The Potential for the Passage of the PRO Act in 2021 and Related Issues

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This teleforum will discuss in detail the various provisions contained in the Protecting the Right to Organize (PRO) Act The Act, which increases worker rights, passed the House in last Congress and is expected to be reconsidered in the new Congress. This teleforum will discuss the Act and potential strategies to be utilized by the Biden administration to obtain passage of the PRO Act.

Featuring:

Maury Baskin, Shareholder and Co-Chair, Workplace Policy Institute, Littler Mendelson P.C.

Moderator: Dean Reuter, General Counsel, Vice President & Director of the Practice Groups, Federalist Society for Law and Public Policy

 

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Event Transcript

[Music]

 

Dean Reuter:  Welcome to Teleforum, a podcast of The Federalist Society's Practice Groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of practice group teleforum calls, become a Federalist Society member today at www.fedsoc.org.

 

 

Dean Reuter:  Welcome to The Federalist Society’s teleforum conference call as today, February 3, 2021, we discuss “The Potential for the Passage of the PRO Act in 2021 and Related Issues.” I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. As always, please note that all expressions of opinion are those of the expert on today’s call. Also, this call is being recorded for use as a podcast and will likely be transcribed.

 

      We’re very pleased to welcome Maury Baskin as a return guest to Teleforum. Maury Baskin is a shareholder with the Littler Mendelson law firm based in Washington, D.C., where he serves as co-chair of Littler’s government relations arm, the Workplace Policy Institute. He’s represented many businesses and trade associations in challenging excessive workplace regulations affecting all aspects of labor and employment law and policy, and I do mean all aspects.

 

      He’s been with us for quite some time. He’s been on Teleforum before. Maury, welcome back. The floor is yours. If you can give us a little background information, please?

 

Maury Baskin:  Thanks, Dean, and welcome, everyone. We are going to be talking primarily about the PRO Act today, but it also says in the title, “related issues.” And I think it’s important to set the landscape for you to discuss what’s already happened with the new Biden administration, what’s happened so far, what we expect to happen on labor policy generally, and then the PRO Act is the big gamechanger if it succeeds in passage. And we’ll talk about what’s in it, and what are the prospects?

 

      First, let’s just set the scene a little bit because we want to talk about the new president, his approach to labor relations, where the unions stand today, a little bit about what it could mean for the National Labor Relations Board and U.S. Department of Labor. Of course, that could take a couple hours right there, so you’re going to get the short version so that we can get to the PRO Act.

 

      Ironically, we’re in a situation right now, given all the concerns about big changes that are coming that are all going to be pro-union. We are at a stage in labor history where the union organizing efforts, measured by petitions and elections at the National Labor Relations Board, have fallen to their lowest levels since World War II. Union membership as a percentage of the private sector workplace is also extremely low now at six or seven percent. That’s just the private sector, of course.

 

      And even though the number of petitions through the labor board are at their lowest level, a number of unions have gone back to the streets in using top-down pressures that they’re still a force to be reckoned with, no question about that, and now with the results of the elections, a greater force than ever because of their close connections to the Democratic party as well as in urban areas around the country. It’s a little deceptive to say that the average is low because in certain parts of the country and in certain industries, people on the management side have been feeling significant pressure.

 

      But it can’t be denied that the numbers have been dropping. In fact, the election petitions even dropped after the quickie election rules that many of you know about were issued in the Obama administration by the National Labor Relations Board. And the feeling then was that, boy, once they get these rules, they’re going to really make a comeback. How can they lose elections going forward?

 

      And indeed, their percentage of victories has gone up slightly. It’s hovering around 70 percent now, but the number of petitions has dropped precipitously, and the number of actual cases going to an election has dropped. Some have said it’s because they had been literally afraid to approach the National Labor Relations Board, which the labor movement has viewed as just too pro-management during the Trump administration. But in reality, the number of elections and petitions dropped all through the previous decade and the decade before that. In fact, it has steadily dropped since the Taft-Hartley Act was passed. And that was 1947, so that’s a long time of dropping.

 

      And that’s an important law to keep in mind because as we get to the PRO Act, what the PRO Act is really about is fundamentally undoing pretty much everything the Taft-Hartley Act did, 75 years later. So that’s just something -- an important milestone in labor history and what has happened since. And when you see what’s happened since, you can understand why the labor movement is trying desperately to change the trajectory, finding that mere regulatory change was not enough, therefore the need to make sweeping legislative change.

 

      Now, they do have an ally in the president, who in a speech said to the AFL-CIO that he was going to be the strongest labor president you have ever had. He endorsed the PRO Act in the form that passed the House of Representatives. And it’s all described on his website, joebiden.com. It’s still up there, and one can see that he’s not at all apologetic about it. He’s always been a strong supporter of the labor movement. And one of his campaign promises was to convene a task force in the White House to look for more ways to organize the entire workforce.

