This would allow many frontline supervisors to unionize.
- Abolish individual arbitration agreements that prohibit class actions (overturning the Supreme Court decision in Epic Systems v. Lewis).
- Prohibit employers from permanently replacing economic strikers or locking out employees.
- Codify the “persuader rule” requiring employers to report payments for labor relations advice to the Department of Labor, which would even include legal advice from attorneys under some instances.
The PRO Act would also help facilitate unionization of nonunion employees by fundamentally changing the union election process and the rights of unions and employers during organizing campaigns in the following ways:
- Strangling employers’ voices in union election proceedings by prohibiting employers from having any input with the NLRB. Decisions in election cases, like the eligibility of employees and certain job titles, would be determined based only on the union’s presentation to the NLRB.
- Aiding unions in election campaigns, including by:
- allowing employees to use employers’ email systems to organize;
- giving unions the right to choose the manner of elections (in-person, mail or email elections); and
- permitting “micro-units” – small groups of employees targeted for union elections based primarily on union choice and selection
- Prohibiting “captive audience” meetings, where employers directly communicate their views about unionization to employees.
In addition to upending the labor-management balance which has prevailed for decades, the PRO Act also would expose employers to costly litigation in federal court. Specifically, the PRO Act would allow unions and employees to bring claims in court if the NLRB dismisses the claim after an initial review. These claims would allow for:
- liquidated damages equal to double the amount of actual economic damages;
- backpay without offsetting for interim earnings of the employee;
- attorneys’ fees; and
- punitive damages.
These remedies are not currently available under the NLRA, which historically has afforded aggrieved employees “make-whole” relief including reinstatement, backpay, and other remedial actions.
If passed, the PRO Act would be a game-changer for ALL employers, regardless of size. As of this writing, the bill has passed the House of Representatives, and it is pending in the Senate, where 45 Senators have signed on as co-sponsors, and, this week, Sen. Manchin of West Virginia added his support. Since the PRO Act is unlikely to draw any Republican support, the real question is whether the Senate will seek to modify or eliminate the filibuster or tack it onto legislation that can pass on a simple majority vote. Regardless, prudent employers will begin planning for its potential passage now because some of its provisions may also be implemented by the NLRB in the near future.
Andrew MacDonald is a partner in the firm’s Labor and Employment Department, resident in its Philadelphia office.