Labor overhaul may not pass Congress, but could make policy

When the House of Representatives considers the Protecting the Right to Organize Act next week, lawmakers will be facing different circumstances than when they approved an earlier version of the bill in 2020. If the general sentiment last year was that the sweeping bill to change labor law was doomed -- one the Republican-controlled Senate quickly confirmed when it declined to take the bill up -- the election of an explicitly pro-union presidential administration, and a new Democrat majority in the Senate, have done much to shift predictions about the bill's prospects.

Opinions are now divided on whether the bill, which substantially amends the National Labor Relations Act to make it easier for workers to unionize and is widely known as the PRO Act, will see the approval of Congress in 2021. But if many still have doubts that the bill will become law, especially in its current, ambitious form, there is less doubt that at least some of the bill's provisions will coalesce into policy with President Joseph Biden's administration -- whether that comes in the form of piecemeal legislation or through rule making by federal labor agencies.

Attorneys say these provisions could bring some of the biggest changes to the nation's labor landscape in decades. And the effect, they say, could be nothing short of revolutionary.

Here are some of the changes the act could bring in its current form: Establish the "ABC" test as the standard for determining whether a worker is an employee or an independent contractor, for the purpose of assessing their rights under the National Labor Relations Act; extend collective bargaining rights to some workers who are currently classified as supervisors; reintroduce the expedited union election procedures that existed in President Barack Obama's administration; allow workers to boycott and hold strikes against third party employers and contractors; ban employers from permanently replacing employees who go on strike; give employees a private right of action to sue their employers in court, in addition to their current right to file charges with the National Labor Relations Board.

To understand why policymakers and labor advocates are pushing for such sweeping changes, it is necessary to look at how labor is currently faring. For attorneys representing both employers and labor, this is perhaps best indicated by the nation's union membership rate, which continues at historic lows. Only 10.8% of the U.S. workforce was unionized in 2020, according to a January report from the U.S. Department of Labor's Bureau of Labor Statistics, compared to nearly a fifth of workers belonging to unions in the early 1980s, when comparable data first became available.

Referencing these numbers, Ron Holland, a partner at McDermott Will & Emery LLP who represents employers, said in an interview the act "is clearly driven to boost union representation and union membership." Provisions of the bill that Holland said best reflect this goal include the reintroduction of the Obama-era "quickie" election procedures, and the launch of the "ABC" test that California already uses to classify its workers. While the "ABC" test makes it harder to classify workers as independent contractors, who generally do not have collective bargaining rights, "quickie" elections give employers "less time to educate employees, and therefore unions have the upper hand," he said.

For Rey Fuentes, a Skadden Fellow at the Partnership for Working Families who has worked with gig driver advocacy group Gig Workers Rising, another clear reason the sweeping reforms of the act have gained traction is because more Americans are warming to the idea of union representation. Young workers in particular are recognizing "the raw deal workers are getting from companies," Fuentes said. Citing a 2016 Economic Policy Institute report, Fuentes said there is evidence union memberships can help close racial wage gaps.

"The entire legislation is premised on this idea that unionization is growing in popularity ... and an important tool to address income inequality in this country," Fuentes said. "That's what animates so much of the PRO Act. There's so much in the details you could on and on about, but ... almost everything the PRO Act is attempting to do is streamline the process of unionization."

Where Holland believes the act unfairly disadvantages employers, Fuentes frames it as a correction to a host of existing policies that have "gummed up the system of unionization" and make it hard for workers to organize. The "ABC" test, along with a provision that makes it harder to classify workers as supervisors -- who generally do not have collective bargaining rights -- rightfully expands the proportion of the workforce that can organize, Fuentes said. Meanwhile, the bill's election procedures could help workers avoid a drawn-out process where "even after an election is done -- and that can be years -- the employer can continue to avoid bargaining ... in good faith by objecting to how the election was performed," he said. "That's a huge benefit of the PRO Act, is it would attempt to re-level the playing field."

But Chris Foster, a partner at McDermott, suggested the bill overreaches and stands to impact not only the relationship between employers and labor, but also between employers and their business partners. The bill would legalize secondary strikes or boycotts against an employer's vendors, suppliers, and neighboring businesses -- something that has long been banned by the National Labor Relations Act.

"A lot of the PRO Act is going to have an impact on nonunionized companies that just happen to be a supplier to another company that has a union dispute," Foster said. Companies that don't have a unionized workforce, but work in partnership with companies that do, would have to keep tabs on the labor status of their workers -- something that is currently not necessary, Foster said. "It certainly increases the complexity and the cost when you're an employer. When you have a potential dispute with a union, now if there's a strike ... you have the possibility of your business partners completely cutting you off."

"It makes it much more high stakes, and you're at a disadvantage in a lot of ways," Foster added. "It changes your risk calculus."

While Foster and Holland said they don't believe the act -- or even an amended form of it -- will be passed by Congress, they believe many of its provisions will turn into policy. "We're going to see bits and pieces of the PRO Act either introduced as separate bills, or we're going to see ... the Department of Labor and the National Labor Relations Board and [its] general counsel proceed with implementing certain aspects of the PRO Act," Holland said. "And then we'll see those challenges in federal court -- both preemption and constitutional challenges -- occurring."

Foster agreed. "If you turned to any ... discrete aspect of this legislation, any part by itself would be one of the most revolutionary changes in labor law in decades and decades," he said. "I think that the Democrats who introduced this legislation would be quite pleased with any aspect of this."