 

      So that is the objective now, but campaign promise is one thing. What’s he done for them lately? Well, let’s look at what’s happening in the first hundred days, which, of course, right now is just the first couple of weeks. But the president’s very first action, pretty much, I think the first on the labor front, happened at 12:30 while he was, I think, still giving his speech, was a note sent to the previously independent general counsel of the National Labor Relations Board, an independent agency, telling general counsel Peter Robb that if he did not immediately resign, he would be fired that day. He did not resign, and he was fired that day. So that was how things got started.

 

      And the significance of this is no president has fired a general counsel since that position was created, general counsel of the NLRB. That position was created after World War II, and the board itself was reshaped to be an independent agency with independent general counsel whose term was set as a four-year term. And it’s overlapped many other administrations. Not even President Trump had the nerve to fire the Democrat general counsel who was in place when he arrived, and President Obama initially had a Republican general counsel and did not take any action against him. So it’s not often there’s something that’s really happening for the first time in the history of the act, but we’ve seen it as pretty much the first act of the Biden administration.

 

      He’s also nominated Marty Walsh to be the Secretary of Labor, who some have said will be the most pro-labor Secretary of Labor in history. He is, of course, a former construction union business agent president as well as Boston mayor. I believe his confirmation hearing is tomorrow, so we’ll see what happens there.

 

      We've also seen some initial executive orders, though not many yet on the labor issues that people are most concerned about. Of course, the high priority being the COVID issue, and the president has issued and executive order calling for an emergency standard from OSHA or calling for them to come back and consider. And clearly, the preference is for them to come back and issue an emergency standard. And that’s expected any time, really, but no later than mid-March. Also, freezing late Trump regulations that were deemed too favorable to business, and it’s certainly expected that even those that have gone into effect are going to be rescinded, particularly at the Department of Labor.

 

      And also, rescinding almost immediately the deregulatory thrust of the Trump executive orders, regardless of whether they affect labor, though many of them do. So that’s a very significant event, particularly for an organization like The Federalist Society because Trump probably got not enough credit for the deregulatory thrust of his actions, and now the Biden administration has targeted those, even where they are simply saying that regulations should be cost justified or some eliminated for those that are added. There’s definitely a belief on their part that regulations are good, and so we’re going to see a lot more of them.

 

      And then, taking control of the National Labor Relations Board is not something that has happened yet, other than the general counsel, who, by the way, was replaced by Peter Orr, who is a former regional director in Chicago and has already taken pretty sweeping steps, even though he’s only the acting general counsel. He clearly feels that he’s entitled to act, and so he has rescinded, I believe it’s up to 12 different guidance memos and orders previously issued by his predecessor.

 

      And some question is still up in the air on the legality of Peter Robb’s dismissal. People who have cases pending, including our firm, are putting into the cases that actions of the acting general counsel are unlawful because of the unlawful nature of the termination of Peter Robb. So that’s going to be percolating for a while, as previous challenges to appointments of general counsels and acting general counsels have let to Supreme Court cases in the past. And Noel Canning is another example of dealing with the makeup of the board.

 

      But the board itself, unless the president takes totally radical action of going after any sitting board members, who are protected by just cause provisions in the statute, the majority takeover by the new administration of the board which they are going to be entitled to, ultimately, this should not take place until the fall. The first departure of one of the Republican board members is scheduled for August, and so it’s anticipated that the Biden administration will nominate replacements that will give them control as early as September, although sometimes these things are delayed.

 

      Of course, that is one of the most significant aspects of the runoff elections and giving control of the Senate to Democrats. There’s no more filibusters of appointments, and so it can be a speedier process if they put their minds to it. Some have wondered why there hasn’t been a nomination already for the vacancy on the board, and, well, we are wondering, but it’s only been two weeks, so I’m sure they will get to it shortly. When they do take control of the board in the fall, there is this grace period, but we do expect to see a significant swing. It’s kind of a pendulum situation at the board in recent years.

 

      So in the Obama administration, there was sort of a war on employee handbooks under the reasonableness test of the Lutheran Heritage Village case, which many thought was unworkable and kept resulting in more and more cases being filed against employers who really had not -- no one had even been disciplined under their policies. But if they were deemed to a reasonable employee—it turned out to be more like a reasonable union organizer, or an unreasonable one—was going to be -- felt that it infringed somehow on their rights of collection action, the Obama administration’s labor board took a very strong position on that.

 

      One of the major changes from the Trump administration with the Bowen case was to change the rules on that to make it clear that some handbook policies were just okay and we should stop litigating over them; others, there was a test that’s easier to work with. And as a result, there were a lot fewer of these handbook cases.

 

      Now, it looks like it’s probably going to come back, although you wonder. And I think an important consideration is as some point, the pendulum needs to stop swinging back and forth, though neither side ever seems to want to give in. It would be nice if they could come up with a middle ground on some of these policies for the business community to just know what the rules are and not have to keep changing each time there’s a change of administration.

 

      But with regard to the handbook issue, workplace investigations, employee access and union access to company email systems, the right to terminate abusive employees, changes to the definition of independent contractor, the joint employer standard, all of these are going to be fair game, no doubt, for changing views at the labor board, even though the business community will seek to find something that maybe is a little more reasonable than the way it was in the Obama administration.

