Much has changed since the United States’ primary labour law – the National Labor Relations Act (NLRA) – was adopted 85 years ago, and more change may be on the horizon. On 9 March 2021, the US House of Representatives adopted the Protecting the Right to Organize Act (PRO Act), which would make substantial changes in US labour laws. This article summarises the PRO Act’s changes which – if enacted – will affect all companies with US operations.
I testified at the House hearing on the PRO Act held on 8 May 2019. At that time, I indicated that the Act, “though intended for good,” would “in practice do significant harm”. In short, the PRO Act will change basic principles governing union representation, collective bargaining, and labour disputes in ways that would differ greatly from longstanding US labour law principles.
Current labour landscape
Employees in the US have the right to be represented by any union that is supported by a majority of workers (in an “appropriate” bargaining unit). If such support exists, the union becomes the “exclusive” representative for all employees in that particular bargaining unit. In most cases, unions are required to demonstrate the existence of employee majority support in a secret-ballot election conducted by the National Labor Relations Board (NLRB).
In the US, many labour contracts include union security provisions requiring employees to become union members or to pay the rough equivalent of union dues within 30 days after commencing employment. However, more than half of US states have enacted “right-to-work” statutes that prohibit labour contract provisions requiring union membership.
At present, US unions and employers can engage in strikes, lockouts, and other economic weapons. When no labour contract exists, unions can strike an employer at any time, and striking employees are protected from being discharged. Employers have the right to continue operations using replacement employees, however, who can also lawfully be advised that their status is permanent (meaning they will not be displaced by returning strikers when the strike ends).
Since 1947, US law has also prohibited most types of “secondary” boycotts, which means unions cannot “threaten, coerce, or restrain” neutral parties to force them to cease doing business with the “primary” employer involved in the union dispute.
What would change?
The PRO Act would modify a broad spectrum of labour law issues, substantially expanding union rights, and imposing many new costs and limitations on employers. The most important proposed changes include:
- Re-defining “employer” and “employee” - The PRO Act would expand “joint employer” and “employee” status, narrow “supervisor” status, and restrict an employer’s ability to classify service providers as “independent contractors”.
- Overriding state right-to-work laws - State right-to-work laws (banning labour contract mandatory union dues) would be overridden if a labour contract requires employees to make payments to a union covering “the cost of representation, collective bargaining, contract enforcement, and related expenditures”.
- Employer rights diminished in union representation elections - Employers would lose the right to participate in NLRB union representation election cases, employees could no longer hold mandatory “captive audience” meetings about union issues, and – if objectionable conduct occurs in some cases prior to an election – employers will be ordered to recognise and bargain with the union without any election.
- Arbitrator-imposed initial contract terms - The PRO Act would impose strict deadlines on bargaining for an initial contract, which if not reached after 90 days, could result in arbitrator-imposed contract provisions that would be binding for two years or more.
- Permitting “secondary” and “intermittent” strikes - For the first time in 70 years, the PRO Act would eliminate the prohibition against “secondary” strikes and picketing. This change would permit unions to lawfully target all companies that do any business with a “primary” employer directly involved in a union dispute. The Act would also protect “intermittent” strikes, which are prohibited under current law.
- No permanent strike replacements and limiting employer lockouts - The PRO Act would eliminate the right to hire permanent strike replacements and employers would lose the right to engage in an offensive lockout (where the employer discontinues operations to pressure the union and employees to accept the employer’s bargaining proposals).
- Two- or three-track NLRB, court and Department of Labor litigation, with expanded damages - The same alleged violations could result in NLRB proceedings, and district court lawsuits, and “whistleblower” claims handled by the Department of Labor. Available remedies – which currently focus on employee reinstatement and back wages and benefits in most cases – would be expanded to include potential front pay, consequential damages, compensatory damages, liquidated (double) damages, attorneys’ fees, and injunctive relief.
- Invalidating “class action” waivers - The Act would invalidate all “pre-dispute” employment agreements in which employees waive the right to pursue class action claims. This would effectively overturns the US Supreme Court decision in Epic Systems Corp v Lewis.
- Other changes - The Act would give employees a statutory right to use employer email systems for union organising and similar non-business purposes, remove current limitations on union recognition picketing, create a new employer notice-posting requirement regarding collective bargaining rights, impose strict deadlines and expanded employer disclosures in union representation elections, make NLRB orders self-enforcing with civil penalties in the event of violations, and more.
Will the PRO Act pass?
It remains to be seen whether the PRO Act – in whole or in part – will become law. Although it was passed by the House on 9 March 2021 (by a vote of 225-206), the US Senate is currently evenly divided, with 50 Republicans and 50 Democrats (including two Independents).
Although tie votes in the Senate can be broken by Vice President Kamala Harris (a Democrat), Senate rules require support from 60 Senators before legislation like the PRO Act can proceed to a vote, although these rules can themselves be changed. In a statement released on 9 March, President Joe Biden said, “I urge Congress to send the PRO Act to my desk…”. Therefore, if the Act is adopted in some form, there is little doubt the President will sign it into law.
All employers that have US operations should closely monitor this legislation, which will substantially change the landscape regarding many important employment and union issues.
Philip A Miscimarra is a partner in Morgan, Lewis & Bockius’ labour and employment practice, and former chairman of the National Labor Relations Board