By: Jennifer L. Mora

Seyfarth Synopsis: On June 23, 2020, the National Labor Relations Board reversed precedent and held in Care One at New Milford, 369 NLRB No. 109 (2020), that during negotiations for a first collective bargaining agreement, employers do not have a duty to bargain with a union over discipline for newly organized employees if the discipline is issued consistent with established disciplinary policies or practices. The decision is retroactive to any case currently pending before the NLRB.

For almost 80 years, the National Labor Relations Board had in place a longstanding rule that employers had no obligation to give a union notice of or an opportunity to bargain over discipline before reaching agreement with a newly elected union on a first contract. That all changed, however, when the NLRB held in Total Security Management Illinois 1, LLC, 362 NLRB No. 106 (2016), that an employer, with limited exceptions, was required to provide a union with notice and an opportunity to bargain about discretionary elements of an existing disciplinary policy before imposing serious discipline on any newly represented employees while bargaining for a first contract. Notably, the NLRB had reached a similar conclusion in Alan Ritchey, Inc., 359 NLRB 396 (2012). That decision, however, was invalidated by the U.S. Supreme Court’s holding in NLRB v. Noel Canning, 134 S.Ct. 2550 (2014), because the Board’s composition at the time of Alan Ritchey included two individuals whose appointments violated the United States Constitution.

As is often the case with the NLRB, the pendulum has swung back, with the current NLRB blasting the Total Security decision for going to great lengths to “devise a contorted bargaining scheme at odds with traditional bargaining practices” and having “shredded longstanding principles governing the duty to bargain.” On June 23, 2020, the NLRB overturned Total Security and held in Care One at New Milford, 369 NLRB No. 109 (2020), that employers have no duty to bargain over serious employee discipline imposed before the negotiation of a collective bargaining agreement so long as the employer acts consistent with a pre-existing disciplinary policy.

According to the Board, Total Security had conflicted with prior Board precedent and the Supreme Court’s statements in NLRB v. Weingarten, 420 U.S. 251 (1975), that a labor organization does not have “any particular rights with respect to pre-disciplinary discussion which it otherwise was not able to secure during collective-bargaining negotiations.” Second, the Board found that Total Security misconstrued the general unilateral-change doctrine announced in the Supreme Court’s decision in NLRB v. Katz, 369 U.S. 736 (1962), with respect to what constitutes a material change in working conditions. Finally, the Care One NLRB concluded that Total Security had imposed a complicated and burdensome bargaining scheme that was irreconcilable with the general body of law governing statutory bargaining practices. According to the Board in Care One:

[T]he correct analysis … must focus on whether an employer’s individual disciplinary action is similar in kind and degree to what the employer did in the past within the structure of established policy or practice …. As such, in order to maintain the status quo, an employer must continue to make decisions materially consistent with its established policy or practice, including its use of discretion, after the certification or recognition of a union.

Negotiating with a labor organization for a first contract can be stressful and time-consuming, which makes the Board’s decision a welcome sigh of relief for employers. In fact, it applies retroactively to any case currently pending before the NLRB. That said, employers with new collective bargaining relationships with labor organizations still must be mindful of the obligation to ensure that any pre-contract discipline is imposed in accordance with their existing disciplinary policies or practices.

By: Kyllan B. Kershaw

Portions of the NLRB’s expansive new representation election rules–scheduled to go into effect on May 31, 2020 following a COVID-19 related delay–were struck down by court order one day prior to becoming effective.  On May 30, 2020, a judge for the U.S. District Court for the District of Columbia ruled that certain portions of the NLRB rules that were challenged by the AFL-CIO were substantive in nature and not implemented in accordance with the Administrative Procedure Act, which requires that any rules that are not merely procedural in nature be subject to a notice-and-comment period.  This late-game decision follows numerous public information sessions held by the NLRB in anticipation of the rollout of the new rules.

In her ruling, Judge Ketanji Brown Jackson overturned elements of the rules challenged by the AFL-CIO, including:

  • Providing employers an increased ability to challenge and litigate certain issues prior to an election;
  • Increasing the length of time between the filing of the petition and the date of the election;
  • Adding to the time period for an employer to serve a voter list;
  • Limiting who can serve as an election observer; and
  • Delaying certification of election results if a request for review is pending or may still be timely filed.

The remainder of the rules were not overturned by the Court; however, the Court remanded the entire set of rules to the NLRB for reconsideration following the court’s ruling. On June 1, 2020, the NLRB announced that all unaffected rules would be implemented immediately, and those now effective changes include the following:

  • Scheduling the hearing at least 14 days from issuance of the notice of hearing;
  • Posting the notice of election within 5 days instead of 2 days;
  • Changes in timeline for serving the non-petitioning party’s statement of position;
  • Requiring petitioner to serve a responsive statement of position;
  • Reinstatement of Post-Hearing Briefs;
  • Reinstating Regional Director discretion on the timing of a notice of election after the direction of an election;
  • Ballot impoundment procedures when a request for review is pending;
  • Prohibition on bifurcated requests for review;
  • Certain changes in formatting for pleadings and other documents; and
  • Terminology changes and defining days as “business” days.

The Court’s order is not yet final and a full Memorandum Opinion is still forthcoming, at which point the NLRB insists it will appeal.

In the interim, the 2014 rules regarding R-case procedures remain in effect as modified above.  This decision is a disappointment to those that were anticipating a completely revised set of election rules to replace the so-called ambush election rules.  A process that provides the parties with a more reasonable time line is particularly important given the difficulties in campaigning during the current COVID-19 pandemic.  Having said that, there are some significant modifications to the prior election rules now in effect that will provide for more meaningful analysis, including an opportunity to understand the petitioner’s legal position before the hearing.

