PRO Act would make ‘ABC test’ the law of the land

On Fe. 6, the House of Representatives passed the Protecting the Right to Organize Act, or PRO Act, a major overhaul of the National Labor Relations Act that could rewrite decades-old labor laws by giving workers more power during disputes at work, adding penalties for retaliation against workers who organize, and extending collective-bargaining rights to hundreds of thousands of workers who currently cannot organize. H.R. 2474 passed mostly along party lines and is unlikely to be taken up by the GOP-controlled Senate.

Reaction was swift and predictable. The U.S. Chamber of Commerce warned that the bill “would destabilize America’s workplaces and impose a long list of dangerous changes to labor law,” calling the bill “a litany of almost every failed idea from the past 30 years of labor policy.” An opinion piece by more progressive minds called the PRO Act “a victory for workers and our democracy.” Citing studies showing that unions contribute to more productive businesses and tend to reduce inequality, the authors hailed the bill as a way to “clean up our government and make it more responsive to all Americans.”

Yes, the PRO Act would broaden protections for unions and their organizers, but its biggest impact could be the unprecedented extension of benefits such as higher base wages and vacation pay to classes of workers never before eligible for union membership. If enacted, HR 2474 would make the “ABC test” the new classification law for workers across the country.

In language that mirrors California’s AB 5, the PRO Act would amend the NLRA to include the following:

(a) Definitions. —

(2) EMPLOYEE. — Section 2(3) of the National Labor Relations Act (29 U.S.C. Section 152(3)) is amended by adding at the end the following: “An individual performing any service shall be considered an employee (except as provided in the previous sentence) and not an independent contractor, unless —

(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.

It’s Assembly Bill 5 on a nationwide basis: no ambiguity, no barriers between jurisdictions like California who have adopted the ABC test as the standard and the NLRA. If the law were enacted, gig workers across the country would, for the first time, be able to organize. Uber and DoorDash drivers in California, currently waiting for AB 5 to be sorted out, could move forward with plans to unionize. Independent contractors in other states that have adopted ABC would have the green light to pursue union activities. The burden would be on employers to satisfy all three ABC factors as applied to their workforces — a difficult, if not impossible, feat for the majority of these companies. The NLRA’s new standard would govern employment classification for all purposes involving organized labor.

The PRO Act would further protect workers’ rights by making it illegal for employers to mislead them about their employment status:

(d) Unfair Labor Practices. — Section 8 of the National Labor Relations Act (29 U.S.C. Section 158) is amended —

(1) in subsection (a) —

(B) by adding at the end the following:

(7) to communicate or misrepresent to an employee under section 2(3) that such employee is excluded from the definition of employee under section 2(3).

Labor unions are federal creatures, governed by the NLRA. A federal statute that casts a wide net around the definition of employee would set Uber and others up for a fight on the labor front if they were to retaliate against workers who asserted rights under the NLRA. Denial of union petitions and other anti-union actions would go straight to the Supreme Court.

The PRO Act would also upend the status quo by doing an end-run around the almost universal requirement that workers submit individual complaints to arbitration, a requirement that is now subjecting companies such as DoorDash to the prospect of paying millions of dollars for thousands of individual proceedings. Companies would be barred from forcing workers to agree to arbitrate NLRA-related grievances:

(e) Notwithstanding chapter 1 of title 9, United States Code (commonly known as the ‘Federal Arbitration Act’), or any other provision of law, it shall be an unfair labor practice under subsection (a)(1) for any employer —

(1) to enter into or attempt to enforce any agreement, express or implied, whereby prior to a dispute to which the agreement applies, an employee undertakes or promises not to pursue, bring, join, litigate, or support any kind of joint, class, or collective claim arising from or relating to the employment of such employee in any forum that, but for such agreement, is of competent jurisdiction;

(2) to coerce an employee into undertaking or promising not to pursue, bring, join, litigate, or support any kind of joint, class, or collective claim arising from or relating to the employment of such employee; or

(3) to retaliate or threaten to retaliate against an employee for refusing to undertake or promise not to pursue, bring, join, litigate, or support any kind of joint, class, or collective claim arising from or relating to the employment of such employee: Provided, That any agreement that violates this subsection or results from a violation of this subsection shall be to such extent unenforceable and void: Provided further, That this subsection shall not apply to any agreement embodied in or expressly permitted by a contract between an employer and a labor organization.

Although there’s slim chance the PRO Act will gain traction in the Senate, the House vote is meaningful. The momentum of AB 5 and similar measures in states across the country is undeniable and may be a harbinger of a larger worker protection trend. In October, the Supreme Court refused to hear Amazon’s appeal of a state court ruling that it was liable for off-the-clock waiting-time wages. In an election year, in a highly charged political climate, the fallout of anti-union, anti-worker positions could be significant. 