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January 31, 2018
The Wind of Change at the NLRB:How US Labor Law is Being Dramatically Reshaped by
The Trump Administration
Keith GrossmanPartner, Hirschfeld KraemerLos Angeles, California
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Leonard CourtCrowe & Dunlevy Oklahoma City, [email protected]
Robert P. JoyMorgan, Brown & JoyBoston, [email protected]
Megan StarichMiller Nash Graham & DunnSeattle, [email protected]
Louis DiLorenzoBond, Schoeneck & King Syracuse, New [email protected]
J. Bruce CrossCross, Gunter, Witherspoon, & GalchusLittle Rock, [email protected]
Speakers:
Robert P. Joy, PartnerMorgan, Brown & JoyBoston, Massachusetts
• In 2011, the “Obama Board” issued its decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011), making it easier for unions to organize “micro-units.”
• A “micro-unit” is a unit of employees consisting of only a small subset of an otherwise larger appropriate bargaining unit.
• Examples:• Employees in the cosmetics and fragrance department at a large department store,
which constituted only one of 11 sales departments. Macy’s, Inc. , 361 NLRB 12 (2014).
• Graduate student employees in separate academic departments (e.g., English department, History department, History of Art department) at a private university. Yale University, 01-RC-183014, 01-RC-183014; 01-RC-183016; 01-RC-183022; 01-RC-183025; 01-RC-183031; 01-RC-183038; 01-RC-183039; 01-RC-183043; 01-RC-183050 (Jan. 25, 2017)
What is a “Micro-Unit”?
• Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011)• Overturning years of precedent, the Board established a new, multi-step
analysis for determining the appropriateness of a petitioned-for “micro-unit.”1. The Board first determines whether the employees in the petitioned-for unit
are “readily identifiable” as a group and share a community of interest with each other.
2. If the Board finds the petitioned-for unit is appropriate under prong 1, then the burden shifts to the employer to show that the proposed unit is under-inclusive by proving that excluded employees share an “overwhelming community of interest” with the employees in the petitioned-for unit.
• This became a nearly impossible burden for employers to meet under Specialty Healthcare.
Creation of the “Micro-Unit”The Specialty Healthcare Test
• The decision made it much easier for unions to organize.
• Allowed unions to get a foot in the door at a particular employer by targeting smaller groups, within which the union knew it had support.
• If the petitioned-for unit consisted of a clearly identifiable group of employees (which was a low burden), the Board presumed the unit was appropriate.
• Employers in all industries were subject to the heightened burden when attempting to challenge the appropriateness of a petitioned-for units that may under inclusive (e.g. retail, manufacturing, higher education, etc.).
• Proliferation of units often resulted in the fragmentation of the workforce.
• This significantly increased cost and administrative complexity of bargaining.
Impact of Specialty Healthcare
• On the eve of Chairman Miscimarra’s departure in December 2017, the Board issued its decision, PCC Structurals, Inc., 365 NLRB, No. 160 (Dec. 15, 2017), which overturned Specialty Healthcare.
• Background:• The union petitioned-for a unit consisting of 100 welders and rework
specialists.
• The employer argued that the smallest appropriate unit was a “wall-to-wall” unit consisting not only of the welders, but of the more than 2,500 production and maintenance employees as well.
• The Regional Director found that PCC could not show that the production and maintenance employees shared an overwhelming community of interest with the welders and rework specialists. PCC appealed, seeking to overturn Specialty Healthcare.
Recent Change in the Law
• The Board’s decision abandoned the “overwhelming community of interest” standard and reinstated the traditional community-of-interest standard for determining an appropriate bargaining unit in union representation cases.• “[T]here are sound policy reasons for returning to the traditional
community-of-interest standard that the Board has applied throughout most of its history, which permits the Board 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.”
PCC Structurals, Inc.
• The Board in PCC explained, inter alia, that under Specialty Healthcare “‘[w]hen the petitioned-for unit contains employees readily identified as a group who share a community of interest’ among themselves, an employer opposing this unit as inappropriate because it excludes certain employees bears the next-to-impossible burden of proving that ‘employees inside and outside [the] proposed unit share an overwhelming community of interest.’”
