The PRO Act and What it Means for Employers
On March 9, 2021, the U.S. House of Representatives passed a sweeping pro-union reform law that, if enacted, would dramatically change the dynamics between employers and workers. The Protecting the Right to Organize Act (the “PRO Act”) was previously introduced in the House but not debated in the Senate. Now it has reappeared as a priority of the Biden Administration.
In essence, the PRO Act’s purpose is to overhaul the National Labor Relations Act (“NLRA”) to strengthen labor unions and make it easier for workers to organize. If enacted, the PRO Act would bring numerous changes, including:
- Effectively invalidating state “right-to-work” laws so that unionized workplaces could require the payment of union dues as a condition of employment – Employees who refuse to pay union dues could be subject to termination pursuant to “union security” clauses in collective bargaining agreements. While this might not affect Illinois employers because Illinois is not a right to work state, it will affect 27 other states, including Wisconsin.
- Legalizing secondary strikes and boycotts such that neutral third parties would be subject to picketing and boycotts associated with labor disputes at other companies.
- Broadening the definition of “employee,” making it difficult for workers to be classified as independent contractors – This could open the door for these workers to collectively organize. It also narrows the definition of “supervisor” to make it more difficult to exempt management employees from union coverage. More employers will also be considered “joint employers” even if they do not exercise direct control over another business’ employees. This will substantially increase the risk of litigation for many franchised businesses.
- Allowing “interest arbitration” by which, if an employer and union cannot reach agreement on the terms of an initial collective bargaining agreement, a federal arbitrator would decide the wages, benefits, and other relevant terms of the union agreement.
- Bringing back the Obama-era “quickie” election rule allowing a union to hold elections only a few days after filing for recognition with the National Labor Relations Board (“NLRB”) – This severely shortens an employer’s time to prepare for elections, thereby increasing the likelihood of a unionized workforce. The PRO Act also gives the NLRB discretion to allow unions to determine the functions of election proceedings.
- Dramatically increasing fines and penalties associated with unfair labor practices, including civil fines of $50,000 for each unfair labor practice, $10,000 for each violation of an NLRB order, requiring the re-hire of employees in discharge cases (mandatory injunctions), and personal liability for company directors and officers.
These changes are merely the “tip of the iceberg.” It is unclear whether the PRO Act can overcome a Republican filibuster in the Senate. However, all private employers should be aware that the Biden Administration generally has instituted more union-friendly policies. Many may assume that the NLRA and the PRO Act only affect employers with existing collective bargaining agreements and relationships with labor unions. This is not the case – all private employers are affected because the NLRA impacts employee handbooks, employee contracts, and day-to-day communications with employees about wages and discipline, regardless of whether the employer is a union shop. As such, employers should evaluate and reconsider their labor relations policies in anticipation of a more labor-friendly NLRB and more labor-friendly NLRA rules and regulations. We recommend consulting with an experienced labor attorney at DiMonte & Lizak, LLC to discuss proactive changes to account for the changing political environment.