Labor Reform: What to Expect From a Biden Administration With Democratic Control of Congress

At noon, eastern standard time, on January 20, 2021, Joseph R. Biden Jr. became the 46th president of the United States, giving Democrats control of the executive branch, and, albeit by the thinnest of margins (with Vice President Kamala D. Harris presiding as president of the U.S. Senate), the legislative branch of the U.S. government for the first time since 2011. While that transition will, no doubt, impact a great many national and global issues, the focus of this article is the potential impact that this dynamic will have on U.S. labor law and policy.

Those who have been monitoring labor issues since 2008 largely know what to expect. After four years of more management-friendly labor policy, today the pendulum has started to swing in the direction of labor, just as it did in 2008. How far the pendulum swings and how fast is yet to be determined, but all signs indicate the swing could be significant. On the eve of the election, President Biden promised to “be the most pro-union president you’ve ever seen.” He has filled his transition team with union leaders and union-friendly lawyers. He nominated Martin J. Walsh, to be the U.S. secretary of labor—the first time a former union official would fill that position in half a century. Most critically, with Democratic control of the U.S. Senate, President Biden will be able to fill the National Labor Relations Board (NLRB) with the same type of pro-labor leadership favored by President Obama. The bottom line is that employers are likely about to experience the same sort of pro-labor agenda, focused on many of the same issues, as they did from 2008 to 2016. Plus, there will be tremendous pressure from organized labor to pass the Protecting the Right to Organize (PRO) Act of 2019, which is one of the most far-reaching labor reform bills ever contemplated.

The following is a brief summary of actions and changes in the labor space that employers can expect from the Biden administration and a Democratic-controlled Congress.

Appointments and Confirmations

• Likely the most significant and immediate impact of Democrats controlling the Senate is that President Biden will be able to have his nominations quickly confirmed.
• Quick confirmation of administrative nominations may mean that President Biden will have a former union member serving as secretary of labor.
• Of more direct impact on labor policy, President Biden will be able to establish Democratic control at the NLRB more quickly than he would have had Republicans maintained control of the Senate.
• On January 20, 2021, President Biden named Member Lauren M. McFerran, currently the lone Democrat on the Board, to be chairperson. This means that she can start to assert control over the Board’s decisional agenda and possibly slow the pace of what is still a Republican majority.
• President Biden will also be able to quickly fill the open slot on the Board, bringing the membership mix of the Board to three Republicans and two Democrats.
• When Member William J. Emanuel’s term expires on August 27, 2021, President Biden will be able to fill his seat with a Democrat, giving Democrats a 3-to-2 majority, likely by early fall 2021.
• In addition, President Biden will be able to replace the NLRB’s current general counsel, Peter B. Robb, whom President Biden fired on January 20, 2021, after Robb refused to resign.
• All of the names being mentioned to fill these critical roles are decidedly pro-labor and would be comparable in labor law philosophy to those who led the Obama Board.
• By 2022, the foundation will likely be in place to reverse the Trump Board’s policies and to restore many of the pro-labor rules and procedures that were in place in 2016.

NLRB Case Decisions and Regulations

Expect the Biden NLRB to attempt to make the following substantive changes.

