NLRB By: Marjorie C. Soto, Esq., Jeffrey A. Berman, Esq., and Mary Kay Klimesh, Esq. 

Seyfarth Synopsis:  In a last minute attempt to leave his mark on the NLRB, the Board’s outgoing General Counsel issued a report attempting to expand the rights of university faculty and students, including scholarship athletes under the National Labor Relations Act.

Just months before the conclusion of his four-year term, Richard F. Griffin, Jr., the General Counsel (“GC”) of the National Labor Relations Board (“Board”), issued a report titled “General Counsel’s Report on the Statutory Rights of University Faculty and Students in the Unfair Labor Practice Context.”

The January 31, 2017 Report was issued with the stated intent to serve as a “guide for employers, labor unions, and employees that summarizes Board law regarding NLRA employee status in the university setting and explains how the Office of the General Counsel will apply these representational decisions in the unfair labor practice arena.” The decisions covered by the Report – – Pacific Lutheran University, Columbia University, and Northwestern University–all involved efforts of individuals to obtain representation by a union.

University Faculty

In Pacific Lutheran, the Board established a new test for determining when it would take jurisdiction over religious colleges and universities.  According to the GC, the Board “will…seek redress for unfair labor practices committed by religious schools against individual faculty member discriminatees who the university does not hold out as performing a specific role in creating and maintaining the university’s religious and educational environment.”

As a practical matter, this means that the GC believes that the faculty who are able to seek union representation because they were “not hired to advance the school’s religious purposes,” also are protected by the Act’s prohibition against discrimination for engaging in protected concerted activities. By implication, this may mean that faculty who are hired to advance a school’s religious purposes are not protected.

The GC also provided his analysis of the standard articulated in Pacific Lutheran regarding the managerial status of faculty members.  Specifically, the GC distinguished between managerial faculty (those who “formulate and effectuate management policies by expressing and making operative the decisions of their employer”) and non-managerial faculty (those whose decision-making is limited to “routine discharge of professional duties in projects to which they have been assigned…”).

The GC concluded that, in the unfair labor practice context, a “complaint will not issue against a university if [the Board] determine[s] that an asserted discriminatee is a managerial employee under the Board’s Pacific Lutheran test.”  He added, however, that even when the Board refuses to process a certification petition, it will still conduct an individualized analysis of the discriminatee’s employment position to determine whether that individual exercised sufficient managerial authority to exempt him from the NLRA.

University Students

Student Assistants. Here, the GC briefly summarized the Columbia University decision, stating that the Board “applied the statutory language of the [NLRA] and longstanding common-law principles to settle the issue of statutory coverage for graduate student employees, determining that student assistants are employees under the NLRA.” The GC relied on the 2000 NYU decision to conclude that graduate students met the common-law test of agency because they “‘perform their duties for, and under the control of’ their university, which in turn pays them for those services…” Similarly, the GC applied this precedent to the unfair labor practices context, concluding that, in his opinion, student assistants are well within the ambit of the NLRA and can therefore organize and receive its protections.

Non-Academic University Workers. The GC stated that, as to university students who are performing non-academic university work (e.g. maintenance or cafeteria workers, lifeguards, campus tour guides, etc.), they are “clearly covered by the NLRA and, as with student assistants, [the Board] will analyze unfair labor practice charges involving non-academic student employees accordingly.” In reaching this conclusion, the GC reasoned that the non-academic university worker category presented an easier question than the student assistants in Columbia as, in his opinion, under the common law agency test, there is no issue of whether or not the work performed by the student employee is “primarily educational work.”

Hospital House Staff. With respect to “hospital house staff” (medical interns, residents, and fellows), the GC concluded that they would “continue to be protected as employees under the NLRA, and [the Board] will continue to process unfair labor practice charges involving those employees.”  In reaching this conclusion, the GC reasoned that, just because certain hospital house staff members also happened to be students did not mean that they were exempt from the coverage of the NLRA. He cited the Boston Medical decision, which held that “nothing in the [NLRA] suggests that persons who are students but also employees should be exempted from the coverage and protection of the [NLRA].”

