Getting Proactive Ahead of The PRO Act

The name of H.R. 2474 (The Pro Act) is enough to make employers sit up and pay attention: Protecting the Right to Organize Act. The title goes on to say its purpose is, “To amend the National Labor Relations Act, the Labor Management Relations Act, 1947, and the Labor-Management Reporting and Disclosure Act of 1959, and for other purposes”. This sweeping legislation passed the House of Representatives in 2019 but was not taken up by the Senate.

No worries – right? Not so fast. Even if this bill never becomes law, it reflects labor trends that aren’t going to end, no matter who is President of the United States and no matter which party controls Congress. Therefore, the Pro Act should be used as a guide for understanding what unions want, to ensure your company is well prepared for the future and what it will take to stay union-free.

The Pro Act Is Like a Union Wish List

There is a long history of successful and unsuccessful labor-focused legislation leading up to the PRO Act. The PRO Act is comprehensive, offering sweeping changes that support unionization and limit employer rights. As employee and labor relations consultant, Peter List, LaborUnionReport.com, says, “It is the amalgamation of a multitude of [labor] bills introduced separately over the last 15 years.” It packs everything that didn’t make it through the legislative process in prior years and adds new items to recognize changing times, like giving gig workers employee status.

In essence, the PRO Act is a 34-page union wish list. For example, it takes away the right of employers to hold mandatory attendance meetings. It forces employers to bargain with the union before the election if a majority of workers support the union. It requires employers to disclose the names and payments made to third parties assisting with the employer’s campaign against the union. This is just the beginning of a series of requirements in the Pro Act.

Employers and employees who don’t support unions are in harm’s way. Employees who don’t support the union lose their freedom not to join a union. All employees relinquish their right to privacy because it forces employers to share personal information with the union. Even temporary and contract workers are impacted because the law forces employers to recognize them as employees.

The economy is also negatively impacted in several ways, according to Heritage.org. Freelance workers, who account for 1 out of every 3 workers, will have fewer opportunities, neutral third parties (other businesses) can be subjected to strikes and boycotts, which will potentially damage reputations and incur financial costs. The American Action Forum estimates that franchises' lost annual output would be $17.2-$33.3 billion due to changes in what defines a joint employer.

Taking Action Point-by-Point

There are many individual provisions in the PRO Act. The following summarizes some of the significant points and offers actionable advice for employers to prepare now so they don’t fear potential union organizing.

1. The PRO Act would revive several NLRB decisions made during the Obama administration: the joint employer rule (Browning-Ferris Industries), the Purple Communications email rule, and the Specialty Healthcare rule.

What this means for companies: The joint employer rule of Browning-Ferris Industries says that an employer doesn’t have to have direct and immediate control over the conditions and terms of employment of another entity’s employees to be considered a joint employer. This rule enabled employees of two different businesses to form a bargaining unit.

Implementing the Purple Communications rule gives employees the right to use the employer’s email for union organizing.

Implementing the Specialty Healthcare rule enables micro-units for organizing purposes.

Employer Action: Educate employees on their rights under the NLRA. They have the right to join, form, or assist with organizing for collective bargaining, and they ALSO have the right NOT to join a union. They can exercise that right when contacted by anyone via any communication channel, including email, whether from a joint employer, member of a micro bargaining unit, union representative, coworker, or anyone else.

2. The PRO Act would implement (AB) 5 with enormous implications for companies that employ gig workers.

AB5 is a California bill requiring a three-factor test to determine if an independent contractor is “employed” by a company. The factors are written such that it’s difficult not to be classified as an employee. To remain an independent contractor, the person must be free from the employer's control and direction, perform work outside the usual course of business, and be engaged in an independently established occupation or business. The stated goal is ensuring that workers aren’t called independent contractors when they are employees, thus denying them employee rights. The reality is that the goal is to move people, like those working for rideshare companies, to employee status.

What this means for companies: Companies such as Uber will have to qualify workers as employees, creating a substantial financial burden. Once qualified as an employee, the person becomes eligible for guaranteed minimum wage, overtime pay, breaks, and various benefits. As employees, they can also join a union. It will impact every employer that hires independent contractors for project work, including in the tech industry. It’s likely to reduce independent contracting opportunities, too, causing a negative economic impact.

Action: The utilization of contracted workers in the workplace has ignited employee protests against employers. In the tech industry, these workers are often excluded from getting benefits unless employed by a staffing agency. The trend is for employers to require staffing agencies to provide some primary benefits, like health insurance. But many employers don’t go through staffing agencies. If you use independent contractors, it’s essential to know the details of their working arrangements if hired through staffing agencies and make sure hired gig workers don’t qualify for employee status to avoid getting blindsided with protests and legal claims.

3. The PRO Act would allow secondary boycotts.

A secondary boycott is when union employees in a labor dispute at their workplace attempt to stop the employer’s business connections from doing business. The goal is to force their employer to resolve a labor dispute by hurting other companies with whom it does business. For example, a bargaining unit goes on strike at a manufacturing facility and then encourages union members at a materials supplier vendor to stop deliveries to the plant.

