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Businesses Urge Democrats to Nix Fines for Labor Law Violations

Oct. 6, 2021, 6:12 PM

A coalition of more than 600 business groups is taking aim at House Democrats’ proposal to allow the National Labor Relations Board to fine employers for violations of federal labor law, urging the provision to be dropped from an expansive social spending package.

The NLRB lacks the authority to levy fines against employers who violate the National Labor Relations Act, but language in a budget reconciliation bill approved by the House labor committee would enable the board to assess penalties of $50,000, with punishments of $100,000 possible in some cases.

Inclusion of this “significant, substantive” policy change in a larger package now under negotiation would give more enforcement power to the NLRB and is “inappropriate” for a budget reconciliation bill, the Coalition for a Democratic Workplace said in a Wednesday letter to Congress.

“Reconciliation bills are intended to focus on items with budgetary effect and are not intended to radically change policy through measures that merely produce an incidental budgetary effect,” the coalition, which includes groups such as the National Association of Manufacturers and Associated Builders & Contractors, said in the letter. The coalition advocates against NLRB actions that it believes harm businesses.

The rallying cry from industry was meant to sway Democratic lawmakers who are negotiating over how to scale back the sweeping social spending vision at the center of President Joe Biden’s domestic agenda.

Democrats intend to use reconciliation legislation, which can be approved with simple majorities in both chambers, to provide a filibuster-proof route to pass numerous policy priorities. But items that aren’t solely budget-related can be scrapped from the legislation if the Senate parliamentarian determines they don’t clear the Byrd rule, a test of that condition.

A ‘Remedial Statute’

Kristen Swearingen, the business coalition’s chair, said the group has held meetings with senators to discuss its concerns with the reconciliation plan.

Adding civil monetary penalties to the NLRA, the coalition argued in its letter, would turn a “remedial statute” into “a punitive law that can easily be exploited by entities with anti-competitive motives.”

The group also targeted other elements that were in House Democrats’ reconciliation legislation, including allocating $5 million to create an electronic voting system for union elections.

“Electronic voting means employees will vote for or against union representation through email or an application on their phones,” the letter said. “There is no way to ensure the vote being submitted is in fact the vote of the individual employee.”

To contact the reporter on this story: Paige Smith in Washington at psmith@bloomberglaw.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com

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