November 19, 2018
New Jersey Law Journal

In April 2018, John F. Ring took a seat on the National Labor Relations Board (NLRB or “the Board”) as the agency’s chairman. His addition marked the first time since a brief stint in late 2017 that a majority of Board members were comprised of Republicans. During that brief stint in 2017, the NLRB issued a number of decisions that rolled back several pro-union decisions rendered during the prior Democratic administration. See, e.g., Raytheon Network Centric Sys., 365 NLRB No. 161 (2017); PCC Structurals, 365 NLRB No. 160 (2017); UPMC, 365 NLRB No. 153 (2017). After those decisions were issued, many in the management community eagerly awaited the return of a Republican majority.

Although Chairman Ring joined the Board over six months ago, there has not yet been any significant change in NLRB law similar to what we witnessed in late 2017. This said, there are signs that meaningful changes may be coming soon. Three of the more noteworthy potential changes concern:

  • the standard to be applied when determining whether two or more entities are joint-employers;
  • whether employees have a presumptive right to use their employers’ email systems to engage in protected concerted activities; and
  • whether language in a pre-hire collective bargaining agreement can automatically transform a temporary collective bargaining relationship in the building and construction industry into a more permanent one.

Joint Employment

Perhaps the most controversial action that the Board took during the prior administration was altering the standard for deciding when multiple employers can be jointly liable under the National Labor Relations Act. In Browning-Ferris Indus. of Cal. d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (2015), the NLRB decided that two or more entities could be joint-employers if one merely reserves the right to indirectly control essential employment terms and conditions of another’s employees. That standard expanded the potential scope of joint-employment liability in an unprecedented fashion. See, e.g., TLI, Inc., 271 NLRB 768 (1984); Laerco Transp., 269 NLRB 324 (1984).

On Sept. 13, 2018, the Board announced that it was proposing a rule setting forth a new joint-employment standard. According to the proposed rule, one entity is a joint-employer with another entity only if it actually possesses and exercises substantial, direct and immediate control over the other entity’s employees’ essential terms and conditions of employment in a manner that is not limited and routine. The proposed rule currently is open to public comments.

The proposed joint-employment rule is not the NLRB’s first attempt to change the joint-employment standard set forth in Browning-Ferris. During the brief stint in late 2017 when a majority of Board members comprised Republicans, the NLRB issued a decision in Hy-Brand Indus. Contractors, 365 NLRB No. 156 (2017) (“Hy-Brand I”) that overruled Browning-Ferris in favor of a standard consistent with the proposed rule. The Board subsequently vacated the decision in Hy-Brand I after the NLRB’s Designated Agency Ethics Official determined that one of the Board members who voted in favor of the decision should not have participated in that decision because that member’s prior employer represented one of the parties in Browning-Ferris. Hy-Brand Indus. Contractors, 366 NLRB No. 26 (2018) (“Hy-Brand II”).

Democratic politicians have been critical of the proposed rule—even before it was proposed. Senators Kirsten Gillibrand of New York, Bernie Sanders of Vermont, and Elizabeth Warren of Massachusetts wrote a letter dated May 29, 2018, to Chairman Ring wherein they expressed their concern that revisiting the joint-employment standard through rulemaking would improperly circumvent ethical concerns raised in Hy-Brand II. In response, by letter dated June 5, 2018, Chairman Ring told the senators that the NLRB would, in fact, engage in rulemaking to address the joint-employment standard, and further explained that a final rule would apply prospectively only, which should eliminate their ethics concerns. Chairman Ring added that, under his leadership, the Board planned to undertake a comprehensive internal ethics and recusal review. Thereafter, last month, by letter dated Oct. 10, 2018, Senator Patty Murray of Washington and Representative Bobby Scott of Virginia sent Chairman Ring a request for information relating to the proposed rule and the internal ethics and recusal review.

What a final joint-employment rule will ultimately look like remains to be determined. If it is the same or similar to the proposed rule, the correspondence from Democratic politicians foreshadow that legal challenges to the rule based on recusal issues may be on the horizon.

Employer Email Systems

Another controversial decision that the NLRB issued under the prior administration limited employers’ abilities to control the use of their email systems. In Purple Communications, 361 NLRB 1050 (2014), the Board decided that employees who receive access to their employers’ email systems for business reasons have a presumptive right to use those systems for protected concerted activities, such as union organizing activities. The decision in Purple Communications overruled a prior decision by the NLRB upholding facially neutral employment policies that restrict the use of employers’ email systems for business reasons. The Register-Guard, 351 NLRB 1110 (2007), enf’d in part and remanded sub nom. Guard Publishing v. NLRB, 571 F.3d 53 (D.C. Cir. 2009). The employer in Purple Communications appealed the decision to the United States Court of Appeals for the Ninth Circuit.

