Employers Beware: Major Changes to the NLRA if the PRO Act Passes the Senate

Labor & Employment Workforce Watch
May 2021

The Protecting the Right to Organize Act of 2021 (H.R.842/S.420), otherwise known as the PRO Act, passed the House of Representatives on March 9, 2021 by a vote of 225-206. The fate of the Act is now left to the Senate, with little likelihood of gaining enough votes to overcome the filibuster and land on President Joe Biden’s desk. That being said, President Biden has already expressed his support for the PRO Act and his promise to be “the most pro-union president.”

If passed, the PRO Act would significantly reshape the landscape of labor-management relations by materially revising the National Labor Relations Act, including by:

  • Expanding the definition of “employer” to cover more situations, including imposing joint employer liability on a business who has indirect or reserved control of another company’s employees.
  • Expanding the definition of “employee,” which would have a major impact on gig economy workers currently classified as independent contractors. The PRO Act would effectively adopt California Supreme Court’s “ABC” test. Read more about the ABC test in Locke Lord’s Quickstudy, AB5: A Major Shift in CA Worker Classification.
  • Permitting union security (mandatory membership) provisions in collective bargaining agreements regardless of states’ right to work laws.
  • Reducing employers’ and workers’ rights to secret ballot elections.
  • Prohibiting the permanent replacement of workers who participate in economic strikes.
  • Prohibiting employers from holding captive audience meetings during a union election campaign.
  • Requiring arbitration of an initial collective bargaining agreement if the parties are unable to reach an agreement within 120 days. The arbitration panel’s decision would be binding for two years unless the parties agreed to amend it in writing.
  • Compelling mediation if collective bargaining over subsequent agreements has lasted 90 days without an agreement.
  • Prohibiting class action waivers in arbitration agreements.
  • Permitting employees to use employer electronic communication devices and systems for all protected union activities.
  • Imposing civil penalties on employers for unfair labor practices—up to $50,000 per violation and up to $100,000 for unlawful discharge or “other serious economic harm to an employee” if the employer has committed a similar violation within the preceding five years. Corporate directors and other officers of the company could be individually liable for unfair labor practices.
  • Creating a private cause of action for unfair labor practices in federal district courts.

The fate of the PRO Act is still uncertain, as we wait to see if Senate Democrats gain enough votes or eliminate the filibuster to move the Act forward. If the PRO Act does become a law, employers will certainly see an increase in union organizing activity.

If the PRO Act fails in the Senate, President Biden still will be able to affect national labor policy though the National Labor Relations Board. In August of 2021, William Emanuel’s (Republican) term on the National Labor Relations Board will end and President Biden will have the opportunity to appoint a Democrat to the Board, giving Democrats a 3-2 majority. Once the Board has a Democrat majority, employers will likely see an explosion of employee and union friendly decisions.