By: Paul Galligan, Esq. and Samuel Sverdlov, Esq.

Last month, the National Labor Relations Board (“NLRB”) vacated election results from a representation election because the Board agent opened the polling for a voting session 7 minutes late. The employer lost the election by a vote of 14-12, with one challenged ballot. However, there were 4 eligible voters (who were present in the polling location during the 7-minute delay) who did not vote in the election. Following the election, the employer filed two objections, one of which challenged the election results because the delay in voting resulted in potential disenfranchisement of a dispositive number of voters. At a hearing before a Hearing Officer, there was no evidence presented regarding either the reasons why the employees did not vote or whether any employees complained that they were prevented from voting due to the delay. Thus, the Hearing Officer overruled the employer’s objection, and the Regional Director adopted the Hearing Officer’s decision.

The employer thereafter appealed the Regional Director’s decision to the Board. In the 2-1 decision, in which Board Members William Emanuel, a Trump-appointee, and Lauren McFerran, an Obama appointee, participated in the majority, together, the Board applied the “potential disenfranchisement test” rather than the “actual disenfranchisement test” to determine whether to set aside the election. The Board majority cited Pea Ridge Iron Ore Co., 355 NLRB 161 (2001) in holding that the key issue in deciding whether to vacate the election is whether the late opening of the polls results in the “possible disenfranchisement of potentially dispositive voters.” As the Board in Pea Ridge stated:

When election polls are not opened at their scheduled times, the proper standard for determining whether a new election should be held is whether the number of employees possibly disenfranchised thereby is sufficient to affect the election outcome, not whether those voters, or any voters at all, were actually disenfranchised.

The Board rejected dissenting Board Member and Obama appointee Mark Pearce’s contention that setting aside an election requires proof of actual-disenfranchisement. Accordingly, the NLRB vacated the results of the election and remanded the case to the Regional Director to conduct a second election.

OUTLOOK

In an era when bipartisan politics appears to be as forgotten as the film, A Bronx Tale, the Bronx Lobster decision reminds us that Republicans and Democrats can still find common ground applying hyper-technical interpretations of union election rules. Specifically, the NLRB is willing to vacate a union election when the polling began 7 minutes late! This decision serves as a valuable lesson to employers that any deviation from the union election rules could result in an election being set aside. Thus, employers should consult with experienced counsel when preparing for a union election to understand the applicable rules, select appropriate observers, and remain vigilant during the election for any irregularities.

If you have any questions please contact your local Seyfarth Shaw attorney.

Yesterday, the National Labor Relations Board (NLRB or Board) issued an Order vacating the Board’s decision in Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co., 365 NLRB No. 156 (2017), in light of the determination by the Board’s Designated Agency Ethics Official that Member William Emanuel is, and should have been, disqualified from participating in the Hy-Brand proceeding. In Hy-Brand, the NLRB had overruled its joint employer test set forth in Browning-Ferris Industries, 362 NLRB No. 186 (2015),and returned to its pre Browning-Ferris test.

Under the pre Browning-Ferris joint employer test, which the Board had restored in Hy-Brand, two or more entities were deemed joint employers under the National Labor Relations Act (NLRA) if there was proof that one entity has exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control) and did so directly and immediately (rather than indirectly) in a manner that was not limited and routine.

In contrast, under the Browning-Ferris test again in effect, the NLRB finds that two or more entities are joint employers of a single workforce if (1) they are both employers within the meaning of the common law;  and (2) they share or codetermine those matters governing the essential terms and conditions of employment. In evaluating whether an employer possesses sufficient control over employees to qualify as a joint employer, the Board will – among other factors — consider whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so.

As the Hy-Brand Board majority underscored, the breadth and vagueness of such a joint employer test threatens to ensnare a vast range of economic relationships, including:

  • insurance companies that require employers to take certain actions with their employees in order to comply with policy requirements for safety, security, health, etc.
  • franchisors
  • banks or other lenders whose financing terms may require certain performance measurements
  • any company that negotiates specific quality or product requirements
  • any company that grants access to its facilities for a contractor to perform services there, and then regulates the contractor’s access to the property for the duration of the contract
  • any company that is concerned about the quality of contracted services
  • consumers or small businesses who dictate times, manner, and some methods of performance of contractors

Accordingly, companies in or contemplating such relationships should account for this new development.  While it is widely expected that the Trump NLRB will eventually overrule Browning-Ferris, when that may occur is uncertain.

