The Workplace Democracy Act

Capitol dome at dawn.
Wednesday, May 9, 2018 - 4:00pm

The Workplace Democracy Act

The Ghost of Labor Reforms Past

On May 9, 2018, Senator Bernie Sanders (D-VT), along with Rep. Mark Pocan (D-WI), introduced the so-called Workplace Democracy Act (S. 2810, H.R. 5728).  The bill repackages many labor law reform concepts that have failed in the past including card check certification and binding first contract arbitration.

But the legislation is far more dangerous than the Employee Free Choice Act of 2009.  For example, it includes language that would codify in federal law a strict new definition of independent contractor imposed in California by the state Supreme Court.  This stringent three-factor test could make using independent contractors difficult, if not impossible, for many tech companies, gig economy firms, and start-ups.  The Workplace Democracy Act would also repeal right to work in all states, thereby overriding laws passed by 28 states.  It would also codify the NLRB’s joint employer ruling, putting any two companies with a contractual relationship in jeopardy of being jointly liable under the NLRA.

While this legislation will not move in this Congress, it is clearly being teed up for a time when Democrats may have congressional majorities.  It will also be part of the 2020 presidential campaign, and it is notable that the list of co-sponsors includes many Senators expected to run, such as Sens. Kristin Gillibrand, Elizabeth Warren, Kamala Harris, and Cory Booker. 

The bill’s major provisions include: 

  • Employee Free Choice Act revisited: Ironically, for a bill with the word “democracy” in its title, the Workplace Democracy Act revives the least democratic notion of all: certifying unions based solely on signed cards instead of a secret ballot election—the infamous “card check” provision of the past. It also includes the less well known, but equally troubling, binding arbitration provision that would force employers to accept contracts mandated by arbitrators.
  • Repeals all state Right to Work laws:  The Workplace Democracy Act undemocratically repeals all 28 state right to work laws by scrapping Section 14(b) of the Taft-Hartley Act.  Workers in all 50 states would have to pay union dues, whether they want to or not.    
  • Codifies the CA Supreme Court’s Dynamex Decision:  In Dynamex, the California Supreme Court articulated a severely restrictive three-part test for when a worker can be classified as an independent contractor. This decision will hit the tech sector, start-ups, and “gig” economy companies especially hard.  All three of these conditions must be met for a worker to be an independent contractor:  1) the worker must be free from control and direction in performing the work both under the contract and in fact; 2) the service performed is outside the usual course of business of the employer; 3) the worker is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as the service performed.
  • Imposes Joint Employer Liability:  The Workplace Democracy Act codifies Browning-Ferris (BFI), which stands as one of the worst decisions of the Obama-era NLRB.  BFI replaced the clear “direct control” standard for determining joint employer liability with a vaguely defined “indirect control” or “potential to control” test.  Under this new standard, thousands of employers face liability for workplaces they don’t manage and workers they don’t employ.  In fact, almost any contractual relationship, particularly with regard to franchising, opens up the possibility of a joint employer finding. 
  • Allows for Secondary Boycotts and Picketing:  The Workplace Democracy Act repeals those sections of the NLRA that restrict unions from pressuring clients and suppliers of businesses involved in a labor dispute of any sort.  It is essentially a license for unions to launch disruptive protests and pickets at businesses across the country that have no involvement with unions.  This is a key tactic in union corporate campaigns when trying to organize a new employer.
  • Bans Employer Meetings During Organizing Campaigns: The Workplace Democracy Act would prohibit employers from requiring employees to attend on-the-clock meetings where the employer can explain their position on unionization.
  • Codifies and Expands the Obama-era “Persuader” Regulation:  The Obama-era Department of Labor issued a regulation eliminating the exemption from financial reporting for outside consultants who merely advise employers on how to deal with an organizing campaign, rather than actually speaking directly to employees.  The Workplace Democracy Act would not only codify this regulation, it would expand it by adding onerous new reporting requirements; requiring criminal background checks and licensing for labor consultants; and imposing penalties of up to $10,000 per violation on employers.

The so-called Workplace Democracy Act would give unions a license to intimidate employees and launch disruptive pickets across entire communities.  It would also override state right-to-work laws, and expand joint employer liability while simultaneously fracturing relationships between firms and independent contractors.  While the bill will not pass in the current Congress, the threat it represents in future years must be taken seriously, now.