What happened?

On May 13, 2024, the Alabama Legislature passed SB 231, which conditions an employer’s eligibility for economic development incentives upon the employer refraining from certain practices relating to labor organizations

What are the details?

Key Bites for Employers

• The law provides in Section 1 several definitions

• In section 2, the law states that no employer is eligible to receive an economic development incentive for a project in the state if the employer:
  • Voluntarily grants union recognition rights for employees solely and exclusively based on signed labor organization authorization cards if the bargaining representative selection may be conducted through a secret ballot election
  • Voluntarily discloses an employee’s personal contact information to a labor organization, or a third party acting on behalf of such an organization, without the employee’s prior written consent, unless that disclosure is otherwise required by state or federal law
  • Requires a subcontractor to engage in any of the foregoing prohibited activities 

• Any employer that engages in prohibited activity under the new law shall be required to repay all economic development incentives received over the life of the project.

• The Alabama Department of Revenue has the authority to investigate potential violations.

• Exceptions: only 2
  • It does not apply to any agreement between the state and an employer executed before January 1, 2025.
  • Employers who, by October 1, 2024, have either a collective bargaining agreement (CBA) with a labor union or have already held a federally regulated secret ballot election.

Business Considerations

• Employers should review if they fall into one of the exceptions
• Employers should be aware of the consequences of voluntarily recognizing unions and should wait until a ballot voting happens to see if they must recognize or not a union.
• Employers should plan a strategy to comply both with the state and federal regulations, especially the ones pertaining to union recognition from the NLRB.

Source References

• AL SB 231

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