What Business Owners Need to Know About the Proposed PRO Act

Labor law

In March 2021, the U.S. House of Representatives passed the Protecting the Right to Organize Act, also known as the PRO Act. The new legislation would provide additional protection for workers trying to organize. However, the bill is unlikely to find support in the Senate.

When the bill was introduced last year, it passed the Democratic-controlled House, but was never taken up in the Senate. Today, Democrats have a razor-thin majority in the Senate but not enough votes to overcome a filibuster.

President Biden, who pledged to be “the strongest labor president you have ever had” would sign the bill, which was a cornerstone of his election platform.

If passed, the PRO Act will result in some of the most significant changes to labor law in decades.

Union Leaders Support the PRO Act

Union leaders say the PRO Act would level a playing field that they claim is unfairly tilted in favor of big business and management and would make union organizing efforts and elections easier.

Big business groups like the U.S. Chamber of Commerce are against the measure, saying it would “undermine worker rights, ensnare employers in unrelated labor disputes, disrupt the economy, and force individual Americans to pay union dues regardless of their wishes." The National Retail Federation has called it "the worst bill in Congress."

The Most Significant Changes to Labor Law in Decades

The PRO Act would result in the most significant changes to labor Law in decades. If passed, the Act would:

  1. Allow unions to override right-to-work laws that permit workers to opt out of the union and avoid paying union dues. If the PRO Act passes, unions would be allowed to collect union dues from workers who opt out of the union. Union leaders claim collecting these dues from non-union workers is necessary to cover the cost of collective bargaining and contract administration.
  2. Forbid employer influence in union elections. Company-sponsored meetings are often used to lobby against a union organizing drive. Under the PRO Act, these meetings would be illegal.
  3. Allow newly certified unions to seek arbitration and mediation to settle impasses in negotiations. This would reduce the number of union organizing drives that fail because of an inability to reach an agreement on a first contract between labor and management.
  4. Prevent an employer from using an employee’s immigration status against them when determining the terms of employment.
  5. Establish monetary penalties for companies and executives that violate workers’ rights. 
  6. Codify the “ABC Test” for determining whether a worker is an independent contractor. With more workers taking part in the gig economy as independent contractors, the PRO Act would reclassify these workers as employees who are subject to union representation under the National Labor Relations Act (“NLRA”). The PRO Act would incorporate the “ABC test,” which states that a worker is an employee 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.” 
  7. Redefine “supervisor” to include more frontline workers as employees covered by the NLRA. The Act would limit the definition of a “supervisor” to someone who performs supervisory duties “for the majority of the individual’s work time.” 
  8. Prohibit the use of mandatory arbitration agreements with employees. Class action waivers generally preclude workers from filing employment claims on behalf of a proposed class of other employees. The PRO Act would make it illegal for an employer to enter into an agreement that requires an employee to promise not to pursue a joint, class, or collective claim arising from their employment. As a result, employers would need to revise employee handbooks, restructure employment agreements, and defend against litigation from broad classes of employees. 

The Future of PRO Act

If passed, the PRO Act would make vast, union-friendly changes to the NLRA. Even if the Act itself is not signed into law, parts of the bill may still pass the Senate and be signed into law by President Biden.

Republicans argue that the Act would take away the freedoms of entrepreneurs and individual workers, many of whom are taking advantage of the ability to work as independent contracts, especially during the COVID-19 pandemic.

They claim that the Act would take millions of dollars away from workers’ paychecks, cost employers an estimated $47 billion in new annual costs, infringe on workers’ First Amendment rights, and put small businesses at risk. 

The prospects of passing the PRO Act are still unclear. The Act has passed the House, but is unclear whether it has support from all 50 Senate Democrats. Even if the PRO Act does not pass in its entirety, portions of the Act may be introduced as add-on legislation to other bills or through executive action. 

Fremstad Law. Moving You Forward.

Our mission is to move our clients forward. If you have questions about how the PRO Act might l affect your business, or other labor or employment questions,  the business lawyers at Fremstad Law are here to help.

Learn more about our people and our services, and contact us today to schedule a confidential meeting to discuss how we can help.