In this podcast episode, Ashley Cano, Partner in the Labor and Employment department of Seyfarth’s Chicago office, and John Phillips, Senior Associate in the firm’s Houston office, discuss the National Labor Relations Board’s changing view of the scope of protected concerted activity.

With a new Acting General Counsel in charge at the NLRB, the Board is already beginning to shift its focus and promote a more worker- and union-friendly agenda. On March 31st, Acting General Counsel Peter Sung Ohr issued a memorandum to all Regional Directors setting forth an expansive view of workers’ rights to engage in protected, concerted activity. He also promised to “vigorously” prosecute retaliation against workers who engage in such activity. In this podcast, Ashley and John explore what employers can expect moving forward.

Listen to the podcast here.

By Molly Gabel

Seyfarth Synopsis: The National Mediation Board’s new decertification rule survived the first round of legal challenge. In 2019, the NMB issued a final rule providing a direct decertification process under the Railway Labor Act and a two-year period of repose under which the NMB cannot conduct an election following a decertification. The Transportation Trades Department, AFL-CIO and its member unions challenged the rule through a lawsuit against the NMB in the United States District Court for the District of Columbia, alleging that the rule violated the RLA and the Administrative Procedures Act. The Court granted summary judgment for the NMB and against the TTD on March 31, 2021.

Unlike the National Labor Relations Act, the RLA does not contain an express decertification provision. Section 2, Ninth of the RLA merely establishes the NMB and enables the agency to hold elections and resolve election disputes. 45 U.S.C. § 152, Ninth (“If any dispute shall arise among a carrier’s employees as to who are the representatives of such employees designated and authorized . . . it shall be the duty of the Mediation board, upon request of either party to the dispute, to investigate such dispute and to certify [the representatives] . . . .  In such an investigation, the Mediation Board shall be authorized to take a secret ballot of the employees involved . . . .”). The Supreme Court, however, has interpreted Section 2, Ninth to give employees the right to decertify. See, e.g., Brotherhood of Ry. & S.S. Clerks, Freighthandlers, Express & Station Employees v. Association for the Benefit of Non-Contract Employees, 380 U.S. 650, 670 (1965) (Railroad employees have the “right to determine who shall be the representative of the group or, indeed, whether they shall have any representation at all.”).

Before 2019, employees who wanted to decertify their union needed to follow a confusing “straw man” process. An individual employee seeking to decertify the union would need to file an election application, win an election, be certified as the representative, and then disavow representation. The ballot included three options in this scenario: (1) for the existing representative; (2) for the straw man; or (3) for “no union.” The straw man would need to choose whether the straw man would direct employees to vote for the straw man or for “no union” (to ensure the vote was not split between the straw man and “no union”), communicate that choice and instruction to employees, and then ensure that choice won a majority of votes in order to achieve decertification. One can imagine how confusing this process was for employees.

The NMB sought to change this through formal rulemaking. In 2019, the agency finalized formal, notice-and-comment rulemaking under the APA. The final rule enables the NMB to accept a direct decertification application from employees and to run a decertification election.  The rule further extended the period of repose to two years, prohibiting elections absent “unusual or extraordinary circumstances” following a decertification for two years. 84 Fed. Reg. 35,987; 29 C.F.R. § 1206.4.

The TTD and its member unions filed suit on October 16, 2019 (Case No. 1:19-cv-03107 (CJN) (D.D.C.)), alleging that the final rule violated Section 2, Twelfth of the RLA and was arbitrary and capricious under the APA. Plaintiffs claimed that Section 2, Twelfth allows the NMB to conduct elections only to certify a representative. See 45 U.S.C. § 152, Twelfth (“The Mediation Board, upon receipt of an application requesting that an organization or individual be certified as the representative of any craft or class of employees, shall not direct an election . . . unless the Mediation Board determines that the application is supported by a showing of interest from not less than 50 percent of the employees in the craft or class.”) (emphasis added).

