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A December to Remember at the NLRB


New Jersey Law Journal

January 22, 2018

Last month, a newly constituted National Labor Relations Board (NLRB) took a wintry flurry of actions that has begun a much anticipated re-leveling of the playing field between Big Labor and Corporate America in the aftermath of profound pro-union actions under the prior administration. On the heels of an instructive memorandum issued by the Board’s new general counsel, the NLRB raised questions about the 2014 “quickie” election rule and issued a number of decisions setting forth more neutral standards for analyzing significant legal issues under the National Labor Relations Act (NLRA), including:

  • Circumstances under which multiple should be deemed “joint employers”;
  • The legality of workplace rules that do not expressly prohibit concerted activities protected by the NLRA;
  • Appropriate collective bargaining units;
  • An employer’s ability to take unilateral action consistent with its past practices; and
  • An administrative law judge’s ability to accept a charged party’s proposed settlement terms.

New General Counsel Memorandum

On Dec. 1, 2017, the Board’s new general counsel, Peter B. Robb, issued a memorandum leaving little doubt that he has a very different view of the NLRA than did his predecessor on several issues. In the memorandum, the general counsel—who is responsible for investigating and prosecuting unfair labor practice cases and supervising the regional offices in their processing of cases—directed the regional offices to seek advice from his office in cases involving “significant legal issues,” which he identified as including “cases over the last eight years that overruled precedent and involved one or more dissents, cases involving issues that the Board has not decided, and any other cases that the Region believes will be of importance to the General Counsel.”

The memorandum further identified a number of specific issues about which the general counsel directed the regional offices to seek advice from his office, including:

  • Whether employees have a presumptive right to use employers’ email systems to engage in protected concerted activities (citing to the NLRB’s controversial decision in Purple Commc’ns, 361 NLRB No. 126 (2014), which answered this question in the affirmative);
  • Whether employers can lawfully implement rules against audio and/or visual recordings in the workplace (citing to the Board’s controversial decisions in Rio-All Suites Hotel & Casino, 362 NLRB No. 190 (2015), and Whole Foods Market, 363 NLRB No. 87 (2015), which deemed such rules unlawful); and
  • Whether employers can lawfully direct employees to keep workplace investigations confidential (citing to NLRB’s controversial decision in Banner Estrella Med. Ctr., 362 NLRB No. 137 (2015), which answered this question in the negative).

The general counsel noted that decisions from his office would be based on existing law, but that his office may want to offer alternative analyses for deciding these issues in cases that have not yet been fully briefed before the Board.

The memorandum also immediately rescinded a number of pro-union memoranda issued by the prior general counsel, including memoranda: attacking innocuous workplace policies (GC Memo 15-04: Report of the General Counsel Concerning Employer Rules); making it more difficult for employers to cease recognition of unions that employees do not want (GC Memo 16-03: Seeking Board Reconsideration of the Levitz Framework); and expanding the scope of the NLRA to individuals historically excluded from coverage, like college football players (GC Memo 17-01: General Counsel’s Report on the Statutory Rights of University Faculty and Students in the Unfair Labor Practice Context).

Return to Traditional Joint Employer Standard

In Hy-Brand Indus. Contractors, 365 NLRB No. 156 (2017), the NLRB overruled perhaps its most controversial decision over the past eight years, Browning-Ferris Industries of California d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (2015), and reinstated its prior standard for determining when multiple employers can be jointly liable under the NLRA. In Browning-Ferris, the Board decided that two or more entities could be joint employers if one of the entities merely reserves the right to indirectly control essential employment conditions and terms of another entity’s employees. In Hy-Brand, the NLRB returned to the decades-old standard that requires an entity held as a joint employer to actually exercise direct and immediate control over essential employment conditions and terms of another entity’s employees in a manner that is not limited and routine.

Standard for Examining Workplace Rules

The same day the Board issued its decision in Hy-Brand, it also overruled Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), in The Boeing Co., 365 NLRB No. 154 (2017), and established a new standard for evaluating workplace rules that do not expressly prohibit concerted activities protected by the NLRA. In Lutheran Heritage, the NLRB decided that facially-neutral workplace rules should be deemed unlawful if employees would “reasonably construe” the rules as interfering with their rights to engage in protected concerted activities protected by the NLRA. In Boeing, the Board tossed aside the amorphous “reasonably construe” standard and announced that it will explore: (1) the nature and extent of the potential impact of facially-neutral workplace rules on NLRA rights, and (2) legitimate justifications associated with the rules.

