By Sean Redmond
U.S. Chamber of Commerce
After launching his 2020 election campaign from a union hall, then-candidate and former vice president Joe Biden famously said he would “be the most pro-union president you’ve ever seen.” Several months into his administration, he repeated that assertion, stating, “You know, you’ve heard me say many times: I intend to be the most pro-union president leading the most pro-union administration in American history.” What that means for employers is a hodge-podge of potential policy shifts that could make the turbulent years of the Obama administration seem rather tame, and businesses in every industry should take heed.
At the core of Biden’s labor-related policies is the fundamental reality that union membership has been declining steadily since the mid-1950s when a little over a third of the workforce belonged to a union. Today, just over 10 percent do, more than half of which are in the public sector; only 6.1 percent of private sector workers are unionized. Factoring out the public sector unions, of which there were few, if any, back then, the decline amounts to about an 82 percent drop in private sector union membership.
That massive decline represents an existential threat to labor leaders and their political allies. Cue agencies like the National Labor Relations Board (NLRB), which is now governed by pro-union appointees of President Biden who are working to reshape labor and employment policies. The Biden administration also is expanding its pro-labor agenda through other agencies such as the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC).
A similar bias existed during the Obama administration, during which one law firm estimated that more than 4,500 cumulative years of legal precedent were overturned by an activist majority at the NLRB. That majority upended countless well-established policies by introducing new legal theories on topics ranging from what constitutes a joint employment relationship to what workplace policies employers may not maintain (for example, requiring civility toward customers and coworkers). For fans of the comic book Superman, Bizarro World comes to mind.
During the Trump administration, the Republican majority at the NLRB tried to restore some sense of balance by reversing many of the lopsided policies that were enacted during the prior eight years. However, on his first day in office, President Biden fired the NLRB’s general counsel, who serves not only as the agency’s attorney but also as the person who tees up cases through which the board establishes precedents via case law. That move effectively halted any further efforts to overturn Obama-era policies and, as of mid-2021, the NLRB had a new general counsel, Jennifer Abruzzo, who has made it clear she intends to swing the policy pendulum in favor of unions once again.
Reinterpreting Long-Held Standards
That pendulum swing is based on an expansive interpretation of the National Labor Relations Act (NLRA), the 1935 law that the NLRB enforces. Under that law, when workers decide on a union, they typically do so by secret ballot, where their privacy is respected, and no one knows how they vote. The general counsel, however, wants to mandate a “card check” process, under which union organizers may publicly solicit workers to sign a card indicating their choice for or against a union.
Collecting signature cards can subject workers to coercion or harassment to get them to sign up, and the NLRA historically does not require employers to recognize a union based on these cards. To get around the statute, however, the general counsel seeks to revive a long-discredited case known as Joy Silk Mills v. National Labor Relations Board. Under this Joy Silk doctrine, if an employer refused to recognize a union based solely on signature cards, the NLRB could seek an order forcing the business to the bargaining table without any secret ballot election. This would allow unions to organize workplaces more quickly and easily, but it would also short-circuit the protections of the NLRA for employees, not to mention employers.
Beyond the union recognition process, the general counsel also announced that she would ask the NLRB to find that meetings at which employers express their views on union organizing violate the NLRA. That view does not jibe with the text of the law, which Congress amended in 1947 to state explicitly that “the expressing of any views, argument, or opinion” by an employer about union issues does not constitute an unfair labor practice provided that it does not include threats of reprisal or promises of benefits. NLRB and court precedents in the 75 years since then have upheld such employer meetings, so it would be another radical departure should the current board majority adopt this interpretation of the law.
In addition to those issues, employers can expect an expansive emphasis on employees’ rights under Section 7 of the NLRA, which protects so-called concerted activity among employees. Under the Obama-era NLRB, a subjective interpretation of that section ensnared many an employer whose workplace policies (such as the aforementioned civility requirement) allegedly violated the NLRA, and the new general counsel seems poised to follow suit.
She also has teed up a case to overturn the board’s 2019 SuperShuttle decision that restored a rational test for determining whether an individual is an independent contractor rather than an employee. In late 2021, the General Counsel’s office brought a case called The Atlanta Opera, Inc. to the NLRB, and the board invited public comment “addressing whether the board should reconsider its standard for determining the independent contractor status of workers.” It’s likely a safe bet that the current majority will do so, and one might expect the board also to declare that alleged misclassification is an unfair labor practice in its own right.
Other changes will likely include an attempt to return to the expansive joint employer standard under the board’s 2015 Browning-Ferris decision, which would require a regulatory rulemaking. The decision held that employers engaged in numerous common business relationships – such as franchising and contracting – could potentially be liable for employees they did not actually employ and workplaces they did not actually control.
During the Trump administration, the board issued a final rule establishing a straightforward standard for joint employment that effectively reversed the Browning-Ferris decision. In June 2022, the current NRLB revealed through its semiannual regulatory agenda that it intended to address joint employer status under the NLRA via the rulemaking process.
Another potential effort could force employers to allow union organizers greater access to their workplaces and email systems. In 2014, the NLRB issued a decision in Purple Communications, Inc., in which the Democrat majority held that Section 7 of the NLRA protects employees’ use of email systems at work to communicate about organizing and related activity. In 2019, the Republican majority reversed Purple Communications, saying it “impermissibly discounted employers’ property rights in their IT resources while overstating the importance of those resources to Section 7 activity.” One can expect the current board to revisit that issue.
In addition to the NLRB, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) also have signaled their interest in scrutinizing training repayment policies that require employees to stay with the company for a certain period of time following training programs. In March 2022, the Treasury Department issued a report on “The State of Labor Market Competition” in which it asserted that such policies reduce employees’ bargaining and earning power. The head of the CFPB made similar comments at a conference not long thereafter.
Labor unions have asked the FTC to address the same issue, which it may do as part of an overall review of non-compete agreements. Last year, the FTC hosted a workshop titled “Making Competition Work: Promoting Competition in Labor Markets,” at which the agency “explore[d] recent developments at the intersection of antitrust and labor, as well as implications for efforts to protect and empower workers through competition enforcement and rulemaking.” More recently, the FTC signed a memorandum of understanding with the NLRB to address “key issues such as labor market concentration, one-sided contract terms, and labor developments in the ‘gig economy,’” such as the use of independent contractors.
Legislative Prospects
Lastly, looking to Congress, chief among organized labor’s goals in the new administration has been the passage of the so-called “Protecting the Right to Organize” (PRO) Act, which actually passed the House of Representatives in 2019 and again in 2021, when a new Congress convened. The PRO Act would codify a slew of lopsided policies designed to force more people into unions, including many if not all of the topics above. However, with the extremely narrow majority in the Senate, the PRO Act so far has not garnered enough support to pass, but there is no doubt that President Biden would sign the bill if it did.
That would completely reshape labor law in this country, and what happens with the upcoming mid-term elections will determine its prospects. Meanwhile, the Biden administration will work assiduously to deliver on the president’s pro-union promises through any other means it can.