The Court disagreed, first concluding that the NMB’s interpretation of Section 2, Ninth and Section 2, Twelfth was entitled to Chevron deference because the agency had engaged in formal rulemaking subject to extensive notice and comment procedures and because Section 2, Ninth and Section 2, Twelfth is silent on decertification and does not “unambiguously preclude the direct decertification method adopted in the Final Rule.” Slip Opinion at 8. The Court went on to hold that the NMB had adequately explained as part of the rulemaking process why it interpreted Section 2, Ninth and Section 2, Twelfth to allow for decertification elections. The Court concluded that the agency’s interpretation of these two statutory provisions was entitled to deference.

In reaching this holding, the Court reasoned that Section 2, Ninth grants the NMB the power to hold elections—not Section 2, Twelfth—and “the Board enjoys exceptional latitude when acting within its proper sphere of Section 2, Ninth power.” Railway Labor Execs. Ass’n v. National Mediation Bd., 29 F.3d 655, 662 (D.C. Cir. 1994). The Court stated that Section 2, Twelfth provides only a carveout within the NMB’s authority under Section 2, Ninth, namely that the agency cannot hold an election unless the application is supported by at least half of the employees in the applicable craft or class. Slip Opinion at 7-8.

The TTD further argued that there was no rational basis for the NMB to extend the one-year period of repose following a decertification to a two-year period of repose. The Court also disagreed with this argument, ruling that the NMB had adequately explained its rationale for extending the election bar: the two years matches the period of repose following certifications so that employees can have time to “judge the advantages and disadvantages of their decision without the turmoil of an immediate organizing campaign.” 84 Fed. Reg. 35,986.

Ultimately, the Court entered summary judgment for the NMB in full and denied the unions’ cross-motion for summary judgment in its entirety. It remains to be seen whether the unions will appeal or whether a Biden Administration majority NMB—when one is seated—will undo the rule. For the time being, however, the rule remains in effect, and railroad, air carrier, and derivative carrier employees have a direct decertification process under the RLA.

By: Jennifer L. Mora and Jeffrey A. Berman

As the National Labor Relations Board transitions from a Republican-majority to a Democrat-majority, the Board’s sole Democrat, Chairman McFerran, continues to provide a window into what the future is likely to look like under a Biden Board. This blog is another in a multi-part series discussing how Chairman McFerran’s dissents may become the law once President Biden appoints new Board members and the Democrats are in the majority. Another example of this appears in the Board’s March 18, 2021 decision, Dish Network, LLC, which considered the enforceability of certain provisions in a mandatory arbitration agreement.

The employer’s arbitration agreement required employees to submit “any” claim or controversy to mandatory arbitration, without any carve-out for unfair labor practices charges alleging violations of the National Labor Relations Act. The agreement further provided, among other things, that “all arbitration proceedings, including but not limited to hearings, discovery, settlements, and awards shall be confidential…”

The Board majority had little trouble in finding that requiring employees to arbitrate “any” claim or controversy unlawfully restricted employees in their ability to access the Board to seek redress for unfair labor practices. It was the confidentiality provision, however, that sparked a very lengthy debate between the Republican majority and McFerran’s dissent, with both sides either relying on or criticizing the Board’s decision in California Commerce Club, Inc. (2020) and disagreeing about the import of the Supreme Court’s decision in Epic Systems (which upheld class waivers in arbitration agreements).

In Dish, the Republican majority upheld the confidentiality provision, except to the extent that it required that “settlements” be kept confidential. On the former, the majority relied on the decision in California Commerce Club, which held that “provisions in an arbitration agreement requiring that arbitration be conducted on a confidential basis, including provisions precluding the disclosure of evidence, award, and/or decision beyond the arbitration proceeding, do not violate the Act and must be enforced according to their terms pursuant to the [Federal Arbitration Act].”

The Dish majority wrote: “the Supreme Court has repeatedly made clear that ‘the FAA requires that courts rigorously enforce arbitration agreements according to their terms, including terms that specify … the rules under which …arbitration will be conducted.” Thus, according to the majority, if a provision in an arbitration agreement pertains to arbitration “proceedings,” then the FAA shields the challenged provision.

However, the Board majority concluded, and McFerran agreed, the provision that “settlements” be kept confidential was unlawful because a settlement (an alternative to arbitration) is not part of the arbitral “proceeding.” As such, the FAA did not shield that provision. That being the case, the Board had to consider whether the requirement that settlements remain confidential violated Section 7. The Board agreed that it did, pointing to the fact that a settlement might cover an issue that could have been submitted to the Board and arguably would prohibit an employee from filing charges with the Board over a settlement that violated the Act.