Return to Traditional Community of Interest Standard

A day after the NLRB issued its decisions in Hy-Brand and Boeing, it overruled Specialty Healthcare & Rehabilitation Ctr. of Mobile, 357 NLRB 934 (2011), in PCC Structurals, 365 NLRB No. 160 (2017), and reinstated the traditional community of interest standard for determining an appropriate collective bargaining unit. In deciding whether employees share a community of interest, the Board examines a number of factors, including job classifications, job functions, departmental lines, interaction among employees, work locations, applicable employment policies, required training and skills, pay, benefits and hours.

In Specialty Healthcare, the NLRB decided that an employer only could add employees to a readily identifiable group of employees that a union seeks to represent in the rare case where the employer could demonstrate that the additional employees shared an “overwhelming” community of interest with the employees in the unit proposed by the union, with little, if any, concern for other employees. The reinstated standard in PCC Structurals examines whether the employees that an employer seeks to include in the unit are sufficiently distinct to justify their exclusion.

A week after the PCC Structurals decision, the Board’s Office of the General Counsel issued an operations memorandum directing the regional offices to follow certain practices in current and future representation cases. The memorandum explained that the NLRB’s regional directors may need to revisit unit determinations in current representation cases and postpone deadlines in future cases to address issues that arise in light of the PCC Structurals decision.

Assessing Whether Employer Has Duty to Bargain over Changes Consistent with Past Practice

The same day the Board issued its decision in PCC Structurals, it overruled E.I. Du Pont de Nemours, Louisville Works, 346 NLRB No. 113 (2016), in Raytheon Network Centric Sys., 365 NLRB No. 161 (2017), and clarified that an employer does not have an affirmative duty to bargain over employment actions that are consistent with its past practice. In DuPont, the NLRB decided that an employment action consistent with past practice is a “change,” and an employer has to provide a union with notice and an opportunity to bargain before implementing such action if the past practice was created under a management rights clause in an expired collective bargaining agreement or the action involves employer discretion. In Raytheon, the Board held that an employment action is not a change if it is similar in degree and kind with a past practice, even if it involves some employer discretion.

Standard for Evaluating Proposed Settlement Terms

The NLRB also overruled U.S. Postal Serv., 364 NLRB No. 116 (2016), in UPMC, 365 NLRB No. 153 (2017), and reinstated its prior standard for determining when administrative law judges can approve a charged party’s proposed settlement terms. In Postal Serv., the Board decided that ALJs could not accept a charged party’s proposed settlement terms if the terms did not remedy all allegations in the case absent the approval of the NLRB’s general counsel and the charging party. In UPMC, the Board held that ALJs can accept a charged party’s proposed settlement terms regardless of whether it remedies all allegations and despite objections by the general counsel and charging party if the terms are “reasonable” in light of the circumstances. Factors to consider in determining the reasonableness of the proposed settlement terms include the nature of the allegations, risks inherent in litigation, and stage of the litigation.

Questions About “Quickie” Election Rule

The NLRB was not just busy deciding cases last month. The Board also published a request for information (RFI) concerning the 2014 quickie election rule, asking whether the rule should be retained, modified or rescinded. The RFI is welcomed by the business community, as the quickie election rule has posed major problems for both employers and employees. For example, the rule places heavy administrative burdens on employers, restrains employers’ abilities to communicate with their employees, and interferes with employees’ abilities to cast informed ballots in union elections.

More to Come

There remains a host of controversial NLRB decisions that were issued under the prior administration that are ripe for reexamination. For example, in a recent order issued in President and Fellows of Harvard College, NLRB Case No. 01-RC-186442, one of the new Board members, William J. Emanuel, noted that “Board precedent on the status of students” as statutory employees under the NLRA “warrants reconsideration.” But, there may be time before we see additional changes in the law. On Dec. 16, 2017, the term of NLRB Chairman Philip A. Miscimarra expired, so the Board now comprises just four NLRB members and likely will be deadlocked two-to-two on controversial issues—at least until President Trump appoints a fifth member, either with the advice and consent of the Senate or during a Senate recess. The President has appointed Marvin E. Kaplan, who was the first Board member he appointed, as acting chairman in light of Miscimarra’s departure. In the interim, we may see another memorandum from the new general counsel identifying initiatives to be implemented by his office.

Reprinted with permission from the January 22, 2018 issue of the New Jersey Law Journal. © 2017 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved. For information, contact 877-257-3382 or reprints@alm.com or visit www.almreprints.com.