On Feb. 6, the U.S. House of Representatives passed the deceptively named Protecting the Right to Organize Act (H.R. 2474/S. 1306), known as the PRO Act, by a vote of 224 to 194. While the bill is dead on arrival in the Republican-controlled Senate and the White House issued a veto threat, the legislation is an indicator of the policies many House Democrats and Democratic presidential candidates want to impose on workers and employers.
The PRO Act is rife with policies that impose radical changes to settled U.S. labor law, benefiting big labor at the expense of workers’ rights and the well-being of the nation’s small businesses.
Should the bill ever be signed into law, secret ballot union elections would be replaced in many circumstances with “card check,” a system that forces employees to sign union authorization cards in front of coworkers and union organizers. Allowing card check eliminates the privacy that comes with a secret ballot election and would enable intimidation and retribution against workers. Secret ballot elections are a critical right in a democracy and have been both a cornerstone of workers’ rights and an integral part of labor relations since the earliest days of the National Labor Relations Act (NLRA).
Past efforts to impose a card check on union representation elections were proposed over a decade ago when Democrats controlled both chambers of Congress; these bills were soundly defeated on a bipartisan basis.
The PRO Act also seeks to impose Obama-era labor regulations, codifying the National Labor Relations Board’s “Ambush” Elections Rule into law, dramatically shortening the timeframe for union representation elections and diminishing employees’ opportunity to hear from both sides of the argument on union representation. Additionally, the rule violates employees’ privacy rights by requiring employers to provide union organizers with employees’ private personal contact information, including phone numbers, email addresses, home addresses, job classification and even assigned shifts—even if the employee objects.
The PRO Act would subvert states’ rights through the repeal of popular right-to-work laws across the country, which protect workers by prohibiting employers from requiring them to join unions as a condition of employment. The PRO Act would reject this choice by forcing individuals to join a specific union and forfeit a portion of their paychecks to support the activities and influence of unions if they want a job at a unionized factory, school or company.
Currently, 27 states have passed right-to-work laws (Fig. 1), including four of the top five states with the fastest-growing economies. The PRO Act would eliminate these independently passed state laws—potentially disrupting high-growth state economies.
Between 2001 and 2016, states with right-to-work laws saw a “37.6% increase in real private-sector output, compared to non-RTW states that only saw a 28.5% change in output. During this same timeframe, RTW states saw 26.7% employment growth compared to non-RTW growth of 15.4%; and from 2001 to 2015, the number of firms increased by 10.2% in RTW states and only 2.8% in non-RTW states,” a study from NERA Economic Consulting says.
Furthermore, the PRO Act seeks to curb the freedom of employees to work independently through gig economy platforms and traditionally independent contractor roles, like consulting and providing specialized construction services to multiple jobsites, by reclassifying many independent contractors as “employees.”
This mass reclassification of workers from independent contractors to employees could result in large-scale changes to business models, significant costs for companies and consumers, and a reduction in flexibility, autonomy and opportunity for many workers. By inserting the costly “ABC test” (California’s AB5) into the definition of “employee” under the NLRA, the PRO Act could, according to a recent study by the American Action Forum (AAF), put up to 8.5% of GDP at risk, leading to between $3.6 billion and $12.1 billion in additional costs to businesses.
Under one of the bill’s most costly provisions—“joint employer”—the PRO Act would make larger employers liable for actions taken by franchisees, subcontractors or other employers, causing it to be exceedingly risky for these companies to work with smaller businesses without stripping them of their independence or needed to thrive. The same AAF study estimates $17.2 billion to $33.3 billion in lost annual output for the franchised business sector alone.
At a time when the construction industry supports an average hourly wage well above the federal minimum wage ($30 per hour in June 2019) and continues to see increased growth under a common-sense regulatory environment and supportive tax code that allows businesses to grow and hire more employees, construction industry groups such as Associated Builders and Contractors believe such aggressive proposals could bring this progress to a halt, costing jobs and money, as well as slowing growth in the construction industry.