Employers should continue to be proactive to maintain positive employee relations, stay in front of workplace issues, and have plans in place for union-organizing efforts.  We are here to help.

By: Bryan M. O’Keefe, Charles M. Guzak, and Samuel I. Rubinstein

Seyfarth Synopsis: In a move that will provide clarity to both unions and employers, the National Labor Relations Board in Providence Health & Services – Oregon d/b/a Providence Portland Medical Center, 369 N.L.R.B. No. 78 (May 13, 2020) held that dual-marked ballots in a NLRB supervised secret ballot election should be voided in the election tally. This new standard applies retroactively. Employers should ensure that their instructions to employees on how to mark ballots in NLRB supervised secret ballot elections are updated to take account of this important procedural rule change.


One ballot out of 767 was the difference in determining whether the union would represent the employees. The ballot in question contained a diagonal line in the “No” square and an “X” in the “Yes” square.   With the conflicting marks, did the voter intend to vote for Union representation or against it?  Since Board elections are conducted by secret ballot, the Regional Director could not use voter testimony to ascertain what the intent of the two marks was. However, applying extant case law, the Regional Director concluded that “it [was] possible to discern a clear expression of the voter’s intent based on the ballot’s irregular markings.” On that basis, the ballot was counted as a vote in favor of the union, resulting in a tally of 384 votes for the union and 383 votes against it. In light of this narrow loss hinging entirely on a single, questionable ballot, the Employer filed a timely request for review, which was granted by the Board.

The Board’s Holding

Prior to this case, the Board evaluated dual-marked ballots by determining whether the voter’s intent could be “ascertained from other markings on the ballot,” such as an attempt to erase one of the two marks or one mark being crossed out. Under that standard, a dual-marked ballot was considered void if there was no other marking to indicate the voter’s intent.

Noting the inconsistencies in past adjudications of dual-marked ballot cases, the Board modified its standard. Finding that it has “no special expertise in judging whether stray marks represent attempted erasures or obliterations,” the Board concluded that such an exercise risked becoming an inquiry rested on speculation, and it was not an efficient use of agency resources. Thus, the Board adopted an objective, bright-line rule pertaining to dual-marked ballots: “where a ballot includes markings in more than one square or box, it is void.” Furthermore, the Board found that the standard would apply retroactively.

Applying this new standard to the case at hand, the Board voided the ballot in question; thus, the tally was tied at 383 votes. Since the union did not receive a majority of the valid votes cast, the union did not become the exclusive representative for the bargaining unit.

Impact on Employers

This new standard may benefit employers, unions, and the Board alike by making it clear how dual-marked ballots will be counted. To be sure, however, the new standard is a double-edged sword for employers: after all, it is just likely that a dual-marked ballot on which the voter intended to vote “No” will now be voided as well. For that reason, employers should make sure that their instructions to employees on how to vote in an election are updated to take account of the new voided ballot rule. Voters should know ahead of time that in order to be counted as a “No” vote, the ballot must only be marked once.

By Ashley K. Cano

Seyfarth Synopsis: The COVID-19 crisis is creating fertile ground for union organizing efforts, and labor unions are aiming to capitalize on this.  Non-union employers should be attuned to this reality, and to the extent they want to remain union-free, they should consider developing and implementing lawful employee relations strategies now, before it’s too late.

As we all continue to endure the Coronavirus pandemic and everything that comes along with it, it is becoming increasingly clear that labor unions are seeing the pandemic as an opportunity to organize new groups of workers.  Unions have been losing market share in the United States for decades, and not surprisingly, they are always on the lookout for the chance to bring in new members, with a corresponding increase in their revenue streams.  This includes efforts to organize employees in industries and areas that traditionally have not been unionized.

Because of COVID-19, worker concerns about safety, job security, and transparency on work issues have become front and center in recent months.  This is true for employees working in industries that have been designated as “essential,” but also for employees in many other industries.  Concerns like these are often ones that unions use to appeal to workers who they are trying to organize, and when employees feel as though their employer is not listening to their concerns or adequately communicating with them, they may turn to labor unions for help.

Unions are already taking steps to capitalize on the organizing opportunity presented by COVID-19.  Many have become adept at organizing employees virtually, using social media, text messages, and Zoom meetings to connect with groups of employees.  And some have even set up websites where employees who are “concerned about working during this Coronavirus Pandemic” can fill out a form to have a union organizer contact them.

As businesses start to reopen their doors or return more employees back to work, the potential for unions to gain traction among employees will almost certainly increase, with worker concerns about issues related to COVID-19 precautions taking center stage.  Employees may be asking themselves whether their employer is doing enough to promote their safety and well-being, and unions will likely be telling them that their employer should be doing more.

This all means that employers proactively should be addressing and anticipating employee concerns, not just as a means to create a better worker environment, but also to eliminate risks of union organizing.  Employers must also be careful not to run afoul of any applicable laws when instituting such programs and plans.  The principal law in this arena is the National Labor Relations Act.  Section 7 of the NLRA protects employees’ right to join together to advance their interests as employees, and to refrain from such activity.  In that same vein, the NLRA makes it unlawful for an employer to “interfere with, restrain, or coerce employees” in the exercise of those rights.

Non-union employers should also be aware that under the National Labor Relations Board’s election rules, the time between when a union files a petition for an election and when the election takes place is very short, averaging around only 3-3.5 weeks at present.  This means that for an employer who has not previously been communicating with its employees about the facts surrounding unionization, the window of time that it has to do so is very limited.  Moreover, due to current social distancing guidelines, many employers are finding themselves hamstrung in these campaigns.  Those guidelines are making it difficult, if not impossible, for employers to conduct in-person meetings with their employees, and employers are also being denied in-person elections, with the NLRB instead conducting elections by mail ballot.

