The House of Representatives passed sweeping union-backed legislation that is being criticized by business interests.
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The House of Representatives passed sweeping union-backed legislation that is being criticized by business interests.

Business and trucking interests are criticizing a union-backed labor bill passed by the U.S. House of Representatives. Among other things, the bill would rewrite how independent contractors are defined along the same lines as the controversial new AB5 law in California, which would upend trucking’s longstanding use of owner-operators.

Critics have called the Protecting the Right to Organize (PRO) Act, HR 2474, a union wish-list.

Perhaps of most concern to trucking is that its language mirrors that of California’s Assembly Bill 5, which set up an ABC test requiring workers to be considered employees rather than independent contractors unless they met all three prongs of the test. The B prong of that test is regarded as extremely problematic for traditional trucking owner-operator arrangements, as it prohibits companies from using independent contractors unless the worker was performing work “outside the usual course of the hiring entity’s business.”

As employees, such workers could organize and join unions. Independent contractors are prohibited by federal law from organizing.

AB5, which went into effect in California Jan. 1, is under a court preliminary injunction from being enforced against the trucking industry while a California Trucking Association lawsuit is adjudicated. The CTA argued that AB5 is pre-empted by federal law.

In a statement praising the PRO Act, Teamsters General President Jim Hoffa said, "The PRO Act will strengthen the NLRA so that workers seeking to organize a union and negotiate higher wages and better benefits will be protected…. The misclassification of workers is on the rise and too many working Americans are falling through the cracks. The Teamsters have witnessed such behavior firsthand as XPO workers across the country try to organize with this union. I'm glad to see a majority of the House are standing with workers by allowing them to join together to negotiate on the job."

Critics, however, say in addition to the independent contractor issue, the PRO Act would, among other things:

  • Effectively nullify state “right-to-work” laws opposed by unions. Currently, 27 states have these laws, which say private-sector employees can’t be forced to join a union as a condition of employment. (Critics of such laws call them “right-to-work-for-less” laws.)
  • Mandate employer recognition of a union if a majority of employees sign pledge cards. Critics of these so-called “card check campaigns” charge that union organizers often engage in high-pressure tactics to get workers to sign.
  • Ban employment arbitration agreements.
  • Authorize “secondary boycotts” by unions of targeted employers.

The U.S. Chamber of Commerce contends that the PRO Act “radically rewrites American labor policy” and that it “would deliberately eliminate basic rights for employers, such as the fundamental right to have standing in representation cases before the National Labor Relations Board.

“The PRO Act would apply nationwide the problematic definition of independent contractors recently enacted by California in a statute known as AB-5," the Chamber said in a letter to representatives. "That statute has made the legitimate use of independent contractors extremely difficult in the state. It is causing significant challenges for a host of businesses and has already resulted in job losses. It makes little sense to impose this restrictive definition on the rest of the country.”

The International Foodservice Distributors Association also issued a release criticizing the bill.

“The PRO Act is a gift to union special interests at the expense of the American worker and business owner," said IFDA CEO Mark Allen. "This legislation would drastically reduce employee privacy and choice and radically remake the nation’s employment landscape. It would give unions free reign to use threats and coercion to force both employers and employees to bend to their wishes through imperiling secret ballot elections and prohibiting state right to work laws, protections that have been in place for decades. 

"These types of radical changes would put the foodservice distribution industry and our nation’s overall economy at significant risk. The PRO Act is a truly bad idea, and we are disappointed that a majority of the House voted to support these types of policies.”

It’s unlikely that the bill will make it through the Republican-controlled Senate, and there’s a threat by President Trump to veto it if it does. The administration released a statement noting that the bill “appears to cut and paste the core provisions of California’s controversial AB 5, which severely restricts self-employment. AB 5 is actively threatening the existence of both the franchise business sector and the gig economy in California. It would be a serious mistake for Congress to impose this flawed job-killing policy on the entire country.”

But Bloomberg Law notes that the sweeping House legislation tees up the issue as something that will play into fall elections.

Sen. Bernie Sanders (I-Vt.), a top candidate in the 2020 Democratic presidential primary race, in a tweet called the vote "an important step in leveling the playing field for working people."

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