July 14, 2021

The PRO Act: A Goody Bag for Organized Labor

On March 9, 2021, the House of Representatives voted to pass H.R. 842, the Protecting the Right to Organize (PRO) Act on a 225-206 vote (pulling in five Republican votes). The bill includes the most sweeping and expansive changes to labor relations legislation since passage of the National Labor Relations Act (NLRA) of 1935. The legislation is unlikely to pass in the Senate, given the lack of Republican support. Although Democrats narrowly control the Senate with Vice President Kamala Harris having the tie-breaking vote between the 50 Democrats and 50 Republicans, there likely won’t be enough votes to overcome a filibuster.

It has been reported that the Biden Administration’s Infrastructure bill includes some or all of the PRO Act. In fact, as of this writing, there is no still no infrastructure bill per se, just an outline furnished by the White House which says nothing about including the PRO Act. The outline says that Biden is calling on Congress “to ensure all workers have a free and fair choice to join a union by passing the Protecting the Right to Organize (PRO) Act, and guarantee union and bargaining rights for public service workers.” Also, negotiations between the Biden Administration and Senate Republicans appeared to have stalled, and inclusion of the PRO Act would not help bridge the divide.

However, Senate Majority Leader Chuck Schumer has indicated that is preparing to move ahead with reconciliation, a parliamentary maneuver that could move a bill forward with a simple majority of Democrats and no Republican support. We don’t know if the PRO Act in part or in whole would make it in the Democrat’s reconciliation efforts. Nevertheless, we do know that the PRO Act, either as a standalone bill, or included in part or in whole as part of the Infrastructure package, is a major priority for Labor and the President.

The PRO ACT would make the following amendment to the NLRA:

•  Preempts State “Right to Work” Laws. Preempts right to work laws by permitting contract terms requiring all employees to pay to the union fees for the cost of representation, collective bargaining, contract enforcement, and “related” expenditures. 27 states, including Arizona, have adopted “right to work” statutes.

•  Institutes Card Check. Permits a union that loses a secret-ballot election to file an unfair labor practice (ULP) charge challenging the results. If the employer can’t prove that the alleged ULP did not affect the election results and the union collected a majority of signatures on union authorization cards, the union would be automatically certified to represent the workers, even though the union lost the election.

•  Expands Joint Employer Liability. Codifies the Obama-era NLRB’s expansive joint employer test under Browning-Ferris. The NLRB (National Labor Relations Board) overruled the Browning-Ferris test by a Final Rule last April. Under the PRO Act, the definition of “joint employer” would allow “indirect or reserved control standing alone” to be sufficient to support a “joint employer” finding.

•  Adopts California’s “ABC” Test. Incorporates California’s ABC test for independent contractors into the NLRA. The strict “ABC” test significantly expands the likelihood of independent contractors being deemed “employees.”

•  Changes Definition of Supervisory Status. Limits the definition of “supervisor,” thus expanding coverage of the NLRA. The PRO Act would require putative supervisors to engage in supervisory duties for a “majority” of their time. Authority to assign work and direct employees would no longer be sufficient to demonstrate supervisory status.

•  Back to Obama-Era NLRB Election Rule Changes. Codifies the NLRB’s previous “micro-unit” rule announced in the NLRB’s Specialty Healthcare decision; establishes “quickie” elections; and allows the union to decide if the election will be in person or by mail-in ballot, among other controversial changes.

•  Prohibits Class Action Waivers in Arbitration. Bars class action arbitration waivers in mandatory arbitration agreements. The Supreme Court has ruled that class action waivers in arbitration agreements are enforceable and are not barred under the NLRA. The PRO Act would statutorily bar such class action waivers in employee arbitration agreements.

•  Institutes Compulsory Interest Arbitration. Like the Agricultural Labor Relations Act’s (ALRA) Binding Mediation provisions, the PRO ACT compels good-faith collective bargaining for 90 days and, if no agreement is reached, requires binding interest arbitration of contract terms. In such cases, an arbitrator is empowered to determine the terms of a two-year collective bargaining agreement.

•  Eliminates Secondary Boycott Restriction. The NLRA protects the right to strike or picket an employer with whom a union has a labor dispute. But it also seeks to keep neutral employers from being dragged into the fray. Thus, it is unlawful for a union to coerce a neutral employer to force it to cease doing business with a primary employer. The PRO Act would eliminate this “secondary boycott” restriction and greatly expand unions’ use of picketing at locations, beyond the target employer.

•  Creates Work Stoppage Rules. Bans employers from permanently replacing strikers in economic strikes.

•  Creates Enhanced Unfair Labor Practice Remedies. Creates a private right of action for employees to bring ULP claims. Employers could be liable for fines and liquidated damages, and corporate directors and officers could face personal liability.

The PRO Act is a veritable goody bag for organized labor, which if passed will have a profound impact on, and create challenges for, employers in most industries. It remains to be seen if the bill, either as a standalone or as part of an infrastructure package, can overcome a filibuster in the Senate, or move in a reconciliation play. If passed, the cost of labor would increase as unions would find it easier to quickly force collective bargaining agreements (CBA) on to unwilling employers and coerced employees who never voted for the union or ratified the CBA. That is why Western Growers is opposed to the PRO Act.