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Everything Changes, Including the NLRB


New Jersey Law Journal

October 16, 2017

A look at the current state of the National Labor Relations Board, and changes that may be coming under President Trump.

President Donald Trump’s less-than-orthodox ascendency to the White House left many uncertain as to the direction that the country would be headed under his presidency. The National Labor Relations Board was no exception. While Republican presidents historically have appointed more “union neutral” officials than their “union friendly” Democrat counterparts, some questioned whether President Trump might take a different path in light of support he received from union members (as opposed to unions themselves) during his campaign. This uncertainty was particularly pronounced because the Obama-era Board heavily tilted the playing field in favor of Big Labor. All indications to date are that a Trump Board will rebalance the playing field, but there are “big league” questions as to how long it may take to do so.

How It Works
The NLRB is the government agency that enforces the National Labor Relations Act, which governs labor relations for most private sector employers in the United States. The agency’s leadership includes up to five board members—one of whom serves as a chairperson—and a general counsel. Each board member and the general counsel have staggered term limits. The president has tremendous influence on the direction of the NLRB because he has the power to appoint board members and the general counsel, albeit with the Senate’s approval of course.

Where We Are
It is no secret that the “Obama Board” altered decades of established law and, in doing so, made it easier for unions to organize employees and for unions to subject companies to liabilities. Some of the Obama Board’s more controversial actions included the following.

    • “Ambush”/”Quickie” Election Rule. The Obama Board exercised its rulemaking powers to promulgate a new election rule that imposes heavy administrative burdens upon employers and leaves employees with less time to understand why unionization might be against their best interests. Representation – Case Procedures, 79 Fed. Reg. 74,308 (Dec. 15, 2014) (codified at 29 C.F.R. pts. 101, 102, 103). The practical effect of the rule is that a union has a better chance of winning an election or setting it aside on technical grounds if it loses. See, e.g., Danbury Hosp. of W. Conn. Health Network, No. 01-RC-153086 (NLRB Reg. Dir. Oct. 16, 2015) (setting aside election where employer failed to provide union with phone numbers for approximately 6 percent of the 866 eligible voters).
    • “Micro Units.” The Obama Board set forth a standard for determining an appropriate collective bargaining unit that practically allows a union to cherry-pick a “micro unit” of pro-union employees to vote in an election, thereby further stacking the deck against an employer in an election. Specialty Healthcare and Rehab. Ctr. of Mobile, 357 NLRB 934 (2011), enforced sub nom. Kindred Nursing Ctrs. E. v. NLRB, 727 F.3d 552 (6th Cir. 2013).
    • “Joint Employer” Standard. The Obama Board devised a new “joint employer” standard that makes it easier for a union to subject distinct entities in a business relationship to collective bargaining obligations and unfair labor practice charges. BFI Newby Island Recyclery, 362 NLRB No. 186 (Aug. 27, 2015).
    • Statutory “Employees.” The Obama Board expansively interpreted what it means to be a statutory “employee” and opened the door to cloaking individuals who historically have fallen outside the scope of the law with its protections, including individuals traditionally classified as independent contractors, managerial employees, and students. See, e.g., Trs. of Columbia Univ., 364 NLRB No. 90 (Aug. 23, 2016) (university students); Pacific Lutheran Univ., 361 NLRB No. 157 (Dec. 16, 2014) (managerial faculty members); FedEx Home Delivery, 361 NLRB No. 55 (Sept. 30, 2014) (independent contractors), enforcement denied, 849 F.3d 1123 (D.C. Cir. 2017), reh’g denied, No. 14-1196 (Jun. 23, 2017).
    • Workplace Policies. The Obama Board doubled-down on a standard for determining when innocuous workplace policies (e.g., confidentiality, courtesy, social media policies) interfere with employees’ rights to engage in protected concerted activities that ignores the underlying reasons for the policies. William Beaumont Hosp., 363 NLRB No. 162 (Apr. 13, 2016).
  • Class Action Waivers. The Obama Board concluded that class action waivers in arbitration agreements interfere with employees’ rights under the NLRA to engage in protected concerted activities. D.R. Horton, 357 NLRB No. 184 (2012), enforcement denied, 737 F.3d 344 (5th Cir. 2013). A circuit split regarding this issue has ensued and the Supreme Court of the United States opened its current term by holding oral argument on this issue in three consolidated cases earlier this month.

Signs of What’s Ahead
When President Trump took over the Oval Office in January, there were three sitting Board members. Two of these individuals were pro-union Democrats, namely, then-chairman Mark Gaston Pearce and Lauren McFerran. The third was Philip A. Miscimarra, a Republican who has issued many dissenting opinions criticizing the Obama Board’s palpably pro-union actions. All three of these individuals currently remain on the NLRB, but President Trump has set the stage for reversing some of the Obama Board’s controversial actions.

