Category Archives: NLRB

October 12, 2017

Top Five Ongoing Challenges For Collective Bargaining and Organizing

By Steve Gutierrez

Most expect that the White House and federal agencies will take a more business-friendly approach than in recent years. Employers hope that will mean they can now look forward to a potential rollback of regulations and enforcement efforts that have stymied their business objectives. Yet when it comes to responding to union organizing campaigns and negotiating collective bargaining agreements, employers still face wide-ranging challenges. Here is my list of the top five ongoing challenges. 

1. Affordable Care Act (ACA) Cadillac Tax 

Many unions, such as the Teamsters, prioritize and bargain extensively over top quality, employer-paid health insurance. They often use it as a selling point to their members. Yet, the ACA’s 40 percent excise tax on workers with comprehensive insurance plans (the so-called “Cadillac tax”), set to be implemented in 2020, is seen by the unions as an affront to their hard-fought bargaining to obtain high quality health care for their membership.

In fact, reports show that unions, including the Teamsters, have actively lobbied members of Congress for a repeal of the Cadillac tax. Because health care reform has not yet passed, it may be unlikely that relief from the Cadillac tax is forthcoming anytime soon.

This opens the door for alternate bargaining tactics over health care plans and benefits. Economics can be based on the ultimate cost to the employees/members, when factoring in the tax. This issue remains a challenge for both employers and the union and can change the overall approach to structuring the economic package during contract negotiations. 

2.  Micro-units 

In 2011, the NLRB issued its Specialty Healthcare decision permitting unions to establish bargaining units that include only a small fraction of a workforce. For example, in 2014, the Board certified a micro-unit of cosmetic and fragrance salespersons working at a Macy’s department store rather than requiring all employees at the store (or even all salespersons at the store) to make up the bargaining unit. The Board authorized the micro-unit by finding that the cosmetics and fragrances salespersons were a readily identifiable group and shared a community of interest. The Board also found that other Macy’s employees did not share an overwhelming community of interest with the cosmetics and fragrances employees, and prior NLRB cases involving the retail industry did not require a wall-to-wall unit.

These micro-units can make union organizing easier as they do not require a majority of the historical “wall-to-wall” bargaining units to vote in favor of the union. For example, a unit of only nine employees needs just five to vote “yes” and the union has its foot in the door with that employer. And organizing on that micro level can more easily go unnoticed by employers. Micro-units can also result in an employer having to negotiate with multiple unions affecting small segments of its workforce, and the headaches involved with administering varying contracts.

Numerous efforts are underway in the current administration to do away with micro-units. Current NLRB Chairman Phillip Miscimarra disagrees with the Specialty Healthcare standard for determining an appropriate bargaining unit, raising chances that the Board will abandon the approval of micro-bargaining units. However, Miscimarra has announced that he will leave the Board when his term expires in December 2017. Despite his impending departure, it is possible that a majority-Republican Board will reverse course on micro-units.

In addition, this past Spring, Senate Republicans introduced (again) the Representation Fairness Restoration Act (S. 801) which would do away with micro-units. That bill has been assigned to the Senate Health, Education, Labor, and Pensions committee where it is one of 250 bills currently being considered by the committee.

Until the law or Board precedent is changed, micro-units remain a challenge for employers. But because a more employer-friendly Board might rule against a micro-unit, it becomes vastly important to challenge proposed bargaining units and any potential outlier unit members. Increased pressure on the Board on this issue should be a continued focus. 

3.  Transparency with Employees/Members 

Unions are becoming quite savvy in communicating with their members and potential members. Union leaders are increasingly focusing on being more transparent with their members during the bargaining process. They continue to build strong communications networks centered on social media and other online platforms, with development of mobile apps and company-specific websites, Facebook pages, and Twitter accounts.

To stay ahead of and counter union communications, employers facing a union organizing campaign or in the midst of negotiating a contract should institute and invest in more robust communication strategies with their employees as well. Social media and other online communications boards are essential in getting the company’s message out, especially to millennials and other employee demographics who will seek their information from such sources. But, be aware that in late 2014, the NLRB ruled that employees may presumptively use a company’s email system for statutorily protected communications as long as it takes place during nonworking time and does not interfere with productivity. That Board decision, Purple Communications, is on appeal in the Ninth Circuit Court of Appeals but remains a challenge for employers until such time it is reversed or overturned.

4.  New Technology in the Workplace 

As more technology comes into the workplace and robots threaten to replace workers, collective bargaining will likely face these issues head on. Just as outsourcing used to be (and in many cases, still is) a sore spot for unions, workplace automation is a similar threat to jobs and future expansion.

One example involves the Teamsters who recognize that autonomous driving vehicles are becoming a reality. The Teamsters are urging lawmakers to prioritize workers and safety when crafting legislation and rules regarding autonomous vehicles. Their concerns likely spill over into their contract negotiations as well.

