NLRB Briefing—Recent Developments and a Few Prognostications

NLRB BriefingRecent Developments and a Few Prognostications

April 20, 2017

Today’s eLunch Presenters

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Derek BarellaPartner, Labor & Employment Practice

Chicago

[email protected]

Matt LewisAssociate, Labor & Employment Practice

Washington, D.C.

[email protected]

“NLRB Sides with Unions in Targeting Employee Handbooks”

“Theater of the Absurd: The NLRB Takes on the Employee Handbook”

“Employers Beware: NLRB Likely To Drop More Pro-Union Rulings By End Of August”

“Critics: NLRB gives big labor another win”“Republicans call on Congress to restrain NLRB”

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New Administration by the Numbers

70%

2 for 1

$0

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238-209

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Percentage of regs candidate Trump says “can go”

E.O. requirement for new regulations

FY17 budget for new regulations

Current open seats on the Labor Board

Vote tally at Trump International Hotel regarding employee representation by Unite Here

Don’t Mess With The Bull…

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NLRB – Who They Are and What They Do

• Five-Member Board• Members serve staggered terms• Appointed by President and confirmed by Senate• Traditionally, majority three members from President’s party• Current Board (all Obama appointees): two Dems, one GOP, two

empty chairs• Current GC (chief prosecutor): Former in-house attorney IUOE

• Board exercises adjudicatory and rulemaking authority• Adjudicatory is more frequent means of setting/implementing labor

policy• Typically decides cases by three-Member panel decisions

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NLRA – Key Provisions

• Section 7 – Protects any employees’ rights to:• “Form join, or assist labor organizations”• “Bargain collectively through representatives of their own choosing”• “Engage in other concerted activities for the purpose of collective

bargaining or other mutual aid or protection”• “Refrain from any or all such activities”

• Section 8(a) – Prohibits employer conduct that interferes with Section 7 rights

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NLRB – Last Eight Years

• Aggressively advanced perceived pro-labor policy• Case decisions and rulemaking initiatives to ease union

organizing• Expansive view of protected, concerted activity• Outreach to non-represented employees

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NLRB – Last Eight Years

• Speedy election rules• Micro-bargaining units• New joint employer standard• Combined single/joint employer units• Assault on handbooks• Employer email for union organizing• Arbitration agreements

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Micro-Units

• Specialty Healthcare, 357 NLRB No. 83 (2011)• A union’s petitioned-for bargaining unit should be upheld

• To overcome, employer must show another group shares an “overwhelming” community of interests with the proposed bargaining unit

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Speedy Election Rules

• Election petitions, etc. can be transmitted electronically • Employer must post Notice of Election within two business

days of service of petition (before unit issues resolved)• Pre-election hearing eight days after notice served with

petition• Non-petitioning party must identify any/all issues in SOP

• Must be filed/served one day before hearing

• Issues not raised are waived

• Prospective voter list (job classifications, shifts, and work locations) due with SOP

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Speedy Election Rules

• Hearings limited to fundamental questions concerning NLRB jurisdiction and whether election bar exists

• Most issues concerning unit and voter eligibility are “deferred” to post-election proceedings

• 25-30 day scheduling parameter is eliminated• Most requests for NLRB review of RD decisions are

“deferred” to post-election• Employer must provide expanded voter list

• Names, home addresses, personal phone numbers, and personal email addresses (if available)

• Two days after RD decision or approval of stipulated election agreement

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Organizing Results

• Median days from petition to election• FY2014: 38 days

• FY2015: 33 days

• FY2016: 23 days

• Union win rates at four-year high during FY2016• Unions won 72% of all representation elections

• Win rate slightly higher in elections with “small” units (less than 49)

• But, number of workers organized in FY2016 is lowest in four years

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Joint Employer Standard

• Historical Test – do two employers “share or codetermine” essential terms and conditions of employment?• Actual control must be shown • Hypothetical, unexercised control not enough• TLI, Inc., 271 NLRB 798 (1984)

• Contract gives user employer sole and exclusive responsibility for “maintaining operational control, direction, and supervision over drivers”

• User employer instructs drivers regarding deliveries, files incident reports with supplier, maintains driver logs and records

• Board holds contract language not sufficient absent evidence user employer “affected terms and conditions of employment”

• Board concludes actual supervision/direction was “limited” and “routine”

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Joint Employer Standard

• New Test – no longer limited to actual control• BFI Indus. 362 NLRB No. 186 (Aug. 27, 2015)

• Indirect control can be enough• E.g., third-party firm raises wages based on contractual increases

• E.g., scheduling of work flow controls third-party scheduling

• Potential control can be enough, depending upon:• Reserved contractual rights, even if unexercised

• Core vs. non-core nature of the work

• Integration of the work

• Economic commercial leverage in the relationship

• Technological oversight

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Combined Single/Joint Employer Units