What this means for companies: The potential financial damage to the boycotted companies is enormous. In a case decided for an employer (Sysco Minnesota, Inc. v. Teamsters Local 120), Local 120 union employees picketed a Sysco food distribution facility in support of striking Teamsters Local 41 at Sysco Kansas City. The company picketed was a wholly separately owned and operated company and not involved in any labor dispute. The sister food distribution company employees refused to cross the picket line, so the company could not make food deliveries to stores. The company lost $1.2 million in profits and lost customers. The judgment was against the Teamsters at that time because secondary boycotts are currently illegal under the NLRA. The PRO Act would change that. Innocent businesses will be harmed and have no recourse to regain financial losses.

Action: Employee engagement, beginning with the employee onboarding process, is key to avoiding employee protests, picketing, and strikes. Developing a positive organizational culture of transparency and good relationships between employees and managers will be even more critical should secondary boycotts become legal.

4.The PRO Act would speed up elections with "ambush" / expedited election rules.

The PRO Act would reinstate the NRLB's 2015 "ambush" election rules that were overturned. The rules reduce the time between filing a petition for a union election and the actual election. The PRO Act would make the ambush election (aka quickie election) rules permanent.

What this means for companies: The impact of this provision is that you would have less time to educate employees on the facts about unions and their rights under the law before voting in a representation election.

Action: Regular communication with employees on topics like the organization’s belief that unions are not necessary and are harmful to employee rights should be ongoing. You don’t want to wait until the union starts an organizing campaign and have to frantically put up a union-free website, print and send information materials, train supervisors on T.I.P.S. and F.O.E. rules and do all the other things meant to keep the union from succeeding. The expedited election rules don’t leave enough time to conduct an efficient, effective employer campaign. It’s also important to regularly share the advantages of working for your company, especially in areas unions target – flexible schedules, excellent benefits, focus on safety, open-door management policy, and more.

5. The PRO Act would force public disclosure of the use of “persuader" advice, even when engaging an attorney.

The “persuader rule” was issued by the Department of Labor’s Office of Labor-Management Standards in 2016 and was rescinded in 2018. The persuader regulation required employers and their labor consultants, including attorneys, to file extensive periodic disclosures with the DOL when they advised employers on persuading employees to stay union-free. Section 203 of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) has always been interpreted as exempting attorneys when they advise employers but don’t have direct contact with employees. The PRO would codify the persuader rule, changing the concept of attorney-client privilege forever.

What this means for companies: Asking for help from labor relations experts (including labor and employment attorneys) during organizing campaigns will be made public. The reporting requirements include disclosing confidential information, like a description of the legal activities performed. Unions will quickly exploit this information against the employer.

Action: Getting proactive in the drive to stay union-free is crucial. Now is the time to train leaders on the soft skills that keep organizations union-free.   

6. The PRO Act would ban Right-to-Work laws.

The PRO Act would ban all right-to-work laws, going against the preferences of numerous states. There are currently 27 states and Guam with right-to-work laws. These laws say an employee can’t be required to join a labor union to get hired or keep a job.

What this means for companies: Union membership will be made mandatory if a union is certified as the bargaining representative.

Action: Educate employees on compulsory union membership and the requirement that they pay union dues, regardless of where they live. Employees lose their right not to join a union and will be forced to pay dues if the company or workgroup is unionized.

7.The PRO Act would potentially add Unfair Labor Practice (ULP) charges.

The PRO Act authorizes employees to use a private right of action when they believe their worker rights were violated. This action means employees can take an employer to court when they think their employer has unlawfully interfered with their NLRA rights or when the employer has retaliated against them for exercising their rights. Currently, the law only allows employees to file an Unfair Labor Practice charge with the NLRB General Counsel.

What this means for companies: Employers can expect to see many more Unfair Labor Practices filed against them, especially if employees believe they will gain financially. Employers can also expect a significant increase in penalties, should they lose the case, and higher legal fees. The potential damage to the employer’s reputation and employer-employee relationships is substantial.

Action: Avoiding charges of Unfair Labor Practices are already tricky because of the complexity of labor laws. Successful employers have a positive organizational culture, high employee engagement, consistent and legal Human Resources policies and procedures, and an effective and fair grievance process. Just as important is training managers and supervisors on employer and employee rights and effective leader communication, including active listening and feedback.

8. The PRO Act would bring back the NLRB’s “poster rule.”

In 2011, the NLRB had issued a rule that employers are required to post a “Notification of Employee Rights under the National Labor Relations Act.” Failure to do so was an Unfair Labor Practice.  Several groups brought separate actions to invalidate the rule. After weaving its way through the lower court, in 2013, the D.C. Circuit Court of Appeals held the NLRB’s 2011 poster rule was invalid. The PRO Act would make the poster rule law.

What this means for companies: The main impact is yet another erosion of employer rights. Currently, notifications are only required when there is a filing of a charge or petition. The PRO Act would automatically make it a ULP when failing to post. When the Court of Appeals invalidated the rule, it had concluded that a ULP determination involving the posting rule should be made on a case-by-case basis. The PRO Act automatically places the employer in the wrong.

