December 7, 2021

Volume XI, Number 341

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December 06, 2021

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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.

Jackson Lewis P.C. © 2021National Law Review, Volume XI, Number 326
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About this Author

Thomas V. Walsh, Jackson Lewis, employment arbitration Lawyer, White plains, Union Organizing Attorney
Shareholder

Thomas V. Walsh is a Shareholder in the White Plains, New York, office of Jackson Lewis P.C. Since joining the firm in 1986, Mr. Walsh has represented employers in all aspects of labor and employment law and litigation.

Mr. Walsh has represented employers before numerous state and federal courts, regulatory agencies, as well as in numerous arbitrations. Mr. Walsh has extensive experience in representing employers faced with union organizing drives and in proceedings before the National Labor Relations Board. He has an...

914-872-6912
Jonathan J. Spitz, Jackson Lewis Law Firm, Labor Employment Attorney, Atlanta
Shareholder

Jonathan J. Spitz is a Principal in the Atlanta, Georgia, office of Jackson Lewis P.C. He is Co-Leader of the firm’s Labor and Preventive Practices Group.

Mr. Spitz lectures extensively, conducts management training, and advises clients with respect to legislative and regulatory initiatives, corporate strategies, business ethics, social media issues and the changing regulatory landscape. He understands the practical and operational needs of corporate America, helping design pragmatic strategies to minimize risk and maximize performance. He has represented...

404-586-1835
Richard F. Vitarelli Harford  Connecticut Labor Relations Lawyer at Jackson Lewis Law Firm
Principal

Richard F. Vitarelli is a Principal in the Hartford, Connecticut, office of Jackson Lewis P.C. Part of the firm’s national labor practice, he has over two decades of experience representing employers nationally in strategic labor relations, collective bargaining, and union organizing, including in the context of mergers and acquisitions, corporate restructuring and contract administration. He serves as general labor and employment counsel for employers and multi-employer associations in various industries, including construction, manufacturing, health care and senior living,...

860-522-0404
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