As workplace technology accelerates, discussions of the use of such technology will likely become key in any bargaining where robots and automation are a possibility. Anticipating that topic, and the potential impact on workers, opens the door for employers to bargain for potential gains and/or trade-offs in their favor when the union opposes or seeks to limit autonomous technology.

5.  Favorability of Unions on the Rise 

According to a January 2017 Union Favorability Survey by the Pew Research Center (PRC), 60 percent of respondents viewed labor unions favorably while only 35 percent viewed unions unfavorably. This is the highest union favorability rating compiled by the PRC since March of 2001 and only the second rating at or above 60 percent since 1985.

Employers should be aware of this rising trend, especially when communicating with employees during an organizing or bargaining campaign. Opposing and criticizing unions too strongly could backfire so communications and strategies should be formulated to focus on issues, rather than the institution of unions and union membership itself.

Responding to organizing campaigns and preparing for collective bargaining is always a challenge but thinking ahead about these top five issues, and investing in some preventative training and education for managers, can help you manage the process and achieve a favorable outcome.

June 22, 2017

U.S. DOJ Files Brief Supporting Arbitration Agreements That Bar Employee Class Actions

By Emily Hobbs-Wright

Last September, the U.S. Office of the Solicitor General urged the U.S. Supreme Court to rule that arbitration agreements that prohibit employees from pursuing work-related claims on a class action basis are unlawful because they violate the National Labor Relations Act (NLRA). On June 16, 2017, however, the federal government filed a brief taking the exact opposite position, namely that class-action waivers in arbitration agreements should be enforced. This flip-flop in position is quite extraordinary, even with the change in administrations, making this important case one to watch next term. Here are the issues at stake for employers.

NLRB Appeal of Murphy Oil Case

With its controversial 2012 decision in the D.R. Horton case, the National Labor Relations Board (NLRB) has advocated that arbitration agreements between an employer and its employees that ban employees from pursuing work-related claims as a class or group are unenforceable as they violate employees’ rights to engage in concerted activities for their mutual aid and protection under the NLRA. In 2013, the Fifth Circuit Court of Appeals overturned the NLRB’s ruling in D.R. Horton, holding that the use of class action procedures is not a “substantive right” of employees under the NLRA and therefore, arbitration agreements with class-action waivers should be enforced under the Federal Arbitration Act (FAA).

The Fifth Circuit rejected the NLRB’s view on class-action waivers a second time when it ruled that Murphy Oil, which operates more than 1,000 gas stations in 21 states, did not commit an unfair labor practice when enforcing its arbitration agreements that required employees to resolve work-related claims on an individual basis. Two other appellate circuits – the Second and Eighth – have agreed with the Fifth Circuit’s position that class-action waivers are enforceable. Other circuits, however, including the Ninth and Seventh, have ruled in favor of the NLRB on this issue, creating inconsistencies concerning whether such agreements are lawful.

In the closing days of the Obama administration in September 2016, the Office of the Solicitor General (which is tasked with conducting government litigation before the Supreme Court) filed a petition with the Supreme Court asking it to decide the validity of class-action waivers in arbitration agreements through appeal of the Murphy Oil case. The government argued on behalf of the NLRB that such agreements were unlawful. Employers Ernst & Young and Epic Systems also sought Supreme Court review of their adverse decisions from other circuits on this same issue. In January 2017, just days before President Trump’s inauguration, the high court agreed to hear all three consolidated cases in its next term.

The NLRB Left To Go It Alone

When the United States filed its brief with the Supreme Court last week changing positions, it did so as a “friend of the court.” The June 16th brief is signed by lawyers from the Solicitor General’s office but not by any NLRB lawyers – although both offices were signatories to the original petition seeking review.

Under the Court’s briefing schedule, briefs from the NLRB and the employee-petitioners are due on August 9, 2017. According to a short statement on the NLRB’s website, the Solicitor General’s Office “authorized the National Labor Relations Board to represent itself” in the Murphy Oil case before the Supreme Court. This sets up a unique situation for oral arguments this fall when a lawyer from the Solicitor General’s office may argue against a lawyer for another federal agency, the NLRB.

What It Means For Employers

The change in position by the Solicitor General’s Office could lend additional weight to the employers’ arguments in favor of upholding class-action waivers in arbitration agreements. It is a business-friendly position that reins in the extensive reach of the NLRB in recent years. If the Supreme Court rules in favor of employers and against the NLRB, businesses will be able to enforce arbitration agreements containing class action waivers nationwide. We will keep you posted as this case proceeds to a ruling, which could be published about this time next year. Stay tuned!

June 20, 2017

No-Recording Policies: May Employers Ban All Worker Recordings?