• PCC Structurals reinforced the longstanding position that “[i]t is the Board’s responsibility to determine unit appropriateness based on a careful examination of the community of interests of employees both within and outside the proposed unit.
PCC Structurals, Inc., (Cont.)
• Moving forward, the Board will assess whether employees in the proposed bargaining unit share interests that are sufficiently separate and distinct from those of the remainder of the workforce to constitute an appropriate unit for bargaining.
• Factors include whether the employees: • are organized into a separate department; • have distinct skills and training; • have distinct job functions and perform distinct work; • are functionally integrated with the Employer’s other employees; • have frequent contact with other employees; • interchange with other employees; • have distinct terms and conditions of employment; and,• are separately supervised.
Traditional Community-of-Interest Test
• Interestingly, the only two decisions citing PCC Structuralssince it was decided had Democratic majorities on their respective panels, and in both cases, the Board found the petitioned-for units to be appropriate, without relying on the Regional Director’s Specialty Healthcare analysis.
1. New Foundations Charter Sch., Inc., 04-RC-199928, (Jan. 3, 2018)• “We also agree with the Regional Director that the petitioned-for unit,
based in [one of the employer’s facility], is presumptively appropriate under the single-facility presumption and that the Employer failed to carry its burden of demonstrating that the operations of the [one] facility had been effectively merged or functionally integrated with [the employer’s other] facility so as to lose its separate identity.”
Looking Ahead
2. Clifford W. Perham, Inc., A Subsidiary of Shaws Supermarkets, Inc., 01-RC-191238 (Jan. 4, 2018). • “[W]e find, contrary to the Regional Director, that under the Board's
traditional multi-facility community of interest analysis the petitioned-for unit…is appropriate because the petitioned-for employees share a community of interest that is distinct from the employees at the Employer's [other] facility.”
• However, despite these very recent decisions, with a Republican majority soon to be firmly in place, employers will be faced with a much lower burden when challenging the under-inclusiveness of a petitioned-for unit.
Looking Ahead (Cont’d)
J. Bruce Cross, DirectorCross, Gunter, Witherspoon & Galchus, P.C.Little Rock, Arkansas
Continuing Viability of the Board’s Purple Communications Rule
Current Board• 2018 Board Members
• Marvin Kaplan – Chair (Trump)• Lauren McFerran (Obama) – Expires 2019• Mark Gaston Pearce (Obama) – Expires 2018• William J. Emmanuel (Trump)• VACANT – Trump nominee – John Ring (awaiting confirmation)
• New General Counsel• Peter B. Robb – Confirmed Nov. 2017• Long-time attorney representing employers in Northeast
Purple Communications, Inc. December, 2014 Decision:
NLRB Held That Workers Have a Right to Use Their Employers’ Email Systems for Non-Work Related
Communications
Purple Communications, Inc. • On December 11, 2014, the NLRB ruled that employees
have a right to use their company email accounts, during non-working time, for statutorily protected activity, such as union organizing.
• Union representatives challenged Purple Communications, Inc.’s electronic communications policy because it prevented workers from using the company email system for nonbusiness related purposes.
• The Purple Communications decision reversed prior Board precedent, which had been in place since its 2007 Registered Guard decision.
Purple Communications, Inc. • The relevant email and other company communications
policy facing the NLRB’s scrutiny in that case stated:• Computers, laptops, internet access, voicemail, electronic mail
(email), Blackberry, cellular telephones and/or other Company equipment is provided and maintained by Purple to facilitate Company business. All information and messages stored, sent, and received on these systems are the sole and exclusive property of the Company, regardless of the author or recipient. All such equipment and access should be used for business purposes only.
Purple Communications, Inc. • The policy was challenged after an unsuccessful
representation election was conducted by a local union. • General Counsel argued the Employer’s policy was overly
broad because it prohibited the use of company email for “engaging in activities on behalf of organizations or persons with no professional or business affiliation with the company,” thus interfering with the employees’ exercise of Section 7 rights.
