The House recently passed the Protect the Right to Organize Act, or PRO Act, which has been championed as both a bill aimed to protect workers’ rights and curb businesses’ ability to interfere with union activities. Despite its rosy gloss, there are far more negative consequences to this expansive legislation than those championing the bill would readily admit.
The U.S. Chamber of Commerce has said the act would “undermine worker rights, ensnare employers in unrelated labor disputes, disrupt the economy, and force individual Americans to pay union dues regardless of their wishes.”
While all five of Arizona’s House delegation signed on to the bill as part of the vote that pushed it through that chamber, the bill is a disaster for Arizonans. While there is likely not enough backing to pass the Act through the Senate, it’s important to note the effects legislation like this would have on Arizona.
Many states around the country, including Arizona, have long enjoyed the benefits of being a “right-to-work” state. This means that employees in those states are free to choose whether they would like to pay union dues, and the payment of dues cannot be a stipulation of the person’s employment status.
There are currently 27 states that operate as right-to-work states. The PRO Act would amend the National Labor Relations Act to invalidate current state right-to-work laws.
The PRO Act passed the House last month with a 225-206 vote, with five Republicans joining all Democrats in voting in favor of the bill. Under this bill, unionized workplaces could potentially require payment of union dues to meet “union security clauses,” which enforce the payment of union dues for services such as bargaining contracts, even if the employee opts out of union membership. Employees who fail to pay these dues are subject to termination under the aforementioned clause.
As a right to work state, there is a lot at stake for Arizona. There is bountiful potential for the economic success that the state has had to be diminished or even reversed, and not just for big business.
According to Jeffrey Eisenach of NERA Economic Consulting, the economic benefits experienced by the 27 right-to-work (RTW) states include:
- Between 2001 and 2016 private sector employment growth of 27 percent, which was 12 percent higher than non-RTW;
- An annual unemployment rate that was 0.4 percentage points lower than non-RTW states. In terms of jobs, if non-RTW states had the same employment rate, 249,000 more people would be employed;
- Output in RTW states grew 38 percent from 2001 to 2016, whereas non-RTW reached 29 percent growth output;
- Another staple of economic productivity, real manufacturing output rose by over 30 percent in RTW states from 2001 to 2016, compared with 21 percent in non-RTW states.
Proponents of the PRO Act paint right-to-work laws as anti-worker, but states with RTW provisions seem to perform far better and deliver far more to workers.
War on independent contractors
Another significant change proposed by the PRO Act is the tightening of requirements surrounding who is an who isn’t an “independent contractor.” The “ABC” test under the PRO Act would reclassify millions of traditional independent contractors as “employees,” which would then make them subject to union dues and representation: “(A) the individual is free from control and direction in connection with the performance of the service, both under the contract for the performance of service and in fact; (B) the service is performed outside the usual course of the business of the employer; and (C) the individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.”
Under this provision the federal government aims to end the debate happening within states over the classification of independent contractors vs employees.
On the state level, this has been tried and received backlash. California, a Democratic stronghold, passed AB5 in 2019, which made it virtually impossible for workers to be deemed independent contractors. Just one year later, after backlash from many businesses and workers, voters there passed Proposition 22, rendering AB5 null. The people were fed up with a bill that limited the ability of workers to participate in the gig economy, even in one of the nation’s most liberal states.
Striking makes a comeback
If the PRO Act were to pass through the Senate, an additional change to the current law would be the allowance of secondary strikes and boycotts. Under Section 8(b)(4) of the National Labor Relations Act, secondary strikes and boycotts were prohibited as they were seen to be non-essential to a worker’s right to strike and would interfere with certain aspects of the economy.
This type of conduct is aimed at a secondary employer, such as a supplier to a company. The purpose of these strikes is to use the secondary employer to put pressure on the primary employer, or the employer with whom there is a direct labor dispute.
Hurting small business
Another provision of the act is to “more closely align” decisions and liability of franchise owners’ corporate counterparts. Businesses would suffer additional stress at the expense of corporate decisions by being forced to be held accountable for the actions of corporations. The Act would re-classify a variety of small businesses that franchise or contract with larger companies as “joint-employers” (which was recently redefined by the National Labor Relations Board). The definition was expanded to include indirect, direct, and potential unexercised control over employees in a joint employer determination. The decision made by the NLRB was met with dismay from many states that have passed retaliatory bills, including Michiga, Louisiana, Tennessee and Texas.
Under the previous law, franchisors and franchisees were separate businesses and only joint employers when they shared direct control over the terms and conditions of employment. Under the PRO Act, small businesses who work under franchisors could be held liable for the actions of their franchisors as well.
For violations of the NLRA, under the proposed legislation, businesses would be subject to heavy civil penalties ranging from $500 to $100,000. Both companies and individuals at the company are subject to these fines, but no penalties are proposed for unions that violate the law.
Another stark change in law is that after the passage employers would be forced to disclose if they receive legal advice from attorneys regarding labor disputes which renders the current practice of attorney-client privilege null. Additionally, any attorney would be required to disclose whether they were paid for the consultation they gave on union issues. This is known as the “persuader rule,” which was implemented during the Obama administration, but eventually was blocked by a federal district court in 2016.
Other changes to the NLRA
The PRO Act aims to make more than 50 significant changes to current employment law and overhaul the NLRA, which hasn’t been done in more than 70 years. Included in these changes are efforts to:
- Limit the ability of employers to contest union election petitions and allow unions to engage in coercive tactics which were previously deemed to be unlawful
- Restrict the ability of employers to obtain labor relations advice
- Facilitate union organizing in micro-units
- Redefine the definition of “supervisor” to include more frontline leaders as “employees” covered by the NLRA
- Give employees the right to utilize employer electronic systems to organize and engage in protected concerted activity
- Prohibit employers from using mandatory arbitration agreements with employees
- Force parties into collective bargaining agreements via interest arbitration
- Expand penalties for violations of the NLRA
As ruinous as this would be for the businesses and corporations, another issue is at stake: workers’ rights.
On top of potentially being forced to join a union in order to keep their jobs, there are other provisions that hinder workers’ rights as they currently exist. Under the act, the ability of union employees to utilize a secret ballot might be in jeopardy. Card check elections take place in the open, which would make workers vulnerable to intimidation as others would be able to see how members vote. Additionally, workers’ privacy would be at stake.
The act would allow for unions to have access to employees’ personal cell phone numbers, emails, and home addresses — and the employee could not prevent the company from releasing this information. Another troubling provision of the bill is the quick unionization elections that would be able to take place. For workers, this means they would not be able to receive the details of what unionization could potentially mean in regards to their workplace before voting. There are laws set in place currently that regulate the ways that unions currently are organized. Through the PRO Act, businesses would not have to be notified of attempts to organize until they are taking place, which leaves business with fewer than three weeks to respond.
For a bill that has been championed as a workers’ rights bill and a pro-labor package, there are plenty of reasons to believe that the PRO Act is anti-labor, anti-growth, and against the interests of the great majority of Americans.