By: James F. Hendricks, Jr., Esq.
Under the new Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) , there are many labor law implications for employers with 500-10,000 employees. Among these include a” good faith certification” that the employer will comply with certain requirements listed in the CARES Act.
First, the employer must certify that it will remain “neutral in any union organizing effort for the term of the loan.” Also, the business must certify that it “will not abrogate existing collective-bargaining agreements for the term of the loan (not to exceed five (5) years) and two (2) years after completing repayment of the loan.” While the CARES Act does not define “abrogate” under this act, the employer must assume it means the employer certifies it will not refuse to honor its collective bargaining agreement.
Although the language in the Act is unclear, it is uncertain with respect to how the legislation will impact covered employer’s’ relationships with its current employees and unions. Furthermore, while the employer must remain “neutral” in any union organizing effort for the term of the loan” it is unclear with respect to the term “neutral.” Normally unions will insist that “neutral” means employers are prohibited from taking any action whatsoever in response to a petition for representation filed by the Union with the National Labor Relations Board. This could have a significant impact on an employer’s right to “free speech” under these circumstances.
For example, if an employer is to remain neutral, does this prohibit the employer from having “captive audience” meetings wherein the employer addresses issues that the employee should consider in a unionizing effort such as the meaning of signing union cards, the express purpose of unions to collect dues and insist on employees required to join the union?
The neutrality requirement flies in the face of employer rights under the Taft-Hartley Act which has a “free speech” clause that balances an employer’s right to those of the unions. It is unclear as to whether or not these requirements will be monitored by the National Labor Relations Board or if they will be handled by the Treasury Department.
Consequently, any midsize business should consider these labor law issues in determining whether or not to accept the loan from the government under the CARES Act.
Leech Tishman’s Employment & Labor Practice Group continues to monitor employment legal issues related to the COVID-19 crisis. Individuals with questions regarding the CARES Act and its impact on their business should reach out to Leech Tishman’s Employment & Labor team.
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