University Football Players. Here, the GC admittedly limits his analysis to the application of the statutory definition of employee and the common-law agency test to find that Division I FBS scholarship football players are employees under the NLRA, and therefore have the rights and protections of that Act. Referring to the Board’s decision in Northwestern, the GC expressly stated that it would be inappropriate for the Report to attempt resolve the sometimes “divisive” questions relating to whether student athletes may organize under the Act.


With Mr. Griffin’s four-year term ending later this year, it is likely that the new GC will want to revisit some or all of the Report. The soon to be Trump-appointed  majority of the Board likely will revisit not only the Report, but also the decisions in Pacific Lutheran, Columbia and Northwestern.

By: Jade M. Gilstrap

In the midst of what appears to be a proliferation of “micro-units,” on Tuesday, October 18, 2016, the NLRB declined to reconsider its decision to certify a unit of 14 service technicians employed by the Buena Park Honda dealership in Buena Park, California. Sonic-Buena Park H, Inc. d/b/a Buena Park Honda, 21-RC-178527.  In doing so, the Board rejected the employer’s argument that additional employees, particularly lube technicians, should be included in the unit, finding the two types of workers did not share “an overwhelming community interest,” necessitating their inclusion in the same unit.

Relying heavily on Specialty Healthcare & Rehab. Center of Mobile, 357 NLRB 934, 938 (2011), enfd. 727 F.3d 552 (6th Cir. 2013), the majority of the three-member board ruled that the petitioned-for unit of service technicians was appropriate based on an application of the “overwhelming community-of-interest” standard.  As articulated in Specialty Healthcare:

When 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 the 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.

Because the facts clearly did not establish that the lube technicians shared an “overwhelming community of interest” with the service technicians, the dealership could not meet this burden. The Board noted that unlike the lube technicians, the service technicians were more skilled, paid substantially higher wages, and required to routinely update and maintain their training and skills, making them “clearly identifiable and functionally distinct.”  Accordingly, the Board held, “[i]n denying review, we find that petitioned-for employees are an appropriate unit and the Employer has not sustained its burden of establishing that any of the disputed classifications, either individually or collectively, share an overwhelming community of interest with the petitioned-for employees such that their inclusion in the unit is required.”

Although board member Philip A. Miscimarra agreed that “the interests of the service technicians [were] sufficiently distinct from the excluded employees and otherwise appropriate for inclusion in a separate unit,” he disagreed with the application of Specialty Healthcare and the “overwhelming community of interest” standard to evaluate whether the petitioned-for unit should be required to include additional employees.  Instead, Member Miscimarra argued that the Board should have applied its traditional principles, believing “bargaining unit determinations should be circumscribed and guided by industry-specific standards where applicable.”

NLRB    By: Bryan Bienias, Esq.

Seyfarth Synopsis: The U.S. Court of Appeals for the D.C. Circuit held that the National Labor Relations Board abused its discretion by ignoring its own precedent and downplaying threats made by pro-union employees during an election campaign where the union ultimately prevailed by a one-vote margin.

Should union supporters’ casual, half-hearted “threats” of violence during an election campaign warrant overturning the results in a closely contested election? Contrary to the NLRB, a three-judge panel of the D.C. Circuit Court of Appeals answered that, under the Board’s own precedent, “probably.”

The case, ManorCare of Kingston PA LLC v. National Labor Relations Board, 14-1166 (D.C. Cir. 2016) stems from a 2013 election among nurses’ aides at the employer’s Pennsylvania facility.  The union ultimately eked out a victory by a margin of 34-32.

The employer challenged the results, alleging that two bargaining unit nurses during the campaign threatened to “punch people in the face,” “beat people up and destroy their cars” and “slash their tires” if the union did not prevail. Although the nurses initially made these comments in a “somewhat joking manner,” the statements were disseminated to eight or nine other unit employees, some of whom believed the threats to be more serious, causing ManorCare to provide additional security for three days following the election.

The Board, purporting to apply its six-factor Westwood Hotel test for evaluating third-party threats during a campaign, and found the threats not sufficiently serious to overturn the election.  Without applying its test to the facts, the Board emphasized the “casual and joking nature” of the original comments and dismissed the remarks as “no more than bravado and bluster.”  Given that the statements were disseminated to other employees out of context, the Board claimed that a “game of telephone” should never be the basis for overturning an election.