This past summer, on Aug. 1, 2018, the Board invited briefs from interested parties to address whether it should revisit the decision in Purple Communications. The case at issue, Caesars Entertainment Corp. d/b/a/ Rio All-Suites Hotel & Casino, Case No. 28-CA-060841, concerns an employment policy that covers the employer’s “computer resources,” not just its email systems. Accordingly, the invitation seeks input as to whether the standard the NLRB deems applicable to employers’ email systems also should apply to other types of employer-provided electronic communications. In light of the invitation for briefs in Caesars Entertainment, the Ninth Circuit has stayed the appeal in Purple Communications.

Like the Board’s proposed joint-employment rule, the invitation for briefs in the Caesars Entertainment matter has drawn the attention of Democratic senators. Senators Tammy Baldwin of Wisconsin, Cory Booker of New Jersey, and Mazie Hirono of Hawaii joined Senators Gillibrand and Warren in a letter to Chairman Ring wherein they urged the NLRB to keep the standard set forth in Purple Communications. As part of that letter, the senators also asked that the Board member who should not have participated in Hy-Brand I recuse himself from the Caesars Entertainment matter. In a written response, Chairman Ring assured the senators that the NLRB would approach the Caesars Entertainment matter with an open mind and follow all ethics requirements.

Similar to the correspondence from Democratic politicians concerning the joint-employment rule, the correspondence surrounding the standard applicable to employer-provided electronic communications suggests there may be legal challenges focused on recusal issues if the decision in Caesars Entertainment rolls back the decision in Purple Communications.

Recognition Language in Construction Industry CBAs

There was another recent Board development on Sept. 11, 2018, when the NLRB issued another invitation for briefs in Loshaw Thermal Tech., Case No. 05-CA-158650. The invitation asks whether the Board should revisit the standard set forth in Staunton Fuel & Material, 335 NLRB 717 (2001), for deciding whether recognition language in a pre-hire CBA can, by itself, convert a temporary collective bargaining relationship, permissible in the construction industry under section 8(f) of the Act, into a more permanent relationship under section 9(a). The invitation also asks whether the NLRB should revisit its decision in Casale Indus., 311 NLRB 951 (1993), which limits the timeframe for challenging the validity of a section 9(a) collective bargaining relationship in the construction industry.

Due to the unique project-by-project nature of work performed in the construction industry, section 8(f) provides a construction industry employer the right to enter into a pre-hire CBA with a union, often before it has hired any employees, without proof that a majority of employees wish to be represented by a union (as would otherwise be required) and to withdraw from that relationship when the CBA expires (which otherwise is not permitted).

In Staunton Fuel, the Board decided that the parties to a pre-hire CBA could transform the section 8(f) relationship into a more permanent relationship under section 9(a) by including language in the CBA that unequivocally indicates that the union requested recognition as the majority or section 9(a) representative of the employees, and was granted recognition based on the union having shown or having offered to show evidence of its majority support. In Casale and its progeny, the NLRB has applied the Act’s six-month statute of limitations to preclude a party from challenging the validity of a section 9(a) relationship in the construction industry.

The Board’s invitation for briefs highlights that the United States Court of Appeals for the District of Columbia already has called the NLRB’s decision in Staunton Fuel into question. See Colo. Fire Sprinkler v. NLRB, 891 F.3d 1031 (D.C. Cir. 2018); Nova Plumbing v. NLRB, 330 F.3d 531 (D.C. Cir. 2003). As the D.C. Circuit has observed, the decision in Staunton Fuel enables an employer and union to create a section 9(a) collective bargaining relationship regardless of whether a majority of employees at issue actually want to be represented by the union. A decision by the Board in the Loshaw Thermal matter, consistent with the D.C. Circuit’s view, could open the door for employers in the construction industry to withdraw from collective bargaining relationships.

Shortly after the NLRB invited briefs in Loshaw Thermal, the union filed a request to withdraw the unfair labor practice charge that the union filed in the case. The Board has not yet ruled on that request, but it has suspended the filing of briefs until further notice.

Conclusion

Important changes in NLRB law may be coming soon under Chairman Ring’s leadership. As correspondence between Chairman Ring and several Democratic politicians demonstrates, some of these changes may be the subject of subsequent legal challenges based on recusal issues.


Reprinted with permission from the November 19, 2018 issue of the New Jersey Law Journal. © 2018 ALM Media Properties, LLC. 
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