Build Back Better Act Update: Committee Releases Labor Provisions for Inclusion in Senate Vote
The Build Back Better Act passed the House on November 19, 2021. It contains controversial provisions on many subjects, including new employer penalties under the National Labor Relations Act (NLRA). On December 11th, the Senate Committee on Health, Education, Labor, and Pensions released its version of the provisions of the Build Back Better bill on subjects within its jurisdiction, including amendments to the NLRA. The panel retained the new, severe employer penalties for unfair labor practices (ULPs), but the bill does not include other far-reaching changes which were in the original House version.
The bill contains unprecedented penalties for employer ULPs. Today, ULPs by either unions or employers are remedied by requiring backpay and reinstatement to prior employment and employment terms. The bill would add new “civil penalties” (fines). These fines would apply only to employer violations, however, not those committed by 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 that 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.
On the other hand, the Committee draft no longer contains certain other new employer violations that were in the original House draft. These were provisions would have applied the same civil penalties to employer actions that have long been held to be lawful, including:
Permanent replacement of economic strikers
Mistakenly advising employees that they are “supervisors” or “independent contractors” and, thus, not covered by the NLRA
Mandating employee attendance at employer group campaign meetings
Entering or requiring employees to enter agreements not to engage in collective actions (such as class action litigation)
The Committee language will become part of the version of the bill that will ultimately be voted on by the Senate. The bill is framed as a budget “reconciliation” bill – allowing it to avoid a Senate filibuster requiring passage by a supermajority, which is unlikely. As a reconciliation bill, it would need a mere 51 votes for passage.
However, there remains a question as to whether the various elements of the bill relating to NLRA amendments meet the standards for a budget reconciliation bill, meaning, they 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.