 

      It’s not automatic that they would go back to those Obama decisions, though it’s certainly -- well, some would say likely on those issues and a number of others, but not immediately. So what we see is change is starting to happen. There’s a long way to go. The administration obviously has other issues on many other fields to deal with.

 

      I think I just want to mention one other issue before we turn to the statute itself, and that is what many perceive as a threat to the federal government contracting community because in the past, the Obama administration and others before it felt they could take action against or set standards and qualification standards for federal contractors, and thereby experiment on them and impose regulations that they could not do across the board because of the way the labor laws control and restrictions created by the labor policies.

 

      We saw that, of course, in the so-called blacklisting regulations of the Obama administration, which we were privileged to help stop through litigation, and with a Congressional Review Act resolution on top of it, a disapproval. And yet, we keep reading and hearing that they are planning to bring some form of that back, maybe with different window dressing, and yet, still some form of that, as well as some of the PRO Act type provisions we’re going to be talking about.

 

      No one knows for sure whether it’s just trial balloons being floated, but it seems like every day we read some new development. And that’s something that can happen by executive order and which certainly would not be surprising to see, but it also will be very quickly, I think, challenged in court. And I have some personal experience and knowledge of that.

 

      So it seems a shame because what they did last time was really outrageously unlawful, and it would be a shame for them to go down that road again and force the issue. But that is the kind of thing that could happen soonest because they don’t have to wait for any change in the makeup of any particular government agency to do these things. But they do have to go through some rulemaking in order to do it, but it’ll start with an executive order, which we frankly anticipate sooner rather than later.

 

      So that lays the groundwork for what we’re going to talk about for the rest of the program, but I’m happy to stop here in case there are any questions about some of the issues I mentioned or your favorite issue that I failed to mention before we turn to the program.

 

Dean Reuter:  Off to a great start. Thanks, Maury, for setting the table. I want to pivot to the PRO Act, as you mentioned, but if I could ask one question about your general comments first, Maury, and that’s with regard to the firing of the NLRB general counsel. I’m wondering what the reaction to that firing has been. Within our own ranks here, The Federalist Society, I hear a lot about the unitary executive, which sort of leans in the direction of unrestrained removal power of executive branch officials, probably even with regard to independent agencies. So there’s that side of the equation.

 

      But there’s also an announced intent on behalf of the administration to return to customs and norms. And you mentioned that no GC of the NLRB has been fired since the position’s been created because of some independence in the structure of the NLRB, and I guess the GC in particular. Can you say just a bit more about that structure? Is that a statutory thing, or how does that structure arrive, and then what the reaction in the legal community has been to the firing?

 

Maury Baskin:  Thanks, Dean. Yeah, that’s an excellent question, and it’s multilayered. In terms of the reaction, it depends on who’s reacting. But across the board, I think people, given it’s the very first day of the administration, people were reluctant -- whether you call it a honeymoon period or not, people were reluctant to go to war over this issue. And there’s also some sentiment in some organizations that, well, the president should have the right to take this action.

 

      The statute is ambiguous, but there was a statute, is, and it was created for a reason, to give the board members staggered terms with a specified length and to create the general counsel’s office for this independent agency to also have a set term. And if they weren’t going to -- if they wanted them to be moved in and out at will, why give them an established term the way they did?

 

      Countering that is the fact that the board members terms are identified as for-cause only termination, whereas the general counsel, it doesn’t say that; well, it just doesn’t say. It says that he has a four-year term. There’d been some rulings that people have cited, none directly on this question, and really dealing with opinion letters. There’s the Supreme Court case about the CFPB and Cordray’s position that came out for that particular agency, which he was the head of the agency and a single person, not a board, that came out in favor of giving the president the authority. And there are analogies that can be drawn from other parts of the bureaucracy and the president’s way of dealing with it and the Article II powers.

 

      Having said all that, I’m just struck by the fact that he did something that nobody’s ever done before, and for a nakedly partisan reason. That just seems wrong and unnecessary all in one. And yet, he did it, and the only -- it’s unclear whether there’s going to be any litigation over the firing itself. But the litigation over the question in other cases that are pending at the board, which the acting general counsel is playing a role in, there’s definitely a legitimate basis for challenging those actions. And Lafe Solomon’s position as acting general counsel was challenged on different grounds under the Federal Vacancies Act. And at the time, people said, “This can’t go anywhere.” It went all the way to the Supreme Court, which found that he was unlawfully acting. And so those who had preserved their rights in some cases, including that case, it made a difference.

 

      So whether it’s legal or not, good policy or not, it just seemed like an unnecessary act designed to send a signal to those on the labor side and those who aren’t. This is the administration’s position and a sign of things to come, I would think. And so “you ain’t seen nothing yet” is the bottom line.

 

      Any other questions before we turn to what “you ain’t seen nothing yet” about, which is the PRO Act itself?

