Labor Relations Insight by Phil Wilson

The PRO Act Pivot

The biggest union election in decades ended in a lopsided loss for the Retail Wholesale and Department Store Workers Union (RWDSU) in Bessemer Alabama earlier this month. Predictably, the entire labor movement is crying foul. The union just filed election objections, meaning that the election will be tied up in litigation for months or years. This is a brazen attempt by the union to disenfranchise the nearly 2,000 workers who told the RWDSU to get lost.

There have already been too many pixels spilled on this election and I’m not going to add to them here. But let’s be clear – the Bessemer election was never about representing the workers. It was always about justifying the PRO Act.

As soon as the results became clear, unions, academics, and politicians began trotting out all the greatest hits about how this election proves that labor law must be rewritten to help bail out Big Labor. Of course, they don’t say it that way. They claim the current rules allow horrible actions by evil companies who force their employees to work in 21st century sweatshops. These arguments are tired, condescending, and contradictory (if the rules are so stacked against unions why do they win 70% of elections?), but they are raining down now. They won’t stop until unions get what they want: the PRO Act.

The PRO Act is coming, one way or the other. If the employer community gets engaged, it may not pass this year or in its current form. It may not ultimately end up on Biden’s desk as legislation. But make no mistake: the key provisions of the PRO Act are coming, some of them very soon.

Here’s what a lot of people miss about the PRO Act. Most of its provisions do not require a legislative fix. Legislation is the preferred method, since it is virtually impossible to get rid of a law once it’s passed. But many of the provisions in the PRO Act can (and will) occur through rulemaking, case law, and operational changes at the agency level. Employers who aren’t pivoting to prepare for a PRO Act world are already way behind.

The PRO Act Pivot is what every company should do right now. That means proactively looking at everything you do with an eye toward the most likely changes coming in the next two years (with or without a legislative fix).

I’ll give one example of dozens. It is a certainty that the Department of Labor will reintroduce the persuader rule, and I predict that happens very soon. Ironically the provisions of the Labor Management Reporting and Disclosure Act related to employer reporting were originally created to combat union corruption and collusion between unscrupulous unions and companies. But over the years the rule morphed into a way to discourage companies from relying on attorneys and consultants during organizing campaigns. It also gives unions a way to smear a company for the “crime” of getting advice about communicating legally about unions.

While the persuader rule is part of the PRO Act, Secretary Walsh isn’t waiting around for a legislative fix. I’d also anticipate changes in interpretive guidance around management reporting. A new persuader rule will face legal challenges just like the last one (that one even earned a nationwide injunction before it was pulled by the Trump administration). Hopefully those challenges will be successful. But putting all your eggs in that basket is like loading up on the latest hot stock tip on Reddit: potentially rewarding, but very risky (#stonks).

There are many other changes likely over the next two years, including:

• Restrictions on mandatory meetings and employer communications;
• Making it much harder for employers to demand elections, essentially back-dooring card-check;
• Return to micro-units and even members-only units;
• Increased and creative penalties for ULP violations, essentially turning remedial “make whole” relief into punitive penalties; and
• Joint employer and independent contractor rules, and much more.

How should you pivot? Using the example of the persuader rule, here’s the approach I recommend. You’ll embark on two parallel tracks. First, what can you do now, before the rules change? Second, what will your approach look like in the future state?

On the persuader rule what you can do now is to make sure all of your campaign communications and tools are produced, reviewed and in place now. Remember the last version of the persuader rule originally required reporting all kinds of positive employee relations practices like employee surveys and vulnerability assessments. A smart company, especially one sensitive to reporting, should do a thorough review of their entire positive employee relations program now to identify gaps and fill those before the persuader rule is finalized.

The second track is equally important. What should your process and tools look like in a world where payments for these activities are now reported? For some companies, that will mean clearly communicating about the value of these activities. The idea that a company should be embarrassed for spending resources on following the law or creating a great workplace has never really made sense to me. But the claim will be made that this spending is bad for workers. You should be prepared to defend these expenditures in the face of negative PR.

Some companies may choose to invest in more heavily proactive ways, far Left of Boom, like on leadership training. These activities reduce labor risk but probably won’t trigger a reporting requirement. Others might choose to bring resources in-house. Whatever the right approach for your company, it is critical to figure that out now and to quickly head that direction. Bottom line: it’s time to pivot.