• Miller & Anderson, Inc., 364 NLRB No. 39 (July 11, 2016)• Other shoe to drop• Combined single/joint employer bargaining units do not require

consent of either employer• E.g., bargaining unit combining employees who are (a) jointly employed by

user employer and supplier employer, and (b) solely employed by user employer

• Allows further union gerrymandering of voting pool

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Employee Handbooks

• Report of the General Counsel concerning recent case developments in the context of employee handbook rules

• Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004)• Facially-neutral work rule will still be found unlawful if:

• Employees would “reasonably construe” to prohibit Section 7 activity

• Rule promulgated in response to union or other Section 7 activity

• Rule actually applied to restrict exercise of Section 7 rights

• Act precludes even “well-intentioned rules” that would “inhibit” protected conduct

• Mere maintenance work rule may violate Act if it has a “chilling effect” on Section 7 activity

• Application of unlawful work rule may violate other sections18

Employer Email For Union Organizing

• Purple Commc’ns., Inc., 361 NLRB No. 126 (Dec. 11, 2014) • Employee use of email for Section 7 communications during non-work

time must presumptively be allowed• Only applies if employer gives employees access to email• Employer can apply consistently enforced controls on system if

necessary to maintain production and discipline• Maybe even a total ban if special circumstances exist, but we’re

skeptical

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Arbitration Of Collective/Class Claims

• D.R. Horton, Inc., 357 NLRB No. 184 (Jan. 3, 2012)• Found class waivers in mandatory arbitration agreement unlawful• “employees who join together to bring employment-related claims on a

classwide or collective basis in court or before an arbitrator are exercising rights protected by Section 7”

• No conflict with FAA• Not hostile to arbitration itself

• Arbitration agreements cannot deprive of substantive rights

• Arbitration agreements invalidated on same grounds as other contracts

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Arbitration Of Collective/Class Claims

• Fifth Circuit disagrees, refuses enforcement• Board failed to give proper weight to FAA, disfavoring arbitration• Collective action is procedural right, not substantive

• ALJs and Board continue to follow D.R. Horton; expressly affirm in Murphy Oil USA, 361 NLRB No. 72 (Oct. 28, 2014)

• Fifth Circuit again disagrees, so do Second Circuit, Fifth Circuit, and Eighth Circuit, DCTs, and CA and NV Supreme Courts

• Seventh and Ninth Circuits agree with Board• USSC grants cert; cases consolidated

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Changes Already Underway

• Jan. 23: New Acting Chair, Philip Miscimarra (R)

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• Jan. 23: New Acting Chair, Philip Miscimarra (R)• Feb. 24: Procedural amendments to NLRB’s Rules and

Regulations

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• Jan. 23: New Acting Chair, Philip Miscimarra (R)• Feb. 24: Procedural amendments to NLRB’s Rules and

Regulations• Mar. 21: USSC concludes Lafe Solomon improperly served

as acting GC while awaiting Senate confirmation • Mar. 27: Fair Pay and Safe Workplaces E.O. (i.e., the

Blacklisting E.O.) revoked

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What’s Next?

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What’s Next?

• Prosecutorial priorities unlikely to change this year• Current GC term runs through 2017

• Speedy election rules• Congressional Review Act not a vehicle to overturn• Likely would require full Board and rulemaking process

• Potential case law changes• Board will only listen to itself and USSC (but Circuit Courts may deny

enforcement)• Case law changes at Board like waiting for the paint to dry

• Acting Chair needs a majority

• Will require “right” cases to percolate

• In the meantime, ALJs will follow precedent29

Likely Targets For Reversal

• Joint employer standard – on appeal at D.C. Circuit• Arbitration of collective/class claims – on appeal at USSC• Employee handbooks

• Verizon Wireless, 365 NLRB No. 38 (Feb. 24, 2017)• Acting Chair Miscimarra dissents, advocates for new standard

• Balance legitimate justifications for disputed rule with adverse impact on protected activity

• “Facially neutral” rule unlawful only if legitimate justifications are outweighed by potential adverse impact on Section 7 activity

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• Employer email for union organizing• Acting Chair Miscimarra dissented from Purple Comm., advocates

return to prior standard• Employer can completely prohibit employees from using employer’s email

system for Section 7 purposes

• Even if employees otherwise permitted to access system

• No need to demonstrate business justification

• Just don’t discriminate

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• Other decisions that were decided 3-2 or 3-1• Specialty Healthcare• Miller & Anderson• Total Security Mgt. Illinois – unlawful to discipline without bargaining

with newly-certified union that has not yet negotiated a CBA• Lincoln Lutheran of Racine – dues checkoff provision survives

expiration of CBA• Piedmont Gardens – employer’s ability to withhold witness statements

from disclosure based on confidentiality concerns must be weighed against union’s need for information

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Thank You.

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Derek BarellaPartner, Labor & Employment Practice

Chicago

[email protected]

Matt LewisAssociate, Labor & Employment Practice

Washington, D.C.

[email protected]

NLRB Briefing—Recent Developments and a Few Prognostications

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