CHICAGO — Labor activists eager to capitalize on the pro-worker sentiment fueled by the pandemic will soon have a friend in the White House.
President-elect Joe Biden is expected to push to make it easier for workers to unionize and hold employers accountable for working conditions, a sharp U-turn from the business-friendly employment policies pursued by President Donald Trump.
Among the most immediate changes will be new leadership at the National Labor Relations Board and Department of Labor, the latter of which is currently helmed by Eugene Scalia, a former corporate attorney who has been criticized by labor leaders for siding with industry over employees.
“They are supposed to be worker advocate agencies,” said Chicago Federation of Labor President Bob Reiter. “Making sure employers don’t run the table is important.”
Business leaders worry about a return to tighter regulations that add red tape and costs..
Still, “this is a time we should give everybody a benefit of the doubt, and until we see hard proposals we can hope for the best,” Illinois Chamber of Commerce President and CEO Todd Maisch said.
Labor policies often swing back and forth as Republicans and Democrats trade control of the White House and install new leadership at the Labor Department, which enforces wage and hour laws, and the NLRB, which enforces labor law in relation to unionizing and collective bargaining.
A divided Congress will blunt big changes, as legislation that burdens business will face an uphill battle if the Senate remains in Republican hands (two seats hang in the balance in Georgia, where a runoff is scheduled for January). But next year could usher in a more worker-friendly era via executive orders handed down by the president and rules set by agencies in the new administration.
Here are workplace policies that may see changes.
Defining who is a joint employer, and therefore liable if workers are treated improperly, has taken on greater urgency in recent years as more companies outsource work. It affects companies that use subcontractors and staffing agencies as well as franchised businesses. Corporations deemed to be joint employers can be forced to bargain with unions and pay up if workers’ rights are violated.
One high-profile fight was over whether McDonald’s is a joint employer with its franchisees, a status that would have put the Chicago-based fast-food giant on the hook for alleged labor law violations at franchised restaurants. The NLRB, dominated by Trump appointees, last year sided with McDonald’s in the case and approved a settlement that gave workers back pay but did not establish a joint employer relationship.
The NLRB this year also reversed the landmark 2015 Browning-Ferris decision that made it harder for companies to avoid joint employer responsibilities. The Obama-era decision, which sent shock waves through the business community, had broadened the definition of joint employer so that it applied to companies that possess indirect control of another business’ employees.
The agency under Trump instead finalized a rule that defines a joint employer more narrowly as one that exercises “substantial direct and immediate control” over employment conditions.
Meanwhile, in September a federal judge in New York struck down a pro-business rule issued by Trump’s Labor Department that set a high standard for establishing that company is a co-boss and therefore liable for workplace conditions.
Biden favors the broader, pro-labor definition of joint employer. The president-elect, on his campaign website, said he would enact legislation codifying the Browning-Ferris definition into law.
Maisch worries such a move, which he believes is “all about facilitating unionization of franchised businesses,” would hurt the franchise model that allows small operators to grow with support from a parent company.
“We think it’s very important to recognize that the franchise model can be very beneficial to people who want jobs,” he said.
Labor advocates have long been concerned that employers classify workers as independent contractors, rather than employees, to keep costs down.
Independent contractors aren’t covered by federal minimum wage and overtime laws, don’t have to be paid health insurance and typically don’t qualify for unemployment insurance or workers’ compensation. The biggest fights in recent years have been over gig workers such as Uber and Lyft drivers, though many industries rely heavily on independent contractors, including truck drivers and sales reps.
The Labor Department this year proposed a rule it said would clarify who counts as an employee via a test that would assess, for example, whether workers are truly in business for themselves or are economically dependent on their employers. Critics say the rule will encourage companies to classify more workers as independent contractors.
Biden’s Labor Department is expected to take the opposite tack and extend employee status to more workers.
