Monday, November 22, 2021
UPDATE: House Passes Build Back Better Bill Retaining Heavy New Penalties for Employer NLRA Violations
The media has been covering the budget bill – the Build Back Better Act – which contains controversial provisions on many subjects. Among them are provisions that include new employer penalties under the National Labor Relations Act (NLRA). It appeared that some of the most aggressive of those penalties would not reach the final bill voted on in the House. However, the final bill which passed on November 19, 2021 retained those original penalties. Details are provided below.
Often overlooked by the press are the bill’s amendments to the NLRA. The bill proposes severe new penalties for employer unfair labor practices (ULPs).
Today, ULPs by either unions or employers are remedied by requiring backpay and reinstatement to prior employment and employment terms. The Build Back Better Act would add new “civil penalties” (fines) in addition to the traditional remedies. But these fines would apply only to employer violations, not unions.
Under the bill, any ULP violation by an employer would additionally be subject to a penalty “not to exceed” $50,000 for each violation.
However, for employers found to have committed certain violations, and any which results in the discharge or “serious economic harm” to an employee, the penalty can be doubled to $100,000 if the employer had been found to have committed a similar violation within five years.
In addition, the bill would add civil fine personal liability for any company officer or director who “directed or committed the violation,” established the policy that led to the violation, or had actual or constructive knowledge of the events and the authority to prevent it but did not act to prevent it. Personal liability has never been part of the NLRA.
It is not surprising that employer groups strenuously oppose these provisions. In addition to the civil penalties above, the bill bans employer acts long held lawful under the NLRA. It appeared earlier that these would be deleted from the bill, however they were ultimately included in the bill which passed the House. These provisions will effectively ban:
(1) Permanent replacement of economic strikers
(2) Employer lockouts
(3) Advising employees (mistakenly) that they are “supervisors” or “independent contractors” and thus not covered by the NLRA
(4) Mandating employee attendance at “captive audience” employer campaign meetings
(5) Entering or requiring employees to enter agreements not to engage in collective actions (such as class action litigation)
Further, the bill applies the same severe civil penalties to these would-be violations.
The bill will now go to the Senate, where it faces an uncertain future. The Build Back Better Act is framed as a budget “reconciliation” bill – a device which allows it to avoid a Senate filibuster requiring passage by a supermajority, which is very unlikely. As a reconciliation bill, it would need a mere 51 votes.
However, there remains a question as to whether it meets the standards for a budget reconciliation bill – meaning it must be limited to budgetary matters. The Senate Parliamentarian decides (in an advisory capacity) whether specific terms of a reconciliation bill meet that standard. In September, the Parliamentarian rejected certain immigration provisions of the original bill on that basis. Senate Republicans reportedly will challenge the remaining NLRA civil penalty amendments as beyond the scope of a reconciliation bill.