The Holidays Arrive Early for Employers at the NLRB

Since September 2017, when the Republican Party regained majority status on the National Labor Relations Board (“NLRB”) for the first time since the Obama Administration, it was anticipated that the newly configured NLRB would return federal labor law to what it was before the pro-union rulings issued over the last eight years. During the week beginning December 11, 2017, that anticipation became reality as the NLRB issued five pro-employer decisions and a request for information on the quickie election rules.

Employer Work Rules

First, over the last eight years, one of the most frustrating issues for employers has been the numerous NLRB decisions finding facially neutral work rules violative of the National Labor Relations Act (“NLRA”). Many frustrated employers even removed rules on workplace civility from their handbooks. Under the Obama-era standard, the NLRB found that employers violated the NLRA by maintaining workplace rules/policies that could be “reasonably construed” by an employee to prohibit the exercise of NLRA rights.

In place of this standard the NLRB held in The Boeing Company, 365 NLRB No. 154 (2017), that all workplace rules/policies fall into one of three categories:

  • Category 1 includes rules/policies that are deemed lawful either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule. According to the NLRB, examples of Category 1 rules include no-camera rules that prohibit the use of cameras at work absent a valid business need and rules requiring employees to abide by basic standards of civility.
  • Category 2 includes rules/policies that warrant individualized scrutiny to determine if the rule/policy prohibits or interferes with an employee’s rights under the NLRA, and if so, whether any adverse impact on conduct protected by the NLRA is outweighed by legitimate justifications.
  • Category 3 includes rules/policies that the NLRB deems unlawful to maintain because they would prohibit or limit conduct, and the adverse impact on employee rights protected by the NLRA is not outweighed by justifications associated with the rule. An example would be a rule that prohibits employees from discussing wages or benefits with one another.

Thus, while some rules would continue to be unlawful to maintain, for many rules that are designed to make for an orderly workplace, the NLRB took away the threat of violation for merely maintaining a rule if its application does not implicate NLRA rights.

Joint-Employer Standard

Second, the NLRB overturned Browning-Ferris and returned to the joint-employer standard that had been in place for thirty years before the Obama Administration. In Browning Ferris, the NLRB held that two employers could be joint employers even if one entity only “reserved” control over the other entity’s employees, as opposed to actually exercising control. This holding had a substantial impact on, among other things, franchise/franchisor relationships and employers who routinely use temporary agencies or other similar methods to staff their business because it increased the likelihood of finding joint-employer status.

In Hy-Brand Industrial Contractors, 365 NLRB No. 156 (2017), the NLRB returned to the “exercise of direct control” standard in joint-employer cases. More specifically the NLRB held that “a finding of joint-employer status shall once again require proof that putative joint employer entities have exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise control), the control must be ‘direct and immediate’ (rather than indirect), and joint-employer status will not result from control that is ‘limited and routine.’“

Micro-unit Organizing

Third, the NLRB voted to overturn its decision in Specialty Healthcare, where it allowed a union to organize micro-units of employees and exclude other employees who shared a community of interest with the employees being organized. According to the NLRB in Specialty Healthcare, employees could only be added to the petitioned for unit if they shared an “overwhelming” community of interest with the employees identified in the petitioned for unit. Application of this standard allowed unions to organize small groups of employees. For example, it allowed a union to organize specific salespeople in a department store even though the employer argued all of the salespeople in the department store shared a community of interest.

In PCC Structurals, Inc., 365 NLRB No. 160 (2017), the NLRB returned to the “community of interest” standard when reviewing such petitions. This traditional standard permits the NLRB “to evaluate the interests of all employees-both those within and those outside the petitioned-for unit-without regard to whether these groups share an ‘overwhelming’ community of interests.” The NLRB’s return to the previous standard is a positive development for employers as once again they have the ability to argue for the inclusion of additional employees to the petitioned for unit. This will prevent a union from handpicking a small group of workers who it believes will vote in favor of unionization and, as the NLRB stated, return us to a standard “rooted in the real world.”

Implementing Actions Consistent with Past Practice

Fourth, the NLRB overruled E.I. du Pont de Nemours, where it held that under certain circumstances, actions by an employer that are consistent with a past practice require an employer to give a union notice of the actions and an opportunity to bargain before said actions are taken. In Raytheon Network Centric Systems, 365 NLRB No. 161 (2017),the NLRB reverted back to the more common-sense approach that an employer does not violate the NLRA by failing to give a union advance notice and an opportunity to bargain before taking action consistent with an established past practice.

ALJ Authority to Accept Settlement Agreements

Fifth, the NLRB reinstated the authority of administrative law judges to accept settlements over the objection of the General Counsel and charging parties, so long as the terms of the settlement are reasonable based onthe factors established in Independent Stave (1987). This reversed the NLRB’s 2016 decision that prevented administrative law judges from accepting objected to settlements unless they provided a full remedy to all the alleged violations in the complaint. See, UPMC Presbyterian Shadyside, 365 NLRB No. 153 (2017).

Request for Information – Quickie Elections

Finally, and perhaps most significantly, the NLRB issued a request for information seeking public comment about the “quickie election rules” that were implemented in 2014. In general, these rules shortened the period of time between the filing of a petition and an election from as much as 42 days to no more than 21 days. The intended impact of these rules in situations where a union was seeking to represent a unit of employees was to limit the ability of an employer to educate employees about, among other things, union dues, collective bargaining and strikes and concomitantly, increase the likelihood of employees voting in favor of unionization.

In its request for information, the NLRB indicated it was going to review the quickie election rule to evaluate whether the rule should be:

  1. Retained without change;
  2. Retained with modifications; or
  3. Rescinded, possibly while making changes to the prior Election Regulations that were in place prior to the adoption of the quickie election rule

The NLRB’s request for information is a positive sign for employers that it is seriously contemplating, at a minimum, changing the quickie election rules to level the playing field.

Employers may not see similar pro-employer decisions in the near future in light of the fact that Chairman Philip Miscimarra’s term expired on December 16, 2017. This means there is no Republican majority until President Trump’s next appointment for the NLRB is approved. Once approval occurs, however, look for more good news from the NLRB. For now, just enjoy the holidays.

The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters for over sixty years, and are available to discuss these issues and others. As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.