While many employers recognize some of the negative aspects or complications that can accompany unionization, many employees (including managers and supervisors) might not.  For example, they may not realize that union representation can and often does result in a loss of flexibility to address employee issues, and that having an outside third-party placed between management and employees often creates a counterproductive “us versus them” attitude.  Many also do not understand the rigors and requirements of collective bargaining.

Takeaway for Employers

Although we are living in uncertain times, it is virtually certain that unions are going to continue their efforts to organize new groups of employees, and the Coronavirus pandemic is providing them with a unique opportunity to try to do so.  Although employers are dealing with countless other issues related to the pandemic, the possibility of union organizing activity among their employees as a result of this crisis is one issue they should not neglect to consider.

Employers who think there is any possibility that their employees might be susceptible to union organizing efforts should consider developing a plan now for lessening and/or responding to union organizing activity within the confines of the law.  Such a plan might include providing training to managers and supervisors on how to recognize and respond lawfully to union organizing activity.  The plan might also include providing positive employee relations training to managers and supervisors, which could head off union organizing activity before it starts.  Many Seyfarth lawyers have vast experience in this area, and are more than happy to help.

By:  Charles M. Guzak, Ronald J. Kramer and Bryan M. O’Keefe

Seyfarth Synopsis: In these uncertain economic times, temporary furloughs and longer-term layoffs have become the norm.  One concern expressed by numerous unionized employers contributing to multiemployer pension plans is whether temporary furloughs or long-term layoffs may result in complete or partial withdrawal liability.

Employers are dealing with a number of immediate and challenging decisions due to COVID-19 and the respective state and local government closure orders. Unfortunately, in these uncertain economic times, temporary furloughs and long-term layoffs have become the norm.

One concern expressed by numerous unionized employers contributing to multiemployer pension plans is whether temporary furloughs or long-term layoffs may result in complete or partial withdrawal liability.

The short answer is that temporary furloughs or long-term layoffs in the wake of COVID-19 are not likely to trigger withdrawal liability of any type.   But as with most legal issues, the devil can be in the details.   Let’s examine the three principal types of withdrawal liability—partial withdrawal, complete withdrawal, and mass withdrawal—and consider how temporary furloughs or long-term layoffs triggered by COVID-19 may implicate each.

Partial Withdrawals

Partial withdrawal liability is the most relevant consideration to furloughs or layoffs.   A partial withdrawal occurs where there is (1) a “70-percent contribution decline” or (2) a “partial cessation of the employer’s contribution obligation.”

  1. 70% Contribution Decline

A 70% contribution decline at the end of a given fund plan year triggers withdrawal liability if the employer’s “contribution base units,” which are contributions based on employees’ hours worked, have declined by 70% for three consecutive plan years. Obviously, if employees are subject to a temporary furlough or even a layoff, the number of hours worked will decline.

But every year begins a new three-year testing period looking at participation levels compared to a “base year,” which is the average of the two highest years in the five plan years before the testing period. As such, an employer would have to already have had 70%+ declines in the past two consecutive years—during flush economic times—for a 70% contribution decline to trigger withdrawal liability now. Moreover, the 70% rule is a clear line in the sand.   For example, two years of a 75% decline and one year of a 69% decline will not trigger a partial withdrawal. So it would be very difficult to trigger a 70% decline partial withdrawal due to temporary reductions in contributions.

To be sure, some employers that were already struggling before COVID-19 and whose contributions over the last two years have dropped by more than 70% as compared to the established based year may have difficulty avoiding another 70% decline this year. And even for employers who were not suffering significant contribution declines before COVID-19, there is no guarantee that the recovery following the pandemic will be swift. Any employer suffering significant (50% plus) contribution declines due to lost business for any reason should closely monitor their prior, current and projected contributions using the statutory 70% decline testing methodology. Employers skirting the edge may wish to work hard to keep contributions high enough to avoid triggering a partial withdrawal.

  1. Partial Cessation of the Employer’s Contribution Obligation

A partial cessation of the employer’s contribution obligation has two further subtypes: so-called “facility take-outs” and “bargaining unit take-outs.”

A bargaining unit take-out occurs where an employer permanently ceases to have an obligation to contribute to one or more, but not all of the collective bargaining agreements under which it is required to contribute to the fund. And at the same time, the employer continues to perform work in the jurisdiction of the type for which it was making contributions were previously required under its collective bargaining agreement. A bargaining unit take-out may also occur where an employer transfers any bargaining unit work to workers not participating in the same fund at another or the same location it owns or controls. Importantly, a bargaining unit take-out will not occur where one operation is closed and the work is transferred to another location where it is still being performed by employees participating in the same fund.

A facility take-out occurs where an employer permanently ceases having an obligation to contribute to the plan for work performed at one or more, but not all, of its facilities covered under the CBA, but continues to perform the same type of work at the facilities. Put differently, if an employer ceased all operations covered by a collective bargaining agreement at one location and then continues to have any of that work done by employees not participating in the fund at a different facility, a partial withdrawal is triggered.

Triggering facility take-outs or bargaining unit take-outs through temporary furloughs or layoffs is unlikely to occur. However, to avoid these traps, employers should ensure that their obligations to contribute to funds under their CBAs and at each of their facilities continue. This can be achieved by continuing or merely temporarily suspending operations at all facilities covered by the plan, and by remaining a party to and complying with all CBAs covered by the plan. Also, it would be advisable to at least make sure the Union is aware that any reductions or suspension of operations at such facilities are temporary in nature. An employer may want to advise the fund as well, especially if all fund participating operations are temporarily suspended.