The D.C. Circuit disagreed, finding that the Board abused its discretion by only cursorily acknowledging its own precedent and failing to discuss how the facts aligned with Board law. The Court noted that the Board has drawn a “firm line” that an election cannot stand where threats create a “general atmosphere of fear and reprisal” that render a free election impossible. The Court noted that the objective standard required by the Board’s precedent “requires assessing the threats according to what they reasonably conveyed, not what the speakers intended to convey.”  Thus, the Court found irrelevant that that the comments might have originated as jokes, noting that “[t]he remarks were threatening, and seriously so.”

The Court also found that the dissemination of the threats to eight or nine voters weighed against upholding the election results, especially since “only a single voter could have changed the outcome,” a fact the Board failed to acknowledge. The fact that the threats actually instilled fear in co-workers and were made in part by an employee who displayed visible injuries from a recent knife fight only underscored the objectively serious nature of the threats.

Despite the D.C. Circuit handing a victory to the company, employers can expect to see this case cited by unions and the Board when addressing similar “joking” statements by pro-company employees. As always, employers should strive to maintain an atmosphere free of physical threats and intimidation during an election campaign — among managers and staff alike — or run the risk of having a hard fought election victory overturned.

By:  Kyllan B.Kershaw, Esq.

Seyfarth Synopsis: The Fifth Circuit upheld the NLRB’s expedited union election rules on Friday, rejecting an appeal from construction-industry employers and small businesses

The U.S. Court of Appeals for the Fifth Circuit upheld the National Labor Relations Board’s expedited election rules, rejecting an appeal by the Associated Builders and Contractors of Texas (“ABC”) and the Texas arm of the National Federation of Independent Business. The appeal followed a lower court decision in June 2015 declaring the rule valid.

The election rules at issue took effect in April 2015 and are designed to expedite the union election process and delay employer challenges to voter eligibility issues until after an election.  The expedited election rules also expand requirements for disclosure of employee contact information to unions.

In its appeal to the Fifth Circuit, ABC and others argued that the election rules exceed the Board’s statutory authority and subject employees to increased risks of identity theft and privacy violations.  Upholding the rules, a three-judge panel rejected these arguments, finding that the rules did not violate the National Labor Relations Act or the Administrative Procedure Act and noting that the challengers did not substantiate claims that disclosure of an email address and cellphone number threatened greater harm to employees than the disclosure of a home address.  The Fifth Circuit panel further commented that ABC and others failed to identify any federal law restricting the disclosure of employee information to unions by employers.

While this is not the first time a federal court has rejected a challenge to the Board’s expedited election rules, the Fifth Circuit’s decision is significant given its reputation as a relatively conservative court and forecasts that future challenges to these rules are also unlikely to succeed.

Gavel      By: Ashley Laken, Esq.

Seyfarth Synopsis: With respect to the lawsuits challenging the Final Persuader Rule, further amicus briefs have been filed and hearing dates have been set for the plaintiffs’ motions for preliminary injunctions.

In follow-up to our earlier blog post regarding the motion for preliminary injunction that was filed by the plaintiffs in the first lawsuit challenging the DOL’s Final Persuader Rule, Associated Builders and Contractors of Arkansas v. Perez (Case No. 4:16-cv-169, U.S. District Court for the Eastern District of Arkansas), the court has set April 28, 2016 as the deadline for the defendants to file their response to the plaintiffs’ motion, and the court has set May 9, 2016 as the date for the hearing on the plaintiffs’ motion.

The court also granted the U.S. Chamber of Commerce’s motion for leave to file an amicus brief in support of the plaintiffs’ motion, and additional amicus briefs in support of the plaintiffs’ motion have been filed by the Employment Law Alliance and the States of Arkansas, Alabama, Arizona, Michigan, Nevada, Oklahoma, South Carolina Texas, Utah, and West Virginia.

Additionally, in follow-up to our earlier blog post regarding the suit filed in the U.S. District Court for the District of Minnesota, Labnet Inc. d/b/a Worklaw Network v. United States Department of Labor (Case No. 0:16-cv-00844), the plaintiffs in that case have similarly filed a motion for a temporary restraining order, or in the alternative, for a preliminary injunction or stay, and the court has set May 26, 2016 as the date for the hearing on that motion.