By Steve Gutierrez

With a smartphone in almost every pocket, workers have high definition video and audio recording capabilities at their fingertips. It may be easier than ever before for employees to record workplace operations, meetings, disciplinary discussions, picketing, and other conditions and happenings in the workplace.

Some employers see potential worker recordings as detrimental to open and honest workplace dialogue and as well as potentially undermining a company’s protection of its proprietary or confidential information. These concerns may lead employers to adopt a policy to limit or prohibit employees from making recordings at work. After all, it seems inherently reasonable to require that employees get prior management approval before recording anything at work, or to limit what employees may do with video or audio recordings after they are made. So what’s the problem? Broad recording bans may infringe on employees’ rights under the National Labor Relations Act (NLRA).

How Policies May Violate The NLRA

Section 7 of the NLRA guarantees employees the right to “engage in . . . concerted activities for the purpose of collective bargaining or other mutual aid or protection.” This means that employees, whether unionized or not, have the right to take actions to help protect, enhance, or improve the terms and conditions of employment for themselves and their co-workers. Employers who interfere with or restrain employees’ Section 7 rights may be found to have committed an unfair labor practice (ULP) under the NLRA.

So how does a no-recording policy interfere with such rights? Even when a policy or rule does not expressly restrict protected Section 7 activities, mere maintenance of a policy can constitute a ULP in three scenarios: (1) if employees would reasonably construe the language in the policy to prohibit protected activity; (2) if the policy was implemented in response to union activity; or (3) if the policy has been applied to restrict the exercise of protected rights.

Overly Broad Restrictions May “Chill” Section 7 Rights 

Typically, it is the first scenario that gets employers in trouble. You see, the National Labor Relations Board (Board) has held that in certain circumstances, employee recordings in the workplace can itself be a protected Section 7 activity. Generally, the Board finds that employee photographing, videotaping, and recording is protected by Section 7 when employees are acting in concert for their mutual aid and protection and there is no overriding employer interest. For example, employees recording images of employee picketing, or documenting discussions about unsafe working conditions, inconsistent application of work rules, or other terms of employment could be concerted activities protected under the NLRA.

When employers implement an overly broad policy that prohibits employees from making any workplace recordings, or permits recordings only with advance management approval, the Board takes the position that employees would reasonably construe that language as prohibiting protected Section 7 activities. As such, broad no-recording policies are seen as “chilling” employee rights, and therefore, a violation of the NLRA.

Second Circuit Recently Upheld ULP On Broad No-Recording Policy

In December of 2015, the Board ruled that Whole Foods had violated the NLRA by maintaining an overbroad no-recording policy. The company’s policy prohibited all recording without management approval. Whole Foods stated that its purpose for the policy was to promote employee communication in the workplace. The Board saw it differently, ruling that the policy’s overly broad language could “chill” an employee’s exercise of Section 7 rights because it was not limited to controlling those activities in which employees are not acting in concert.

Whole Foods appealed the Board’s decision to the Second Circuit Court of Appeals which recently issued its summary order affirming the Board’s 2015 decision. The appellate court wrote that the Board’s determination was supported by substantial evidence and was decided in accordance with law.

In a footnote, however, the Court noted that not every no-recording policy will necessarily infringe on employees’ Section 7 rights. But a lawful policy would have to be drafted narrowly so that it protects the company’s interests without interfering with employees’ protected activities.

Practical Policy Pointers

Employers generally have the right to control what goes on in their workplaces, so long as their policies do not violate specific employee rights. Legitimate business concerns, such as protecting confidential and proprietary information and fostering open and honest communications in the workplace, may justify a policy that limits employees from recording what goes on at work. In order to craft an enforceable policy that would likely avoid NLRB scrutiny, consider implementing the following practical tips:

  • Tailor the policy narrowly – identify those areas, activities, and/or times when employees are prohibited from recording, leaving non-problematic areas, activities, and times open to recording. An outright ban will likely be struck down.
  • Identify the legitimate reasons for the policy – by stating the strong business reasons for not allowing recording at certain times or places, employers help dispel the argument that the policy infringes on employee rights.
  • Be consistent – if your business permits visitors to your plant to take video or audio recordings of your operation, it will be difficult to argue a legitimate business reason for denying employees to make recordings in the same areas. Similarly, if your business has surveillance cameras throughout the workplace, it may be difficult to argue that employee recordings will harm your business interests. Also, be consistent in policy enforcement because allowing some employees to record while denying that ability to other similarly situated employees will lead to trouble.
  • Include a disclaimer – the policy should state that it is not intended to infringe on any employee’s right to engage in protected concerted activity.

Like most employment policies, a no-recording policy should reflect your specific business interests and industry and be narrowly tailored to achieve your end goal. If in doubt about whether you need or should revise a no-recording policy, please consult with your employment attorney.

