Employer Labor Relations Blog

Pepsi Beverage Co. Bargaining Unit Clarified To Exclude Home-Based Delivery and Install Employees

Posted in Bargaining Unit, Current Events, NLRB, Representation Cases

By:  Kenneth R. Dolin, Esq.

The Board recently reversed a Regional Director and found that four disputed home-based delivery and install employees did not belong in the contractual unit at the employer’s Grand Rapids, Michigan facility.  It reasoned that the four disputed employees did not work at the Grand Rapids facility, were not covered by the recognition language contained in the CBA, and did not share an overwhelming community of interest with the Grand Rapids Service Technicians who were in the bargaining unit, even though they were assigned to pick up loads at the Grand Rapids facility where the unit employees worked.  Thus, the Board clarified the unit to exclude these home-based delivery and install employees.

Unit clarification is the appropriate method for resolving ambiguity concerning the unit placement of employees who come within newly established classifications.  A valid accretion exists only where the additional employees have little or no separate group identity and they cannot be considered to be a separate appropriate unit and when the additional employees share an overwhelming community of interest with the pre-existing unit to which they were accreted.  See Safeway Stores, Inc., 256 NLRB 918 (1981).  However, once it is established that a new classification is performing the same basic functions as a unit classification historically had performed, the new classification is properly viewed as “already belonging in the unit” rather than “being added to the unit” by accretion.  Developmental Disabilities Institute, Inc., 334 NLRB 1166, 1168 (2001).  See also Premcor, 333 NLRB 1365 (2001).

Since 2007, the employer had centralized all delivery and install functions in the Market Equipment Operation Center (MEOC) operation located first in Lansing and then in Flint, removing it from the Grand Rapids facility as well as 16 other locations.  The Grand Rapids field service technicians had performed delivery and install functions, but had not done so since 1997.  In November 2009, when the MEOC moved to Flint, it established the Grand Rapids drop and hook operation, and assigned the four disputed MEOC delivery and install employees to operate out of the Grand Rapids parking lot.

The disputed employees remained part of the MEOC operations; they kept the same supervisor, seniority opportunities, and wages and benefits, and continued to receive their assignments through the MEOC (not the call center which routed the field service technician assignments); performed their functions in a larger geographic service area; and attended meetings as needed in the Flint operation.  The work of delivery and install employees had been completely separate from that of the Grand Rapids field service technicians since 1997, unlike the pre-1997 period when the field service technicians also performed delivery and install functions.  Indeed, the Grand Rapids drop and hook delivery and install employees had remained part of the MEOC operations and the only change that had occurred was that the four disputed employees began picking up their loads in the Grand Rapids parking lot instead of at Flint.

The Regional Director had found traditional accretion analysis was unwarranted in these circumstances because the case did not involve “the placement of employees at the new facility who perform work that was never performed by employees in the existing bargaining unit.”  Instead, he found (1) the delivery and install employees performed the same basic delivery and install functions that historically had been performed by unit employees at the Grand Rapids facility, in that employees at the Grand Rapids facility previously delivered and installed equipment as part of the unit work, and (2) the unit description in the CBA covering the facility had never been altered and continued to encompass the work assigned to the delivery and install employees, (3) this work had not changed such that it should be severed from the unit, and (4) the delivery and install employees shared a sufficient community of interest with the field service technicians who worked at the Grand Rapids facility to warrant inclusion.  He concluded that the delivery and install work was not eliminated from the Grand Rapids operation, but was merely relocated from Grand Rapids to Lansing, and then returned to the Grand Rapids location and that the Board is reticent to overturn long-existing historical units.

Contrary to the Regional Director, however, the Board (Pearce, Hirozawa and Johnson) did not find the delivery and install employees belonged in the contractual unit because: (1) for the past 12 years, the delivery and install employees had been part of an operation based in a different location and not the Grand Rapids facility where the bargaining unit employees worked; (2) the delivery and install employees at issue had been historically excluded from the CBA for this 12-year period; and (3) the evidence failed to establish that the delivery and install employees had little or no separate identity from, or that they shared an overwhelming community of interest with, the Grand Rapids field service technicians in the bargaining unit.