 

Dean Reuter:  I don’t see any, so I do want to turn back to Maury Baskin to read us in to the PRO Act. Maury?

 

Maury Baskin:  Okay, great. And you all are probably just saying, “Let’s get to the point, already. Here we are.” So let’s talk about the PRO Act and why it is such a threat.

 

      The first reason is it’s the sheer number of proposed changes to labor law. I lost count when I got above 50. And those of you who have seen summaries of it, only a half a dozen fit on a slide -- all right, two slides. You’re still only up to a dozen. There are 50 at least. And really, one could say there are more changes, each of which in a normal year would be front page legal news. Not front page news news, but at least for labor lawyers, really big deals. And just multiply that times 50. So that’s why it is such a big deal.

 

      I mentioned the Taft-Hartley Act and that it is an effort to essentially overturn the Taft-Hartley Act and return to the original National Labor Relations Act, although in a way, it’s broader. It’s worse than that because it’s not just about unions and union organizing. It’s also about the workplace relationship, getting into issues of joint employment, independent contractors, who’s a supervisor, who’s not, and much more than just union organizing, even though it’s called Protecting the Right to Organize Act. That’s what PRO stands for.

 

      And while it’s difficult to choose what’s really the worst thing about it, I personally have been struck by the way it allows unions to impose -- to use pressure to get what they want, much more so than in recent decades, and really, hearkening back to pre-Taft-Hartley Act era when even during World War II there were massive strikes going on and secondary picketing and pressure of all kinds. And lo and behold, the union market share was much higher than it is today.

 

      Now, whether it would really reverse the course is always hard to say. After all, people said that about the quickie election changes. But they put all these things together. It’s really a wish list to accomplish every change, to undo every defeat from the legal standpoint, whether at the Supreme Court, in Congress, or at the presidential level, every defeat they suffered since the early ’50s.

 

      And I’m going to walk through some specifics, but when I’m talking about pressure, it’s not just from union picketing or that sort of thing but the massive new penalties that are imposed under the proposed law, penalties of new fining power, $50,000 fines, $100,000 fines being given to the labor board in what was originally and currently a law that was designed as a remedial law, not a punitive law. That was the whole concept. Even the National Labor Relations Act, that’s clearly codified in the Taft-Hartley law that has prevailed ever since. And that means there’s no double damages. There’s no punitive damages. There’s no attorneys fees. There’s no private right of action by employees against employers or even unions against employers to enforce the act.

 

      Well, the PRO Act would radically, drastically change and would impose all of those things. A new and private right of action for employees so they could bring their own class actions the way they do in a number of other fields; and the unions themselves, in addition to finding power of the labor board, there are then the liquidated damages, the possibility of punitive damages, the possibility of individual liability of managers, presidents, CEOs of companies, all designed, really, to force neutrality on the business community, to make it so difficult to resist that organizing would inevitably happen, or certainly be made a lot easier.

 

      One reason why the quickie election rules on their own were not enough, one can argue, is that the employees still have to sign up. And they had not been buying what the unions are selling, particularly with management’s right to communicate the reasons not to unionize, and that’s what’s happened. And of course, the unions maintain that, well, it’s being stifled because management is doing more than just communicating; they’re threatening and otherwise violating the act, which is a controversial debate about various studies and counter studies.

 

      But all that was taken into account, and the labor board in the Obama administration determined that, “Well, if we change these rules to give them better access and quicker results, that should take care of the problem,” combined with continuing enforcement of the rules against threats and the like.

 

      But this, the PRO Act, goes beyond that level, way out there in terms of just fundamentally changing how it would work. And it is hard to see how employers, even in industries that are overwhelmingly nonunion, can resist for long if the unions are getting -- if they get all these new tools and are able to martial them. So it’s the increased pressure and the disruption of employer-employee relations that I think are so important.

 

      So let me give a few more specifics about what’s in it. I’m not going to go all the way up to 50, but just to hit you with a sense of couple of slides worth of what the key elements are. First, it does greatly limit employer rights to oppose union election petitions. In fact, it just says right in the one sentence in Section 9 as amended, which is the section that deals with union election petitions, it says employers shall have no standing to object to the representation’s proceedings.

 

      It’s a huge change right there, one sentence, because as many of you know, employers currently have the right to participate in a hearing and the right to ask for a hearing. It is their workplace. It is their workforce. Of course they have standing, or at least they should have standing to participate, but not if the PRO Act passes.

 

      So right there, that’s just at the outset of what the election will look like. And that was one of the changes to the quickie election rules was to try to reduce the influence that employers have. But even the board did not -- the Obama board didn’t think it had the authority to cut the employers out of it altogether. And in fact, they don’t have that authority under current law. But that’s what’s so dangerous about the PRO Act. It just completely transforms the law. And once it does that, the labor board really won’t have much to say different. And certainly, they can then cut the employers out of it altogether.

