Stay or Pay? What to do with existing agreements

The National Labor Relations Board (NLRB) recently informed companies across the United States that it will begin to challenge “stay or pay” agreements that companies have made with their employees. The General Counsel, Jennifer A. Abruzzo, believes these agreements violate worker’s rights. She distributed a memo informing everyone that they have 60 days to comply with her perspective on these agreements, or face challenges, penalties or worse with the NLRB.

ABC of Wisconsin’s Counsel, Daniel Barker of Jackson Lewis, provided a Two Minute Drill addressing the issue for our members.  He also provided a session at our recent HR+ Conference where he discussed a number of legal issues, including this one.

His suggestions include:

First, put enforcement of any agreements on hold, until we get through the presidential election. President Biden fired the previous general counsel and appointed Jennifer Abruzzo on his first day in office. If Kamala Harris wins, she will likely either re-appoint Abruzzo, or appoint another general counsel with similar leanings.  If Donald Trump wins, he will likely remove Abruzzo on day one, and replace her with someone who shares a more moderate perspective on labor issues. Either way, it’s prudent to delay doing anything more to enforce existing agreements until we know who will represent the NLRB beginning in 2025.

Next, speak to your legal counsel about the agreements you have, and determine if they need to be removed or reworked in order to make them comply with this and future guidance.

Finally, remember that your best, and most effective way to ensure your employees stay, is to provide a positive working environment. “The one thing that the NLRB will never be able to legislate away from the merit shop is its ability to create a nurturing environment for apprentices where they are valued for their work and are viewed as a key part of the team.  A place where they can grow based on their own merit.  It’s that basic appreciation – and not any repayment agreement – that convinces employees to stick around for the long haul,” says Barker.

This article is for informational purposes, and is not intended as legal advice. For specific advice, contact your legal counsel, or use the ABC of Wisconsin First Free Call service, where you can reach counsel and determine if you need more support.