By: Robert A. Fisher & Skelly Harper

Seyfarth Synopsis: A 2016 decision of the National Labor Relations Board (“Board”) finding that the graduate students at Columbia University were employees under the National Labor Relations Act (“NLRA”) has been teed up for review by the Court of Appeals. In order to obtain appellate review of the Board’s decision, Columbia University has refused to bargain with the union certified to represent its graduate-student assistants.

In a landmark ruling, Columbia University, 364 NLRB No. 90 (2016), the Obama Board reversed prior precedent and held that graduate-student assistants at Columbia University were employees and therefore could vote on whether to form a union. After the Union prevailed at the election in December 2016, Columbia filed objections and requested a rerun election. In a decision issued in December 2017, the current Board rejected those objections and certified the Union as the exclusive bargaining representative of the graduate-student assistants. 365 NLRB No. 136.

Teeing up the issue of whether graduate-student assistants are employees under the NLRA, Columbia has now refused to bargain with the Union. There is no right to a direct appeal of Board decisions in representation cases, and the only way for the University to obtain review of the earlier election determination is by refusing to bargain with the Union. Presumably, the Union will file an unfair labor practice charge against Columbia that will then lead to an adverse Board decision against Columbia. At that point, the University would be able to ask a federal Court of Appeals to assess whether the Board correctly decided the employee issue in the first instance.

While it is not the Board’s practice to review representation cases in the context of a refusal to bargain, there is reason to believe that the current Board may revisit whether graduate-student assistants are employees under the NLRA. Both Columbia decisions included vigorous dissents by a Republican Board member. In addition, in a separate December 2017 decision in a case involving Harvard University, another Republican Board member noted his view that Board precedent on the employee-status of students warrants reconsideration. Indeed, the Board had previously gone back and forth on the issue. In Brown University, 342 NLRB 483 (2004), the Board held that graduate-student assistants were not employees. Just two years earlier, in New York University, 332 NLRB 1205 (2000), the Board had held that graduate-student assistants were employees under the NLRA.

Regardless of whether the Columbia University decision is revisited through the appeals process or by the Board itself, it is unlikely that the 2016 decision will be the last word on the issue. The final outcome will most certainly impact efforts by unions to organize graduate-student assistants and other students such as residence assistants. The final decision also may impact the cases in which certain college athletes, usually scholarship athletes, are claiming employee status for purposes of state and federal wage-hour laws.

  By: Kyllan B. Kershaw, Esq.

Seyfarth Synopsis: Union organizers are increasingly embracing the #MeToo movement as an organizing tool, claiming that unions are the key to eliminating gender inequity and sexual harassment in the workplace.

Employers across the country are examining their corporate culture and taking steps to avoid being the next sexual harassment headline in response to the #MeToo movement. While employers already have plenty of reason to eliminate sexual harassment in the workplace, the #MeToo movement has also created an uptick in unions claiming that joining their ranks is the key to preventing sexual harassment.

Female union organizers are openly embracing this strategy, publicly forecasting plans to collaborate with the Women’s March and use political action committees to promote unions aimed at protecting women. Given the current focus on sexual harassment, employers can also expect to see unions increasingly target companies with high-profile sexual-harassment or gender-discrimination claims, including employers facing collective actions.

Female union leaders are not only using #MeToo as an organizing tool but to call out organized labor on its own gender issues. For example, in a recent article entitled “What #MeToo Can Teach the Labor Movement,” union organizer Jane McAlevey bemoans the “sexist male leadership inside the labor movement” and calls on women to embrace the idea of a female-led labor movement focused on obtaining free childcare, schedule control, and family leave, including in areas such as education and healthcare where women employees comprise the majority.

Employers should expect that the #MeToo movement’s substantial momentum will spur increased organizing efforts aimed specifically at women and quite possibly result in a significant shakeup of union leadership or the formation of new female-focused unions. As such, female-driven union campaigns are likely on the rise, creating unique issues for employers and an increased need for well-trained female members of management who can persuasively assure female employees that a union is not necessary to stopping harassment, achieving pay equity, and otherwise improving the workplace for women.

Seyfarth lawyers have extensive experience devising strategies to avoid and respond to union campaigns targeted towards women, including those involving claims of sexual harassment or raising issues of gender equity. Please do not hesitate to reach out to any Seyfarth lawyer for more information.

 

By: Ashley Laken, Esq. & Brian Stolzenbach, Esq.

