Seyfarth Synopsis. The National Labor Relations Board has been making a lot of noise since the current administration took control. From reversing draconian restrictions on workplace civility rules to restoring employer control over nonemployee union activity on private property, the noise should be music to employers’ ears. As 2020 quickly approaches, below we revisit some of the greatest hits.
It started like a small California wave, and now, after three years has turned into a Tsunami. Since taking control of the NLRB, the current administration has systematically altered, revised and overturned many of the key rulings of the Obama-era Board, and in some instances, has reversed even longer-standing precedent. These changes resonate with many unionized employers, but have unions singing the blues.
Here are some decisions that have (or are destined to) climbed the charts:
Common Sense Employee Conduct Rules. The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017). In an early harbinger of things to come, in 2017, the Board overruled a 2004 decision, Lutheran Heritage Village-Livonia, that the Obama-era Board used to invalidate a number of common sense workplace civility policies. For instance, the old Board used Lutheran Heritage to hold unlawful policies prohibiting “abusive or threatening language to anyone on the company premises” and policies restricting conduct that impedes harmonious interactions or relationships. According to the prior Board, employees could construe these types of civility rules as prohibiting protected concerted actions under the NLRA. In Boeing, the new Board sought to apply a more common sense analysis to rules clearly aimed at actually balancing an employer’s legitimate interests in maintaining a civil workplace and employees’ rights under the NLRA. Of course, not all work rules fly under Boeing, but the decision and its progeny are a welcome sign that common sense is back in vogue at the Board.
A Return to Tradition in Deciding the Composition of Potential Bargaining Units. PCC Structurals, Inc., 365 NLRB No. 160 (Dec. 15, 2017). PCC Structurals reversed the Obama-era decision, Specialty Healthcare, 357 NLRB No. 83 (2011), which allowed unions to organize so-called “micro units” for determining the appropriateness of a bargaining unit election. The Obama-era “overwhelming community of interest” standard allowed unions to organize very small sub-sections of an employer. For instance, in one decision, the Board approved a 41 person micro-unit limited to only non-supervisory employees in the fragrance department of a department store. In PCC, the Board restored the traditional “community of interest” standard. Now, the Board will apply a multi-factored test to determine if organizing employees’ interests are sufficiently distinct from those left out of the group. As the Board noted, this common sense approach makes it harder for organizers to gerrymander bargaining units to exclude unsupportive coworkers.
Return to the Historical Independent Contract Analysis. Supershuttle Dfw, Inc., 367 NLRB No. 75 (Jan. 25, 2019). SuperShuttle expressly overruled the Obama-era Board’s ruling in FedEx Home Delivery, 361 NLRB 610 (2014), which significantly limited the importance of “entrepreneurial opportunity” in analyzing whether individuals were employees or independent contractors under the NLRA. Instead, the Board returned to the long-standing common law agency test the predated the FedEx decision.
When is a Successor “Perfectly Clear.” Ridgewood Health Care Ctr., Inc., 367 NLRB No. 110 (Apr. 2, 2019). The Board used Ridgewood Health Care to narrow the scope of when an employer acquiring a unionized company is required to bargain prior to setting the initial terms of employment. In doing so, the Board overruled precedent established in 1996 in Galloway School Lines, 321 NLRB 1422 (1996). Generally, employers acquiring unionized companies cannot set initial employment terms for a workforce if the companies indicate they will hire “substantially all” of the prior employer’s employees. Galloway effectively lessened this standard in situations where a successor employer engaged in discriminatory hiring practices. If an employer, for instance, violated the NLRA in its hiring practices, the Board prohibited the employer from setting the initial terms of employment if it failed to hire “some” employees, as opposed to “substantially all” employees. Ridgewood Health Care rejected this lower standard. Now, even if successors engage in unfair hiring practices, they only lose the right to set the initial terms of employment if, absent the successor’s unlawful conduct, it would not have hired all or substantially all of the predecessor employees.
Discipline Before Execution of a CBA. Oberthur Techs. of Am. Corp., 368 NLRB No. 5 (June 17, 2019). Here, the current Board overruled Total Security Management, 364 NLRB No 106 (2016), which complicated employers’ ability to discipline employees during CBA negotiations, or before a new CBA took effect. In Oberthur, the Board held that a newly organized employer without an executed collective bargaining agreement has a duty to bargain before it changes any disciplinary standards, but not before it makes a decision to discipline consistent with its established rules. The upshot is that employers now have much less risk in disciplining employees after being organized but before they enter into a contract with the union.
Equity to Withdrawing Recognition of a Union. Johnson Controls, Inc., 368 NLRB No. 20 (July 3, 2019). In this case, the current Board overruled Levitz Furniture, 333 NLRB 717 (2001), which made it more difficult to withdraw recognition of a union. Generally, unionized employees can ask employers to withdraw recognition of a union by submitting evidence that at least 50% of the bargaining unit members no longer wish the union to represent them. Under Levitz, if the union challenged the withdrawal of recognition, the employer ultimately had the burden of proving the union lacked majority status, and would be subject to unfair labor practice claims if it failed to carry its burden. Johnson Controls takes a more equitable approach. If a union contests the withdrawal petition, it will have 45 days to seek a Board-supervised secret ballot election to verify whether 50% of the bargaining unit supports withdrawal.
Restoring Reason to Employer’s Rights to Control Activities on Their Property. Kroger Ltd. P’ship I Mid-Atl. & United Food & Commercial Workers Union Local 400, 368 NLRB No. 64 (Sept. 6, 2019). In this case, the current Board overruled 20 years of precedent that restricted when employers can bar nonemployee union agents from employer property. Under the prior precedent, set in Sandusky Mall Co., 329 NLRB 618 (1999), allowing Girl Scouts and the Salvation Army to fundraise at a store would take away employers’ rights to bar nonemployee union agents from soliciting signatures or engaging in other union activities on the employer’s property. The Board’s decision in Kroger overturned Sandusky. Now the Board will look at whether the employer allowed activities on its property “similar in nature” to the nonemployee union agent activities. If so, then the employer must allow the union activity; if not, the employer is well within its right to remove the nonemployee union agent from its property. Kroger does not apply to employee activities on the property, nor does it change state-specific laws in places like those in California that place additional restrictions on employer property rights. Nevertheless, it represents another common sense change to Board law that was long overdue.
Alignment with Long-Standing Circuit Court Rulings Regarding Unilateral Changes to Working Conditions. MV Transportation, Inc., 368 NLRB No. 66 (Sept. 10, 2019). Generally, employers and unions can agree in a CBA to give employers the unilaterally power to change certain terms and conditions of employment. Since 1993, the D.C. Circuit has applied the “contract coverage” standard to evaluate the scope of such CBA provisions. A waiver is valid if it is “within the compass or scope” of the CBA. The Board rejected the Circuit Court’s approach for years. Instead, it applied a higher standard, requiring employers to prove unions “clearly and unmistakably waived [their] right[s] to bargain over” a unilateral change. In MV Transportation, the Board finally agreed to follow long-standing circuit court precedent. The practical effect of the old “clear and unmistakable waiver” standard was that the Board rarely found employer changes permissible, even when the subject of the change was discussed at the bargaining table with the union, and common sense suggested the parties contemplated the change or waived the issue. Now, the Board will apply a much more reasonable standard, and one that has been applied by circuit courts for years.
As detailed above, the times they are a changing for unionized employers. Stay tuned to this blog for all of those changes and how they might impact your workplaces going forward.