Complete Withdrawal

The second type of withdrawal is a complete withdrawal, which occurs when an employer permanently ceases all fund-covered operations or permanently ceases having an obligation to contribute to the fund. To that end, as long as the employer still has some fund participating employees actively employed somewhere under a contract, you cannot have a complete withdrawal from that fund. And, even if you lay off all employees that participated in a particular fund, if the layoffs are not intended to be permanent, you have likely not permanently ceased operations. Although ERISA does not specifically define “permanent,” Section 4218(b) of ERISA provides that “an employer shall not be considered to have withdrawn from a plan solely because…an employer suspends contributions under the plan during a labor dispute.” Based on this language, temporary cessation in contributions with planned or foreseeable end dates due to furloughs or layoffs, even of the entire workforce, should not constitute permanent cessations of contributions to a plan if they do not go on for so long they seem permanent.

The permanent cessation of an obligation to contribute to the fund typically only occurs where an employer is somehow able to get out of its collective bargaining agreement or negotiates an exit from the fund, the employees decertify, or the union disclaims interest. Employers cannot control what the employees or union does, but by far most withdrawals due to a cessation of an obligation to contribute are triggered by employers. One warning: There are special withdrawal rules for construction industry employers, under which a withdrawal is only triggered if an employer ceases having an obligation to contribute yet continues to perform work within the jurisdiction of the contract or resumes such work within five years without renewing its contractual obligation to contribute. Given most construction contracts are entered into pursuant to Section 8(f) of the NLRA, the expiration of such an agreement ends the bargaining relationship and any ongoing obligation to contribute. In this scenario, a construction union can trigger a withdrawal by ending the contract while the employer is in the midst of work it cannot immediately cease.

Mass Withdrawal

The final and least relevant type of withdrawal in this context is mass withdrawal. A mass withdrawal occurs when all employers or, pursuant to an agreement or arrangement, substantially all employers (the assumption is 85%) withdraw from a fund. Of course, by its very nature, a mass withdrawal is not in any one individual employer’s control. It also is very rare, especially outside of funds with very few participating employers. The risk of mass withdrawal, while very slight, arguably increases in bad economic times — in particular for funds in critical and declining status. Regardless of the hypothetical risk, this does not seem to be the type of consideration which should drive an individual employer’s furlough or layoff decision-making.


Employer contributions will of course decline during periods of temporary furloughs and layoffs, but unless that decline has been ongoing, or a permanent partial or complete withdrawal occurs, no withdrawal should be triggered. Employers should carefully monitor their participation in funds, and the potential withdrawal risks that may be triggered by permanent closures and layoffs, and avoid accidentally turning temporary reductions into permanent reductions without knowing the consequences.

By: John P. Phillips

Seyfarth Synopsis: In a continuation of its push to protect employee free choice, the NLRB issued a final rule on April 1 that returns to the Board’s previous Dana Corp. rule. Under Dana Corp., employees may petition the Board for a secret-ballot election within 45 days of an employer’s voluntary recognition of a union. In 2011, the Board overruled Dana Corp. and set out a procedure under which an election could be barred for up to four years. The new final rule permitting employees a 45-day window to petition for an election will go into effect on July 31, 2020.

As we previously reported, in August 2019 the National Labor Relations Board published several Notices of Proposed Rule Making (“NPRM”) regarding amendments to the Board’s union representation procedures. The proposed amendments consisted of: (1) a change from the current election blocking charge policy to a vote-and-impound procedure; (2) a reversion to the rule of Dana Corp. with respect to voluntary recognition agreements; and (3) a modification of the evidentiary requirements for § 9(a) recognition in the construction industry. On April 1, 2020, the Board issued its final rule on these matters. The final rule was set to go into effect on June 1, 2020, but the Board recently announced that the rule would be delayed to July 31, 2020, due to the COVID-19 pandemic.

This blog post explores the return to the procedures originally set forth in the Board’s 2007 Dana Corp. decision.

Voluntary Recognition

Under the NLRA, employers may voluntarily recognize a union based on the union’s showing of majority support. In these circumstances, a Board-conducted election is not required.  Furthermore, once a union demonstrates majority support and has been recognized by an employer, an election bar goes into effect. Voluntary recognition would bar the filing of an election petition for a reasonable period of time, and, if the parties then reached a collective bargaining agreement, the contract-bar doctrine would continue to bar elections for the duration of the agreement, up to a maximum of three years.

Dana Corp.

In 2007, the Board issued its opinion in Dana Corp. The Board concluded that the voluntary recognition bar policy “should be modified to provide greater protection for employees’ statutory right of free choice and to give proper effect to the court- and Board-recognized statutory preference for resolving questions concerning representation through a Board secret-ballot election.” Dana Corp. held that voluntary recognition does not bar an election unless (1) bargaining-unit employees received adequate notice of the recognition and of their opportunity to file a Board election petition within 45 days and (2) 45 days had passed from the date of the notice without the filing of a petition.

Lamons Gasket Co.

In 2011, the NLRB overruled Dana Corp. In its ruling, the Board defined the reasonable period of time during which a voluntary recognition bars an election to be at least 6 months after the date of the parties’ first bargaining session and no more than one year after the first bargaining session. As a result, when the contract bar also applies, an election may be barred for as many as four years after voluntary recognition—without employees ever having a chance to vote on whether or not they want union representation.

The Return to Dana Corp.

In the final rule, the NLRB returns to the practice set forth in Dana Corp. Once the rule takes effect, an employer who voluntarily recognizes a union must post a notice to its employees about the voluntary recognition. Affected employees then have 45 days in which to petition for a secret-ballot election. The petition must be supported by at least 30-percent of the bargaining unit. If a valid petition is not filed in that period, the voluntary recognition bar would preclude an election for “a reasonable period of time.”