Seyfarth Synopsis: Although many employers may think they can let their guard down a little bit when it comes to the NLRB under the Trump Administration, history suggests otherwise. During the last Republican Administration, labor unions often decided to wage their battles outside the NLRB, using tactics like the “corporate campaign.” Although corporate campaigns have been around for a long time and continued even during the Obama Administration, union corporate campaign activity during the Bush Administration suggests that employers would be well advised to implement strategies aimed at reducing their vulnerability to such campaigns and effectively responding to such campaigns in the event they become a target.

When the NLRB shifts from Democrat control to Republican control, as it has under the Trump Administration, many employers rejoice, believing that a Republican-controlled NLRB will take a more employer-friendly approach. This is almost certainly true, but employers should keep in mind that appeals to NLRB intervention are not the only ways for unions to create incredible headaches for employers.

Background on Corporate Campaigns

A corporate campaign is an attack by a union on a company or an industry with the goal of putting so much pressure on the target that it will give in to the union’s demands. Such attacks are multi-pronged and often long-running. Indeed, unions have devoted millions of dollars and multiple years to individual corporate campaigns, and such campaigns have become more sophisticated and coordinated over the years. The typical union philosophy in launching such a campaign is to cost an employer so much time and money and cause it so much disruption that it ultimately gives in to what the union wants.

A corporate campaign’s most common objective is to facilitate union organizing, often by coercing an employer into accepting a card-check agreement along with neutrality commitments (in other words, to agree to recognize the union without a formal election and to stay silent on its views regarding the unionization of its workforce). Corporate campaigns are widely known as a means of organizing workers by disorganizing companies.

In launching a corporate campaign, a union identifies and then exploits a company’s perceived vulnerabilities. Common tactics unions employ in corporate campaigns include:

  • Filing a stream of unfair labor practice charges against the company
  • Encouraging investigations of potential OSHA, wage and hour, environmental, and/or antitrust violations by the company (see our recent management alert regarding antitrust enforcement against employers here)
  • Causing union-paid organizers to get jobs within the company (known as “salting”)
  • Placing print, digital, radio, and/or TV ads attacking the company, establishing anti-company websites, and distributing anti-company materials (including emails and social media messages) to customers, shareholders, and employees
  • Introducing shareholder resolutions aimed at reducing management’s independence
  • Challenging the zoning or permitting of new company facilities
  • Alleging or implying sexual misconduct by company executives or claiming that the company does not pay its employees fairly (the #metoo and #timesup movements are likely to add more fuel to any such fire)
  • Recruiting celebrities, politicians, clergy, and other community leaders to put pressure on the company

A variety of unions have launched a multitude of corporate campaigns over the years, and they often team up with each other and pool their resources against a single company. Collectively, unions employ hundreds of professional corporate campaigners, with job titles such as “online advocacy organizer” and “strategic communications specialist.” The typical position postings for such jobs list responsibilities that include developing campaign strategies and messages, conducting online research, and executing effective media plans. Given the growing presence of Millennials in the workforce, a group that (broadly speaking) considers itself both technologically savvy and socially conscious, unions are likely to have no shortage of candidates for such positions.       

What Employers Can Do

Companies of all sizes, in all locations, and in all industries are potentially vulnerable to corporate campaigns. Of course, the larger the company, the more attractive that company may be as a target, as more employees equals more potential revenue from union dues. In reality, however, almost no relatively large company is safe from such an attack.

Given the power of the internet and the ubiquity of social media platforms such as Facebook, Snapchat, Twitter, and Instagram, the speed with which unions can launch and carry out sophisticated and well-coordinated corporate campaigns is nothing short of astounding. Employers would be well-advised to proactively develop strategies aimed at reducing their vulnerability to such campaigns and quickly and effectively responding to such campaigns. Such strategies could include:

  • Conducting OSHA, wage and hour, and antitrust compliance audits
  • Engaging in positive employee relations training and messaging
  • Conducting up-to-date anti-harassment training
  • Evaluating pay equity within the company
  • Creating an effective internal and external communication system in relation to potential and actual union activity
  • Assembling a dedicated team of inside or outside counsel to respond to filings at the NLRB, such as unfair labor practice charges and representation petitions

Seyfarth lawyers have extensive experience devising and implementing strategies designed to avoid and effectively respond to corporate campaigns. Please don’t hesitate to contact your favorite Seyfarth attorney for more information.

By: Monica Rodriguez, Esq.

