As if the massive disruption resulting from the Coronavirus is not enough, mid-size employers must remain alert to union efforts to organize your workforce and petition for an election in the midst of the ongoing crisis.

Two recent events give rise to the concern that unions will be aggressive in their organizing efforts in this sector, not only during the COVID-19 related business interruption, but also in its aftermath.  First, on March 19, the NLRB suspended Board-conducted elections for two weeks, through April 3, because the developing COVID-19 situation made it impossible to ensure the safety or our employees or the public.   Then, on April 1, even though the COVID-19 situation has significantly deteriorated compared to two weeks ago, with more shelter-in-place orders, the closing of non-essential business on a wide scale, and a crisis in many hospitals and health care facilities, the Board announced that elections would resume on April 6. No word on how the logistics are supposed to work or how elections will be conducted in a way that keeps employees safe while maintaining fair election procedures. Even though many businesses have to shut down, apparently union elections must continue.

Second, the resumption of union elections is occurring at the same time the federal government is making loans available to businesses in financial distress under the recently enacted CARES Act. What’s the connection between the government loans and a union election? Like many government programs that are intended to help, the loans have strings attached that could make them less helpful than appears on the surface. For employers between 500-10,000 employees, one of the conditions of accepting a loan is that, until it is paid back, “the recipient will remain neutral in any union organizing effort.”    Many businesses are not aware of this condition because it’s buried on page 524 of an 883 page law.

What does it mean to “remain neutral?” Ordinarily, an employer that opposes a union has the right to engage in a campaign to counter the union’s organizing effort.   An employer is not allowed to say or do anything that might threaten employees who favor a union or coerce them into voting against it. But, employers are allowed to communicate to employees their desire to remain union free, to provide truthful information about employee’s rights to vote against the union, to explain potential disadvantages of becoming a union member, and how a union would change the relationship between employees and management.  To remain neutral means to give up all those rights, and allow the union to run its campaign completely unopposed.

Even though you may be giving up our rights only during the term of the loan, if your employees vote to be represented by a union, the union will still be there long after the loan has been repaid. Once your workforce is organized, it’s very difficult to become union free again.   You will be obligated to bargain in good faith with the union to try and reach agreement on contract terms. There are only limited circumstances that would allow an employer to withdraw recognition from the union, and even then it is legally risky. Even if employees decide they don’t want the union to represent them anymore, it is difficult to decertify a union as the bargaining representative.  It requires a majority vote of employees, and the employer is not permitted to support a decertification campaign.

Of course, it is possible this part of loan provision is not enforceable, and it might be unconstitutional.     The NLRB is the agency with jurisdiction over the labor laws, but the loan program is administered by the Treasury Department, which has no authority over, or experience with, the National Labor Relations Act.   But, until a court rules the this part of the law cannot be enforced, an employer who accepts a loan and tries to oppose a union will have lots of legal trouble on its hands.    Businesses will have to decide if the short term financial protection the loan program offers is worth the potential long-term cost.

Photo attribution: Labor Union by Nick Youngson CC BY-SA 3.0 Alpha Stock Images