Checking In On The PRO Act

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Snell & WilmerAs we previously reported, the Protecting the Right to Organize (“PRO”) Act is pending before Congress.  With the Pro Act, House and Senate Democrats seek to amend the National Labor Relations Act.  Some of the most significant provisions in the PRO Act include provisions that would override state “right-to-work” laws; increase regulation of employer communication with employees during the unionization process and therefore restrict employer influence on unionization; ban mandatory arbitration agreements; and change the independent contractor test. To learn about these provisions in more detail, you can read our previous Legal Alert here.

Below, we discuss the status of the PRO Act which, if it becomes law, will be the most significant change to United States labor law in decades.

The PRO Act’s Status

The PRO Act has passed the House, but it still must clear the Senate and receive President Biden’s signature to become law.  President Biden supports the Act.

Last week, the Senate Budget Committee Democrats announced that they reached an agreement amongst themselves and are planning to push through a $3.5 trillion spending plan without Republican support.  Among other things, the plan will reportedly include “key provisions” from the PRO Act.  The Democrats therefore plan to pass the PRO Act, or at least parts of it, using the budget reconciliation process.  Through this process, a reconciliation bill only needs a simple majority in the Senate.  The catch, however, is that this procedure only allows certain spending-related provisions.

While we can only speculate on what “key provisions” from the PRO Act will be included in the spending plan, the announcement mentioned increasing fines against employers that violate the National Labor Relations Act (“NLRA”).  Specifically, the announcement alleged that “[u]nder current law, the fine you pay for a parking ticket is greater than the fine companies pay for violating workers’ right to organize a union.”  As such, we expect that the spending plan could include provisions that, if passed, could increase financial penalties against employers that violate the NLRA. Currently, although the National Labor Relations Board (“NLRB”) has authority to impose remedial penalties, such as ordering backpay and reinstatement, it does not have authority to impose punitive measures for violations of the NLRA. See Republic Steel Corp. v. N.L.R.B., 311 U.S. 7, 10-14 (1940).

Additionally, the Senate Committee on Health, Education, Labor and Pensions held a hearing on the PRO Act on July 22, 2021.  The hearing was used to express support for the PRO Act and discuss how to get it enacted.

Nonetheless, it is still too early to determine whether the PRO Act, in parts or in whole, will become law.  Therefore, employers may wish to continue monitoring the effects of the PRO Act and consult with legal counsel for a fuller understanding of the PRO Act’s potential impact on their organization.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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