 

      On top of that, even aside from the setup of the election, the logistics of the election, who’s in, who’s out, that kind of thing, the PRO Act restricts the ability of employers to communicate in several different ways. One is the time-honored captive audience speech. That’s how it’s referred to, but it’s basically just the right to talk to their employees on company time. The unions have the right to talk to employees off the premises, to contact them at their homes, which employers are generally restricted from doing. But the one place that the employer is supposed to be allowed to talk to them is at the workplace, at least up until the last 24 hours before the vote. That would become an unfair labor practice under the PRO Act, so yet another radical change in long-standing tradition.

 

      It would drastically increase the penalties for employer misconduct across the board, too many to count how they would to it, but probably the biggest penalty is to deny employers rerun elections and resort to card checks. If there’s a majority of cards, then that would settle the question, and no more need for that pesky secret ballot.

 

      Now, ironically, many of you recall the Employee Free Choice Act, the so-called card check bill which was very radical in its day and just barely failed to pass through Congress, even though they had more numbers of senators available in the president’s party, but they still could not get it done, in part because that card check bill took away the right to a secret ballot altogether. And this bill, that’s the one thing it does not outright do. A little surprising that they were so moderate on this issue, but I think because they felt that’s why they lost last time was because there’s something un-American about doing away with the secret ballot.

 

      But here, what they do is they give you -- they say it can be one vote, but if there’s anything wrong, which unions file their charges, objections, and whatever, and if anything is found wrong, then they undo -- overrule the results of the election and go back to the card check. So in effect, it’s encouraging more card checks instead of secret ballot voting.

 

      Now, also on the communications front, the ability of employers to get labor advice during organizing will be jeopardized because in the PRO Act is a change to the so-called persuader law of the Labor Management Reporting and Disclosure Act. And those of you in the know may recall another Obama change through rulemaking was an effort by the Labor Department to remove or eviscerate the so-called advice exemption.

 

      The persuader rule in a nutshell is that consultants, outside third parties like lawyers or just persuaders, if they communicate directly or indirectly with the employees, the voters, then they have to file detailed financial reports which are made public at the Department of Labor. And because people are reluctant to disclose those kind of communications, very few law firms do that kind of thing. And there are persuaders who do it, but it’s a much narrower group of people. The exception for that was, all right, you don’t communicate directly with the employee, but you give advice to the employers. That was permitted under the so-called advice exemption that is the statute currently.

 

      What the Obama administration tried to do was to evade the terms of the advice exemption that was in the statute and by redefining advice in such a way that it was, well, frankly, nonsense and was found by a court to be unlawful at its core, in addition to suspect constitutionally because of its restriction on the ability of people to communicate with employers as well as infringing on attorney-client privilege and other things.

 

      Now, in the PRO Act, they’re going to avoid having to deal with regulation, although, frankly, we do anticipate that the Biden administration may go try it on its own. I’m going to come back to that in a second, what can they do on their own. But first and foremost, in the PRO Act, they’re trying to take care of that problem, just eliminate the advice exemption or basically codify it the way it was proposed in the Obama years. So that is going to be another serious hindrance to employers who are trying to get help on the very difficult and what will be even more difficult subject of how to communicate with employees during one of these organizing drives if the other provisions of the PRO Act go through.

 

      I already alluded to this somewhat, but I want to repeat it because the PRO Act allows unions to shut down projects, work, jobs, through what’s called secondary boycotting. And people are sometimes confused as to what is secondary boycotting. It’s too technical. And I think it’s more easily referred to as simply mob rule because the unions in the past—and this is pre-’50s and even into the ’50s—the tactic was to simply anybody who wanted to use a customer, any customers of a nonunion company who the union had targeted, the customers themselves would be targeted. Neutrals, in other words, customers, other contractors on various types of projects or facilities, hotels, restaurants, manufacturing, construction, all of these things.

 

      And it was a key part of the union playbook was to go after the customers because they would say, “Wait, we don’t want this trouble. We’ll just let go, get rid of this contractor or other person, the person you have the dispute with, if you leave us alone.” And then that gives the unions tremendous leverage.

 

      And so in 1959, along with the persuader rule, Senator John Kennedy was very prominent in the enactment of additional protections in 8(b)(4) of the act to protect against and guard against all types of different union strategies that were then in use that were in effect secondary boycott strategies, and they are now prohibited and have been for decades. It would be a real disaster for business community and for the economy as a whole if those are lifted.

 

      And going back to the legislative history and the types of conduct that were going on at that time, the thought that we would return to that and that people in Congress really want that to happen, if they understood it, it just seems hard to believe. But that is a very important part of this PRO Act, including just wiping out not only the secondary boycott concept but also the ability of employers to sue unions directly over that. That’s just a stroke of a pen. And you get to that part, it just says that section is deleted, a crucial section for protection of large and small businesses.

 

      Another very significant issue is use of arbitration in two respects. First, under the card check bill of the earlier years, the notion was advanced to also require -- because it’s so hard for unions after they win the election to get that first contract signed. And something like half of the time, they don’t get it because management has the right to say no. So the proposal then, and it’s come back now in exactly the same form, is to say management does not have the right to say no. Instead, it will be turned over to a mediator and then an arbitrator who will make the decision on that first contract. And there will be an order to have a first contract, which gets the union’s foot in the door, from which it will never be removed.