March 21, 2017

Supreme Court Rules That NLRB Acting GC Became Ineligible To Serve After Nomination To Permanent Role

By Steve Gutierrez

Once a President nominates a candidate for a Senate-confirmed office, that person may not serve in an acting capacity for that office while awaiting Senate confirmation, pursuant to a ruling today by the U.S. Supreme Court. In a 6-to-2 decision, the Court ruled that Lafe Solomon, who had been appointed by President Obama to serve as acting general counsel for the National Labor Relations Board (NLRB) during a vacancy, could no longer serve in that acting role after the President later nominated him to fill the position outright.

NLRB General Counsel Appointment

The position of general counsel of the NLRB must be filled through an appointment by the President with the advice and consent of the Senate – a so-called “PAS” office. When a vacancy in a PAS office arises, the President is permitted to direct certain officials to serve in the vacant position temporarily in an acting capacity. Under the Federal Vacancies Reform Act of 1998 (FVRA), only three classes of government officials may become acting officers. The FVRA,  however, prohibits certain persons from serving in an acting capacity once the President puts that person forward as the nominee to fill the position permanently.

In Lafe Solomon’s case, he was directed by President Obama in June 2010 to serve temporarily as the NLRB’s acting general counsel when the former general counsel resigned. Solomon had worked for ten years as the Director of the NLRB’s Office of Representation Appeals and was within the classes of officials who could be directed to serve in an acting capacity under the FVRA. In January 2011, President Obama nominated Solomon to serve as the NLRB’s general counsel on a permanent basis. Solomon continued to serve as acting general counsel for an additional two-plus years as the Senate failed to act on his nomination. In mid-2013, the President withdrew Solomon’s nomination, putting forward another candidate whom the Senate confirmed in late October 2013.

Company Facing ULP Argued Solomon Couldn’t Be Acting GC After Nomination

In January 2013, while Solomon was acting general counsel, SW General, Inc., a company that provides ambulance services, received a complaint alleging it committed an unfair labor practice (ULP) for failing to pay certain bonuses to employees. After an administrative law judge and the NLRB concluded that SW General had committed the ULP, the company argued in court that the complaint was invalid because Solomon could not legally perform the acting general counsel duties after the President had nominated him for the permanent position. The company pointed to wording in the FVRA restricting the ability of acting officers to serve after being nominated to hold the position permanently. Whether the FVRA prohibits all classes of acting officials or only first assistants who automatically assume acting duties from continuing to serve after nomination was the issue before the Supreme Court.

Once Nominated, Official Is No Longer Eligible To Serve In Acting Capacity

The Court ruled that once a person has been nominated for a vacant PAS office, he or she may not perform the duties of that office in an acting capacity. The Court rejected the NLRB’s position that the FVRA restricted only first assistants who were in an acting capacity, rather than restricting all classes of officials directed to serve in an acting capacity who are later nominated for the permanent position. In applying its ruling to Lafe Solomon, the Court ruled that Solomon’s continued service as the NLRB acting general counsel after he had been nominated to fill that position permanently violated the FVRA. NLRB v. SW General, Inc., ___ 580 U.S. ___ (2017).

Solomon’s Actions “Voidable”

So what does this mean for all of Solomon’s actions taken during the over two-year period in which Solomon improperly served as the acting general counsel after his nomination for the permanent position? For example, what happens to the ULP complaints filed by, or at Solomon’s direction, during that period?

The Court noted in a footnote that the FVRA exempts the general counsel of the NLRB from the general rule that actions taken in violation of the FVRA are void ab initio (i.e. from the beginning). The Court of Appeals had ruled that Solomon’s actions during that period were “voidable.” Because the NLRB did not appeal that part of the lower appellate court’s ruling, it was not before the Supreme Court to decide. Consequently, the Court of Appeals’ decision that Solomon’s actions are voidable stands. Accordingly, each action taken by Solomon during the time that he improperly served as acting general counsel would need to be challenged on an individual basis.

August 24, 2016

NLRB Reverses Position on Grad Student Assistants, Allowing Them To Unionize

By Steven Gutierrez

Overruling its 2004 Brown University decision, the National Labor Relations Board (NLRB or Board) decided that graduate student assistants at private colleges and universities can be considered statutory employees under the National Labor Relations Act (NLRA), permitting them to organize and form a union. Columbia University, 364 NLRB 90 (August 23, 2016). The Board concluded that student assistants who perform paid work at the direction of their university have a common-law employment relationship with the university and therefore, are entitled to the protections of the NLRA.

Why Brown University Was Wrong

The 2004 Board that decided this issue in Brown University ruled that graduate assistants could not be statutory employees under the NLRA because they are primarily students and have a primarily educational relationship with the university, not an economic one. The current Board rejected that view, finding that because student assistants perform work, at the direction of the university, for which they are compensated, they are statutory employees and the fact that there may be another relationship not covered by the NLRA, namely an educational relationship, did not foreclose their coverage as employees.

