NOTICE | Reconciliation Bill Makes Small Businesses an Offer They Cannot Refuse | Op-Ed
COVID-19 and lockdowns have devastated small businesses. Now the reconciliation bill could increase their pain. The House bill contains little noticed language that could cripple small businesses.
Currently, employers who commit unfair labor practices (PLUs) must reinstate injured workers, but they do not pay punitive damages. The reconciliation bill imposes fines on companies that commit up to $ 50,000 per violation. It also imposes personal liability on business owners and managers, as well as on the business.
On the surface, this seems like a minor change. It is already illegal to discriminate against union activists. However, the conciliation bill does not limit its sanctions to serious PLUs. It adds fines for all unfair labor practices. Career staff at the National Labor Relations Board (NLRB) would decide on the amount of the fine to be requested.
This is important because federal labor law is very technical. Many things that most Americans – and small business owners – would assume are legal violate the National Labor Relations Act (NLRA). For example, an employer faced with a union campaign usually cannot ask employees about their frustrations and how the company could improve. It is “solicit grievances”. They also cannot ask employees about their feelings towards the union. It is “the interrogation”.
Worse, the rules are constantly changing. Obama’s NLRB ruled that common workplace civility policies were illegal. Under their rules, employers could not tell workers to “be respectful of others and the company” or not to “mock, disparage or defame your colleagues, customers, franchisees, suppliers, the company or our competitors “. The Trump NLRB reversed these policies. Now the Biden NLRB plans to bring them back.
Large companies can afford expensive lawyers to navigate these requirements. Many small businesses cannot. They often stumble upon these complex and changing work rules. This is why companies with less than 500 employees employ half of the private sector, but receive four-fifths of ULP complaints.
Currently, small businesses that commit technical ULPs only need to repair the damage caused. The House reconciliation bill hits them with potentially massive punitive damages. While the bill tells the NLRB to “consider” the “seriousness” of the offense, it ultimately leaves the sentencing to the Board. This puts small business owners in a difficult position.
Consider a small business owner with 30 employees. During a union campaign, she asks them how she can improve their workplace. The union could file a complaint against the ULP. The House bill punishes soliciting grievances 30 times with up to $ 1.5 million in fines against her company, and as many against her personally. The NLRB could show leniency, but it would be at the mercy of a highly ideological career staff. And she still owed $ 1 million even if the NLRB asked for a third of the maximum fine. She would also incur huge legal costs. This small business owner faces bankruptcy – unless the union withdraws the complaint.
This is where the catch lies. Unions can make his legal problems go away… for a price. These sanctions would allow unions to pressure small businesses to give up their rights.
Federal law does not require secret ballot elections before companies unionize. On the contrary, employers can call for a vote when unions demand support from the workplace. In the 1990s, unions changed their organizing tactics to no longer persuade workers in these elections. They concluded that it was easier “to organize employers, not employees” – as one guide to organizing a union put it – because “[e]employees are complex and unpredictable. Employers are straightforward and predictable.
The unions are now trying to pressure employers to recognize them without an election. They do this by “making them pay for the functioning of a non-union”. This strategy works. The AFL-CIO reports that most new members unionize this way.
Civil financial penalties for minor ULPs would provide unions with enormous leverage. They would let them credibly threaten small businesses with massive fines. While large businesses can afford this damage, small business owners often cannot. Many should give in – deny their employees a secret ballot election.
The unions have already tried to get rid of the secret ballot elections. The “card check” was not possible even for the majority Democratic Congress in President Obama’s first term. It was just too unpopular. Four-fifths of union members support the secret ballot elections.
Adding penalties to all ULPs would advance card control through the back door. They would not formally end the elections. But unions could put pressure on small businesses not to ask for them. In particular, the bill does not penalize union ULPs. The unions do not want in the same boat.
These sanctions could also become law. “Reconciliation” allows financial arrangements to bypass the systematic obstruction of the Senate. Since these penalties would affect federal revenues, the parliamentarian of the Senate can authorize them in the reconciliation bill. If so, they can pass a party line vote.
Workers should have the right to organize. But union representation should result from their free choice – not economic pressure to prevent an election. Unfortunately, the reconciliation bill can do just that. Union organizers may soon be making small businesses an offer they can’t refuse.
Linda McMahon is Chair of the Board of Directors of the America First Policy Institute (AFPI) and is also Chair of AFPI’s Center for the American Worker. Previously, she served in President Donald Trump’s cabinet as a director of the Small Business Administration (SBA).