Changes from the Proposed Rule to the Final Rule

As mentioned above, the Board proposed these changes in August 2019. Although the final rule is substantially similar to the proposed rule, there are some differences:

  • The final rule clarifies that it will only apply to an employer’s voluntary recognition after the effective date of the rule (e., July 31, 2020), and will only apply to the first collective bargaining agreement reached after voluntary recognition.
  • The final rule clarifies that either the employer or the union must notify the Regional Office that voluntary recognition has been granted (the proposed rule required both parties to notify the Regional Office).
  • The final rules makes clear that the notice must be posted “in conspicuous places, including all places where notices to employees are customarily posted.”
  • The final rule refers only to an employee’s right to file “a petition,” rather than the right to file “a decertification or rival union petition.”
  • The final rule requires an employer to distribute the notice to unit employees electronically if the employer customarily communicates with its employees by such means.
  • The final rule contains the wording for the required notice as shown here (on pages 34-35 of the final rule).

The Board’s reversion to the Dana Corp. standard provides employees with greater freedom in choosing whether or not they want to be represented by a union. The Board’s promulgation of the final rule also shows its continued commitment to advance the rulemaking agenda that it set out last year.

By Jack Toner and Jeff Berman

Seyfarth Synopsis: During the COVID-19 crisis, the NLRB (for the most part) has truncated its operations to those operations and functions that can proceed without threatening the health of its employees or the  public. In a sense, and as we have seen over the last few months, “neither snow, nor rain, nor heat”, nor pandemic stays the NLRB from “the swift completion of most of its appointed rounds.” Below, we detail the developments at the Board during this time of the crisis, which demonstrates the NLRB’s desire to move forward where this reasonably can occur.

Like many companies and government agencies, and for the safety of NLRB employees and the public,  the National Labor Relations Board (“NLRB”) has cut back on its operations in response to the COVID-19 pandemic. Offices were closed and, for the most part, agency employees performed their duties via teleworking unless critically essential. The NLRB also suspended all representation elections scheduled through April 3, 2020.[1]

The NLRB delayed implementation of the new rule designed to modify the NLRB’s representation case procedures by allowing a fairer and more efficient election process.  According to the NLRB’s press release, the delay was designed to facilitate the resolution of legal challenges against the rule.

NLRB Moving Forward

But, even during these trying times, the NLRB continued to complete its “appointed rounds.” On February 26, it released its long-awaited joint-employer final rule. The rule making process had commenced on September 14, 2018, when the NLRB issued its Notice of Proposed Rule Making. A little over a month after issuing the joint-employer rule, the NLRB issued a new rule designed to better protect employee free choice in connection with its election process. This new rule is discussed in greater detail below.

Guidance on Bargaining During the Pandemic

Not to be outdone by the NLRB, its General Counsel issued a Memorandum designed to summarize cases pertaining to the duty to bargain in emergency situations. GC Memo 20-04. Case Summaries Pertaining to the Duty to Bargain in Emergency Situations The Memorandum was designed to bring the prior decisions of the NLRB into a single place.

Approval of Savings Clause for Otherwise Invalid Policies

During the period that the NLRB curtailed some of its activates, it proceeded to issue decisions.  One of the more important decisions issued during this period is Maine Coast Regional Health Facilities369 NLRB No. 51 (2020). This case involved a media policy that the Board found to be unlawful because it was overly broad, even under the NLRB’s recent Boeing, Inc. analysis. According to the NLRB, the policy improperly prohibited employees from communicating about work-related disputes to third parties, including the media.

However, disagreeing with the Administrative Law Judge, the NLRB concluded that a subsequent amendment to the media policy rendered the revised policy lawful.  Although Maine Coast did not change the prohibitory language in its media policy, it added a “savings clause” that told employees that the policy did not apply to issues covered by the National Labor Relations Act.

Specifically, the savings clause stated that the policy did not apply to employee communications “concerning a labor dispute or other concerted communications for the purpose of mutual aid or protection protected by the National Labor Relations Act.” Since the days of the Obama Board, employers have wondered what types of savings clauses would be useful in the context of common employment policies that raised legal issues under the Act. They now have their answer.

Employee Free Choice Rules

As noted above, on April 1, 2020, the NLRB issued a final rule intended to better protect the free choice of employees regarding questions of union representation. The new rule will:

  1. Prevent or at least substantially minimize the use of so called “blocking” charges to delay the processing of petitions for elections
  2. Provide employees with notice and ability to challenge an employer’s decision to voluntarily  recognize a union as the representative of the employees without providing the employees an opportunity to have a secret ballot election regarding the issue, and
  3. Require unions in the construction industry to demonstrate that they represent a majority of employees in order to block an election petition by either a rival union or by employees challenging the union’s status as the representative of the employees.

* * *

For guidance on these and other traditional labor topics, please contact the authors or your Seyfarth attorney in the Labor Management Relations practice group.


[1] Pending at this time is an apparent NLRB effort to restart elections as early as April 6, 2020, but many are questioning the propriety of this.  (See our alert here.)

By John Telford

On February 25, 2020, the National Labor Relations Board (the Board”) issued its final rule setting forth the standard for determining joint-employer status under the National Labor Relations Act (“NLRA”).  The new rule effectively overturned the overly-broad joint employer standard announced in the NLRB’s 2015 Browning-Ferris decision, where the Board ruled that joint-employer status could be found based solely on an entity’s indirect and/or reserved-but-unexercised control over the terms and conditions of employment of a nominally separate entity’s workforce.

