United States: Democrats Introduce Bill To Increase Dramatically NLRA Penalties Against Employers

Last Updated: September 28 2015
Article by Seth H. Borden

On Thursday, September 17, 2015, Senator Patty Murray (D-WA) and Representative Bobby Scott (D-WA) introduced the Workplace Action for a Growing Economy (WAGE) Act (S. 2042).  The bill, promoting collective-bargaining and labor unions by drastically enhancing penalties against employers under the National Labor Relations Act, is being proposed primarily as an election season litmus test, with virtually no chance of becoming law any time soon. Nevertheless the bill contains a number of proposals employers must track, particularly in the unlikely case there winds up being any serious policy discussion on the measure at all.

We've provided a red-lined version of the National Labor Relations Act including the bill's proposed revisions here. In sum, the WAGE Act would amend relevant portions of the NLRA to:

  • Provide treble damages in cases of economic loss to employees (without any offset for interim earnings);
  • Provide concurrent private civil causes of action for individual employees to pursue in the federal courts;
  • Allow private litigants to obtain relief as under the civil rights acts, including attorneys fees;
  • Provide civil penalties up to $100,000 against employers who commit unfair labor practice charges resulting in economic loss to employees;
  • Provide civil penalties for up to $100,000 personally against officers or directors of an employer;
  • Expressly expand the Board's "joint employer" standard for enforcing joint and several liability against multiple parties;
  • Expressly protect the right of unauthorized immigrant workers to collect these remedies;
  • Require the Board to pursue, and federal courts to grant, preliminary injunctions in a broad variety of cases;
  • Provide bargaining orders as the standard remedy for any election objections, if majority authorization card status can be established at any time within a year preceding an election;
  • Require all employers to post a Notice of employee rights under the NLRA, and advise new employees of the same;
  • Make Board Orders self-enforcing

Both in the aggregate, and some individually, these represent fairly radical increases in the exposure employers would face when unions seek to organize their workplaces. Perhaps notably, it also seeks to amend the law legislatively in ways which have been inappropriately pursued by executive and administrative fiat the past few years.  For instance, the Notice posting provisions resemble significantly the attempted 2011 rulemaking by the Board, which was subsequently  invalidated by the federal courts. The effort to include express expansion of joint employment liability beyond even the Board's recent radical departures from longstanding precedent raises provides another example.

Many other provisions of the bill are outright retreads or subtle re-packaging of provisions proposed without any success during the repeated failure to pass the Employee Free Choice Act (EFCA) last decade.  The treble damages provision, for one, was central to one of EFCA's "three legs." The WAGE Act includes that proposal "on steroids."  Current financial remedies available to the National Labor Relations Board in economic loss cases are primarily designed as "make whole" remedies – to put a wronged employee in the financial position he or she would have been in, absent any unlawful activity causing a loss.  This proposal, purportedly for deterrent effect, would provide an economic windfall via the treble damages provision, not to mention the right to pursue concurrent civil litigation outside the Board.  Because the bill expressly forbids offsetting interim earnings, an employee terminated by an employer may be entitled to three times the amount of his or her compensation from that employer – even if he or she had obtained a higher paying job the next day.

Of course, the central feature of EFCA was card-check certification – whereby a union would be certified as an exclusive bargaining representative based solely on signatures collected by the union rather than the more accurate reflection of employee support captured in a secret ballot election. The WAGE Act would provide a significant back-door approach to this scheme, by allowing the Board to issue a bargaining order against an employer for any run-of-the-mill election objection.  So long as the union could subsequently prove it had signatures from a majority of employees at some point prior – regardless of how collected – the union could be certified without a re-run election.  For decades, the Board has reserved this type of remedy for only the most egregious examples of employer misconduct during union organizing efforts.  Under this bill, it would become the norm, and allow the Board to force union representation upon employees who have voted against union representation after becoming more informed about the issue.

All of this begs the question – why would Democrats, who enjoyed a legislative majority supporting an otherwise very labor-friendly White House for most of the last four years, wait until 2015, when they've lost that majority to propose these measures?  The AFL-CIO, which coordinated a publicity blitz (blog posts, Richard Trumka contribution to The Hill, etc.) with yesterday's introduction of the bill, is not being coy about its true intent.  In a Guardian piece today, entitled "New pro-union bill to serve as litmus test for 2016 presidential candidates," the coalition's Director for Government Relations explains the strategy:

Having this legislation really puts [politicians] to a test – we want to make sure that our elected officials have something concrete to point to, to embrace, to explain to the public and to the press, and that's really why we are doing this now.

While even the AFL-CIO concedes this bill has absolutely no chance of being enacted into law this year, or next, the proposal should provide employers with a very clear vision of the Democrats' potential 2017 labor agenda.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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