• NLRB considered whether the current rule established in the case Registered Guard should be overturned.
NLRB Precedent Under The Register Guard Standard
• In Register Guard (2007), the employer had a policy which stated that its email system was “not to be used to solicit or proselytize for commercial ventures, religious, or political causes, outside organizations, or other non-job-related solicitations.”
• The employer had allowed internal solicitations and personal messages from its employees, but there had not been any attempt at solicitation for an outside organization.
• The Board held in Register Guard that the Company’s policy was lawful, as long as it was consistently applied to all outside organizations.
Purple Communications, Inc.
• Purple Communications left employers with unanswered questions.• Non-employee third party access?• Storage capacity issues?• Monitoring email communications?• Spoliation if employer deletes emails on the server?
• 2016 Obama-era GC memo signaled an expansion of Purple Communications.• Expand Purple Communications “to electronic systems other than email .
. . and cases presenting the question of whether the employer engaged in unlawful surveillance of employee emails.” Other electronic systems included internet, phones and instant messaging if used in regular course of work.
Purple Communications, Inc. (Cont’d)
• December 1, 2017, Trump GC memo signaled the opposite and will likely try to overturn. • Named Purple Communications decision as one that GC “might
want to provide the Board with an alternative analysis . . . .” Also rescinded GC memo on expansion of Purple Communications decision to other electronic systems.
• BUT, on December 19, 2017, asked the 9th Cir. To affirm the Purple Communications decision . . . more to come, continue monitoring.
Louis DiLorenzo, Managing MemberBond, Schoeneck & KingSyracuse, New York
Possible Changes to Joint Employer Test
Joint Employer• Pre-Browning-Ferris
• Joint employer turned on whether two separate entities exercised joint control over essential functions. “Reserved” right to control not determinative. Flagstaff Medical Center, 357 NLRB 659, 667 (2011)
• Control over employment matters needed to be “direct and immediate”. Airborne Express, 338 NLRB 597 (2002).
• “Indirect Control” (such as an agreement specifying the maximum total amount of reimbursable labor costs) was not enough. CNN America, Inc., 361 NLRB 439, 472 (2014)
• Control that was “limited and routine” (such as supervision as to the work to be performed, where and when to perform it, but not how to perform it) not enough. TLI, 271 NLRB at 799
• Browning–Ferris Ind. of Calif., 362 NLRB No 186 (2015).• Majority held that even when two separate entities have
never experienced joint control over essential terms and conditions and not “immediate and direct”, it is enough if “reserved” control, “indirect” control or “limited and routine” control.
• Hy-Brand Industrial Contractors, 365 NLRB No 156 (2017) overruled Browing-Ferris and identified five major problems with the prior decision:i. Exceeded the Board’s statutory authority by disregarding
the common law limits of “employee”;ii. Incorrectly assumed the modern economy presents
unique conditions requiring the involvement of third parties;
iii. Confusion over deference to NLRB for factual distinctions when applying the common law standard vs. modifying the standard itself;
iv. Replaced a test of certainty with one of vagueness and uncertainty; and
v. Sought to correct a perceived inequality of bargaining leverage by targeting the employer’s business partners.
Leonard Court, Director Crowe & DunlevyOklahoma City, Oklahoma
Policies and Procedures• The “Obama” Board took a very expansive view
concerning the scope of employee protections cover by Section 7 of the NLRB• Disrespectful conduct• Use of the employer logo• No camera/no recording• Requiring confidentiality during investigations
Policies and Procedures• Not surprisingly, the “Trump” Board has already begun
rolling back some of these decisions
1. General Counsel Memo (GC 18-02) –
2. The Boeing Case – 365 NLRB No 156 (Dec. 14, 2017)
Policies and ProceduresThe Boeing Case
1. The Board in a 3-2 decision created a new standard for deciding whether factually neutral policies unlawfully interfered with Section 7 rightsa. Test had been whether an employee could “reasonably
construe” the language as interfering with Section 7 rights
Policies and Procedures2. Boeing test
a. The nature and extend of the potential impact on Section 7 rights and
b. Legitimate justification for the rule
Policies and ProceduresThe Board created three categories of rules
1. Category 1 – lawful to maintain because:
a. The rule does not prohibit or interfere with the exercise of Section 7 rights when it is reasonably interpreted or
b. The potential adverse impact on protection rights is outweighed by the justification associated with the rule (no camera rule)
