The US House of Representatives on Tuesday passed legislation that would affect several aspects of employment law, including independent contractor classification and joint employment.
The Protecting the Right to Organize (PRO) Act of 2021 “restores fairness to the economy by strengthening the federal laws that protect workers’ right to organize a union and bargain for higher wages and better benefits.” It would codify the Browning standard for joint-employer status and a three-factor worker classification standard.
If enacted, the act would include the following changes to employment laws:
Joint employment. The PRO Act would codify the joint employer standard the National Labor Relations Board (NLRB) enacted in its 2015 Browning-Ferris decision, which was overturned by the Trump NLRB in a rulemaking. If the PRO Act is enacted, two or more persons shall be employers if each codetermines or shares control over the employees’ essential terms and conditions of employment. In applying this standard, the National Labor Relations Board or a court of competent jurisdiction shall consider as relevant direct control, indirect control, reserved authority to control and control exercised in fact when determining joint employer status.
Independent contractor classification. An individual performing any service would be considered an employee and not an independent contractor under Section 2(3) of the National Labor Relations Act unless:
- The individual is free from the employer’s control in connection with the performance of the service, both under the contract for the performance of service and in fact;
- The service is performed outside the usual course of the business of the employer; and
- The individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed
Joint, class, and collective actions and arbitration agreements. Agreements requiring employees to waive the right to pursue joint, class, or collective claims in court would be prohibited, effectively banning mandatory arbitration agreements for such claims. The act would overturn the 2018 US Supreme Court ruling in Epic Systems Corp. v. Lewis, which held employers may force workers into signing arbitration agreements that waive the right to pursue work-related litigation jointly, collectively or in a class action.
The act also strengthens employees’ right to unionize and seek redress in court.
President Biden supports the act; in a statement urging its passage, he said, “We should all remember that the National Labor Relations Act didn’t just say that we shouldn’t hamstring unions or merely tolerate them. It said that we should encourage unions. The PRO Act would take critical steps to help restore this intent.”
The act passed by a vote of 225-206. The House passed the act last year, but it was never taken up in the Senate. NPR reports it is unlikely to pass the Senate this time due to the filibuster.