*Story by Angelina Spencer-Crisp
The PRO Act would impact how businesses classify independent contractors by expanding a version of California’s AB 5 federally.
The American Jobs Plan, President Joe Biden’s Infrastructure Bill, now includes the Protecting the Right to Organize (PRO) Act. It’s uncertain as of today exactly how much of the PRO Act’s provisions will be included in a final bill, but if it does become law, business owners should be prepared.
The PRO Act was passed by the House of Representatives in mid-March, but is currently held up in a Senate committee. The legislation would roll back decades worth of labor law and would impact how businesses classify independent contractors by expanding a version of CA’s AB 5 at the federal level. It also gives unions the freedom to organize and solicit members at places of business without interference from business owners.
“Nearly 60 million Americans would join a union if they get a chance, but too many employers and states prevent them from doing so through anti-union attacks,” Biden said in a statement.“They know that without unions, they can run the table on workers — union and non-union alike.”
The law may not be as good for employees as elected officials think, but if passed, it also creates a host of headaches for employers.
The PRO Act enables unions to overcome contract and organizing challenges through independent arbitration. The potential legislation would also result in corporate directors and officers being subject to personal liability, if it’s discovered workers’ rights are violated. A portion of the PRO Act permits workers to picket both a business and its vendors (although attorneys say this could violate some other labor acts).
Passage of the PRO Act in the Senate depends on the filibuster because it’s not budget related. If it is part of a “reconciliation” bill, which only needs a majority vote in the Senate chamber to pass, it would have to be gutted, and basically, has no teeth. For the PRO Act to pass intact, the Senate would have to change its filibuster rules, which requires 60 votes, an unlikely event.
Yet there is a major concern looming for business and workers even if the PRO Act fails. As President Biden appoints new members to the National Labor Relations Board, it will reach Democratic majority probably next year as terms continue to expire. Most of the PRO Act’s provisions could, without much effort or interference, be implemented through the NLRB. Lawyers say the passage of the PRO Act either way poses significant challenges — and added costs — for businesses and workers.
For example, it would give unions the ability to override local “right to work” laws and require employees who don’t belong to a union but work at a company that’s covered by a union contract, to pay union dues. This would provide greater financial resources and influence for unions to use in wage and benefit negotiations with employers.
Additionally, the PRO Act limits the amount of influence business owners have over their business because it allows employees to cast ballots off company property and permits union organizers to enter a business to organize workers.
The PRO Act is opposed by most corporations and business groups, such as the U.S. Chamber of Commerce, and the National Retail Federation. Yet the legislation also has significant impact on small businesses, ones that likely don’t have resources to respond to unions’ demands. Ultimately, it could take away more jobs than it provides, and force employees to pay more from their checks to cover union dues. Unions targeting small businesses might then become a profitable cottage industry, as they go after ‘low-hanging fruit’ first.
Lawyers are advising business owners to revisit their insurance coverage, because new rules favoring unionization could result in litigation over back pay, wrongful discharges, and “all sorts” of new penalties either under the NLRB or upon Congressional passage. As one lawyer said,”You need to make sure your liability insurance covers union organizing activities.”
Most businesses seem fearful of educating employees about the pros and cons of unions, and don’t usually bother until they receive a petition. But that can be too late. Once a business gets a union petition, they only have a few weeks to educate employees before workers vote on whether or not to organize.
Research shows if employers put their employees in a position to make a good business decision for themselves, most wind up not joining a union. But keep in mind, if the PRO Act passes, and you’re thinking, “I have independent contractors, doesn’t apply to me,” you might want to remember the test for independent contractor versus employee is a whole lot more stringent under the PRO Act.
Consequently, some business owners are checking market rates for compensation to ensure worker pay and benefits are competitive. The thinking for this is that if a business owner pays and treats employees better, why would they want to join a union?
Angelina Spencer-Crisp is an author, government relations specialist and former executive director of the Association of Club Executives (ACE).