 

      And so that is part of the PRO Act. Again, a fundamental change in labor law, overruling Supreme Court case H.K. Porter which said employer cannot be required to say yes. And this, in effect, will achieve that.

 

      The other way arbitration is at issue is the PRO Act would overrule another Supreme Court case just decided in the last couple years, the Epic Systems case, which talks about arbitration outside the union context, arbitration with class action waivers, which has been critically important to a number of industries who, prior to then, were being and still are being sued to death in class action cases dealing with wage and hour and many other types of issues.

 

      And the arbitration, Federal Arbitration Act, and general interpretations, and now the Supreme Court’s holding has been that under current law, employers do have the right to require employees to sign arbitration agreements as a condition of performing work that say that if they have a dispute, they won’t go through this super expensive class action process; instead, they will present their case to an arbitrator. So it’s not that they don’t have a remedy. It’s just really that the class action lawyers don’t stand to make millions and hundreds of millions of dollars on these class cases.

 

      But that would also be changed under the PRO Act. They’ve gone after that very issue and have said it will be illegal. It will be just the way the trial lawyers and unions alike had pushed for prior to Epic Systems. So that would overrule that case.

 

      Another issue, because this is not all about nonunion companies, the PRO Act would ban the permanent replacement of strikers and most lockouts. Again, a Supreme Court case going back decades in which it was held that employers have the right to permanently replace economic strikers as well as the right to lockout as economic leverage in labor negotiations. So that would be changed, again giving the unions, well, all the leverage.

 

      Not to be outdone, Congress in the PRO Act is also proposing to eliminate or effectively eliminate or greatly restrict state right-to-work laws, another huge change. The right to have right-to-work laws was only firmly established in the Taft-Hartley Act, and now it’s about half of the states that have those kind of laws, which does not mean you can’t have unions. And they do. All the states have private sector collective bargaining. It’s just that you can’t force employees to pay dues or service fees, agency fees, to the unions under those state right-to-work laws.

 

      And that, the PRO Act is just saying it’s going to do away with, leaving only some fair share concept in place. So again, quite a radical move going back 70 plus years, and just yet another change.

 

      Other issues, and I could go on and will, just a little bit longer, because we’re nowhere close to the 50. Expanding the joint employer standard, and in this case, basically reinstating the expanded standard that had been adopted by the Obama board and then rescinded by the Trump board, and then a rule enacted by the Trump board with notice and comment that if they don’t pass something in the PRO Act, that should have a little sticking power because even if the board wants to, once Biden takes it over, if they want to undo it, they really can’t do that with a case decision. They would have to most likely do that through another notice and comment proceeding. So it could be well into 2022 before that happens, although it still seems reasonable to expect that it will happen.

 

      This is not to be confused with the joint employer rule back-and-forth over at the U.S. Department of Labor, which deals solely with the Fair Labor Standards Act, wage and hour laws. So the labor board, the NLRB, is dealing with joint employer issue a lot, was, under the National Labor Relations Act, relation to union issues and other collective actions. So that’s what’s affected by the PRO Act.

 

      In addition, the PRO Act would expand the definition of employees to include most what I call 1099 in which someone who is not viewed as an employee under current law of the National Labor Relations Act instead is thought of as an independent contractor. You may well have heard of AB 5 in California which created this three-part test, a much broader test for who is an employee, and then has become riddled with exemptions, and then on top of that, the voter initiative rejecting it altogether for the gig economy and those aspects of it that are affected by Prop. 22, and other states that have adopted similar tests and others that are considering those tests.

 

      Well, the PRO Act would enforce that test, which is a huge change from current law for matters covered by the National Labor Relations Act. It’s important to note that so far, anyway, it’s not an across the board of all types of industries, so it would be sitting there just for labor or just for NLRB stuff while different states are doing different things. The Department of Labor will be looking at it as well, no doubt. But it would be a huge change for the National Labor Relations Board, which is currently governed by a section of the statute that narrowly defines independent contractors and says it has to be according to common law.

 

      Supreme Court authority greatly limits the authority and ability of the National Labor Relations Board under current law to deviate from the common law of independent contractor and the right of control test and other factors. Even so, they’ve kind of gone back and forth. Within the board, there have been fluctuations about the nature of that test and how much weight to be given to entrepreneurial activity and the like. The Fed Ex case, the SuperShuttle case and others have been decided.

 

      And it’s expected that the Biden board, once it’s constructed, will revisit that issue too. But this is one of the things the labor board will not be able to do unless they change the PRO Act. They could not, in my view, adopt what they call the ABC test for independent contractors unless they change the law, and that’s what they’re apparently aiming to do.