The Board found significant the evidence that the delivery and install functions were removed from the Grand Rapids field service technician duties for 12 years.  If the bargaining unit field service technicians had continued to perform delivery and install functions as part of the unit work for the past 12 years, it is possible, if not likely, that the Board would have applied Developmental Disabilities Institute to find the new classification as “already belonging in the unit,” as opposed to “being added to the unit” by accretion, irrespective of the “traditional” accretion standard.

This case is a good example of how employers confronted with an accretion issue must first determine whether the new classification “already belongs in the bargaining unit” because employees in that job classification are performing the same basic function that a unit classification has historically performed (Developmental Disabilities Institute, supra); and whether the unit description in the CBA encompasses the work at issue.  If the answer to both of these threshold questions is no, then the employer should apply “traditional” accretion analysis and determine whether the additional employees should be added to the unit by accretion because they have little or no separate group identity and can be considered a separate appropriate unit or whether they share an overwhelming community of interest with the pre-existing unit to which they can be accreted.  Significantly, however, this third question, i.e., the traditional accretion test, is irrelevant if the case involves the placement of employees at a new facility who perform work that was performed by employees in the existing bargaining unit.

Wisconsin Poised to Become 25th “Right to Work” State

Posted in Collective Bargaining, Current Events, Elections, Organizing, State Law

By:  Michael J. Rybicki, Esq.

Today Wisconsin became the 25th state to pass right to work legislation applicable to private sector employers. Most private employers are covered by the National Labor Relations Act (“NLRA”), which originally permitted collective bargaining agreements to provide for the termination of any employee who failed to join or at least pay representational fees to the union. While these “union security clauses” remain lawful in now half of the states, the 1947 Taft-Hartley amendments to the NLRA gave states the ability to enact laws giving workers the “right to work” without becoming a union member or paying union dues, which is what the Wisconsin bill does. The bill would also make it a crime punishable by up to nine months in jail to require private sector workers who are not union members to pay dues after the bill becomes effective.

The Wisconsin bill will be effective after the Governor has signed it – most likely March 11, 2015. It does not make union security clauses presently in effect unlawful or otherwise render them null and void because the Act only applies to the “renewal, modification, or extension” of a collective bargaining agreement occurring on or after its effective date. Although some unions may attempt to negotiate contract extensions prior to the law’s effective date they have relatively little time to do so (unlike the case with the Michigan law).

The Wisconsin bill was narrowly approved in the Senate by a 17-15 vote on Wednesday, February 25, 2015. It was referred to the Republican-controlled Assembly where it passed on party lines on Friday, March 6, 2015. Wisconsin Governor Scott Walker has said he will sign the bill on Monday (March 9, 2015).

Once largely confined to southern or western states, right to work laws have now come to the “rust belt,” historically a union stronghold. In 2012, Indiana and Michigan passed right to work laws, and why unions hate them is evident from the Michigan experience. In 2013, the first full year under the state’s right to work law, Michigan saw one of the sharpest dips in year-to-year union membership, declining from 16.3% to 14.5%.

Advocates of right to work legislation argue that it is unfair to force workers who do not want to join a union to pay dues, which are frequently used for political purposes they personally oppose. Advocates further argue that right to work laws promote economic growth and figures from the Department of Labor and the Bureau of Economic Analysis appear to support this contention.

Unions and their supporters counter that such legislation is nothing more than part of a “race to the bottom” that undermines the middle class. They also argue that because so-called “free riders” – workers who do not pay union dues – share the benefits of collectively bargained contracts, they should have to pay their “fair share” to the union.

Right to work legislation unquestionably has a heightened political dimension in today’s polarized environment. The Democratic Party, of course, relies heavily on Big Labor to raise money and turn out the vote at election time. The Wisconsin right to work bill is part of an continuing epic battle between that state’s Republican and Democratic constituencies, which up to now the Republicans have been winning. Its passage also occurs against the backdrop of Republican Governor Walker’s presidential bid. Democratic Representative Cory Mason, of Racine, denounced the bill saying, “It is the workers in this state that are suffering through the politics of our governor’s ambitions.”

It is likely that a legal challenge to the Wisconsin legislation will be mounted by the bill’s opponents. Legal challenges to right to work laws in Indiana and Michigan, however, failed.

