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Beware Organized Labor’s Trojan Horse Inside the Stimulus Package.

Employment Law Blog

Beware Organized Labor’s Trojan Horse Inside the Stimulus Package

March 27, 2020

As part of the $2 trillion pandemic stimulus Coronavirus Aid, Relief and Economic Security Act (CARES Act) expected to be passed and signed in to law today, there are loan opportunities for “mid-sized” businesses and not for profit organizations with between 500 and 10,000 employees.

In order for those who qualify to receive these market favorable loans, the government will require the borrower to agree to some unique terms beyond the no stock buybacks and limits on executive compensation that you may have read about in the media.

Borrowers that are organized will be required to agree not to abrogate a collective bargaining agreement during the term of the loan plus an additional two years. Given the relatively low rate of organization in this country and that there are already laws that severely limit when an employer can abrogate a collective bargaining agreement, this provision will have little impact.

BUT for the vast majority of borrowers, there is a trojan horse provision in the stimulus package. The federal government will require borrowers with unorganized employees to “remain neutral in any union organizing effort for the term of the loan.”

Borrowers beware. Remaining neutral means near certain unionization once a union finds an opening to organize. Employees will never hear the counterpoint about what rights they give up and the other negatives that come from being organized. They will only hear the mis-truths and half-truths that organizers are legally authorized to spread.

While we recognize that value that the CARES Act brings to this recovery, for some businesses it may come at a far greater cost than anticipated.

Employers considering borrowing should take all preventative steps possible in advance of making an application. As we have been for almost sixty years, we CARE and are here to help.

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