Advancing the notion that the majority’s decision was yet another effort at forcing employees to “suffer in silence at work,” the McFerran dissent was forceful enough to result in the majority writing a separate section in response. In short, the McFerran maintained that the confidentiality provision restricted employees in their ability to seek redress from the Board and prohibited them from discussing terms and conditions of employment.

In terms of interfering with Board access, McFerran’s dissent gave as an example an employee being unable to seek Board redress if the employee learned during the arbitration about Section 7 violations. Or employees might be subject to “coercive interrogation” during arbitral discovery or directed not to discuss with co-workers the facts at issue in the matter. By maintaining a rule generally prohibiting disclosure about anything taking place at the proceeding to anyone necessarily meant that an employee could not reveal the information to a private attorney or the Board. It made no difference to McFerran that an employer would not actually be able to enforce these provisions as the Board as long recognized that such rules might have a “chilling effect” on employees.

Chairman McFerran made clear that the Board’s decision in California Commerce Club may have a short shelf-life, stating flatly that the case was “wrongly decided” and that the Board misapplied Supreme Court precedent “when it concluded that the NLRB and the FAA cannot be reconciled and that the FAA must displace the NLRA with respect to confidentiality provisions in mandatory arbitration agreements.” It could be the case that the Supreme Court will have to finally put the issue to rest.

As the McFerran dissent is likely to become Board law once Biden appoints new Members, employers should review their arbitration agreements to ensure that cannot be read to prevent employees from filing charges with the Board or discussing any settlement they might have with an employer over an employment-related dispute. Employers concerned about their confidentiality provisions should work with experienced labor counsel until the dust (hopefully) settles.

Wednesday, March 24, 2021
1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
11:00 a.m. to 12:00 p.m. Mountain
10:00 a.m. to 11:00 a.m. Pacific

One part of the recently passed $1.9 trillion “American Rescue Plan” is the “Butch Lewis Emergency Pension Plan Relief Act of 2021” (“Butch Lewis”).  Butch Lewis is the long awaited law designed to provide underfunded multiemployer pension plans with sufficient monies to pay for all accrued benefits owed to retirees, without reduction, through the plan year ending in 2051.  Is this the reform plans and participating employers have been looking for?  In this webinar, Seyfarth attorneys will review Butch Lewis, address what it means for multiemployer plans, and discuss what it means for employers participating in those plans.

Topics will include:

  • Overview of prior pension reform attempts and the state of multiemployer pension plans
  • Butch Lewis as adopted
  • Plan eligibility for relief and the application process
  • Conditions on relief
  • Impact for multiemployer plans
  • Impact for participating employers

Register Here

Wednesday, March 24, 2021
1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
11:00 a.m. to 12:00 p.m. Mountain
10:00 a.m. to 11:00 a.m. Pacific

One part of the recently passed $1.9 trillion “American Rescue Plan” is the “Butch Lewis Emergency Pension Plan Relief Act of 2021” (“Butch Lewis”).  Butch Lewis is the long awaited law designed to provide underfunded multiemployer pension plans with sufficient monies to pay for all accrued benefits owed to retirees, without reduction, through the plan year ending in 2051.  Is this the reform plans and participating employers have been looking for?  In this webinar, Seyfarth attorneys will review Butch Lewis, address what it means for multiemployer plans, and discuss what it means for employers participating in those plans.

Topics will include:

  • Overview of prior pension reform attempts and the state of multiemployer pension plans
  • Butch Lewis as adopted
  • Plan eligibility for relief and the application process
  • Conditions on relief
  • Impact for multiemployer plans
  • Impact for participating employers

Register Here

By Jennifer L. Mora and Jeffrey A. Berman

Seyfarth Synopsis: When a new President is about to shift the balance of power at the National Labor Relations Board, a Board dissent can foreshadow how the newly constituted Board will consider a similar issue. Such is the case in Stericycle, Inc., a February 17, 2021 divided Board decision addressing unilateral implementation of an employee handbook.