The current Board also disagreed with the Brown University Board’s “fundamental belief that the imposition of collective bargaining on graduate students would improperly intrude into the educational process and would be inconsistent with the purposes and policies of the [NLRA].” Instead, this Board believes that allowing grad assistants to be covered employees meets the “unequivocal policy” of the NLRA to encourage the practice and procedure of collective bargaining, and will make sure that an entire category of workers are not deprived of the protections of the law.

Multiple Flip-Flops On Graduate Assistants

In overruling Brown University, the Board’s position returns to the position held in the 2000 New York University (NYU) ruling, which itself was overruled in Brown University. Prior to the NYU ruling, however, the Board had long held that various student assistants could not be included in petitioned-for bargaining units.

This new flip-flop on the issue of coverage for graduate student assistants is not surprising given the leanings and make-up of the majority of the current Board, which has favored the extension of coverage and its jurisdiction, when possible. Board member Philip Miscimarra dissented in this case, writing that he agreed with the Brown University reasoning that graduate student assistants have a predominately academic, rather than economic, relationship with their school. He would not have overruled Brown University, or permitted the petitioned-for bargaining unit to proceed.  Read more >>

August 23, 2016

Employer Violates NLRA By Barring Employees From Bringing Class or Collective Actions, Says Ninth Circuit

By Brian Mumaugh

Bad news for employers in the ongoing saga of whether an employer violates the National Labor Relations Act (NLRA) by requiring that employees pursue any legal dispute against the company on an individual basis, rather than in a class or collective action with other employees. The Ninth Circuit Court of Appeals recently ruled that the NLRA precludes employees from waiving their right to have disputes heard collectively and an employer that requires employees to waive that right as a condition of employment commits an unfair labor practice. Morris v. Ernst & Young, LLP, No. 13-16599 (9th Cir. August 22, 2016).

Broad Ruling Extends To Any “Separate Proceedings” Requirement

Accounting firm Ernst & Young required its employees to sign agreements mandating that all legal claims against the firm be pursued exclusively through arbitration and only as individuals in “separate proceedings.” When employee Stephen Morris brought a class and collective action in federal court alleging that the firm misclassified employees denying them overtime pay under the Fair Labor Standards Act, Ernst & Young sought to compel arbitration on an individual basis pursuant to its arbitration agreement. The district court agreed, dismissing the federal court case and ordering arbitration.

Morris appealed, arguing, among other things, that the “separate proceedings” clause violated the NLRA. Morris relied on determinations by the National Labor Relations Board (the Board) in the D.R. Horton  and Murphy Oil cases in which the Board ruled that concerted action waivers violate the NLRA. The Ninth Circuit agreed. It ruled that when an employer requires employees to sign an agreement precluding them from bringing a concerted legal claim regarding wages, hours, and terms and conditions of employment, the employer violates the NLRA.

The Court focused on the Board’s interpretation of the NLRA’s statutory right of employees “to engage in . . . concerted activities for the purpose of . . . mutual aid or protection” to include a right to join together to pursue workplace grievances, including through litigation. It characterized this as a labor law case, not an arbitration case. It stated that the problem with the contract was not that it required arbitration, but that it excluded all concerted employee legal claims. The Court explained that the same problem would exist “if the contract required disputes to be resolved through casting lots, coin toss, duel, trial by ordeal, or any other dispute resolution mechanism, if the contract (1) limited resolution to that mechanism and (2) required separate individual proceedings.” Read more >>

January 12, 2016

Anticipating Revisions To The “Persuader Rules” – What You Need To Know

Mumaugh_BBy Brian Mumaugh

As early as March, the U.S. Department of Labor (DOL) plans to issue its final rules that will significantly narrow the type of union-avoidance activities that employers and their labor attorneys and relations consultants may engage in without having to report those activities to the government. The tightening of the so-call “persuader rules” will mean that employers who utilize labor relations consultants, including lawyers, to help with union-avoidance or collective bargaining activities will need to disclose many more of those activities, and the fees paid for them.

Evolution of the “Persuader Rules”

In the late 1950’s, because of perceived questionable conduct by both unions and employers involved in union organizing and collective bargaining campaigns, Congress enacted the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). The LMRDA seeks to make labor-management relations more transparent by imposing reporting and disclosure requirements on labor organizations and their officials, employers, and labor relations consultants.

Under the LMRDA, the reporting requirements for employers and their labor consultants are triggered when they undertake activities intended to directly or indirectly persuade employees to exercise (or not to exercise) the employees’ right to organize and bargain collectively through representatives of their own choosing. Employers must file a Form LM-10 (Employer Report) that discloses all payments made to unions and union officials, persuader payments made to employees and employee committees, persuader agreements/arrangements made with labor relations consultants, including lawyers, which includes the amount and dates of payments made to such consultants, and any expenditures made to interfere with, restrain or coerce employees, or otherwise obtain information concerning employees or a labor organization. Labor relations consultants must file a Form LM-20 specifying, among other things, information about the consultant and the nature of the “persuader activities” to be performed. Under the LMRDA, the DOL must make all such forms available for public inspection.