The majority of right to work provisions (either by law or constitutional provision) were passed in the 1940’s or early 1950’s. Prior to the recent passage of right to work laws by what is now a trio of rust belt states, the only other right to work provision passed in this century was in 2001, when voters approved a constitutional amendment in Oklahoma. Right to work proponents will continue to press their case in other states and there may come a day when union security clauses are permitted in only a minority of states, a situation once considered preposterous.

Senate Takes Next Step in Fighting Off Controversial “Ambush Election” Rules

Posted in Current Events, Elections, NLRB

By: Howard M. Wexler, Esq.

Hoping that the third time is the charm, the National Labor Relations Board (“Board” or “NLRB”) has once again adopted its expedited election rules (aka “Ambush Election Rules”). We previously discussed the current version of the Ambush Election Rules here. The Ambush Election Rules have been proposed twice before by the Board and approved in part once, only to be ruled invalid by the United States District Court for the District of Columbia on procedural grounds).

The new Ambush Election Rules, which are scheduled to go into effect on April 14, 2015, would significantly change existing representation case procedures, including: shorter times for pre-election hearings and elections to be held ; additional Excelsior List requirements (e.g. providing employees’ email addresses and available telephone numbers (home and cell)); and no right to NLRB review of post-election disputes.

Several business groups have already filed lawsuits – one in Texas and the other in Washington D.C. – to stop the implementation of the Ambush Election Rules.   In addition, 52 members of Congress sponsored a joint resolution on February 9, 2015  that would stop the implementation of the rule through the Congressional Review Act (“CRA”). Under the CRA, Congress can vote on a joint resolution of disapproval to halt a federal agency from implementing a rule or regulation without the express authorization of Congress

On March 4, 2015 the Senate passed the joint resolution by a vote of 53-45, which is the first step in the process of stopping the implementation of the Ambush Election Rules under the CRA.  (Copy here).  In support of the Senate’s passage of this joint resolution, Chairman of the Health Education Labor & Pensions Committee Lamar Alexander stating that, “The NLRB’s rule to shorten union elections to as little as 11 days allows a union to force an election before an employer has a chance to figure out what is going on… Senate passage of this joint resolution is an important first step in stopping the NLRB’s harmful rule and preserving every employer’s right to free speech and every employee’s right to privacy.”

It remains to be seen whether the pending lawsuits or legislation seeking to halt the Ambush Election Rules will succeed. However, given the implementation date is a little over one month away, we expect there to be a flurry of activity over the next few weeks. We will be sure to keep our readers informed as the battle over the Ambush Election Rules continues. Stay tuned!

Brown University’s Graduate Assistant Decision Under Challenge . . . Again

Posted in Current Events

By: Ronald J. Kramer, Esq.

While everyone knew it was only going to be a matter of time, two new challenges to have been raised to the NLRB’s graduate assistant decision in Brown University, 342 NLRB 483 (2004). On February 20, 2015, Graduate Workers of Columbia-GWC and Student Employees at The New School, both UAW affiliates, filed requests for review with the NLRB seeking the reversal of orders dismissing their petitions to represent graduate assistants and research assistants given Brown University. Columbia University, Case No. 02-RC-143012 (Feb. 6, 2015); The New School, Case No. 02-RC-143009 (Feb. 6, 2015).

In Brown University, the full NLRB overruled an earlier decision, New York University, 332 NLRB 1205 (2000), to determine that graduate assistants are students, not employees, and thus are not protected by the NLRA. The decision restored more than twenty-five years of prior precedent holding that graduate student assistants are primarily students and thus not statutory employees. The unions argue that under the common law definition of “employee” — any person who works for another in return for financial or other compensation — graduate assistants must be considered to be employees under the NLRA.

The current Board has been looking for cases in which to revisit Brown University. For example, in 2012 the Board granted review of UAW graduate student petitions involving New York University and the Polytechnic Institute of NYU, and solicited briefing from interested parties. In November 2013, before the Board could rule, however, the UAW and NYU reached an agreement to allow a vote, which the union won, and the petitions were withdrawn.

Technically, Columbia University and The New School are the second and third cases still pending before the Board in which Brown University is at issue. In Northwestern Univ., Case No. 13-RC-121359, the student athlete case, the Board invited briefing on whether Brown University was applicable to student athletes and whether it was still good law. Briefing has been completed, and a decision is pending.

Given it is possible that the Board could decide Northwestern without addressing the validity of Brown University as to graduate students, Columbia University and The New School provide the Board with the opportunity to revisit whether graduate assistant are employees covered by the NLRA. Whether the Board does so, and whether it invites yet another round of briefing from interested parties, remains to be seen. Stay tuned.

NLRB Administrative Law Judge Finds UFCW Local Illegally Coerced Employees By Requiring Them To Visit Union Office

Posted in Unfair Labor Practices

By:  Ashley K. Laken, Esq.

On February 19, an NLRB Administrative Law Judge ruled that a UFCW local union illegally restrained and coerced grocery store employees by requiring them to appear at the union office in person to file objections to paying full membership dues. See United Food & Commercial Workers Union Local 135, Case No. 21-CB-112391 (2/19/15). The ALJ reasoned that, through the requirement, the Union had implicitly threatened employees with discharge pursuant to a union-security clause in the applicable collective bargaining agreement for reasons other than failure to pay dues, thus coercing employees in the exercise of their Section 7 rights.

Background Facts

The Union and the employer were parties to a collective bargaining agreement running from March 2011 through March 2014 that contained a union-security clause. In July 2013, the Union sent a new hire at the grocery store a letter stating that the CBA between the Union and the employer requires that all employees shall, as a condition of employment, become members of the Union, and that “[a]ll new hires are required to come into one of our offices to affiliate in person with Local 135” (emphasis in original).

The new hire contacted the Union by phone and asked what his reduced dues amount would be if he objected to union membership, and he was told he would need to come to the Union office in person to receive information regarding reduced dues. After much back and forth, the Union finally sent the new hire a letter with information about reduced dues, and eventually registered him as a dues objector under Communications Workers of America v. Beck, 487 U.S. 735 (1988), which holds that objectors can be required, as a condition of employment, to support only those union activities that are related to collective bargaining, contract administration, and grievance adjustment (representational activities). The new hire then filed an unfair labor practice charge against the Union, and the NLRB’s General Counsel issued a complaint.

The ALJ’s Decision

In addition to protecting an employee’s right to support a union, Section 7 of the NLRA protects an employee’s right to refrain from supporting a union. In this case, the ALJ found that by requiring employees to come to the Union office in person to affiliate (i.e., to become full members or Beck objectors), the Union had implicitly threatened employees with discharge pursuant to the union-security clause for reasons other than failure to pay dues (namely, for failure to appear at the Union office in person), and that this amounted to unlawful coercion of employees in the exercise of their Section 7 rights.

The ALJ noted that it was irrelevant that the new hire ultimately was not required to go to the Union office to process his affiliation. The ALJ also found that it was of no consequence that the Union never actually threatened that the new hire could lose his job if he did not come to the Union office. Rather, the ALJ found that “[l]ike an overly broad rule set forth by an employer,” the Union’s rule “would cause a reasonable person to infer” that if he did not affiliate in person with the Union, the Union could cause his discharge. The Union was ordered to cease and desist from requiring new hires to affiliate in person, to revise its communications to new hires, and to post a corresponding notice at its offices and electronically.

Concluding Thoughts

The ALJ’s decision highlights that unions are held to the same standard as employers when determining whether employees’ Section 7 rights have been interfered with. As the ALJ noted, “[t]he test for illegality is not whether employees were actually threatened or coerced, but whether the rule in issue may reasonably tend to coerce employees in the exercise of rights protected under the Act.” As we have previously blogged, this test often comes into play for employers with respect to employee handbooks and other work rules.

Review of the NLRB’s Specialty Healthcare Test for “Appropriate” Bargaining Units — Part II

Posted in Bargaining Unit, NLRB, Representation Cases

By: Kenneth R. Dolin

Nestle Dreyer’s Ice Cream Co. v. NLRB is a case pending in the U.S. Court of Appeals for the Fourth Circuit that very well may determine the viability of the Board’s Specialty Healthcare standard for ascertaining the appropriateness of bargaining units. The Sixth Circuit previously upheld the Specialty Healthcare standard in Kindred Nursing Centers East LLC v. NLRB, 727 F.3d 552 (2013), but without referencing a prior Fourth Circuit case, NLRB v. Lundy Packaging, 68 F.3d 1577 (1995), that at least arguably proscribed the Board from using the “overwhelming community-of-interest” standard in determining the appropriateness of a unit.

Section 9(b) of the National Labor Relations Act grants to the Board the power to determine “the unit appropriate for the purposes of collective bargaining.” While the Board therefore possesses broad discretion in determining the appropriate unit, Section 9(c)(5) of the NLRA limits that discretion by providing that “whether a unit is appropriate… the extent to which employees have organized shall not be controlling.” In Lundy Packaging, the Fourth Circuit rejected the Board’s attempt to implement an “overwhelming community-of-interest” test when determining whether a petitioned-for unit is appropriate. The court in Lundy Packaging reasoned that the Board’s attempt to favor the union’s petitioned-for unit violated the NLRA by giving controlling interest to the extent of union representation and represented a wholesale reversal of decades of Board precedent in the determination of appropriate units without reasoned explanation.

The issue in Nestle is whether the petitioned-for unit seeking to include only maintenance employees, and excluding production employees, is an appropriate unit. The Regional Director, in a decision adopted by the Board, found that the bargaining unit consisting of just the maintenance employees was an appropriate unit, while the employer contended that the petitioned-for unit of just maintenance employees was inappropriate and that an appropriate unit must include production as well as maintenance employees.

In Specialty Healthcare, 357 NLRB No. 83 (2011), enfd. sub. nom. Kindred Nursing Centers East LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013), the Board returned in large part to the standard announced by the Board (but rejected by the Fourth Circuit) in Lundy Packaging, and set forth the following test for determining whether a petitioned-for unit of employees is an appropriate unit when a party contends that a larger unit is the only appropriate unit:

*          *          *

[W]hen employees or a labor organization petition for an election in a unit of employees who are readily identifiable as a group (based on job classifications, departments, functions, work locations, skills or similar factors), and the Board finds that the employees in the group share a community of interest after considering traditional criteria, the Board will find the petitioned-for unit to be an appropriate unit, despite a contention that employees in the unit could be placed in a larger unit which would also be appropriate or even more appropriate, unless the party so contending demonstrates that employees in the larger unit share an overwhelming community of interest with those in the petitioned-for unit.

The Board in Nestle found that the maintenance employees were readily identifiable as a separate group because they were in their own department, and were in different job classifications, had different skills, and performed different functions from production employees.

The Board then found that the maintenance employees shared a sufficient community of interest among themselves for purposes of collective bargaining because they shared: (1) similar wages, (2) similar hours, (3) common supervision among themselves, reporting directly to their own maintenance supervisors, and (4) common functions and skills.

Finally, the Board found that the employer had not established the requisite “heightened showing” that maintenance employees shared an “overwhelming community” of interest with production employees because there was not: (1) a significant amount of temporary interchange between production and maintenance employees; and (2) common supervision between maintenance and production employees. Moreover, the Board found that the petition did not seek to represent only a fraction and arbitrary portion of the maintenance employees and the bargaining history of a production and maintenance employee bargaining unit consisting of only one contract and an invalidated certification of election was insufficient to establish that the maintenance employees shared an overwhelming community of interest with production employees.

Thus, the Board concluded that while factors might have shown that a unit containing both production and maintenance employees was “an” appropriate unit, these factors were insufficient to meet the “heightened showing” threshold of an “overwhelming community of interest” under Specialty Healthcare to render the petitioned-for unit inappropriate.

After the union won the election in the voting unit of maintenance employees, the employer refused to bargain in order to challenge the union’s certification in court. The Board ruled that the employer committed an unfair labor practice and on November 7, 2014 the employer petitioned the Fourth Circuit Court of Appeals for review of the Board’s order.

The employer has argued that the “overwhelming community-of-interest” test effectively makes the extent of union organization controlling, contrary to the NLRA and Lundy Packaging, that the “overwhelming” test is unsupported by prior Board precedent and this test is a departure from Board precedent without any reasoned analysis. Finally, the employer has argued that the employees excluded from the bargaining unit were functionally identical to employees that the Fourth Circuit in Lundy Packaging found should necessarily have been included in the voting unit.

It remains to be seen whether the Fourth Circuit will hold in Nestle Dreyer’s Ice Cream that the overwhelming community of interest test of Specialty Healthcare is improper.  We will closely monitor this case and related developments.

Seventh Circuit Denies Rehearing Regarding Indiana Right To Work Law

Posted in NLRB, Preemption, State Law

By: Marc R. Jacobs, Esq.

On January 13, 2015, the U.S. Court of Appeals for the Seventh Circuit rejected the International Union of Operating Engineers Local 150’s bid for the full circuit court to rehear the September 2, 2014 panel decision upholding the Indiana law.  Five of the ten active judges on the Seventh Circuit dissented from the decision not to rehear the case.  Under the court’s rules, because a majority of the active judges did not vote for rehearing, the panel’s decision stands. 

We discussed the panel’s decision and the issues that it raised in a September 4, 2014 post [here], in which the panel (despite a vigorous dissent from Judge Diane Wood) held that the Indiana law was not preempted by the National Labor Relations Act and did not violate the United States Constitution.  As we also reported in a November 7 post [here], the Indiana Supreme Court has upheld the Indiana Right to Work Law, ruling that the law did not violate the Indiana Constitution.  

In light of the January 13 ruling, the union’s sole remaining avenue of judicial redress is to the United States Supreme Court.  Although the union has not formally announced its plans, a petition to the Supreme Court is likely.

NLRB Finds the Posting of an Employer Memo Referencing “Dignity and Respect” and Its Lawful Workplace Violence Policy to be an Unfair Labor Practice

Posted in Elections, NLRB, Unfair Labor Practices

By:  Kenneth R. Dolin

In continuing to apply strict scrutiny to workplace communications, the Board in a 2-1 panel decision recently held that an employer acted unlawfully by posting a memorandum shortly after a union election, urging employees to treat each other with “dignity and respect” and reiterating its workplace violence policy, even though the policy itself was lawful and the memorandum expressly acknowledged employees’ Section 7 rights. Care One at Madison Avenue, 361 NLRB No. 159 (Dec. 16, 2014).

The panel majority (Chairman Pearce and Member Schiffer) found the employer did not meet its burden of demonstrating a legitimate basis for issuing the memorandum because: (1) there was no evidence that the referenced threats actually occurred or that the employer attempted to investigate any alleged threats; (2) the memorandum referenced the union election three days earlier and the “differences that arose in the workplace during the union’s campaign”; and (3) the memorandum “suggested that the employer believed that employees did not treat each other with dignity and respect when they engaged in protected union activity.” In these circumstances, particularly since the memorandum was “posted on the heels of the union election and in the wake of several contemporaneous unfair labor practice charges,” the majority found that the employer “promulgated and posted the memorandum in response to the employees’ union activity” and employees would reasonably construe the memorandum to prohibit Section 7 activity. The acknowledgement in the memorandum of the employees’ right to support a union did not prevent a finding of illegality, according to the majority, because the memorandum “failed to make clear that employees also had the right to engage in protected activity in furtherance of those views.”

Member Johnson dissented from the majority’s findings on this issue, stating that the majority gave the memorandum a “manifestly unreasonable reading in light of its text and the language of the indisputably lawful workplace violence prevention policy,” and failed to recognize the legitimate need of employers to guard against workplace violence. Contrary to the majority, Johnson wrote there was “no promulgation in response to union activity”; instead the employer’s memorandum merely “reiterated, cited, attached and incorporated by reference the lawful preexisting workplace violence policy without modification.” Moreover, Johnson observed that the memo was promulgated in response to claimed reports of threats and not in response to union activity and that the references in the memorandum to “respect and dignity” did not broaden or otherwise amend the lawful workplace violence policy. He concluded that employees would not reasonably consider the memorandum in conjunction with the reiterated policy as restricting their Section 7 rights, particularly since the “memorandum acknowledged the employees’ Section 7 rights.”

With this decision, the Board signals that it will closely scrutinize any employer postings concerning prohibitions of “threats” or “harassment,” especially when coming on the heels of a union election campaign, and in the context of other unfair labor practices. Employers electing to post such communications should ensure there is sufficient evidence of harassment to justify the heavy practical burden this Board will place on it to provide evidence that it was motivated by legitimate workplace concerns, and not any union or other protected activity.  In this regard, employers should avoid references to recent union or other protected activity, as well as any inference that employees failed to treat other employees with “dignity and respect” merely by engaging in union, or other protected, activity. Finally, to maximize the protection of providing an acknowledgement of the employees’ right to support a union, such an acknowledgement should also make clear that employees have a right to engage in concerted activity in furtherance of those views.

