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Could labor finally get its day?

The Workplace Democracy Act has yet to gain traction in Congress, but if passed it would shatter the employer-employee dynamic in Madison.

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Big changes for local employers

Whether the WDA is good or bad for labor and employment is clearly a matter of heated debate, but local employment law attorneys agree if the bill ever becomes law it will mean some serious changes for Madison businesses.

Assuming the bill survived challenges by the state, which could be fought on various grounds including state sovereignty under the 10th Amendment, the Workplace Democracy Act would impact certain elements of Wisconsin’s existing labor laws, notes Colin Good, senior counsel at Madison-based Hawks Quindel S.C.

“For instance, the WDA would abrogate Act 1 — the right-to-work law — by repealing the state’s right-to-work law. Similarly, the WDA would abrogate Act 10’s requirement that unions win, every year, support from a majority of employees in the bargaining unit, not just a majority of those voting in the certification election, through the use of ‘signed cards’ — often called a ‘card check.’”

The WDA would also change Wisconsin’s “economic realities test” in determining who is an employee versus an independent contractor. Wisconsin traditionally looks at six factors to determine whether an individual has sufficient economic independence to operate a business on his or her own, or is economically dependent on the employer to be an employee, Good explains. The WDA makes a lot more individuals employees by imposing stricter requirements for who is and is not an independent contractor.

“This would have a positive impact on people who work for ‘gig’ economy companies like Uber, which attempt to distance themselves from the people who provide services on their behalf,” says Good. “Employees have many more rights, such as coverage under the Family Medical Leave Act and the ability to bring suits for discrimination and retaliation, than independent contractors.”

The WDA would also broaden Wisconsin’s definition of what constitutes a “joint employer” for purposes of establishing liability. For instance, Wisconsin adopted the definition of “franchisor” found in the Code of Federal Regulations through the passage of 2015 Wisconsin Act 2013. Under that act, franchisors can be treated as an employer of its franchisee’s employees if the franchisor has agreed in writing to assume that role or the franchisor has been found by the applicable department or division of state government to have exercised a degree of control over the franchisee or the franchisee’s employees that is not customarily exercised by a franchisor for the purposes of protecting the franchisor’s brand.

According to Good, it is important to note that, while repealing any right-to-work legislation and making it easier for employees to form unions, the WDA does not require that employees join unions or force employers to organize its workforce into unions. It would, however, make organizing and sustaining a union much easier.

“The impact of the WDA on Madison-area employers could be substantial,” says Good. “The WDA would [require] employers to take financial responsibility for their employees, instead of letting them languish as independent contractors. It would also impact employers, and franchisors specifically, by increasing their liability for lawsuits arising from discrimination or retaliation. It would also prevent employers from interfering with employees who wish to organize. It would potentially increase costs associated with running a business, but that is not a certainty.”

However, smaller employers are not likely to see much, if any, impact, as workers at small companies are less likely to unionize, notes Jessica M. Kramer, partner at Kramer, Elkins & Watt LLC in Madison. She adds though that it’s not just about the size of the employer, but about how it sets terms and conditions of employment and how flexible it is in being willing to listen to its employees’ concerns and wishes.

“Smaller employers, particularly newer ones, tend to be more open to including employees in the development of their policies and practices, as they may not have any other starting point,” explains Kramer. “Also, we are seeing an increase in employers wanting to give employees some ownership in the business, which can create a different dynamic altogether.

“As for larger employers, they may see more union-related activity and they may see their workers take more of an interest in such activity, particularly if there has been high turnover or unrest among their workers in recent years,” Kramer continues. “Employers who already have union members as employees or whose employees have been moving in the direction of organized labor may see things progress more quickly, particularly when a union contract is first being negotiated, as this legislation puts strict timelines on the contract negotiation and execution process and incorporates mediation and arbitration as a means to ensure the negotiation gets completed in time.”

Kramer says as a practical matter this means those employers will have to devote more time and attention to the collective bargaining process in a shorter period of time, which may mean having to make some adjustments to business operations and staffing.

“Employees wanting to organize or beginning to organize may benefit from the fast-tracked process, which is clearly the intent of the legislation,” states Kramer. “This would be most apparent in industries where there have been complaints of wage stagnation and workers have been asking for pay increases across the board, but have not been seeing them. Under current law, if a union is formed and workers sign on, it can take some time for the workers to see results in the form of increased pay or benefits.”


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