Policies and ProceduresCategory 2
2. Includes rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.
Policies and ProceduresCategory 33. Includes rules the Board will designate as unlawful to
maintain because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule, such as a rule that prohibits employees form discussing wages or benefits with one another.
Policies and Procedures• When a facially neutral rule, reasonably interpreted, would
not prohibit or interfere with the exercise of NLRA rights, maintenance of the rule is lawful without any need to evaluate or balance business justifications, and the Board’s inquiry into maintenance of the rule comes to an end.
Policies and Procedures• But, when a rule, reasonably interpreted, would prohibit
or interfere with the exercise of NLRA rights, the mere existence of some plausible business justification will not automatically render the rule lawful.
Policies and Procedures• The Board may find that an employer may lawfully
maintain a particular rule, notwithstanding some possible impact on a type of protected Section 7 activity, even though the rule cannot lawfully be applied against employees who engage in NLRA-protected conduct (a “courtesy and respect” rule)
J. Bruce Cross, DirectorCross, Gunter, Witherspoon & Galchus, P.C.Little Rock, Arkansas
Potential Targets for Future Change
Protected Concerted Activity • Fresh and Easy (2014)
• Board held that an employee who asked a co-worker to assist in her sexual harassment claim was engaged in PCA.
• Co-workers didn’t want to help, or help her.• No issue of unionization.• No issue of bargaining, or “group grievance.”
• Forecast: Expect reversal of this broad definition of PCA.• Will need to relate unionization, bargaining, or a “group
grievance” of working conditions. Individual harassment claims and discussions regarding the same should not be regarded as PCA related events.
• This decision was included in a recent GC memo of examples of decisions where the GC wants to provide the Board with an “alternative analysis.”
American Baptist Homes of the West• Restricts an employer’s ability to permanently replace
striking workers.• Reduce employer’s ability to maintain its operations during an
economic strike.• Must demonstrate that replacements were for legitimate
business reasons and not as economic sanctions.
American Baptist Homes of the West• This decision undercuts on of the Supreme Court’s
longest established Board precedents.• Which authorizes employers to hire replacement workers “at
will” and “with impunity” in economic strikes without regard to motivation.
• Forecast: Trump’s Board likely will reverse. • October 2016, D.C. Cir. Dismissed appeal due to lack of
jurisdiction over the matter.
Piedmont Gardens• On June 26, 2015, the Board overruled Anheuser-Busch, Inc., test for
analyzing whether an employer is obligated to disclose witness statements during grievances under the NLRA.• Under the new test, the Board balances the union's need for the
requested information against any “legitimate and substantial confidentiality interests established by the employer.”
• No categorical protection for witness statements. • Party asserting confidentiality carries the burden of proving a
“legitimate and substantial” confidentiality interest.
• Forecast: Trump’s Board will likely reverse.• This decision was included in a recent GC memo of examples of
decisions where the GC wants to provide the Board with an “alternative analysis.”
• D.C. Cir. Ruled in June 2017, that Piedmont lacked standing to challenge the Board’s decision, expressing no opinion as to the challenge or merits of the Board’s new rule.
Banner Health• NLRB ruled that asking employees who are involved in
an investigation not to discuss the investigation with co-workers ran afoul of the NLRA.• The ruling does not permit employers to ask workers to keep
investigations under wraps in some circumstances, but it held that the employer must justify the confidentiality by showing it has a legitimate business need for it that outweighs the employees Section 7 rights.
• In March 2017, the D.C. Circuit denied enforcement of part of the decision, but the NLRB’s position has not been rejected.
