Changes to Labor Laws Look Big After PRO Act

Bruce Cross Commentary

Changes to Labor Laws Look Big After PRO Act

The U.S. House of Representatives recently passed (again) a sweeping batch of amendments to the National Labor Relations Act. The Protecting the Right to Organize Act of 2021, or PRO Act, has greater potential than any other recent legislation to impact all labor-dependent businesses.

The PRO Act has passed the House before, but at that time both the Senate and the president made it clear that it would go no further. Now, however, President Joe Biden has expressed support for the act, and with the Senate evenly split and eyeing a revision of the filibuster rule, the PRO Act is closer than ever to becoming law. Consequently, all employers must understand and prepare for the substantial changes it will bring should the filibuster rule be abandoned.

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First among the many changes is a provision that overrides existing right-to-work laws. Most states, including Arkansas, have right-to-work laws that prohibit contracts requiring payment of union dues as a term of employment. Without these prohibitions, employees must support union activities financially simply because they want to keep their jobs. Repeal of Arkansas’ right-to-work law would affect the state’s businesses by allowing far greater funding for union campaigns and far fewer options for workers to avoid union membership.

Additionally, the PRO Act would redefine “employee.” Liberalized changes to the NLRA definition would immediately affect industries that allow workers to operate as independent contractors. As companies are required to revise their classification of workers from independent contractors to employees, they will face efforts by unions to expand membership to new sections of the workforce. This expansion could result in an explosion of union funding and organizing efforts in jobs previously beyond the reach of the NLRA.

As unions seek to expand into more workplaces, they will have several new techniques available to them. One that may seem minor at first is a set of changes to the election protocols. Under the new law, elections can be held in as little as two weeks after the petition, they can be done electronically and in smaller bargaining units, and, above all, an election may be avoided entirely with the “card check” process, which only requires unions to show that a majority of employees have signed an “authorization” card.

Each of these factors has been shown to increase the likelihood of organization. Shorter timelines do not allow employers enough time to defend an open workplace, mail-in ballots allow electioneering by union reps outside the workplace, smaller bargaining units allow unions to select the employees who support membership, and card checks create a union environment without employees being given the opportunity to vote.

Another new technique allowed under the PRO Act is secondary action. Secondary actions are prohibited under the NLRA, but a notable example of what could happen under the PRO Act occurred when the United Farm Workers, not covered by the NLRA, boycotted and demonstrated at grocery stores that sold food picked by nonunion workers. Repeal of the secondary action prohibition would likely spur a huge number of such actions. For example, manufacturing workers could protest stores selling goods made at their factory, and construction workers could organize boycotts of companies that hire nonunion contractors. This confusing and coercive technique forces unrelated third parties to pressure the nonunion employers to accept union demands.

Further increasing the prospect of a successful election is the return of the “persuader rule” under the PRO Act. The rule was introduced in 2016 by Department of Labor rulemaking, but federal injunctions prevented enforcement before it was finally rescinded in 2018. The new rule expands reporting requirements to include management’s interactions with consultants and even outside counsel that could in any way be construed as opposing unionization. Attorney-client privilege rules suffer.

Another signature provision of the PRO Act is the inclusion of liquidated damages and civil penalties for a violation. Under the NLRA, employers’ damages are generally limited to back pay.

The new law provides for penalties up to $50,000 and $500 per day for continuing violations. As an added scare tactic, officers and directors may be found personally liable.

As of the date of this writing, the act needs three more votes in the Senate to reach a majority. The filibuster rule could be the only thing standing in the way of passage. Popular opinion and sentiment seem to favor pro-union reform. Thus, employers should prepare, just as unions will, for a sea change in the labor world.

J. Bruce Cross is a labor and employment management attorney with Cross Gunter Witherspoon & Galchus of Little Rock.