The Board stated that it intended for the new rule to return, with clarifying guidance, to the carefully balanced law as it existed before the Board’s departure in Browning-Ferris.  The rule provides that an entity will be considered a joint-employer of another employer’s employees only if the entity exercises “substantial direct and immediate control” over the essential terms and conditions of employment of the other employer’s employees.  The rule enumerates an exhaustive list of those essential terms and conditions: wages, benefits, hours or work, hiring, discharge, discipline, supervision and direction; and provides that the putative joint-employer must possess and exercise such substantial direct and immediate control over at least one of those terms as to warrant a finding that the entity affects matters relating to the employment relationship.  The rule further defines that control is not “substantial” if only exercised on a sporadic, isolated or de minimis basis.

The rule clarifies that a joint-employer relationship will not be established solely by the indirect and/or reserved-but-unexercised control over essential terms or conditions of employment or the control over non-essential terms and conditions of employment that may be mandatory subjects of bargaining.  Evidence of this lesser form of control may be probative of joint-employer status, but only to the extent that its supplements and reinforces evidence of direct and immediate control.  Further, indirect control does not include control or influence over setting the objectives, basic ground rules or expectations of another entity’s performance under a contract.

In criticizing the prior Browning-Ferris analysis, the NLRB noted that the Obama Board failed to draw meaningful distinctions between direct and immediate control and indirect and/or reserved-but-unexercised control, giving both equal weight.  The final rule re-establishes a “commonsense hierarchy” that recognizes the superior force of evidence of actually exercised direct and immediate control as compared to indirect and reserved-but-unexercised control.

The Board modified its proposed rule based on public comments and the DC Circuit’s decision in Browning Ferris.

In response to the nearly 29,000 comments and the DC Circuit’s Browning-Ferris decision following the announcement of its proposed rule, the Board modified the final rule in several significant ways.   First, the Board expanded the list of essential terms and conditions of employment to add “wages, benefits, hours or work” to “hiring, discharge, discipline, supervision and direction” and expressly stated that this was an exhaustive list of all essential terms and conditions.  Second, while the proposed rule was silent on the value of any control beyond the direct and immediate control of essential terms or conditions of employment, the final rule provides that indirect or reserved-but-unexercised control over essential terms of employment or control over mandatory subjects of bargaining that are not essential terms of employment may be considered, but would not be sufficient without more to make an entity a joint employer.  Instead, such factors may  weigh in the analysis but only to the extent that they supplement and reinforce evidence of the entity’s direct and immediate control over a particular essential term or condition of employment.  Third, the Board decided to omit hypothetical scenarios from the final rule and, instead, provide more specific guidance as to what does or does not constitute direct and immediate control in the text of the rule itself.  Fourth, the final rule does not include “limited and routine” as a general qualifying term and uses that term solely in the context of control over supervision.

Through the rule-making process, the Board provided granular guidance on the distinction between direct/immediate control and indirect/reserved-but unexercised control.

In announcing the final rule, the Board explained that the use of rulemaking provided it with the ability to “give this complex, nuanced and vitally important issue the kind of comprehensive and detailed explication it deserves…resulting in greater clarity and certainty of the law under the NLRA.”   The following chart summarizes that guidance from the Board relating to each essential term and condition of employment.

Essential Term Direct and Immediate Control NOT Direct and Immediate Control
Wages Actually determining wage rates and/or salary of another employer’s individual employees Entering into a cost-plus contract (with or without a maximum reimbursable wage rate)
Benefits Actually determining the fringe benefits of another employer’s employees by selecting benefit plans and/or level of benefits Allowing another employer to participate in an employer’s benefit plans through an arm’s-length contract
Hours of Work Actually determining the work schedules or work hours, including overtime, of another employer’s employees Establishing an enterprise’s operating hours or when it needs services provided by another employer
Hiring Actually determining which particular employees will he hired and which will not Requesting changes in staffing levels or setting minimal hiring standards such as those required by government regulation
Discipline/Discharge Actually deciding to discipline or discharge another employer’s employee Bringing misconduct or poor performance to the attention of another employer; expressing a negative opinion or another employer’s employee; refusing to allow another employer’s employee to continue performing work under a contract; refusing to allow another employer’s employee to access its premise; setting minimal standards of performance or conduct
Supervision/Direction Actually instructing another employer’s employees how to perform their work; issuing performance appraisals for another employee; assigning particular employees to their individual work schedules, positions and tasks Providing instructions that are limited and routine and consist primarily of telling another employer’s employees what work to perform, or where and when to perform the work; setting schedules for completion of a project; describing the work to be accomplished


Consistent with the provisions of the final rule, an evaluation of the type of control in the right-hand column should not be conducted unless the proponent of joint-employer status proves that the entity exercised direct and immediate control over at least one essential term and condition of employment.

“Indirect control” does not include routine business to business contractual terms inherent in contractual relationships between entities, though the line between probative and irrelevant arrangements remains vague. 

The final rules provides that “indirect control” does not include “control or influence over setting the objectives, basic ground rules or expectations for another entity’s performance under contract.”  While not specifically addressed in the text of the final rule, in promulgating the final rule the Board explained that social responsibility provisions, such as contractual provisions requiring workplace safety practices, sexual harassment policies, morality clauses that protect the reputation of the contracting entity, wage floors or other measures to encourage compliance with the law or to promote desired practices generally will not make joint employer status more likely under the Act and will constitute the setting of basic ground rules or expectations for the third-party contractor.