We will keep you apprised of further developments as they occur.

By: Ashley Laken, Esq.

Seyfarth Synopsis: The plaintiffs in the first lawsuit challenging the Final Persuader Rule have filed a motion for preliminary injunction, and the U.S. Chamber of Commerce seeks to file an amicus brief in support of that motion.

In follow-up to our earlier blog post about the first lawsuit to challenge the U.S. Department of Labor’s Final Persuader Rule, Associated Builders and Contractors of Arkansas v. Perez (Case No. 4:16-cv-169, U.S. District Court for the Eastern District of Arkansas), the plaintiffs in that lawsuit have filed a motion for preliminary injunction and for an expedited hearing on the motion, and the U.S. Chamber of Commerce has filed a motion seeking leave to file an amicus brief in support of the plaintiffs’ motion.

In their motion, the plaintiffs argue that absent injunctive relief, the challenged Rule, which is otherwise scheduled to take effect on April 25, 2016, will cause a radical change in the well-settled application of the Labor-Management Reporting and Disclosure Act’s advice exemption that would irreparably harm the plaintiffs’ First and Fifth Amendment Rights. The plaintiffs also argue that an order for injunctive relief will simply preserve the status quo and temporarily retain the same interpretation of the advice exemption that has been in effect for more than 50 years, and therefore, the DOL will not be harmed by a preliminary injunction.

In the proposed amicus brief, the Chamber argues that the Rule will chill the free exchange of ideas between employers and employees and will impose substantial compliance costs as employers and their attorneys are forced to grapple with DOL’s incoherent new guidelines. The Chamber explains that of greatest concern is the fact that the DOL’s new interpretation of the LMRDA’s advice exemption—if allowed to take effect— threatens to expose thousands of companies, law firms and lawyers to potential criminal liability for failure to abide by an exceedingly vague interpretation of the LMRDA.  The Chamber also explains that the Rule “adopts an unworkably vague standard and imposes severe burdens on attorney-client confidences.”

It is unclear when any hearing on the motion for preliminary injunction will or could be, but we will keep you apprised of further developments as they occur.

By:  Karla Sanchez, Esq.

In a recent blog post (here), we discussed the Board decision changing the rule concerning captive audience speeches in mail-ballot elections by setting the prohibition (on such speeches) to start 24 hours before the Region is scheduled to mail the ballots, rather than from the date and time the mail ballots are to be mailed.  This decision means that employers now have one less day to hold campaign-related meetings with their employees. In Premier Utility Services, LLC, 363 NLRB No. 159 (April 5, 2016) (decision), the Board has given employers yet another reason to try to avoid mail ballot elections.  In that case, the Regional Director refused to count 48 ballots that were postmarked before the voting period ended.  Instead, the union was certified as the bargaining representative based on only 34 votes out of 101 eligible voters.

The employer, a utility company with five boroughs throughout New York City and Long Island, had approximately 101 eligible voters who lived and worked in the five boroughs.  As a result, the parties held a mail ballot, which was conducted from October 20 to November 4, 2015.  November 5, 2015 was set as the date to tally the votes.  However, as of November 5, the Region had only received 4 ballots out of the 101.  Due to this extremely low number of ballots, the employer and the union agreed to postpone the tally for one week or until November 12.  This was a deviation from the NLRB’s normal procedures.  By November 12, the Region received 34 valid ballots—still a low number of ballots for a unit of 101.  Later, the Region received an additional 55 valid ballots, including 48 ballots that had been postmarked before November 4, which had been the last day of the original voting period. The Regional Director refused to count these ballots because they had been received after November 12.  In response, the employer filed objections to the election by which the employer sought to have those 55 ballots counted. The Regional Director overruled the employer’s objections and the employer requested review of the Regional Director’s decision.

The Board (Chairman Pearce and Member Hirozawa) denied the employer’s request for review stating that there were “no substantial issues warranting review.”  The Board apparently had no issue with certifying a union as the bargaining representative of 101 employees by only counting the ballots of about a third of the unit, when an additional 55 employees—more than half of the entire bargaining unit—had voted but not had their ballots counted.