Action: The notification of employee rights doesn’t have to stand alone. Employees and employers have rights. All employees should be educated now on why they should stay union-free and their right to oppose unionizing. You should also make use of company electronic communication channels, like email and social media providing employees with consistent avenues of information and education.

9. The PRO Act would provide civil penalties for labor law violations.

The PRO Act will likely increase the number of Unfair Labor Practices charges because it gives the NLRB the authority to award liquidated damages in amounts equal to up to two times the amount of damages awarded. These damages are in addition to what has been customarily awarded – front pay, back pay, and consequential damages.

What this means for companies: The potential for employers to incur large amounts of damages is enormous. Fear of these harmful damages will likely influence decision-making, decrease flexibility, and influence decisions in directions they might not go otherwise.

Action: Avoiding Unfair Labor Practices is not always easy. UnionProof has extensively written that employers can unintentionally make a mistake and end up defending themselves against a ULP. That’s why it’s so crucial for leaders to be well-trained in both leadership skills and best practices for staying union-free.

10. The PRO Act would require companies to mediate until a first contract is reached.

The PRO Act requires binding arbitration for employers and unions for two years while negotiating the first contract. Mandatory binding arbitration requires the two parties to resolve contract disputes before an arbitrator rather than a court. It also says that contracts will be based on the employer’s size and financial status, wages and benefits of other employers in the same business, employees’ ability to sustain themselves, and employees’ cost of living.

What this means for companies: Union contract negotiations have long adhered to the principle of good faith bargaining. The employer and the union representatives strive to maintain good intent during talks. Only then is an outside party needed when someone fails to act in good faith or an impasse is reached. Mandated binding arbitration sets the wrong tone initially by assuming a third party is necessary for fairness. The employer will also be required to engage in lengthy negotiations even when it is clear the negotiations are not succeeding, incurring high costs and keeping the workforce in limbo. Another impact is the fact the ability to negotiate certain aspects of the contract is taken away.

Action: The best move is to stay union-free!

11. The PRO Act would ban employers from permanently replacing strikers.

The PRO Act prohibits employers from permanently replacing strikers who are out on an economic strike. Since 1935, when a strike ends, employees on a “preferential recall list” could be called back to work as positions became available. The PRO Act ends that legal practice, meaning striking workers can regain their jobs, even if filled. 

What this means for companies: An inability to replace strikers permanently would harm the ability to hire the most qualified employees needed to maintain operations. It is also disruptive to productivity. This inability could have significant financial impacts.

Action: Maintain high employee engagement to avoid events getting so out of control that employees are willing to strike. Actively disengaged employees are sources of discontent in the workplace. Educate your employees on the actual cost of striking – for the employee, the employee’s family, and the company – and the real cost of unionizing.

12. The PRO Act would institute a "stealth" card check.

Card check is when a union gets 50 percent plus one employee to sign union authorization cards. The union can then ask for recognition as the employee’s bargaining representative without holding a union vote. Card check was not written into the PRO Act. What was written into the bill is a “stealth” card check. If the union gets the 50 percent plus one union card signed, and you have no knowledge of it but commit a ULP, the union can use the ULP from any time over the prior year to get a bargaining order from the NLRB after the fact. The bargaining order is used as a card check.

What this means for companies Unions can sneak in by secretly getting enough cards signed and then getting the bargaining order. Given the right circumstances, unions can challenge election results or organize a workplace by proving that employees had previously signed union authorization cards.

Action: Whether you are talking about standard card checks or stealth card checks, the union needs employee signatures. You need to ensure that employees understand the value of their signature on the cards and that signing the card doesn’t lock them into voting for the union. Currently, employees can revoke a union authorization card.

The More You  Read, The More There Is

These are just some of the major provisions. There are more. The PRO Act removes critical language defining “supervisors,” making it easier to reclassify them as employees who are eligible for union membership. The Pro Act eliminates the employer’s right to participate in any representation proceeding before the election. Captive audience meetings held by employers are banned as coercive and designated as a ULP. There are additional penalties for unlawful discharges and for not obeying an order of the NLRB. It even imposes financial penalties on corporate directors or officers personally.

Don’t Wait for Pro-Union Laws to Act

Even if this particular legislation never gets signed into law, pro-union legislators are bound to break up the list into smaller bills over the coming months and years to tackle one or two issues at a time. Unions lobby legislators, but there are other reasons to believe the union organizers have the wind at their back.

For example, the pandemic led to non-union employees organizing protests to demand personal protective equipment, schedule changes, hazard pay, and improved workplace safety procedures. Many employees believed they could only get these changes through collective action, so they walked off the job, formed public protests in front of employer facilities, and utilized social media to advance their cause. Now the number of organized protests is growing. Many of these employees want permanent changes to labor law, so they don’t have to protest.

Have no doubt that the PRO Act is about helping unions grow their membership by making it easier to organize, and tipping every organization’s balance towards unions. Its passage into law would significantly change labor law and employee-employer relations.