In justifying the final rule, the Board made it clear that it was rejecting an economic realities test and stated that an entity’s ability to cancel a contract (even an at-will contract) or terminate a business relationship with another entity should not be deemed reserved control relevant to the joint-employer inquiry.  The Board also indicated that being the exclusive purchaser of a manufacturer’s product or a donor conditioning donations to a nonprofit on changes to terms and conditions of the nonprofit’s employees will not be the kind of control that is relevant to the joint-employer analysis.

Further, the Board noted that policies prohibiting disruption of operations or unlawful conduct generally constitute the type of basic ground rules and expectations.  These basic ground rules and expectations would also likely include contractual specifications of timeframe and production standards for a parts supplier and a requirement that the supplier certify that it has a drug and alcohol testing program.

The Board noted that divining the line between indirect control and ground rules will largely depend on the enterprise, citing for example that a business that engages a food service contractor to staff its lunchroom merely sets “basic ground rules or expectations” by specifying when the lunchroom is open,  is not evidence of indirect control, and should not even be considered.  “Accordingly, what is indirect or reserved control over an essential term and condition of employment versus what is merely a setting of objectives, basic ground rules or expectations for a contractor’s performance is an issue of fact to be determined on a case-by-case basis.” As such, when evaluating current relationships with contractual partners or establishing new ones, employers should consult with counsel.

Why the rule is important to employers.

The NLRB’s final rule is consistent with the joint-employer rule recently promulgated by the Department of Labor implementing the Fair Labor Standards ActAnd the Equal Employment Opportunity Commission has expressed interest in a similar rule for nondiscrimination laws.  Each of these agencies understands the importance of clarifying the scope of the employer-employee relationship in the ever-changing economy.  Under the NLRA, re-establishing the limited scope of joint employer status is critical, as an overly-broad joint employer standard would result in a company being required to bargain with a union whose bargaining relationship derives from organizing another employer’s workforce, opening up the company to picketing and other activity that would otherwise be secondary and unlawful and subjecting the company to joint and several liability for the other employer’s unfair labor practices.

As the Board stated – “A less demanding standard would unjustly subject innocent parties to liability for others’ unfair labor practices and coercion in others’ labor disputes.  A fuzzier standard with no bright lines would make it difficult for the Board to distinguish between arm’s-length contracting parties and genuine joint employers.  Accordingly, preserving the element of direct and immediate control over essential terms draws a discernible and predictable line, providing ‘certainly beforehand’ for the regulated community.”

The NLRB’s rule will go into effect April 27, 2020.  Opponents of the rule have promised legal challenges, but the Board’s willingness to modify the terms of the proposed rule based on the submitted comments and to tailor the final rule to the DC Circuit Court’s decision in Browning-Ferris should increase the likelihood that the final rule will survive.

 By: Marc R. Jacobs, Esq.

Seyfarth Synopsis: As the BLS reported more strikes in 2019, employers going into bargaining in 2020 should really consider preparing for the possibility of a work stoppage.

The federal Bureau of Labor Statistics issued its annual report of “major work stoppages” in 2019 and the data shows there were 25 “large strikes” in 2019 involving approximately 425,000 workers. This total is up from 20 in 2018, although the number of workers involved in 2019 decreased from 485,000 in 2018 to 425,000 in 2019. For a large strike to be reported by BLS, it must involve over 1,000 workers who are off work for at least one entire shift, either in the public or private sector. The 2018/19 two year average is the highest in about 35 years.

Several items reported by other sources should cause more concern for unionized employers, especially those with contracts expiring in 2020. First, Bloomberg reports that almost 90 percent of work stoppages occur in workplaces with fewer than 1,000, and the number of work stoppages in 2019 was almost as high as 2018 (which had the highest level since 2012). Second, the Economic Policy Institute suggests that the large number of strikes – despite a general decrease in the number of unionized workers to the lowest level since BLS started tracking the statistic in 1983 to about 10.2 percent of the US workforce – is in part because employees are not as afraid for their jobs because of low unemployment rates.

A key takeaway for an employer going into bargaining in 2020 is that it is more important than ever to prepare for the possibility of a work stoppage as part of overall bargaining preparation. Do not rely on wishful thinking that ‘our workers will never strike’ but instead apply that old adage “hope for the best but prepare for the worst”. These efforts should involve a plan for operations in the event of a strike, facility, security and logistics assessments, public relations and communications plans, and early identification of your internal (and external) team.

By:  John Telford and Rachel Reed

Seyfarth Synopsis:  The National Labor Relations Board, pushed out a number of noteworthy decisions early this week.  The Board’s holiday rush coincided with the departure of its sole Democratic member, Lauren McFerran, who ended her term on December 16, 2019.

The National Labor Relations Board, pushed out a number of noteworthy decisions last week.  The Board’s holiday rush coincided with the departure of its sole Democratic member, Lauren McFerran, who ended her term on December 16, 2019.  The end of McFerran’s term was no different.  While a number of the decisions issued in the final days of her term were business as usual for the now-exclusively Republican Board, some represented major shifts from precedents set in Obama-era rulings.  The move is consistent with the Board’s historical reluctance to overturn precedent without having a member of the minority party involved in the decision or, as McFerran has often done, writing in dissent.

Here are some of the key outcomes employers need to know:

Rules Requiring Confidentiality During Workplace Investigations Are Permissible

On December 16, 2019, the Board issued its decision in Apogee Retail LLC, 368 NLRB No. 144 (2019).  Apogee establishes that work place rules requiring confidentiality during investigations are lawful under the National Labor Relations Act.  The decision conclusively resolves a long-standing tension between employers’ interests in conducting confidential investigations and employees’ Section 7 rights and reverses an Obama Board ruling that required employers to prove the need for confidentiality on a case-by-case basis.  See, Banner Estrella Medical Center, 362 NLRB 1108 (2015) (“Banner Health”).

