CARES ACT Relief for Mid-Size Businesses Comes with Important Union Related Conditions
Mid-sized businesses (defined as 500 to 10,000 employees) impacted by the Coronavirus may be able to obtain relief loans under the COVID-19 stimulus law, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), but only if non-union employers agree not to oppose the unionization of their workforce for the term of the loan, and if unionized employers agree not to “abrogate” existing collective bargaining agreements for the term of the loan and 2 years following loan repayment.
First, for the entire term of a Treasury Department loan, an employer must agree to “remain neutral in any union organizing effort.” In other words, if a union comes knocking, those businesses cannot oppose unionization. The bill does not define or elaborate on the concept of employer neutrality or how such obligations would be enforced (although future regulations may provide more detail). Importantly, it does not require “card check” agreement – allowing an employer to insist on a secret ballot election at the National Labor Relations Board.
Second, for the entire term of the loan and 2 years following loan repayment, businesses must certify that they “will not abrogate existing collective bargaining agreements.” The word “abrogate” is not defined in the statute, there has been no regulatory guidance to date as to its scope (or how it will be enforced) and it is not clear whether the statute imposes additional obligations beyond those that are imposed under the National Labor Relations Act.