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Every day we speak with business owners who are facing a crisis. The crisis is not always the same. Throughout Maine, small and mid-sized employers are dealing with labor shortages, supply chain problems, rampant inflation, COVID, and COVID mandates. To this grim list, some in Washington seek to slap employers with punishing civil penalties.
The recently deceased Build Back Better Act (BBB) would give the National Labor Relations Board (NLRB) the power to impose fines of between $50,000 and $100,000 on companies for each “unfair labor practice” for the first time in history.
Worse, “a civil penalty for a violation described in this section may also be assessed against any director or officer of the employer,” the measure reads, “who directed or committed the violation, had established a policy that led to such a violation, or had actual or constructive knowledge of and the authority to prevent the violation and failed to prevent the violation.” The “officers and directors” of most small businesses in Maine are the business owners themselves.
Senate leadership is committed to bringing back a new version of the BBB, one they believe can get the necessary 50 votes to pass. We urge Sens. Susan Collins and Angus King to oppose any efforts to include these employer penalties in a new reconciliation package.
The fines in question apply only to employers. Unions would face no new consequences when they are ruled to have committed unfair labor practices. These fines are strictly about tilting the playing field against employers and toward unions.
Imagine the environment such a new punitive regime would create in Maine’s workplaces.
“It may be tempting to view the addition of penalties as simply an enhanced deterrent to ensure compliance, but reshaping the nature of the [National Labor Relations Act] from focusing on remedies to focusing on punishment will have effects on employers that go far beyond fines,” labor lawyer Michael Lotito predicted in the Wall Street Journal. “The lure of high-dollar penalties will embolden organized labor and likely result in a dramatic increase in unfair labor practice filings at an astronomical cost to employers and consumers.”
According to a new WSJ Small Business CEO Survey, nearly 80 percent of small businesses report higher costs for labor and over two-thirds are wrestling with supply chain problems and cost pressure due to inflation. We believe there would never be a good time for this idea to become law. However, we know with certainty that now is precisely the wrong time to do it.
Advocates of these fines know the Senate cannot pass these fines without using the reconciliation process, which gets the bill around the possibility of a filibuster. But there’s a catch to reconciliation: all the items in the bill are supposed to be strictly budget related.
Fines on the scale that are projected here could be ruinous to some businesses, but they are a drop in the bucket to the greater funding pool.
New “unfair labor practice” fines are currently projected to bring in just a few million dollars per year as part of a $1.7 trillion government spending initiative. In other words, it’s not really about raising money, it’s about changing policy.
It is almost certain Congress will make another attempt at passing a big reconciliation bill after its holiday recess. Maine’s delegation should make sure these jobs-killing fines are not in the new bill.