The “Advice” Exemption

The LMRDA contains an exemption from the reporting requirements for persuader activities for services that give “advice” to the employer. Except for brief periods when the LMRDA was first enacted and again in 2001, the DOL has interpreted this “advice” exemption to apply to activities where a consultant or lawyer prepares a speech or documents for use by the employer, or revises materials initially drafted by the employer. In other words, as long as the consultant or lawyer did not directly deliver or disseminate speeches or materials to employees for the purpose of persuading them with respect to their organizational or bargaining rights, behind-the-scenes activities where the consultant/lawyer drafts materials for use by the employer would not trigger a reporting obligation. Under the proposed rules, that is about to change. 

Expanded Proposed Interpretation of “Advice” Exemption

Believing its long-standing interpretation of the “advice” exemption to be overly broad, the DOL proposed a narrower interpretation that would require reporting in any case in which the agreement or arrangement with a labor consultant/lawyer in any way calls for the consultant to engage in persuader activities, regardless of whether or not advice is also given. The revised interpretation would define reportable “persuader activity” to include activities where a lawyer or consultant provides material or communications to, or engages in other actions, conduct, or communications on behalf of an employer that at least in part, has the objective of persuading employees concerning their rights to organize or bargain collectively. Exempt “advice” would be limited to recommendations, verbal or written, regarding an employer’s decision or course of conduct.

Stated examples of covered persuader activities that would require disclosure include:

  • drafting, revising, or providing written materials for presentation, dissemination, or distribution to employees
  • drafting, revising, or providing a speech, video, or multi-media presentation to be presented, shown or distributed to employees
  • drafting, revising, or providing website content for employees
  • planning or conducting individual or group employee meetings, and training supervisors or employer representatives to do the same
  • coordinating or directing the activities of supervisors or employer representatives
  • establishing or facilitating employee committees
  • developing personnel policies or practices
  • deciding which employees to target for persuader activity or disciplinary action
  • conducting a seminar for supervisors or employer representatives

The DOL justifies this expansion of the reporting circumstances, in part, because the role of outside consultants and law firms in managing employers’ anti-union efforts has grown substantially over the years, citing reports that somewhere between 71% and 87% of employers facing organizing drives hire third-party consultants to assist in their counter-organizing efforts. The DOL also states that underreporting of persuader activities is a problem as “employees are not receiving the information that Congress intended they receive.” Regardless of its reasoning, the DOL’s proposed change of its 50-year old interpretation will result in significant burdens on both employers and their consultants.

March 2016 Is New Target Date for Final Rule

Almost five years has passed since the DOL published its proposed rule changing the “persuader rules.” After numerous delays in publishing its final rules, the DOL’s regulatory agenda indicates that it expects to issue the final “persuader rules” this March. We will let you know when the final rules are published, or if the timeline changes. In the meantime, you might want to take advantage of the next few months before the new rules kick in to obtain union-avoidance materials and training from your consultants now. At a minimum, talk to your labor relations consultant/labor lawyer about the upcoming changes so that you are aware of how they may impact your labor strategies in the future.

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December 4, 2015

Court Upholds NLRB Ruling On Overly Broad Employment Policies

Gutierrez_SBy Steven M. Gutierrez 

The National Labor Relations Board (NLRB or Board) may feel emboldened after a recent ruling by the District of Columbia Circuit Court of Appeals, which upheld the Board’s decision that an employer’s policies on investigation confidentiality, electronic communications, and work hours were overly broad, potentially chilling employees’ rights to engage in protected concerted activities. As a result, employers should expect the further onslaught of NLRB attacks on seemingly neutral employment policies to continue, or worse, escalate.

NLRB’s Attack on Handbook Policies

In recent years, the Board has scrutinized many handbook policies, including those of non-union employers. As we’ve written in a past post, the NLRB attacks those policies that it believes interferes with, or chills, employees’ §7 rights to form labor organizations, bargain collectively, and engage in similar concerted activities. If the employer’s policy or rule would reasonably tend to chill employees in the exercise of their statutory rights, then the employer violates §8(a)(1) of the National Labor Relations Act, committing an unfair labor practice.

Analysis of Whether Policies Violate NLRA

The D.C. Court of Appeals set forth the proper analysis for determining whether an employment policy or work rule can amount to an unfair labor practice under the National Labor Relations Act (NLRA). Hyundai Am. Shipping Agency, Inc. v. NLRB, No. 11-1351 (D.C.Cir. Nov. 6, 2015). First, the Board must determine whether the policy explicitly restricts §7 rights, such as by restricting employees from discussing or forming a union. An explicit restriction on employees’ rights will invalidate the policy, amounting to an unfair labor practice.