• Forecast: Trump’s Board likely to reverse.• This decision was included in a recent GC memo of examples of
decisions where the GC wants to provide the Board with an “alternative analysis.”
Weingarten Rights• In 1975 the U.S. Supreme Court held that employees covered by a
CBA may request the presence of a union representative during an investigatory interview that the employee reasonably believes may result in disciplinary action.• Clinton-era Board found non-union employees have Weingarten rights
in its Epilepsy Foundation (2000) decision, but Bush-era Board reversed in its IBM (2004) decision.
• September 2017, Obama-era GC memo urged the Board to once again extend Weingarten rights to unrepresented employees who are forced to submit to investigatory interview without coworker assistance.
• Forecast: Trump’s Board will likely not overrule Bush-era precedent. • This decision was included in a recent GC memo of examples of
decisions where the GC wants to provide the Board with an “alternative analysis.”
• GC memo also rescinded the Obama-era GC Advice memo seeking to overturn the IBM decision.
Megan Starich, PartnerMiller Nash Graham & DunnSeattle, Washington
The Magnificent Seven Rescinded GC Memos• December 1, 2017
• Memorandum GC 18-02 from Peter Robb to all Regional Directors
• Outlines his enforcement approach
• Rollback of significant and aggressive changes from prior administration
Statutory Rights of UniversityFaculty and Student in ULP Context
• Religious Institutions
• Managerial Exception
• Student Assistants/Non-Academic University Workers
• Student Athletes
• Decisions re organizing still stand, but ULP toolkit may be more limited.
ULP Remedies• Prior GC expanded range of remedies for ULPs against
employers:• Front pay permitted in settlements
• New GC memo expressly rescinds this
• Reinstatement rather than front pay
Deferral to Arbitration• Prior GC directed regions to stop deferral on 8(a)(1) and
8(a)(3) cases where arbitration could not be completed within one year
• Expressly rescinded
• More deferral to arbitration procedures in CBAs
Employer Handbook Rules• Prior GC issued extensive memo addressing handbook
rules:• Disrespectful conduct• Use of employer trademarks• Confidentiality rules• Use of cameras in the workplace
• Signal that NLRB will ease up on handbook rule enforcement
Other Rescinded Memos• Default language in settlement agreements allowing for
immediate summary judgment• Standards for withdrawal of recognition by employer• Standards for intermittent or partial strikes
Louis DiLorenzo, Managing MemberBond, Schoeneck & KingSyracuse, New York
Employer Rights After Contract Expiration
• Dues Checkoff – Lincoln Lutheran of Racine, 362 NLRB No 188 (2015) – overturned 53 years of precedent concerning union dues clause continuation after contract expiration.
• Unilateral Changes – Raytheon Network, 365 NLRB No. 161 (2017) overruled E.I. du Pont de Nemours, 364 NLRB No. 113 (2016) and returned to previous test if the change is similar in kind and degree to established and comparable changes in the past.
How Conflicts Between the NLRA and Other Statutes Will Be Resolved
NLRA and Conflict with Other Statutes• Consolidated Communications v. NLRB, 837 F.3d (D.C. Cir.
2016) – animal exuberance and § 7 rights v. Title VII• Cooper Tire v. NLRB, No. 16-2721 (2017) arbitration award
found clearly repugnant by ALJ and picketers reinstated. Eighth Circuit (2-1) upheld the Board.
• Recent EEOC Task Force Report notes the NLRB’s position on civility codes may not be productive.
• Insider Trading Policies – Dresser Rand Company, 358 NLRB No 34 (2012).
Conclusions & Wrap Up
Leonard CourtCrowe & Dunlevy Oklahoma City, [email protected]
Robert P. JoyMorgan, Brown & JoyBoston, [email protected]
Megan StarichMiller Nash Graham & DunnSeattle, [email protected]
Louis DiLorenzoBond, Schoeneck & King Syracuse, New [email protected]
J. Bruce CrossCross, Gunter, Witherspoon, & GalchusLittle Rock, [email protected]
Speakers:
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