The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the new stimulus package recently passed by Congress, includes a “union neutrality” mandate for mid-sized employers who accept loan proceeds. This union neutrality commitment would be in place for the life of the loan. Mid-sized employers are defined as those with 500 to 10,000 employees.
For many years, to assist their organizing efforts, unions have demanded of certain multi-state employers that they commit to “stay neutral” in union organizing campaigns at other company sites. Such neutrality demands have included asking the employer not to express opinions which disfavor the union’s organizing efforts, or not to hold captive audience speeches during the union’s organizing drive, or to accept a showing of majority status by way of checking authorization cards (i.e., that the employer not demand a secret-ballot election to determine if the union has majority support).
It is not clear under the new stimulus package what “union neutrality” would require, but employers should be aware of this requirement. The requirement is buried among the list of “good faith certifications” the loan recipient must make, such as:
(a) That the uncertainty of economic conditions makes the loan request necessary to support ongoing operations.
(b) The funds will be used to retain 90% of the workforce, at full compensation and benefits, until September 30, 2020.
(c) The recipient intends to restore not less than 90% of the workforce (that existed as of February 1, 2020) and to restore all compensation and benefits to workers no later than four months after the termination date of the public health emergency.
(d) The entity is domiciled in the United States, created or organized in the United States, with significant operations and a majority of its employees in the United States.
(e) The entity is not a debtor in bankruptcy.
(f) The entity will not pay dividends or re-purchase any equity securities of the recipient or a parent, other than as contractually required as of the date of the CARES Act.
(g) The recipient will not outsource or offshore jobs for the term of the loan and two years after repayment.
(h) The recipient will not abrogate any existing collective bargaining agreement for the term of the loan and two years after repayment.
(i) The “recipient will remain neutral in any union organizing effort for the term of the loan.” (emphasis added)
Thus, among the certifications required, the loan recipient – a “mid-sized employer” – must agree to remain “neutral,” but there is no guidance on what neutrality means or how robust the neutrality requirement will be. But, suffice it to say, the recipient of the loan could become a target of a union organizing drive during the term of the loan and would be required to remain “neutral” – however defined – and may not be able to engage in any informational campaign to ensure that its employees are hearing both sides of the unionization question.
If you have any questions regarding the information in this alert, please contact any of our labor and employment attorneys.