In the absence of an explicit restriction on §7 rights, the Board must ask whether the rule:

  1. could be reasonably construed by employees to restrict §7 activity;
  2. was adopted in response to such activity; or
  3. has been used to restrict such activity.

If the answer is “yes” to any of these three questions, then the employer must show an adequate justification for the restrictive language to avoid it constituting an unfair labor practice.

Court Upholds Board Order On Three Policies

The Court reviewed the Board’s order regarding four policies maintained by employer Hyundai America Shipping Agency in its employee handbook, namely its policies on investigation confidentiality, electronic communications, work hours, and complaint provisions. Here is how the Court analyzed whether the Board correctly concluded that each of the policies was restrictive of employees’ §7 rights:

  • Investigative Confidentiality Rule: Hyundai had an oral rule that prohibited employees from discussing information about matters under investigation. The Court stated that “this blanket confidentiality rule clearly limited employees’ §7 rights to discuss their employment.” The Court then looked at whether Hyundai had offered a legitimate and substantial business justification for the rule that outweighed the adverse effect on its employees’ rights. While acknowledging that there may be a legitimate business justification for mandating confidentiality for particular types of investigations, such as sexual harassment investigations, the Court found that those concerns did not justify a ban on discussion of all investigations. Because the confidentiality rule was overly broad, the Court upheld the Board’s determination that it violated the NLRA.
  • Electronic Communications Rule: The electronic communications policy in Hyundai’s employee handbook stated that employees should only disclose information or messages from the company’s electronic communications systems to authorized persons. The Court stated that the key to determining the validity of this policy was whether the prohibition was limited to confidential information. Because Hyundai’s rule was not limited to the disclosure of confidential information, a reasonable reader could conclude that it applied to information about the terms and conditions of employment and therefore, it was overly broad and invalid.
  • Working Hours Rule: Hyundai maintained a handbook policy that allowed for employees to be disciplined, including termination, for “[p]erforming activities other than Company work during working hours.” Here, the key distinction is the use of the phrase “working hours” rather than “working time.” “Working time” excludes break periods so restrictions on union activity during working time is acceptable. On the other hand, “working hours” describes the period from the beginning of a shift to its end, including breaks. Because restrictions on union activity during working hours (sg., including break time) is presumptively invalid, the Court upheld the Board’s conclusion that Hyundai’s rule was invalid.
  • Complaint Provision: Hyundai’s handbook provided that employees should voice complaints directly to their immediate supervisor or to Human Resources, rather than complaining to fellow employees which would not resolve the problem. Although the Board had ruled this provision invalid, believing it prohibited employees from complaining about the terms or conditions of work among themselves, the Court disagreed. It stated that although the rule urged employees to voice complaints to a supervisor or to Human Resources, it was not mandatory, did not preclude alternative discussions, and did not provide penalties if an employee complained to fellow employees. Therefore, the Court found that the language would not be read to prohibit complaints protected by §7.

Court Rejects NLRB’s Investigation Confidentiality Rule Standard Affirmed in Banner Health

Interestingly, while discussing Hyundai’s investigation confidentiality rule, the Court rejected the ALJ’s opinion that in order to show a legitimate and substantial justification for an investigation confidentiality policy, the employer must determine whether any “investigation witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated and there is a need to prevent a cover up.” The NLRB had reaffirmed that standard in its widely cited Banner Health ruling on confidential investigation policies.

The D.C. Court of Appeals stated that it “need not and do[es] not endorse the ALJ’s novel view” on how employer’s must show a legitimate justification for an investigation confidentiality rule. The Court instead simply held that Hyundai’s confidentiality rule was “so broad and undifferentiated that the Board reasonably concluded that Hyundai did not present a legitimate business justification for it.”

Review and Narrow Your Policies

To help avoid NLRB scrutiny, review your employee handbook and other employment policies to determine whether any language could potentially chill employees’ §7 rights. If possible, narrow any restrictions that may infringe on employees’ rights and make certain that your organization can articulate a legitimate and substantial justification for your restrictions. Because these issues are continually evolving, discuss any questionable policy wording with your employment counsel.

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September 11, 2015

Broader Joint-Employer Test Leads to Teamsters Win At Browning-Ferris

Gutierrez_SBy Steve Gutierrez 

In a previous article, we noted that the NLRB’s recent Browning-Ferris ruling was significant for those employers who use temporary or staffing agencies to provide workers. The Board set a new, broader test for joint-employer status that does not require the purported joint employer to exercise control over the workers in question. Instead, if the company has the right to exercise control over the terms and conditions of certain workers, it can be deemed a joint employer even if it never actually exercises that control. Now we can see the significance of the impact.  

