Now that President Trump’s picks for the National Labor Relations Board (“NLRB” or “Board”) and for its General Counsel position are in place, the Board has wasted no time overturning some of the aggressive positions taken by the previous NLRB in recent years. In December 2017, the Board announced four important new cases which overturn decisions of the last eight years and often reestablish the standards under the National Labor Relations Act (“NLRA”) that had been in place previously. These decisions, discussed below, should be of interest to all employers, not just those dealing with unions.
NLRB Overturns Joint Employer Test. On December 14, 2017, the NLRB in Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co., 365 NLRB No. 156 (NLRB 2017) overturned the controversial joint employer standard first implemented in the case of Browning-Ferris Industries, 362 NLRB No. 186 (NLRB 2015). Browning-Ferris had broadened the test used to determine whether two employers were joint employers for purposes of the NLRA, including for collective bargaining and for liability for unfair labor practices. Prior to Browning-Ferris, two employers could be found to be joint employers only if they each exercised actual control over the employees. In Browning-Ferris, the NLRB had held that two employers would be joint employers of the same employees if they “share or codetermine those matters governing the essential terms and conditions of employment.” Terms and conditions of employment include such things as wages, schedules, job duties, and break times. Under the Browning-Ferris decision, as long as one employer had the ability to make or influence decisions concerning the terms and conditions of employment, whether or not that employer actually exercised that ability, a joint employer relationship could be found. In Hy-Brand, the court overturned the Browning-Ferris test, stating that it was “a distortion” of the law, and that it “is contrary to the [NLRA], and its application would prevent the Board from discharging one of its primary responsibilities under the Act, which is to foster stability in labor-management relations.” The NLRB in Hy-Brand now has reinstated the standard that had been in place for decades before the Browning-Ferris decision.
NLRB Overturns Social Media Standard. On December 14, 2017, the NLRB in The Boeing Co., 365 NLRB No. 154 (NLRB December 14, 2017) overturned the standard set forth in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004) as to when a facially-neutral work rule will violate Section 7 of the NLRA. Section 7 is applicable to all employers covered by the NLRA, not just employers with unions. Under Section 7, employees have the right to engage in concerted, protected activity, such as discussing wages and conditions of employment with each other or with outside parties. The Lutheran Heritage standard held that a facially-neutral rule would violate Section 7 if “employees would reasonably construe the language to prohibit Section 7 activity.” Recently, the NLRB has used this standard aggressively to find that all kinds of policies – including policies that had appeared without objection as a matter of course in employment handbooks for years – violated Section 7. This included policies requiring employees to act professionally, policies requiring that employees interviewed during investigations keep the investigations confidential, and policies prohibiting photography of confidential industrial processes. In Boeing, the NLRB held that, where there are facially-neutral policies which could reasonably be interpreted as potentially interfering with Section 7 rights, the NLRB will evaluate: (i) the nature and extent of the potential impact on NLRA rights; and (ii) the legitimate justifications of the employer. The NLRB stated that it would make this evaluation keeping in mind the NLRB’s “duty to strike the proper balance between . . . asserted business justifications and the invasion of employee rights in light of the [NLRA] and its policy.”
NLRB Overturns Micro-Union Decision. On December 15, 2017, in PCC Structurals Inc., 365 NLRB No. 160 (NLRB 2017), the NLRB overturned its earlier ruling in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (NLRB 2011). Specialty Healthcare had overturned decades of precedent regarding when a proposed bargaining unit was an appropriate unit for collective bargaining. Prior to Specialty Healthcare, the NLRB used a community of interest standard to determine appropriate bargaining units, under which the NLRB examined whether members of the proposed unit shared a sufficient community of interest to make it reasonable and effective to bargain as a single unit. In Specialty Healthcare, the NLRB created a presumption that the unit sought by the union was appropriate, unless the members of the proposed unit shared an overwhelming community of interest with excluded employees. This paved the way for the NLRB to approve micro-units of just a few employees who were in favor of the union. The return to the old standard will help to preclude the approval of small units, which can wreak havoc on employers who are trying to treat similarly situated employees similarly, and who are trying to avoid having to bargain with several different unions or several different bargaining units.
NLRB Overturns Prior Ruling Regarding Employer’s Obligation To Bargain. On December 15, 2017, in Raytheon Network Centric Systems, 365 NLRB No. 152 (December 15, 2017), the NLRB overturned E.I. du Pont de Nemours, 364 NLRB No. 113 (2016) and returned to its previous precedent that had been in place for over 50 years. Du Pont had held that, once a collective bargaining agreement expires, the employer may not make unilateral changes without providing notice and an opportunity to bargain to the union. It also held that any exercise of an employer’s discretion during this time must be bargained with the union before implementation. Du Pont overturned the decision in Shell Oil Co., 149 NLRB 283, 287 (1964). The Raytheon case restored the standard in Shell Oil, holding that employers have no obligation to bargain in these circumstances over a unilateral change, as long as the change is consistent with past practice.
What Does This Mean For You? The current NLRB appears to have taken on recent decisions that had greatly expanded its reach. If you are non-union, this means that you once again have more latitude to put in place the kinds of policies you need in your workplace, including civility codes and confidentiality of investigations. Please note, however, that the NLRB continues to hold that policies that preclude employees from talking to other employees about their wages do violate Section 7 of the NLRB. Non-union employers also should take heart at the change to the standard for finding a joint employer relationship. The return to the old joint employer standard will renew the viability of business models such as franchises, which were at risk under the Browning-Ferris standard. Non-union employers also should breathe a sigh of relief that unions may no longer be able to parse their workforces to create micro-unions in order to get a foot in the door. For union employers, the joint employer decision is good news, because it makes it less likely that a third party will be considered a joint employer and need to be present at the bargaining table for collective bargaining. Union employers also should be happy about the NLRB backing away from micro-units. Union employers also should benefit from the return to the old standard with respect to any requirement to bargain after the expiration of the parties’ collective bargaining agreement.
If you have any questions or concerns about this update, or any other employment or labor law questions, please contact S. Whitney Rahman at email@example.com or (717) 509-7237.