September 9, 2021
4 Ways the PRO Act Would Impact the Construction Industry
The Protecting the Right to Organize Act (the “PRO Act”) is a proposed law that would dramatically rewrite the National Labor Relations Act (“NLRA”). Breathtakingly broad in scope, the PRO Act targets several longstanding features of existing law perceived by unions and labor activists to be unfair to labor and too favorable to employers. The proposed legislation is essentially a grab-bag of grievances that the labor movement has compiled over decades and sought to change through legislation and before the National Labor Relations Board (“NLRB”) without success in the past.
While the PRO Act would affect virtually all private sector employers, it would alter the labor dynamic in the construction industry in four major ways:
1. Removing the current prohibitions on secondary, jurisdictional, and other forms of picketing. Current law attempts to balance the rights of employers to operate their businesses without unnecessary interference with the rights of unions to protest concerning wages and working conditions. As part of this balancing act, the NLRA prohibits unions from picketing under certain conditions or with certain aims. These restrictions include the prohibition on “secondary” picketing by unions of neutral employers, which are employers with which the union does not have a direct labor dispute, and “jurisdictional” picketing by unions to force an employer to assign certain work to a specific trade or group of employees. The elimination of these restrictions in the PRO Act would have a significant impact on the construction industry.
a. The NLRA prohibits “secondary” picketing so that neutral employers are not ensnared in a labor dispute between a union and another “primary” employer. If it becomes law, the PRO Act will allow unions to freely picket neutral employers and pressure these employers with no connection with the union as part of the union’s campaign against its primary employer target. On construction sites, this will mean that the reserved gate system, which seeks to assign union-targeted employers to specific gates, will be worthless against mass union picketing. In practical terms, the passage of the PRO Act will almost certainly lead to shutdowns of many construction projects across the country, as union picketing of multiple employers will inevitably lead to employees across the job site honoring the picket line.
b. The NLRA also prohibits “jurisdictional” picketing to prevent needless labor disputes between different trade or craft unions over certain work from interfering with employer operations. In a jurisdictional dispute, one union – often a union that does not represent any employees employed on the project – claims that certain work “belongs” to it, rather than the union representing the employees already assigned to perform that work. Currently, a trade union cannot picket a job site to try to force the employer to assign work to its members instead of the other employees. The PRO Act would eliminate this restriction on picketing, which would likely contribute to a massive uptick in picketing activity and construction slowdowns over what is essentially an intra-union struggle over work.
2. Allowing intermittent strikes and work slowdowns. In addition to allowing secondary and jurisdictional picketing, the PRO Act will end the current NLRA prohibition on certain strikes that significantly impact employer operations, while, at the same time, providing little risk to unions and their members. Currently, a union cannot lawfully call for a strike over some issue one day, return to work, then resume the strike over that same issue again weeks later. In addition, a union cannot simply call for members to slowdown production or fail to perform certain tasks. Instead, unions and employees must strike for set periods of time or for an unlimited duration, risking loss of pay for those potentially extended periods of time while they are on strike. The PRO Act would allow for unions to engage in intermittent strikes and slowdowns to pressure employers (primary or secondary employers) into acceding to the union’s demands. On construction sites, this change in the law would allow for unions to take “hit-and-run” actions against employers, which would potentially cause delays for multiple contractors and raise the chance of missing important project deadlines.
3. Modifying the joint employer standard to broaden the scope of potential joint employers. As the law currently stands, an employer can be deemed to be the employer of employees of another business (a “joint employer”) if it exercises “substantial direct and immediate control” over other employees. The PRO Act would change this standard to include indirect sharing of control over employees of another business. This standard, which had for a short period of time in the 2010’s constituted the standard per the NLRB, could potentially spread liability for employment disputes and labor issues across multiple construction employers on a single job site. If enacted, the PRO Act will limit the ability of employers in the construction industry to deal with employees of other contractors on a job site. It could even potentially inhibit construction contractors’ ability to impose commonsense requirements including safety standards and employment compliance for subcontractors, given that indirect control over employment terms could lead to a finding of joint employer status.
4. Imposing new monetary damages, civil penalties of up to $100,000, and personal liability for NLRA violations. The NLRB’s current set of available remedies includes the authority to order reinstatement and back pay to employees, as well as other notice-posting and cease-and-desist orders for employers who violate the NLRA. The PRO Act would dramatically expand the universe of possible remedies to include liquidated damages in the amount of double back pay, attorneys fees to lawyers for aggrieved employees, and other types of damages that are more commonly found in the employment discrimination arena. In addition to damages that would be potentially recoverable by employees, the PRO Act would allow the NLRB to impose civil penalties, ranging from up to $50,000 for initial violations to up to $100,000 for repeat offenders. On top of the additional forms of damages and penalties, the PRO Act would extend liability to directors and officers of the employer found to violate the NLRA. As many construction contractors who have been entangled in labor disputes know, NLRA violations can sometimes be very technical in nature, sometimes depending on the specific language used in an employee handbook or the way bargaining for a contract was handled in negotiations. These technical violations may potentially turn into a personal liability for employer executives if the PRO Act becomes law.
The PRO Act has passed the House of Representatives, but currently faces resistance in the Senate, which requires 60 votes to pass such legislation. Since the PRO Act is unlikely to draw any significant Republican support, the real question is whether the Senate will seek to modify or eliminate the filibuster or tack it onto legislation that can pass on a simple majority vote. Regardless, prudent employers will begin planning for its potential passage now because some of its provisions may also be implemented by the NLRB in the near future.
Fox Rothschild LLP is home to one of the deepest Construction Practice Groups in the United States. With offices in major construction hubs nationwide, Fox’s experienced team advises on major construction and infrastructure projects, including drafting and negotiating contracts and litigating disputes involving such projects. Harnessing the combined strength of a nationally recognized construction practice and a deep bench of lawyers focused on Federal Government Contracts, we provide business-friendly advice to help our clients complete projects in the United States and internationally. Fox construction law practice is backed by a national firm of 950 attorneys providing a comprehensive suite of legal services from 27 offices coast to coast. For more information, visit foxrothschild.com/construction.
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