Just days after taking office, President Trump appointed Miscimarra to the role of acting chairman. This appointment was a strong indication that there would be a change in the Board’s direction in light of Miscimarra’s repeated disagreements with the Obama Board majority. See, e.g., Minn. Timberwolves Basketball, 365 NLRB No. 124 (Aug. 18, 2017) (criticizing independent contractor analysis); European Imports, 365 NLRB No. 41 (Feb. 23, 2017) (criticizing new election rule); Columbia Univ., 364 NLRB No. 90 (Aug. 23, 2016) (criticizing conclusion that university students were statutory employees); William Beaumont Hosp., 363 NLRB No. 162 (Apr. 13, 2016) (criticizing standard for deciding whether innocuous workplace policies are unlawful); BFI Newby Island Recyclery, 362 NLRB No. 186 (Aug. 27, 2015) (criticizing new joint employment standard); Pacific Lutheran Univ., 361 NLRB No. 157 (Dec. 16, 2014) (criticizing analysis addressing whether managerial faculty members at religious institution were statutory employees); Murphy Oil USA, 361 NLRB No. 72 (Oct. 28, 2014) (criticizing conclusion that class action waiver in arbitration agreement is unlawful), enforcement denied, 808 F.3d 1013 (5th Cir. 2015), cert. granted,137 S. Ct. 809 (2017); Purple Commc’ns, 361 NLRB No. 126 (Dec. 11, 2014) (criticizing standard for deciding when employees must have access to employer email systems for non-business purposes); Macy’s, 361 NLRB No. 4 (July 22, 2014) (criticizing micro unit standard). In April, President Trump elevated Miscimarra to the role of chairman on a non-acting basis.

This summer, President Trump nominated two individuals whose views on key issues align with Miscimarra’s to the two open Board member seats. The first nominee, Marvin E. Kaplan, previously served as Workplace Policy Counsel to the House Education and Workforce Committee. In that role, he helped draft the Workforce Democracy Fairness Act, which would undo key components of the new election rule and eliminate the micro unit standard if enacted. The second nominee, William J. Emanuel, has represented employers in traditional labor law matters for decades. As a private practitioner, Emanuel challenged decisions by the Obama Board holding class action waivers to be unlawful.

Last month, President Trump continued the trend when he nominated Peter B. Robb to replace Richard F. Griffin Jr. as the NLRB’s general counsel when Griffin’s term expires in November. Quite unlike Griffin, who previously worked as an in-house lawyer for a labor union, Robb’s career has focused on representing employers in traditional labor matters. As a private practitioner, Robb has been critical of numerous actions by the Obama Board, including its new election rule and attack on innocuous workplace policies. During a recent Senate hearing, Robb noted his disagreement with a memorandum Griffin issued which characterized college scholarship football players as statutory employees.

Are We There Yet?
Although the Senate approved Kaplan’s nomination in August and Emanuel’s in September, presumably handing Miscimarra the votes he needs to turn his dissenting views into law, there still are questions as to when we may begin to see changes that will relevel the playing field.

For starters, the Obama Board’s actions with which Miscimarra disagreed cannot be undone with a snap of a finger. Most if not all changes will come in the form of NLRB decisions. It’s anyone’s guess as to when a case that presents an issue that is ripe for changing law will make its way to the Board members for consideration. Some issues, like the propriety of micro units, are more commonly litigated than others, and, therefore, more likely to be addressed sooner. The Trump Board also could utilize its rulemaking powers to unravel some of the Obama Board’s actions, particularly the new election rule, but the rulemaking process typically includes public comment and waiting periods that can prove time-consuming as well.

Additionally, the newly-comprised Trump Board will soon be losing a key member: Miscimarra himself. The chairman announced that he will step down from the NLRB when his term expires in December. Between the expiration of his term and the appointment of his replacement, the Board almost certainly will be deadlocked two-to-two on controversial issues, which means there won’t be any changes in the law on those issues during that time.

As far as the general counsel, Robb still is awaiting Senate approval and the expiration of Griffin’s term. Regardless of the Board members, if/when Robb becomes the general counsel, one should expect to see a reduction in complaints containing the types of allegations that set the stage for the Obama Board to issue its controversial rulings. See, e.g., Memorandum GC 17-01 (Jan. 31, 2017) (Griffin’s take on statutory rights of university faculty and students); Memorandum GC 15-04 (Mar. 18, 2015) (Griffin’s take on workplace policies); “NLRB Office of the General Counsel Issues Consolidated Complaints Against McDonald’s Franchisees and their Franchisor McDonald’s, USA, LLC as Joint Employers, Office of Public Affairs” (Dec. 19, 2014).

One final point. If/when the Trump Board reverses an Obama Board action, the reversal will be subject to judicial review and a potential about-face under another administration. Of course, there also is the chance that Congress or the Supreme Court conclusively weighs-in on an issue and leaves the NLRB will no choice—as the Supreme Court may do on the class action waiver issue.

There have been significant changes at the NLRB under the Trump administration which indicate a releveling of the playing field between Big Labor and Corporate America. But, it could take time for the Trump Board to make a meaningful dent in light of the moving parts—and the clock keeps ticking.

Reprinted with permission from the October 16, 2017 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.