• Policy and precedential change at the NLRB comes through case decisions and, more recently, adoption of regulations. Both are likely to be part of the Biden Board’s tool kit.
• The Biden Board will likely maintain or reestablish the “ambush election” rules put in place by the Obama NLRB. This may or may not involve a rollback of the 2019 Trump Board changes, but it will result in the maintenance of the compressed election schedule, the expanded voter list requirements (to include available personal contact information) (assuming the Trump Board does not finalize their proposed regulations on this issue), and the obstacles that currently exist to having voter eligibility disputes resolved pre-election.
• In addition, expect the Biden Board to explore moving away from the long-standing preference for holding elections at the employer’s worksite (which Member McFerran believes “inherently risks jeopardizing employee free choice in a way that a neutral site does not”) and toward greater use of mail balloting and consideration of telephonic or electronic voting (if related budget restrictions are lifted).
• Likewise, the Biden Board may attempt to restore the expanded right to micro-voting units, employee access to employer email for Section 7 activity, and to apply a greater level of scrutiny to employer campaign communications, making many currently lawful campaign statements unlawful and objectionable.
• The Biden Board might even go so far as to prohibit mandatory employer campaign meetings (often called “captive audience meetings”) by finding them inherently coercive.
• The Biden Board is likely to do what it can to deliver “card check recognition” to labor, although full implementation of that concept will require legislative change.
• The new administration may make an effort to undo the current joint-employer rule (either by new regulation or case decision) and to alter the definition of “independent contractor” in a way to make it considerably harder to establish independent contractor status (thus making more putative independent contractors—including workers in the so-called “gig economy”—employees with organizing rights). This could involve rulemaking.
• In a related vein, a Biden Board could seek to narrow the definition of “supervisor,” making more putative supervisors employees with organizing rights.
• Biden’s new NLRB general counsel may use more aggressively the existing power to seek injunctions from federal district courts to reverse allegedly unlawful employer actions.
• The Biden Board is also likely to give labor leverage in negotiations by making some form of “intermittent strike activity” protected, to loosen current limitations on secondary boycott activity, and to place limits on the “offensive lockout.”
• The Biden Board is also likely to roll back the Boeing standard for evaluating the legality of employer work rules and return to a heightened standard of review as was applied by the Obama Board (which made it very difficult to draft workplace policies that could withstand NLRB review).
• Finally, the Biden Board is likely to return to an extremely expansive definition of “protected concerted activity.”

Legislative Change

While the NLRB is the more likely path to labor policy reform, the effort to amend the National Labor Relations Act (NLRA) could play out as follows with regard to the PRO Act.

Labor’s wish list of changes that would help them organize and bargain more successfully can be found in the PRO Act. The PRO Act contains many of the concepts identified above plus others that can only be achieved by amending the NLRA.

While the U.S. House of Representatives passed the PRO Act in 2020 (and is likely to reintroduce it and pass it again in 2021), the bill’s passage by the Senate still remains unlikely, even given Democratic control. The reason: because of the Senate legislative filibuster, passing a law actually requires 60 votes, not 51, to move legislation to the floor. It is only after the legislation is moved to the floor that it may be passed by a simple majority. While there is pressure on Senate Democrats to eliminate the legislative filibuster, that prospect remains unlikely, since even some Democrats oppose eliminating it. If the legislative filibuster remains in place, the PRO Act is not likely to become law. Nonetheless, the PRO Act is likely to be reintroduced in this Congress, and it will be a focus of discussion for the labor movement.

In addition to these changes, the PRO Act would also make the following changes if passed:

• revise, by legislative action, the definition of “supervisor” or amend the Act to eliminate the exclusion of supervisors from protection under the NLRA;
• adopt the Browning-Ferris Industries (BFI) test for joint employment and an expanded test for independent contractor status;
• create a private right of action for labor law violations that would make unfair labor practice (ULP) procedures similar to U.S. Equal Employment Opportunity Commission (EEOC) procedures (i.e., subject to enforcement by lawsuit filed in federal district court);
• create new penalties for labor law violations (e.g., monetary penalties, double or even triple back pay damages, tort-like damage claims, attorneys’ fee awards, and individual liability for officers and executives);
• increase the use of bargaining orders to remedy labor law violations;
• establish federal contractor debarment as a penalty for labor law violations;
• make NLRB orders self-executing;
• establish binding interest arbitration when the parties cannot reach agreement on a collective bargaining agreement (CBA) (which means a “neutral” arbitrator decides the terms and conditions contained in the CBA);
• amend the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) to adopt the Obama DOL’s “persuader rule” reporting requirements; and
• eliminate the ability for states to have right-to-work laws, which even for many Democrats is a “bridge too far.”

While passage of the PRO Act in its current form remains unlikely, its content will inform the debate over labor law reform under the Biden administration. Perhaps more importantly, certain parts of the PRO Act could be offered in a more surgical fashion and would have a much greater likelihood of becoming law.

Ogletree Deakins’ Traditional Labor Relations Practice Group will continue to monitor developments with respect to these and other potential policy changes and will post updates on the firm’s Traditional Labor Relations blog. In addition, former NLRB member Brian E. Hayes, who is a shareholder in Ogletree Deakins’ Washington, D.C. office, has prepared a detailed white paper discussing these concepts, which will be forthcoming. Finally, Ruthie L. Goodboe (who co-chairs the Traditional Labor Relations Practice Group) and I discussed this topic on the next installment of her Third Thursdays with Ruthie podcast series on January 21, 2021. We will, likewise, keep you informed as these issues progress.