On February 6, 2020, the House of Representatives passed H.R. 2474, The Protecting the Right to Organize Act of 2019 (PRO Act). The PRO Act would fundamentally alter federal labor law by dramatically tilting the playing field in favor of labor unions at the expense of employers and employees. The act would make the following changes to federal law:
1. Enact Obama-Appointed NLRB Decisions
The National Labor Relations Board (NLRB) decisions handed down by the Obama-appointed Board in Browning-Ferris Industries (which expanded the joint-employer rule), Specialty Healthcare (regarding gerrymandered bargaining units), and Purple Communications (permitting workplace email access for organizing purposes) would all be codified into law.
2. Make California’s AB 5 the Law of the Land
The PRO Act would implement the so-called “ABC” test codified in California’s Assembly Bill (AB) 5 for determining whether a worker should be designated as an employee or independent contractor. The ABC test instituted stricter requirements for classifying a worker as a contractor instead of an employee, with huge implications on gig economy workers who had previously been categorized as contractors. Employers and observers worry that AB 5-style laws could result in decreases in the viability of many gig economy companies. Note also that on January 16, 2020, a federal court enjoined AB 5’s enforcement as to any motor carrier operating in California, pending the entry of a final judgment.
3. Codify the “Ambush” Election Rules
The PRO Act would return to the NRLB’s 2015 “ambush” election rules. Among other changes, these rules cut short the time period between the filing of a petition for election and the actual election, require employers to provide unions more sensitive information about their employees than previously required, and leave many complex legal questions unresolved until after the election. Such rules create significant lingering uncertainty in the legitimacy of elections and severely limit an employer’s rights under the NLRA. Recently, the Trump-appointed NLRB reversed some elements of the rule to return to the traditional election timing rules. The PRO Act would override the NLRB and permanently institute the ambush election rules.
4. Codify the 2016 “Persuader” Regulation
The PRO Act would codify the U.S. Department of Labor’s 2016 persuader regulation, which narrowed the “advice exception” of the Labor-Management Reporting and Disclosure Act (LMRDA), by requiring labor lawyers and firms to disclose significant facts about their relationships with employers. In 2016, a federal court held the persuader rule incompatible with the law and client confidentiality, and the rule was strongly condemned by many, including the American Bar Association.
5. Ban Right-to-Work Laws
The PRO Act would ban all right-to-work laws. Twenty-seven states currently have such laws, which prohibit employers and unions from requiring employees to join or pay fees to the union as a condition of employment.
6. Institute “Stealth” Card Check
The PRO Act would undermine the traditional NLRB secret ballot election by allowing unions to challenge election results in certain circumstances and organize workplaces by demonstrating that a majority of employees had previously signed authorization cards.
7. Provide a Private Cause of Action for Unfair Labor Practices
The PRO Act would provide greater penalties for employers that violate labor laws by creating a private cause of action outside of NLRB jurisdiction and increasing the amount and type of damages available to workers. Labor law is already a complex legal field with a wide variety of available remedies. Some see this provision as an unnecessary and duplicative punishment on employers.
8. Codify the NLRB’s Failed “Notice Posting” Requirement
The PRO Act would require employers to post a notice informing employees of their rights under the NLRA. In 2013, the D.C. Circuit Court of Appeals held that the NLRB’s 2011 notice posting rule was invalid.
9. Introduce New Civil Penalties for Labor Law Violations
The PRO Act would expand the unfair labor practice scheme by granting the NLRB the ability to award liquidated damages in amounts that are up to two times the amount of damages awarded, in addition to the traditional back pay, front pay, and consequential damages. Such an expansion would have far-reaching chilling effects on employers’ flexibility in decision-making, potentially hamstringing companies for fear of damage awards.
10. Require Binding Arbitration for First Contracts
The bill would mandate binding arbitration upon employers and unions for two years when negotiating a first contract. Bargaining in good faith would no longer be enough—the employer would be required to engage in lengthy (and expensive) mediation until an initial contract is ratified.
11. Reverse the Supreme Court’s Decision in Epic Systems
The PRO Act would reverse Epic Systems Corp. v. Lewis, in which the Supreme Court of the United States held that arbitration agreements mandating individual arbitration are enforceable under the Federal Arbitration Act. The reversal would likely lead to a dramatic increase in class action lawsuits.
12. Ban Employers From Permanently Replacing Strikers
The PRO Act would forbid employers from permanently replacing strikers. Such a rule would severely harm an employer’s ability to hire qualified employees who are essential to the successful operation of its business when a union chooses to go on strike.
13. Allow Secondary Boycotts
Lastly, the PRO Act would allow workers to engage in secondary boycotts, despite the potential damage that such actions could have to a company completely unrelated to the labor dispute. As seen in the past, secondary boycott abuses cause vast deleterious effects across industries, potentially forcing good companies out of business just so that organized labor can have more negotiating power at an entirely different employer’s table.
In all, the PRO Act would introduce a great deal of potentially harmful changes to the labor law landscape that may negatively affect American businesses and their employees. The bill seeks to institute increasingly complex legal strictures when labor law is already profoundly complicated and confusing. Instead of simplifying matters or assisting companies and unions in facilitating their businesses, the act would create a tangled web of regulations that would benefit organized labor at the expense of both employers and employees. Political prospects for the bill are dim in the U.S. Senate, but the PRO Act will now be the baseline for labor reform proponents should political winds blow differently in the future.