 

      Other things—I could go on at some length; I know we have time constraints and do want to get to some questions—but it would narrow the definition of supervisors. It would allow individuals to sue in court. It could create a new whistleblowing potential claims, although now there’s talk -- they just recently made some changes. They’re about to reissue -- reintroduce the bill in the House of Representatives. It was voted and approved in the previous Congress, but there’s a new Congress, so they have to do it again. And the numbers are slightly different. And the word is they might be removing this whistleblower aspect.

 

      There’s also something in the bill about getting a report on so-called sectoral bargaining, which is not yet required or called for by the PRO Act, but that is the next generation of radical changes. This is basically allowing a system in which one union would set the terms for the entire industry.

 

      Well, let me just mention a couple of the big questions, whether you ask them or not. The first big question --

 

Dean Reuter:  -- Maury?

 

Maury Baskin:  Yes, Dean?

 

Dean Reuter:  It’s Dean. I just wanted to let you know we do have at least one person with a question when you’re ready to turn back to the audience.

 

Maury Baskin:  Okay. Well, let’s stop there, as long as the question is not “Will it pass?” because that’s the thing I’m about to address next. But go ahead. Let’s hear the question.

 

Dean Reuter:  All right. Go right ahead, caller.

 

Caller 1:  Thanks very much. I’ll try to be as brief as I can. I actually had three interrelated questions. So the first one was I didn’t hear anything specific addressing small employers, and I don’t know if there are any changes. Obviously, the third-party boycott thing would have potential impact on small businesses, but I wasn’t sure if there were any other particular impacts that would hit there.

 

      And then the second one is, at least in terms of what’s gotten in the news recently, I’m aware of unionization efforts involving, I think, Amazon in Alabama and a few other places. And I’m just wondering to what extent the political dynamics might -- there might be a “be careful what you wish for” phenomenon just to the extent that some significant donors to the Democratic party or supporters in terms of big tech and so forth might find that there might be some internal tensions there. And don’t know in terms of where those current active unionization efforts are located, what that might mean for the support they might get from the senators and representatives from those areas.

 

Maury Baskin:  Those are both great questions, also challenging to answer. Well, let me take it this way. Small business is not singled out in the PRO Act, and yet, a number of the provisions have a direct impact on them. For example, the persuader rule changes probably hurt small business more than anybody because they’re the ones that are most in need of the advice when the time comes. They don’t have people on staff who are doing nothing but dealing with the union issues or labor experts, and so they will be significantly restricted in their ability to get that kind of information when they need it most.

 

      Combined with the quickening of the labor election process, those quickie election rules do make it very more important than ever. You can’t waste the first week going around looking for a lawyer. You really need to have that ready, and very few small businesses are paying close enough attention to or have the resources to be ready like that. That’s just one example, but there are many others, I think.

 

      Most of these issues -- one could say that the independent contractor issue is very much aimed at small businesses, although the larger businesses would say, “What are you talking about? It’s aimed at us.” It’s aimed at both. They’re not singled out. The joint employer is the same way. You’re in a small business, and now this other company is now found to be your same employer. And what are the ramifications of that?

 

      The changes to the election process itself, the ability to be sued by your workers for this, there’s just very few -- I don’t think any small business can withstand the pressure that is created as a result of all this. But there’s not a small business section of it, nor are there any small business exemptions from it, other than the existing -- you’ve got to be almost a non-business to be exempt under the current rules.

 

      But then let’s flip it around, as you did, with the campaign, the politics of it. The campaign’s going on among the larger businesses, some of the largest like Amazon, Google, not necessarily through petitions, but through unions trying to work their way in even though they are a minority and trying to get recognized as a minority union.

 

      The political dynamics are -- you’re quite right. It is different, but they were already very fraught, the political dynamics. On the one hand, the tech companies were obviously major supporters of the new administration, and yet, you see that the new administration is talking just like the previous one about antitrust and these kind of things on different aspects. And on this issue, it certainly should be causing concern for larger tech companies as well, but there are just a lot of cross currents.

 

      And that’s something that I’m going to use to segue into the “Will it become law?” because there’s so many different conflicting agenda points, and it’s in part a question of will they push it -- will they give it a primacy of place because that’s what happened with the card check bill, is they put the Affordable Care Act ahead and pretty much used up all their capital on that. And they did not have enough juice left to push that radical card check bill across the finish line, a bill that was much less radical than this. And even though they had more supporters, seemingly, in the Senate, they could not get it done.

 

      And so some have said how can they possibly get it done this time around with so many other agendas, the environment, and the obviously the COVID crisis overall, over everything, and other issues, the need to restart the economy. And how does it square with restarting the economy if you impose these kind of changes that would seemingly crush a number of businesses and in a number of different industries?

 

      And so all of those are reasons why it still seems hard to believe that they can or will pass this. And yet, people are watching very closely what’s happening with the stimulus bill. Yes, it’s a reconciliation thing. They seemingly are going to try to push it through with just the 51 votes. But if they can do that, and, of course, if the filibuster is broken, then all they need is 51. Now, at the same time, I’m seeing projections that there are at least four Democratic senators who won’t vote for it, but is that true? Does anybody really know? That’s really the challenge.

