Unions Rewarded in CARES Act

April 01, 2020
Inside HR
Employee & Labor Relations
Strategic Planning
Read time: 2 mins

You’ve heard the cynical political adage “never let a good crisis go to waste?” It turns out that tucked away in the fine print of the 880-page legislation known as the Coronavirus Aid, Relief and Economic Security (CARES) Act, is a not-so-little boost for unions looking for leverage with desperate employers. In Section 4003 (D) of the Act, “Assistance for Mid-Sized Business”, the following conditions were added for the recipients of loans:

  • The recipient will not abrogate existing collective bargaining agreements for the term of the loan and 2 years after completing the repayment of the loan. (i) IX
  • The recipient will remain neutral in any union organizing effort for the term of the loan. (i) X

The meaning of the first condition is wide open to the interpretation of what employer actions might be viewed as abrogating a labor agreement. The meaning of the second is clear: take a loan and be prepared for union organizing activity. Your organization will be targeted because your hands are tied in responding to the union’s campaign with your employees. Remaining neutral means no letters to or meetings with your employees to express your concerns with unions and how your organization will be impacted. Anything more than telling employees “the decision to unionize is up to you” will likely be challenged. 

Exactly how the above conditions on receiving a loan will be enforced remains to be clarified. Normally, the National Labor Relations Board is the federal agency that enforces labor law, including issues on the duration of labor agreements and the conduct of union elections. However, the CARES Act is administered by the Treasury Department.

If your mid-sized organization (over 500 employees) is in desperate need of a CARE loan to survive, these union provisions might be irrelevant. If, however, you are currently unionized or concerned about your vulnerability to union organizing, these conditions for receiving a loan might warrant further review and consideration