Based upon the joint-employer determination, the impounded ballots of the workers of Leadpoint Business Services, the entity that staffed Browning-Ferris’s California recycling plant, were counted as part of the bargaining unit, which provided a 73-17 margin in favor of representation by the Teamsters. Depending on the outcome of any objections filed by the company, the NLRB will certify the union as the collective bargaining representative for the recycling center’s workers. This allows the unit to collectively bargain over the terms and conditions of employment at that facility. 

Bargaining Over Terms Of Contingent Workers 

Think about this: Browning-Ferris does not “employ” the workers placed at its facility by staffing agency, Leadpoint. It doesn’t hire, pay, provide benefits to, or fire them. Yet, it will be required to sit down at the bargaining table across from the Teamsters to negotiate the terms and conditions of employment of those contingent workers over which it retains authority to control. That is the result of being found a joint employer of the bargaining-unit workers. 

Extension of Joint-Employer Test to Other Contexts? 

Joint-employer status is a critical determination for companies that use contingent workers as well as for franchises. And, it can apply not only in the union context, but also in other employment law contexts, such as for pay purposes under the Fair Labor Standards Act or for discrimination under Title VII. Even though the standards and policy behind a joint-employer relationship under other employment laws may differ from those behind the National Labor Relations Act, this new, broader test will likely be asserted in these other contexts in order to bring in franchisors and companies that use contingent workers as potentially liable parties. 

Appeal Over Joint-Employer Test Coming? 

Because of the high stakes involved in this ruling, it would not be surprising if Browning-Ferris (which is part of Republic Services, Inc.) appealed the NLRB’s ruling, taking its case to the applicable court of appeals. Another option is that after the union is certified, Browning-Ferris could refuse to bargain with the Teamsters which would lead to more proceedings before the Board, and ultimately, the courts. Given that the Board has already ruled in favor of the union on this matter, the company will likely have a better chance seeking review by circuit judges. Either way, this matter is probably not over. 

Stay tuned and we will let you know what develops further. What we do know, is the NLRB will not sit idle and we should expect it to use its power to push the envelope in favor of the nation’s unions.

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April 3, 2015

Presidential Veto Quashes Congressional Attempt to Overturn NLRB “Quickie” Election Rules

Husband_J By John Husband and Brad Williams 

On March 31, 2015, President Obama vetoed a joint resolution passed by both houses of Congress that sought to overturn the National Labor Relations Board’s (NLRB’s) rules designed to speed up the union election process. Scheduled to go into effect on April 14, 2015, these so-called “quickie” or “ambush” election rules significantly shorten the period of time between a petition for a union election and a vote. 

History of “Quickie” Election Rules 

Williams_BThe “quickie” election rules have a tortured history. First proposed in June 2011, the rules faced immediate and severe criticism that led to a watered-down version of the rules being adopted in December 2011. These watered-down rules went briefly into effect in April 2012, but were quickly invalidated by a federal court just two weeks later. The court ruled that the Board had lacked a statutorily mandated quorum when it voted to adopt the rules. 

Notably, the federal court also stated that nothing prevented a properly constituted quorum of the Board from voting to re-adopt the rules in the future. That is exactly what the Board did in February 2014. It re-proposed its original rules, and subsequently adopted the rules in December 2014. The new rules are slated to become effective on April 14th. 

Legal Challenges Continue 

Despite Congress’s ill-fated  attempt to block the rules under the Congressional Review Act, the rules still face potential hurdles. For instance, the U.S. Chamber of Commerce filed a lawsuit in the District of Columbia in January 2015 seeking to vacate the rules and enjoin their enforcement. Business groups in Texas filed a similar lawsuit in January 2015. These lawsuits allege numerous reasons why the rules should be invalidated, including alleged violations of the National Labor Relations Act and Congressional intent, alleged violations of the First Amendment and due process protections, and arbitrary and capricious rulemaking under the Administrative Procedure Act. However, the lawsuits will take time to wind through the courts, and their chances of success are uncertain. 

Anticipated Effects of Rules 

Barring any unexpected injunction before April 14th, employers should anticipate big changes from the new rules. The rules will shorten the period of time between a petition for a union election and a vote to perhaps fifteen or fewer days (as opposed to the five or more weeks under current practice). The rules are expected to boost organizing activity as unions attempt to increase their membership – and dues-generated revenue – through “ambush” elections. The compressed timeline between a petition and vote will limit employers’ ability to fully explain the pros and cons of union representation before an election, and limit employees’ ability to cast an informed vote. To retain flexibility in dealing directly with their employees, employers should be ready at the first hint of union organizing to educate their employees about the desirability of union representation. Advance preparation, and a properly orchestrated counter-organizational campaign, will be key.

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