In Stericycle, the employer had a collective bargaining relationship with the Teamsters. In February 2015, the employer distributed a company-wide handbook at one of the union facilities. The handbook was inconsistent with several provisions in the parties’ collective-bargaining agreement, including those involving attendance, overtime, time off, work rules, discipline, grievance procedures, and the employee probationary period.

However, the first page of the handbook stated that “[s]ome benefits may not apply to union team members and in some cases these policies may be impacted by collective bargaining agreements.” The last page of the handbook required employees to sign and return to human resources a statement attesting that they “understand it is [our] responsibility to know and abide by its contents.” The employer had not applied the nationwide employee handbook in a manner inconsistent with the collective bargaining agreement.

The administrative law judge (ALJ) found the employer was obligated to provide the union advance notice and an opportunity to bargain over the handbook before distributing it. According to the ALJ, the handbook “contained numerous Company policies and practices that affected numerous mandatory subjects of bargaining.” The ALJ also ruled that the disclaimer language on the first page referring to union-represented employees “did not provide . . . clear guidance as to the applicable policies affecting certain terms and conditions of employment.”

A majority of the three Member panel, Members Emanuel and Ring, disagreed. While the handbook undoubtedly conflicted with some mandatory subjects in the labor agreement, the majority concluded the employer did not represent to employees that the handbook trumped the labor agreement and did not profess to make any changes to the collective bargaining agreement. The majority found it telling that the handbook stated on the first page that the labor agreement affected the policies in the handbook, and that some terms in the handbook might be different for the union-represented employees. Thus, the majority found no evidence of an intent to “modify, alter or change the existing contract” – – essentially, the employer’s disclaimer carried the day.

But it is Chairman McFerran’s dissent which, in the end, may be the most important part of the decision as it likely provides a roadmap for how the Biden Board will consider employer efforts to implement employee handbooks. Starting with the undisputed premise that the handbook conflicted in some respects with the labor agreement, the dissent took issue with the Board’s conclusion that the employer did not purport to change the labor agreement or represent to employees that the handbook superseded the agreement. The problem with this argument, according to McFerran, was that union-represented employees were required to sign an acknowledgement of their receipt of the handbook. Thus, the employer was essentially telling employees that it “was free to sidestep the Union and supplant, expand, or alter terms and conditions of employment that the parties had reached through bargaining and impose additional terms and conditions of employment without bargaining.”

Chairman McFerran also found the disclaimer lacking for several reasons. First, the disclaimer did not communicate to employees with “the clarity or the specificity required by the duty to recognize and bargain with the Union as employees’ exclusive representative.” Next, the handbook should have advised employees that the labor agreement trumped the handbook (rather than the opposite). This failure meant that employees were left to guess which handbook provisions were impacted by the labor agreement. And the disclaimer was silent about the application of new terms and conditions in the handbook that were not in the collective bargaining agreement. Ultimately, according to the dissent, the message the employer communicated to unit employees was that “it did not respect the Union as their exclusive representative.”

While employers with a mix of union and non-union workforces might understand that their employee handbooks do not supplant or alter a collective bargaining agreement with their employees’ bargaining representative, the Biden Board will ask in future cases – – do union-represented employees share this same understanding? The lesson for employers with mixed workforces is take a fresh look at their handbook disclaimers to make it extremely clear to unionized workforces that, if conflicts exist, the labor agreement always wins. However, depending on the composition of the new Biden Board, even this may not be sufficient.

By Ronald KramerSeong Kim, and James Hlawek

Seyfarth Synopsis:  On Monday, the Senate Parliamentarian ruled that the multiemployer pension plan bailout provisions in the $1.9 trillion American Rescue Plan (a.k.a. the latest COVID-19 relief bill) would be eligible for a simple majority vote in the Senate as part of the budget reconciliation process, and thus will remain as part of the relief bill likely to become law shortly.

On Monday, March 1st, Senate Finance Committee Chair Ron Wyden released a statement reporting that the Senate Parliamentarian had determined that the multiemployer pension plan reform provisions of the American Rescue Plan, entitled the “Butch Lewis Emergency Pension Plan Relief Act of 2021” (“Butch Lewis”), has the necessary budget impact to remain part of what is to be a budget reconciliation bill that will need only majority approval in the Senate.