NLRB Sets Its Sights on McDonald’s and Other Franchisors

Posted in Concerted Activity, Current Events, NLRB

By: Ronald J. Kramer, Esq.

On December 19, 2014, the NLRB General Counsel’s Office issued thirteen consolidated complaints against the purported unfair labor practices of numerous McDonald’s franchisees nationwide, with franchisor McDonald’s USA LLC being named as a co-defendant on a joint employer theory.  According to the NLRB’s press release, click here, the defendants allegedly violated the rights of employees by, among other things, making statements and taking actions against them for engaging in activities aimed at improving their wages and working conditions, including participating in nationwide fast food worker protests about their terms and conditions of employment during the past two years.

This action unfortunately comes as no surprise:  General Counsel Richard F. Griffin, Jr. announced back in July that he had authorized the issuance of complaints against McDonald’s USA LLC as a joint employer.  Moreover, in the highly anticipated Browning-Ferris joint employer litigation, the General Counsel argued for the adoption of a broad interpretation of employment status.  There the General Counsel argued for a test that would include looking at the way in which the parties have structured their commercial relationship, and whether the putative joint employer wields sufficient influence over the working conditions of the other entity’s employees such that meaningful bargaining could not occur in its absence.  As the General Counsel asserted, his interpretation “would make no distinction between direct, indirect, and potential control over working conditions and would find joint employer status where ‘industrial realities’ make an entity essential for meaningful bargaining.”

The General Counsel’s position — and given the timing of the complaint right before the issuance of Browning-Ferris, likely a majority of the Obama Board’s position — would reverse over thirty years of precedent applying a common law agency test to determine employment status.  Under that test, joint employer status turns on the “direct and immediate” control over the particular employees at issue:  The extent to which the purported employer determines matters governing essential terms and conditions of employment, including the right to hire and fire, set work hours, determine start and end times of shifts, directions, compensation, day to day supervision, record keeping, and to approve the contractor’s employees assigned and devise rules under which those employees were to operate.  There is no possible way these complaints would have issued under the existing joint employer test.

Franchisor-franchisee relationships are ubiquitous throughout all sorts of businesses, from fast food and other restaurants, to hotels, convenience stores, gas stations, car dealers, movie theatres, hardware stores, professional sports teams, and even private schools.  As our colleague, former NLRB Member Marshall Babson, stated to Bloomberg’s Daily Labor Report: “Upending traditional franchise arrangements and finding employment relationships where none exist is a threat to commerce and contrary to the purposes of the NLRA.”  Should the Board find a joint employment relationship exists between franchisors and franchisees, this issue will be litigated through the courts for years to come.


Posted in Bargaining Unit, Current Events, Elections, NLRB, Organizing

By:  Jeffrey A. Berman, Esq.

On December 19, 2014, the Board released Pacific Lutheran University, 361 NLRB No. 157 (2014) (Pacific Lutheran Board Decision), a decision that will have significant impact on two key issues:  (i) when the Board can assert jurisdiction over religious schools; and (ii) the analysis to be applied in determining when faculty who participate in the governance of a private school are managerial employees and therefore may not unionize.  A majority of the Board adopted a new test for determining when to assert jurisdiction over religious colleges and universities, and also “refined” the analysis used to determine the managerial status of faculty. While a brief overview of the decision appears below, for a more in-depth analysis, click here to read the detailed management alert issued to our education sector clients.

 Pacific Lutheran University, affiliated with the Evangelical Lutheran Church of America, took the position in response to an adjunct faculty representation petition that the Board could not assert jurisdiction over it as the result of the Supreme Court’s decision in NLRB v. Catholic Bishop of Chicago, as subsequently applied by the D.C. Circuit in University of Great Falls v. NLRB and Carroll College v. NLRB.  In all three cases, efforts by the Board to assert jurisdiction over the religious schools were held improper.  The University also argued that, under the Supreme Court’s decision in NLRB v. Yeshiva University, several of its adjunct faculty were managerial employees and, as such, could not unionize.