Member Miscimarra dissented.  He noted that while the Board will usually not count mail ballots received after the count, there are times when the Board’s normal rules “must be balanced against our statutory responsibility to assure that employees have been reasonably permitted to freely exercise their rights under the Act.” Member Miscimarra further noted that here, the Regional Director had already deviated from the Board’s normal processes by moving the count day by a week.  Thus, there was no reason why another deviation couldn’t have been granted.

Again, the takeaway for employers is to try to avoid a mail ballot election.

By Ashley K. Laken, Esq.

In follow-up to our earlier blog post about the first lawsuit to challenge the U.S. Department of Labor’s Final Persuader Rule that was promulgated in late March, two additional lawsuits have been filed challenging the Final Rule, this time in the U.S. District Court for the District of Minnesota and in the U.S. District Court for the Northern District of Texas.

The suit filed in Minnesota, Labnet Inc. d/b/a Worklaw Network v. United States Department of Labor (Case No. 0:16-cv-00844), was filed by a group of eleven law firms who are all members of an association of independent law firms.  The suit filed in Texas, National Federation of Independent Business v. Perez (Case No. 5:16-cv-00066), was filed by an association of small businesses, a national trade association, and a local chamber of commerce.

The new lawsuits attack the Final Rule on the following grounds:

  1. The DOL exceeded its statutory authority in promulgating the Final Rule because: the Final Rule is contrary to the plain meaning of and completely destroys the Labor-Management Reporting and Disclosure Act’s advice exemption; it illegally attempts to usurp state laws with respect to regulation of the attorney-client relationship; it attempts to amend the LMRDA by rulemaking; and it improperly attempts to regulate the conduct of union representation proceedings, a role that has been delegated to the National Labor Relations Board under the National Labor Relations Act.
  2. It violates free speech and association rights guaranteed under the First Amendment because it interferes with employers’ free speech right to express views regarding union organizing, it targets those who communicate a particular message conveying a particular viewpoint, and it will substantially hinder employers from consulting attorneys when formulating and delivering their views on the topic of unionization.
  3. It violates due process rights guaranteed under the Fifth Amendment because it is too vague, and laws that carry criminal sanctions are subject to a strict application of the void for vagueness test.
  4. It violates the Regulatory Flexibility Act because the DOL both failed to properly conduct the regulatory flexibility analysis required by that Act and was arbitrary and capricious in its certification that the Final Rule will not have a significant impact on a substantial number of small entities. In this regard, an independent analysis by the former Chief Economist at the DOL concluded that the first-year cost alone would be $10,433 per firm.
  5. Even if the Final Rule is determined to be valid as applied to advice given to a particular client, the ensuing reporting requirement is overbroad because it requires disclosures concerning all receipts from all clients “regardless of the purposes of the advice or services” and because it requires the filer to disclose all disbursements to its officers and employees.

Both lawsuits ask the courts to declare that the Final Rule is unlawful under the Administrative Procedure Act, to preliminarily and permanently enjoin implementation and enforcement of the Final Rule, to set aside the Final Rule, and to award the plaintiffs their attorneys’ fees and costs. We will keep you apprised of  further developments as they occur.

By: Ashley K. Laken, Esq.

Yesterday, a group of plaintiffs (including a trade association, the Arkansas Chamber of Commerce, the Coalition for a Democratic Workplace, the National Association of Manufacturers, and a law firm) filed suit in the United States District Court for the Eastern District of Arkansas against the U.S. Department of Labor challenging the DOL’s Final Persuader Rule that was promulgated last week (a link to our One Minute Memo regarding the Final Rule is available here).

The lawsuit, Associated Builders and Contractors of Arkansas v. Perez (Case No. 4:16-cv-169), is the first of several likely suits challenging the Final Rule.  The Complaint contains seven grounds to attack the new Rule:

  1. The DOL exceeded its statutory authority because the new limits on the “advice” exemption conflict with and thereby violates the plain language and legislative intent of the Labor-Management Reporting and Disclosure Act’s exemption from reporting “advice.”
  2. The Final Rule is arbitrary and capricious under the Administrative Procedure Act.
  3. The Final Rule violates the First Amendment because it infringes on the rights of freedom of speech and association by arbitrarily narrowing the definition of advice that will be considered exempt from public reporting under the LMRDA.
  4. The Final Rule violates due process rights under the Fifth Amendment because it is too vague and does not give fair notice as to what conduct could subject plaintiffs to criminal penalties under the LMRDA (specifically, employers and their potential advisors will be left to guess at the meaning of the new reporting requirements because the Final Rule is confusing and open-ended with regard to potential persuader activity).
  5. The Final Rule violates the National Labor Relations Act because the U.S. Supreme Court has held that Section 8(c) of the NLRA precludes all regulation of non-coercive speech about unionization.
  6. The Final Rule infringes upon attorney-client confidentiality because it blurs the line between advice and reportable persuader activity.
  7. The Final Rule violates the Regulatory Flexibility Act of 1960 and the Small Business Regulatory Enforcement Fairness Act of 1996, which require agencies to analyze the impact of their regulatory proposals.

The suit seeks a preliminary injunction to enjoin the Final Rule’s implementation, a declaratory judgment declaring the Final Rule invalid, an order vacating the Final Rule and permanently enjoining it from being implemented, and the plaintiffs costs and attorneys’ fees under the Equal Access to Justice Act. It was assigned to Judge Kristine G. Baker, who was appointed to the bench by President Obama in 2012.  We will keep you apprised of further developments as they occur.

By: Brian M. Stolzenbach, Esq.

This morning, the DOL revealed its final “persuader” rule — a regulation that has been in the works for years. According to the DOL, the rule “realign[s] the Department’s regulations with the text of . . . the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA).”  Among other things, the LMRDA requires certain public reporting by employers and the third parties they retain to persuade their employees “to exercise or not to exercise, or . . . as to the manner of exercising, the right to organize and bargain collectively through representatives of their own choosing.”

The Final Rule, which will be published in the Federal Register tomorrow, is designed to be effective April 25th. In its press release, the DOL says the Final Rule will apply to covered agreements and arrangements with so-called “persuaders” that are entered into on or after July 1, 2016.

The Final Rule seeks to significantly expand the scope of what employers and “persuaders” must publicly report to the DOL. You can expect legal challenges to the Final Rule, with requests to enjoin implementation while that litigation proceeds and to permanently enjoin implementation at the conclusion of the litigation.

At present, however, all employers — not just those with unionized employees and not even just those who believe they are the target of actual or potential organizing by labor unions — need to familiarize themselves with the Final Rule and its potential effects on their businesses.

Alas, the Final Rule is more than 400 pages long! Seyfarth Shaw attorneys are already hard at work performing an in-depth analysis of the Final Rule, potential legal challenges to the Final Rule, and best approaches for compliance with the Final Rule.  As soon as we have conducted a thorough analysis, we will be prepared to provide further and more specific guidance.

In the meantime, you may wish to consider the DOL’s own basic summary of the Final Rule, which reads as follows:

Consultant activities that trigger reporting of an agreement or arrangement with an employer include direct contact with employees with an object to persuade them, as well as the following categories of indirect consultant activity undertaken with an object to persuade employees:

  1. Planning, directing, or coordinating activities undertaken by supervisors or other employer representatives including meetings and interactions with employees;
  2. Providing material or communications for dissemination to employees;
  3. Conducting a union avoidance seminar for supervisors or other employer representatives; and
  4. Developing or implementing personnel policies, practices or actions for the employer.

Agreements are not reportable if the consultant merely advises or represents the employer. For example, agreements under which a consultant exclusively provides legal services are not to be reported.  Representation of the employer before a court or similar tribunal or during collective bargaining negotiations also does not trigger reporting.  Other examples of non-reportable agreements include:

  1. Guidance on employer personnel policies and best practices
  2. Seminars in which the consultant does not develop or assist the attending employers in developing anti-union tactics or strategies
  3. “Vulnerability Assessments,” including the use of surveys, in which a consultant evaluates an employer’s proneness to union-related activity and offers possible courses of action
  4. Sales pitches
  5. Sales of “off-the-shelf” materials
  6. Provision of information for use only in conjunction with an administrative, arbitral, or judicial proceeding
  7. Franchisor-franchisee agreements

The entire Final Rule and related information from the Department of Labor can be found here: