A $ 3.5 trillion budget resolution could increase penalties for labor violations

The framework for a Budget resolution of $ 3.5 billion Approved by Congress last month, it could include a provision that will have a major impact on the way construction companies treat their workers.

Though some lawmakers like Senator Bernie Sanders, I-Vt., Have pushed for aspects of the PRO Act In order to be included in the reconciliation, most will not find their way, several sources told Construction Dive, due to the rules, which provisions can be included in budget decisions. But one idea from the PRO Act that could get through is to change the penalties and procedure employers and business owners face for committing unfair labor practices.

The House Committees are currently drafting the key parts of the budget decision and are expected to finalize their parts by September 15.

That would mean employers could face civil penalties, sanctions and other damages, including personal liability for directors and officers, even for minor work violations, Christopher Horton, partner at Smith Currie construction law firm, told Construction Dive.

Some of the work violations that could be affected by the provision, according to Horton, include:

  • Promising employee benefits when they reject a union.
  • Negative action against an employee who has filed a complaint about unfair labor practices.
  • No notification and no opportunity to negotiate job changes.
  • Refuse to bargain collectively.

“Under current law, the fine you pay for a parking ticket is greater than the fine companies pay for violating workers’ right to unionize,” wrote Rep. Bobby Scott, D-Va., In a July Publication that aids the inclusion of the provisions in the budget process. “Imposing fines for unlawful anti-union activity will finally stop employers from breaking the law and better protect workers’ rights.”


Should the provision enter into force, companies that commit labor violations such as those listed above would face punitive damages, personal liability and consequential damages in addition to penalties for violations. Employers involved in labor disputes could impose civil penalties of $ 50,000 to $ 100,000 for repeated violations, Horton said.

Previously, these concerns could be brought to the National Labor Relations Board, which would then initiate the process of resolving the problem and, as multiple sources put it, “making the worker whole” – or to determine that the employer should pay or award the plaintiff their wages owed or other funds lost as if the injury never happened. The ability to seek penalties in a civil court is a new addition to the procedure.

Large contractor groups such as Associated Builders and Contractors and the Associated General Contractors of America strongly oppose the measure.

“Reports suggest that the bill could add harmful labor provisions to the reconciliation package, which could include increased fines for employers who ‘interfere’ with workers’ union rights, which could lead to unfair and frivolous lawsuits with a devastating impact on construction companies,” Kristen said Swearingen, ABC Vice President for Legislation and Policy, wrote to members of the house Last month.

The opposition

AGC and ABC have made it clear: They believe this provision is bad for businesses, especially small contractors who make up the majority of construction companies in the country. To avoid labor violations, some contractors may choose to give unions more leverage.

“The provision would cripple small businesses and increase union influence enormously – which means more employers will give in to union demands to refrain from secret ballots for union representation and to recognize a union on the basis of a ‘card check'” Swearingen told Construction Dive. “It will also mean that more employers will give in to the demands of the unions at the negotiating table – even if those demands jeopardize the long-term competitiveness of the company.”

The “card verification” that Swearingen is referring to is a practice of workers signing their names to certify their union application rather than only with secret voting. Contracting parties fear that this could put undue pressure on some to ratify the union.

Contractors can give more to unions to avoid the increased civil penalties for business owners.

“When a company is held liable, it is usually not the person who runs the company,” said Jimmy Christianson, AGC’s vice president of government relations. “This is a new twist that would change the norm and increase a company’s risk profile.”

If an employee sues their employer, in addition to filing criminal charges with the NLRB, the plaintiff can also reimburse attorney fees and costs if they win in court, Chad Wishchuk, attorney and partner at Finch, Thornton & Baird, told Construction Dive.

The goal

The concept behind the provision is simple: reducing labor violations through more severe penalties than in the past.

“The driving force behind these provisions is the goal to strengthen workers’ rights to freedom of association and collective bargaining,” said Wischuck. “It is certainly very far from the historical approach of the National Labor Relations Act.”

President Joe Biden has made it clear that he has supported trade unions and workers’ rights and campaigned for the PRO Act.

Horton added that not only would this increase the deterrent to labor violations, but it could also provide another means of funding the country’s massive infrastructure goals.

Implementing the penalties would likely increase both oversight and litigation, Horton said. As some companies face harsh penalties for labor violations, others would create barriers to avoid them.

If the worst comes to the worst

While owners and executives can now be held liable in civil courts, it is important to note that they should only lose cases where they are directly responsible for labor violations.

“Although the (National Labor Relations) Board has considerable discretion under the PRO Act in pursuing personal liability to directors and officers, the board must nonetheless identify a causal link between the violation and the director or officer,” said Horton .

An example could be that the owner directly influenced or enacted the Labor Infringement Policy.

However, this reality does not necessarily reassure contractor groups.

“Reality opens that up, especially in an environment of heightened enforcement, to give more examples for businesses – opening Pandora’s box is bad enough for us here,” said Christianson

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