Labor & Employment

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CARES Loans Come With "Union Neutrality" Price Tag

March 27, 2020

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Under the CARES Act (H.R. 748), mid-sized businesses affected by the COVID-19 pandemic may be eligible for low-interest rate loans. These loans, however, come with a hidden price tag:  a requirement that the business makes a "good-faith certification" that it "will remain neutral in any union organizing effort for the term of the loan.”

What it means for a business to remain "neutral" is up in the air. The CARES Act does not define the term.   

Generally, a "neutrality agreement” is a contract between a union and an employer under which the employer agrees that it will not exercise its right to lawfully communicate its views with respect to unionization, for example, how the collective bargaining process operates. The scope of such an agreement can vary. A neutrality agreement can include a gag order on speech not favorable to the union. Or it can require an employer to recognize a union automatically if a certain number of signed union authorization cards are collected, rather than through a secret ballot election.  Additionally, a neutrality agreement can give a union permission to come on company property, require the employer to provide the union with employees' contact information, or require "captive audience" meetings. 

Ultimately, the meaning of the neutrality requirement will most likely be determined by the National Labor Relations Board (NLRB). But it could provide a boost to union organizing efforts.

For more information, please contact:

Emily Leahy

415-995-5155 Direct Phone
415-995-3557 Fax

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Raymond Lynch

415-995-5055 Direct Phone
415-995-3507 Fax

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