In his press release, Senator Wyden stated the following:

“I’m pleased our pension protection package will remain in the critical relief bill. This economic crisis has hit already struggling pension plans like a wrecking ball, and the retirement security of millions of American workers depends on getting this package across the finish line.”

Given that the inclusion of Butch Lewis will not derail plans to vote the American Rescue Plan into law by a simple majority vote in the Senate, with Vice President Harris being the tie breaker, it is highly likely that Butch Lewis will remain in the final bill and, if passed, will become law very shortly.

As discussed in our prior post, Butch Lewis as drafted will make a seriously underfunded multiemployer plan eligible for “special financial assistance” that is not subject to any financial repayment obligations, designed to cover the amount required to pay all accrued benefits through the last day of the plan year ending in 2051.

The Protecting the Right to Organize Act, known as the PRO Act, was first introduced in February 2020 but flew somewhat under the radar given the onset of the pandemic. On February 4, 2021, House Democrats reintroduced the PRO Act in essentially the same form.

In this episode of Seyfarth’s Policy Matters Podcast, Scott Mallery, Counsel in Seyfarth’s Sacramento office, and Kyllan Kershaw, Partner in Seyfarth’s Atlanta office, discuss how the composition of government is much different for the recent reintroduction of the PRO Act, given the trifecta of democratic majorities in the House and Senate and a democratic president and vice president in the White House, and note that employers are undoubtedly tuned in.

Listen to the podcast here.

By: Jennifer L. Mora

On January 25, 2021, the National Labor Relations Board’s Division of Advice released an Advice Memo on the issue of whether certain cannabis workers were exempt from the National Labor Relations Act as agricultural workers. The Advice Memo noted at the outset that the “Board has not ruled on whether employees of a marijuana enterprise are agricultural laborers or statutory employees.” The difference in classification is important – the Board has jurisdiction over statutory employees but not agricultural laborers, which means the latter cannot seek redress from the NLRB for alleged labor law violations.

In determining whether a worker is an agricultural laborer, the Board, pursuant to an annual appropriations rider, looks to the broader definition of “agriculture” in the Fair Labor Standards Act, which includes the production of “horticultural commodities” as agricultural activity and, thus, exempt from the NLRB. In concluding that the workers at issue in the Advice Memo were exempt from the NLRA, the Division of Advice highlighted that the workers “perform a substantial amount of agricultural functions” within the meaning of the FLSA standard, including harvesting, pruning, and sorting of plants. Both of the employees used their hands rather than machines to perform their tasks, and were not involved in “transform[ing] the natural product from its raw state.”

The Division of Advice distinguished the facts before it from situations in two previous Advice Memos issued regarding marijuana facility employees. In one, the “processing assistants used machines that transformed the raw plant into retail products, whereas the two employees here handle the plants by hand and do not substantially transform them.” In the other, the functions were similar but the context was different, with the Division of Advice determining that the FLSA’s definition of “agriculture” was inapplicable because, unlike in the instant situation, the employees were not engaged in organizing activities as required by the appropriations rider.

The Advice Memo was limited to its facts and should not be read to mean that exempt cannabis or other agricultural workers are entitled to no protections. Indeed, some states have enacted statutes that protect the right of agricultural workers to organize. Importantly, Advice Memos are not binding on future Board determinations. And, given the Division of Advice wrote the memo before President Biden fired the NLRB General Counsel and the Deputy General Counsel, it remains to be seen whether a Biden Board will issue a decision that actually decides whether other cannabis workers who participate in the transformation of the product are agricultural workers or statutory employees.

With the new Biden Administration and Democrats now controlling Congress, employers can expect President Biden to move as quickly as possible to appoint Democratic Members to the NLRB. Currently, the Board has three Republican members, one Democratic member, and one vacancy. President Biden is well positioned to flip the majority composition of the Board by the end of this year. When he does so, employers can expect a more union-friendly NLRB and a reversal of many of the Board’s pro-employer decisions during the Trump administration.

In this episode of Seyfarth’s Policy Matters Podcast, Ashley Cano, Partner in the Labor and Employment department of Seyfarth’s Chicago office, and John Phillips, Senior Associate in the firm’s Houston office, discuss what employers can expect at the National Labor Relations Board over the next several months and at least the next few years.

Listen to the podcast here.