In Banner Health, the Board held that employers were prohibited from implementing blanket policies requiring confidentiality during ongoing investigations.  Instead, employers had the burden of conducting an individualized assessment of each investigation to determine whether the integrity of the investigation would be compromised without confidentiality and whether its interest in preserving the integrity of its investigation outweighed employees’ Section 7 rights.

A 3-1 Republican Board majority overruled Banner Health, explaining that the decision improperly placed the burden of balancing employer and employee interests on the employer.  The Board also found that Banner Health’s prohibition on investigative confidentiality rules ran contrary to guidance from the EEOC, which endorses the adoption of blanket rules requiring confidentiality during employer investigations.

The Board went on to conclude that Boeing Company, 365 NLRB No. 154 (2017) laid out the proper framework for analyzing rules involving investigatory confidentiality.  Boeing places work rules into three categories based on the impact they may have on workers protected rights under the National Labor Relations Act.  Category 1 rules are deemed lawful because they either do not interfere with employee rights, or the employer’s justification for the rule outweighs any adverse impact.  Category 2 rules require an individualized assessment to determine the balance of employer and employee interests.  Category 3 rules are deemed unlawful, and include those rules where business justifications cannot outweigh the adverse impact employees’ protected rights.  Seyfarth wrote on Boeing and its three work rule categories here.

The Apogee decision determined that rules requiring confidentiality during the course of investigations belong in Category 1.  As such, these rules are lawful.  This means that employers can create and promulgate confidentiality rules that apply to any workplace investigation without running afoul of the NLRA.  Confidentiality rules that expand beyond open investigations, however, belong in Category 2.  Rules that require confidentiality after an investigation concludes or rules, like the one in Apogee, that are silent as to duration, will still require an individualized assessment to determine their lawfulness.

We also note that Apogee did not invalidate an employer’s obligation to disclose confidential witness statements collected during an investigation to union representatives processing a grievance.  Similar to the now defunct Banner Health balancing test, employers seeking to maintain the confidentiality of witness statement have to demonstrate that their interest in confidentiality outweighs the union’s need for information.  This disclosure obligation was established in American Baptist Homes of the West d/b/a Piedmont Gardens, 362 NLRB No. 139 (2015) (“Piedmont Gardens”).  Piedmont Gardens remains good law, but the Board majority in Apogee indicated it was ready to revisit the decision if raised in a future case.  This issue remains one to watch.

Policies Prohibiting Email Use for Non-work Purposes are Permissible for Most Employers

In Caesars Entertainment, 368 NLRB No. 143, issued on December 16, 2019, a Board majority ruled that employers have the right to restrict employees from using work email, and other company communication systems, for non-business related purposes.

In this long-anticipated decision, the Board determined that, with limited exception, employees have no right under the National Labor Relations Act to use employer email and information systems to engage in Section 7 protected communications (i.e. communications regarding wages, hours, working conditions, and union activities).  The Caesars decision makes clear that employers have the right to control the use of their equipment and can restrict employees’ use of their equipment for certain purposes, so long as the restrictions are not discriminatory.

Caesars expressly overrules Purple Communications, Inc., 361 NLRB 1050 (2014), a controversial decision, which held that employees had a presumptive right to use company email for Section 7 purposes, and that even facially neutral policies prohibiting non-work-related email use were presumptively unlawful.  Seyfarth previously blogged about the battle over Purple Communications and employee use of employer email systems here.

With its rejection of Purple Communications, the Board also reinstated its holding in Register Guard, 351 NLRB 1110 (2007), a pre-Obama Board decision governing employee use of company email.  Like Caesar’s, Register Guard recognized that employers have a strong property interest in controlling the use of their email systems.  In recognition of this right, employers under Register Guard were allowed, without exception, to implement bans on using work email for non-work purposes.  Caesars, however, recognizes an exception to this rule.  Under the new rule, employees’ use of company email for Section 7 communications will be protected “in those rare cases where an employer’s email system furnishes the only reasonable means for employees to communicate with one another.”

Although the Caesars decision anticipates that in a “typical workplace” employees will have adequate opportunities to communicate face to face and through other avenues, such as text and social media, the Board declined to discuss head on whether these private means of communication would adequately address the rights of dispersed and remote workers.  With employers’ use of remote workers on the rise, the Caesars exception is sure to be tested.

Employers Can Stop Collecting Union Dues Once a CBA Expires

In yet another 3-1 ruling, the Board restored employers’ rights to stop collecting and remitting union dues after a collective bargaining agreement with a dues check off arrangement expires.  Valley Hospital Medical Center, 368 NLRB No. 139 (2019), overruled the Obama Board’s decision in Lincoln Lutheran of Racine, 362 NLRB 1655 (2015), which held that employers had a statutory obligation to continue checking off union dues after the expiration of a collective bargaining agreement.

By overruling Lincoln Lutheran, the Board returned to its prior, longstanding rule established by Bethlehem Steel, 136 NLRB 1500 (1962).  Like in Bethlehem Steel, the Board in Valley Hospital held that dues check off provisions fall within the “limited category of mandatory bargaining subjects that are exclusively created by contract.”  As such, these provisions are only enforceable for the duration of the contract and an employer has no obligation under the Act to continue dues checkoff once a contract expires.

This shift back to established law will likely create an additional incentive for unions to agree to reasonable employer terms during negotiations prior to a contract’s expiration.

This recent slew of cases signals that Employers can likely expect even more management-friendly decisions in the year to come.  But, Employers should bear in mind that the Board’s rulings are almost always subject to change with the political tide.  While these rules are likely to remain in place for now, their longevity—like the longevity of the rules they replaced—may depend on the results of next year’s election.