 The Regional Director decided against the University and, after the University appealed, the Board invited amicus briefs on numerous issues.  Dozens of amicus briefs were filed, primarily by schools, associations of schools, and unions.

 New Faculty Function Test

 In its decision, the Board announced a new standard for determining jurisdiction over religious colleges and universities, specifically rejecting the test established by the D.C. Circuit in Great Falls and Carroll College.  Under the Great Falls test, the courts and the Board are to consider three factors:  (i) does the school hold itself out as providing a religious educational environment; (ii) is the school a nonprofit, and (iii) is it affiliated with, or owned, operated or controlled by a recognized religious organization or an entity, membership of which is determined, at least in part, with reference to religion.

 Under the new standard, the Board will only decline to assert jurisdiction over faculty members at a college or university that, in addition to claiming it “holds itself out as providing a religious educational environment,” can show that “it holds out the petitioned-for faculty members as performing a religious function.” 

 The first part of the new test—whether the college or university holds itself out as providing a religious education environment—is the same as the first prong of the Great Falls test.  The Board held that it would examine such things as handbooks, mission statement, corporate documents, course catalogs, documents published on the school’s website, press releases and other public statements. 

 In order to satisfy the second part of its new standard, the college or university must show “that it holds out those faculty as performing a specific role in creating or maintaining the university’s religious educational environment.”  The Board stated that, although it would not examine the actual duties performed by faculty members, they need to be held out as performing a “specific religious function” and that generalized statements that faculty members are expected to, for example, support the goals or mission of the school are not alone sufficient.  This is because such statements do not indicate that faculty members are expected to incorporate religion into their teaching or research, that they will have any religious requirements imposed on them, or that the religious nature of the school will have any impact on their employment.  This is especially true when the school also asserts a commitment to diversity and academic freedom. 

 The analysis of whether faculty members were held out as performing a “specific religious function” will include a review of job descriptions, employment contracts, faculty handbooks, statements to accrediting bodies, and statements to prospective and current faculty and students.  The Board also will look to determine if faculty members are subject to employment-related decisions based on religious considerations, such as dismissal for teaching a doctrine at odds with the school’s religious faith or if faculty are required to accept ecclesiastical sources of dispute resolution.  Finally, the Board will determine if the school holds itself out as requiring its faculty to conform to its religious doctrine or to particular tenets or beliefs in a manner that is specifically linked to their duties.  The fact that the school does not require faculty members to attend religious services or be a member of a particular faith will not be required before the Board declines jurisdiction.

 Refined Managerial Status Standard

 In response to criticism as to the lack of guidance it has provided in determining managerial status under Yeshiva University, the Board purported to “refine” the standard by which it determines managerial status pursuant to Yeshiva.  Going forward, the Board will determine whether faculty “actually or effectively exercise control over decision making pertaining to central polices of the university such that they are aligned with management.”  Essentially, the Board will be analyzing the breadth and depth of the faculty’s decision-making authority. 

 In making this determination the Board will examine faculty participation in the following areas of decision-making: academic programs, enrollment management policies, finances, academic policies, and personnel policies and decisions, giving greater weight to the first three areas than the last two.  This examination will be done in the context of the school’s decision-making structure, administrative hierarchy, and the nature of the employment relationship of the faculty in issue.

 Applying its two new tests to Pacific Lutheran University, the Board concluded that it should take jurisdiction over the election petition, and that none of the adjunct faculty members were managerial employees.

 Members Miscimarra and Johnson dissented from the majority’s holding as to the jurisdictional issue, arguing in favor of the Great Falls test.  With regard to managerial status, Member Miscimarra concurred with the majority, and Member Johnson dissented.  An appeal is expected.

 While some religious schools may applaud the new jurisdiction test, others will not, and others will give the Board an “incomplete” as it specifically limited its holding to faculty employed by colleges and universities.  The decision leaves open the questions of whether the new jurisdiction test will be applied to K through 12, and whether it will be applied to non-faculty.

 On January 21, 2015, Seyfarth Shaw will be conducting a webinar for educational employers to further discuss the holdings in Pacific Lutheran University, what steps schools should take in response, and other labor issues such as the unionization of adjunct faculty, graduate students and student athletes.  Invitations will be sent out in early January.