Understanding the Union Provisions in the CARES Act Treasury Fund

The CARES Act contains a provision that allows the Secretary of the Treasury to set up a new middle-market loan program for employers with between 500 and 10,000 employees. The provision is a part of an optional program that would create additional assistance for mid-sized businesses.

The bill states that the Treasury Secretary “shall endeavor to seek the implementation” of such a program.  In plain English, this means that the Treasury has the option to set up the program, and even if it were to be set up, no one would be required to use it.

The specificity of language is important, because any business taking a loan under this program (assuming the program is actually established) would be required to remain neutral in any union organizing campaign during the loan period. Additionally, businesses participating in this program would be prohibited from abrogating the terms of their collective bargaining agreements for the duration of the loan, plus two additional years.

While it’s unfortunate that Congress would include language in this legislation that limits employer speech rights and hampers business ability to respond to crises, it is highly unlikely that it will affect business operations. Assuming that the program is actually established, it is entirely up to individual businesses to choose whether or not to participate.