 

      And I think the most dangerous part of this situation is the threat that they will break it up into its 50 parts because the challenge -- we’re assuming that the Republicans are all a monolithic voting block against it. In fact, a number of Republicans, a small number, but still a number, voted for it in the House in the previous administration. Now, maybe they could take that vote forward because they knew it had no chance in the Senate, and will they do the same, and now we have a narrower gap in the House. So those are all considerations that could hold it back.

 

      But if they just take parts of it, and you have to count on, first of all, the Republicans not being fractured by things like the impeachment and the Trump -- the divisions that have surfaced lately, they have to be a block; can’t afford to lose any of them. And on each individual component part, by going so big, the labor advocates have given themselves a cushion. They can say, “All right, we will compromise, like, the 1.9 trillion. Instead -- we don’t need all 50 of these changes. We’ll settle for just 40 of them.”

 

      Well, that would be a disaster. If they settle for four of them, it will be a huge burden on the business community and seismic impact. Somewhere between 4 and 40, who knows? And they could be rolling them out one at a time, forcing Republicans to take filibuster each time until you reach the point where Democrats can say, “Look at all those filibusters. You’re just being obstructionist. Now we have to act.”

 

      And some of the so-called moderates who’ve been identified have actually taken a lot of labor votes and voted with labor. So it’s not quite clear just who the moderates are anymore in that party, and there are some moderate Republicans who might say, “Well, attorneys fees, that doesn’t sound so bad. And let’s have increased opportunities to vote. And when employers do the wrong thing, they should be punished,” and a few more things like that. And it’s bad news.

 

      So I’m not here to tell you today whether it will become law. I think that it shouldn’t, but it could. It seems unlikely. It seems preventable. And yet, there is a path forward if people are not extremely vigilant, those who are against it. It’ll be a challenge to message. There’s so many different messages you have to get across, each of which is a pretty complicated subject. Persuader alone, last go around, was just a hugely difficult subject to convey and explain. And the blacklisting thing is also very challenging. It’s just dealing with labor law violators, who can be friends with them. The ABC test and independent contractors, even secondary boycott, although, frankly, on that one, I think it’s just outrageous that they would go back to the practices that were permitted back in the ’50s.

 

      But each of these issues is a very technical issue, an issue that some senators may just not think is worth their time or worth sacrificing their credibility with or their efforts at bipartisanship, so they’re going to feel they have to give something. So I think the piecemeal approach is the greatest threat. I don’t discount the possibility of them going for it all, but that just seems preventable. There seem to be a number of obstacles that should prevent it, but look, after the Georgia runoff outcome, you can’t say that anything is clear cut anymore. And they do have all the levers of government in their control, and that is a huge difference maker.

 

      I did want to just close up with one reference. I sort of alluded to it as the question, can the executive branch do it without Congress passing the laws? What are the things the labor board can do, and what can’t they do? Once again, we don’t have time to go through all 50 of them. My answer is basically most of the provisions in the PRO Act cannot be done by the NLRB. A few, they can be. In fact, on a few of them, they are copying what the Obama board already did. So some of the changes to the election rules are things that the Obama board did. The joint employer standard they’re advocating now, the Obama board did it. And so if the Obama board could do it, then they could change the law to make it -- to codify it.

 

      On the other hand, you heard me say the independent contractor standard, the labor board cannot do that alone, and neither can the president, at least across the board. It cannot be done alone for the National Labor Relations Act. They would have to change the law. The secondary boycott activities, the labor board cannot permit those. Permanent replacement of strikers, that’s established Supreme Court authority.

 

      The list goes on and on, and it really comes out to, I don't know, 75, 80 percent of it can only be changed if Congress changes it. And if it does, it will be the most radical, sweeping change to labor law in the lifetime of anyone. I don’t mean your professional lifetime. I mean your lifetimes, of the people on this call.

 

      Well, that’s quite a thing to happen, but is it a good thing? And many would say it is not. And so we’ll just have to hope that common sense prevails in the U.S. Senate when the time comes. And we will just wait and see. And if common sense doesn’t prevail, one of my mentors once said, “If justice triumphs, we will appeal immediately.”

 

      So we will see how it all plays out, but that’s about all I’ve got to say on the subject today unless we have any final questions because I think our time has run out. Dean?

 

Dean Reuter:  We are indeed out of time. And I want to thank you, Maury Baskin. That’s a very sweeping set of comments, and a lot of insight, and the wisdom of years of experience. I certainly appreciate your time today and look forward to having you back as things progress. Maybe we move towards one of those options that you mentioned; maybe the Congress does, that is. But thank you again for your remarks on behalf of The Federalist Society, and I personally thank you as well.

 

      Also, to the audience, thank you for joining us and thank you for your thoughtful questions. Be on the alert, monitor your emails, and check in to our website for our next teleforum conference call. But until that next call, we are adjourned. Thank you very much, everyone.

 

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Dean Reuter:  Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s Practice Groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at www.fedsoc.org.