Biden, on his campaign website, said he would drive aggressive enforcement to reduce worker misclassification and enact legislation that makes it “a substantive violation of law under all federal, labor, employment and tax laws with additional penalties beyond those imposed for other violations.”
The independent contractor dispute is also playing out in the states. A California law that took effect this year presumes workers are employees unless they meet a strict test, prompting massive pushback from ride-sharing companies and a controversial binding referendum, Proposition 22, seeking carve-outs for that industry. In a major victory for Uber and Lyft, voters approved it.
“That could easily be a big battleground here (in Illinois) as well,” said Maisch, who expects Illinois lawmakers to introduce legislation similar to California’s to curtail independent contractors and anticipates that ride-sharing companies will fight it.
The Protecting the Right to Organize Act, which would strengthen workers’ ability to form unions and fine companies that interfere with their organizing efforts, passed the House early this year but died in the Senate. It is likely to come up again and still face strong headwinds in a Republican-controlled Senate, but it would have Biden’s support.
In addition to giving the NLRB the power to fine employers that violate labor law, the PRO Act would weaken “right-to-work” laws that allow employees to skip paying union dues and give independent contractors the status of employees for the purpose of union organizing.
The proposed law would be a big boost for labor at a time when interest in unionizing is on the upswing, a trend amplified by the pandemic as concerns about worker safety and rights became top of mind.
“During the pandemic we have seen more people reach out for workplace protections than we ever would have expected,” said Chicago Federation of Labor President Bob Reiter. “I think the Biden coalition has a deep appreciation of that rising activism around holding employers accountable.”
Biden has said he would go beyond the PRO Act with legislation to impose stiffer penalties on corporations that block unionizing efforts and hold executives personally liable, including criminally liable if the interference is intentional.
The vast majority of labor unions endorsed Biden, including the 13 million-member AFL-CIO, though Trump was endorsed by several police unions.
Rules for federal contractors
Some of the swiftest changes could come via executive order to the working conditions at federal contractors.
Biden is likely to reinstate the Fair Pay and Safe Workplaces order, signed by President Barack Obama and revoked by Trump, which required companies applying for federal contracts to disclose labor violations. At the time of the order, there were 24,000 businesses with federal contracts employing 28 million people.
Biden also is expected to issue an order requiring federal contractors to pay a $15 minimum wage. Biden supports increasing the federal minimum wage, currently $7.25 an hour, to $15 for everyone but that would have to happen through legislation that is unlikely to pass a Republican-controlled Senate. (The minimum wage is set to rise to $15 next year in Chicago and by 2025 in Illinois).
Another executive order to watch involves what kind of implicit bias training federal contractors and grant recipients can offer. Trump’s order, signed last month, takes aim at critical race theory, which is the idea that institutions are inherently racist, and prohibits “blame-focused” training that implies everyone is racist by virtue of their race. Critics have said Trump’s move has had a chilling effect on diversity training programs.
Biden’s campaign website says he will work with civil rights leaders to institute bias training programs and make them available to the public.
Scabby the Rat
The fate of the snarling inflatable rats that often show up at picket lines as a symbol of labor strife could depend on the composition of the NLRB.
The agency is considering whether to crack down on their use, which the NLRB’s Trump-appointed general counsel has argued is unlawful under the National Labor Relations Act and not protected by the First Amendment because the rats are used to “menace, intimidate and coerce.”
Scabby, born in Chicago 30 years ago, is used to protest strikebreakers, pejoratively called “scabs,” and the hiring of nonunion labor. But the NLRB has argued it also scares away customers from businesses not involved in the labor dispute.
The agency is accepting public comment on the issue until Dec. 28. It may be a while before Biden appoints new members to the NLRB — there is one spot open on the five-member board, while the other board members’ terms don’t expire until 2022 at the earliest, and the general counsel’s term isn’t up until late next year — but Big Labor is hopeful Scabby will prevail.
“It has become a symbol for us in the labor movement for fighting for workers,” Reiter said.