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Democrats’ Budget Deal Seeks to Penalize Labor Law Violators (1)

July 14, 2021, 9:47 PMUpdated: July 14, 2021, 11:57 PM

Senate Democrats’ budget reconciliation bill will seek to create monetary penalties for companies that violate workers’ union rights, according to congressional, union, and Biden administration officials briefed on the plans.

The proposal is part of a $3.5 trillion budget blueprint from Senate Democrats that aims to advance the Biden administration’s progressive policy goals, including union-friendly measures, without the need for Republican support.

The sources, who all spoke on condition of anonymity to divulge private deliberations, told Bloomberg Law that monetary penalties from the National Labor Relations Board stand the best chance of various labor measures that could be included in the planned reconciliation bill, which must focus on budgetary matters.

Sen. Bernie Sanders (I-Vt.), who chairs the Senate Budget Committee, said Wednesday that the party’s compromise for the blueprint will include the PRO Act, a comprehensive labor law overhaul bill. But he declined to provide details on what parts of the sweeping labor legislation would make it into a package that will eventually get submitted to the Senate parliamentarian for approval.

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The PRO Act, which was approved in the House in March but hasn’t advanced in the Senate, would give the National Labor Relations Board the authority to assess up to $50,000 per labor violation, and up to $100,000 for repeat offenders, on top of damages recouped for workers. It’s unclear how much Democrats may amend the penalties language for inclusion in the budget bill.

Union Leverage

While getting the entire PRO Act into law remains the grand prize for Democrats and organized labor, supporters recognize that the Senate’s 60-vote threshold makes passage impossible. Therefore, unions and lawmakers have coalesced around the strategy of targeting monetary penalties as a shorter-term victory that stands a better chance at winning the parliamentarian’s approval because of its budgetary nature.

If enacted, the monetary penalties would give unions a major source of leverage in gaining a foothold at nonunion workplaces, allowing the government for the first time to fine employers for violating workers’ rights.

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Under current law, if employers are found to have fired employees in retaliation for their union organizing activity, for instance, they must provide back wages in certain circumstances, or provide workers with a poster informing them of their rights. But there are no further financial penalties on the employer to deter future violations.

“Creating financial penalties for unlawful anti-union activity will finally deter employers from violating the law and will better protect workers’ rights,” said House labor committee chair Bobby Scott (D-Va.), one of the PRO Act’s authors. “The only people who should worry about these penalties are the executives committing unfair labor practices and currently getting away with it.”

The sources said Senate Majority Leader Chuck Schumer (N.Y.) and his staff have been heavily involved in the effort, and are in lockstep with relevant committees about including monetary penalties in the legislation.

Union officials insist they’re pushing to get the entire PRO Act signed into law. The sprawling bill would also override state “right to work” laws and ban employers from holding mandatory anti-union meetings, among other measures.

“There’s a lot of strategizing going on in terms of the legislative process and how to bring it to life,” Elizabeth Shuler, secretary-treasurer of the AFL-CIO, told reporters Wednesday. “We’re not willing to start negotiating away the benefits of law that we think are so important.”

(Updated with comments from Rep. Bobby Scott, in 9th paragraph, and from an AFL-CIO official, in 10th, 11th paragaphs.)

To contact the reporters on this story: Ben Penn in Washington at bpenn@bloomberglaw.com; Ian Kullgren in Washington at ikullgren@bloombergindustry.com; Andrew Kreighbaum in Washington at akreighbaum@bgov.com

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

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