Seyfarth Synopsis: On Friday, December 1, 2017, newly appointed NLRB General Counsel Peter Robb issued a memorandum containing a broad overview of his initial agenda as General Counsel. It previews many anticipated developments during the Trump Administration. Our blog is exploring a different aspect of the memo each day during the first three weeks of December.  Click here, here, here, here, here, here, here, here, here, here, here, here, here & here to find prior posts.

To many employers’ delight, the Collyer Deferral Doctrine is no longer on the NLRB’s “naughty” list thanks to GC Memorandum 18-02, which rescinded GC Memorandum 12-01.

What Is The Collyer Deferral Doctrine?

Under the Collyer Deferral doctrine, the NLRB should defer certain unfair labor practice (“ULP”) charges to an employer’s and a union’s bargained-for contractual grievance procedure if certain requirements are met. The purpose of the doctrine is to encourage the parties to resolve issues directly through their collectively-bargained dispute resolution procedures without unnecessary government intervention.

What Did GC Memorandum 12-01 Do?

In January 2012, Acting General Counsel Lafe Solomon issued General Counsel Memorandum 12-01, instructing NLRB field offices not to defer cases to arbitration where arbitration would not resolve the case within one year. This Memorandum also introduced significant changes to the NLRB’s longstanding arbitration deferral policy by imposing significant limits to the use of dispute resolution systems specifically designed by employers and unions to meet their particular needs.

For example, the Memorandum required that once a case was deferred, the Region must ascertain from the parties the status of the arbitral proceedings every ninety days and determine whether the parties are meeting their obligation to process the case and what action should be taken. Section 8(a)(1) and 8(a)(3) cases had the additional requirement that after the charge had been deferred for one year, the Region should send a “show cause” letter to all parties seeking an explanation of why deferral should not be revoked and a full investigation made. The GC Memorandum 12-01 called the Regions to revoke the parties’ agreed upon method of handling disputes, unless arbitration was imminent. Section 8(a)(5) cases were to be handled in a similar manner as Section 8(a)(3) cases if arbitration was not likely to occur in a year or had not been completed within a year, and the case implicated statutory rights or involved serious economic harm to the Charging Party.

What Does The Rescission Of GC Memorandum 12-01 Mean?

Robb’s new GC Memorandum rescinds this GC Memorandum 12-01. Rescission of this memorandum upholds basic principles of contract law and allows the parties to move within the time limits set forth in their bargained-for agreements.

 By: Bryan R. Bienias, Esq.

Seyfarth Synopsis: On Friday, December 1, 2017, newly appointed NLRB General Counsel Peter Robb issued a memorandum containing a broad overview of his initial agenda as General Counsel. It previews many anticipated developments during the Trump Administration. Our blog is exploring a different aspect of the memo each day during the first three weeks of December.  Click here, here, here, here, here, here, here, here, here, here, here, here & here to find prior posts.

While the weather outside may be frightful (for some), the agenda recently set forth by NLRB General Counsel Robb in GC 18-02 is sure to make some employers delightful this holiday season. In this installment, we will focus on the GC’s targeting of the Obama Board’s controversial decisions imposing the duty to bargain over discipline of newly unionized employees, as well as the GC’s preservation of longstanding Board doctrines governing employer campaign communications and withdrawing recognition of unpopular unions.

Out with the Old: The End of Alan Ritchey?

As we discussed here, the Board in Total Security Management, 364 NLRB No. 106 (Aug. 26, 2016) not only reaffirmed the Board’s employer-maligned Alan Ritchey decision, which required employers to bargain over discretionary discipline issued to newly organized employees prior to execution of a first contract, but also mandated prospective make-whole relief including reinstatement and back pay for future violations.

Total Security Management went even further and held that such make-whole relief would be subject to an employer’s “for cause” affirmative defense, placing the ultimate burden of persuasion on the employer to show at the compliance phase that (1) the employee engaged in misconduct; (2) the misconduct was the reason for the suspension or discharge; and (3) that the employee would have received the same discipline regardless of any disparate treatment or reasons for leniency shown by the charging party.

With GC 18-02’s listing of Total Security Management as one Board decision that “might support issuance of complaint, but where we also might want to provide the Board with an alternative analysis,” GC Robb sends a gift-wrapped message to employers that, much like 2017, Alan Ritchey’s and Total Security Management’s days may be numbered.  However, employers should continue treading carefully when considering discipline for newly unionized employees. While the Board’s reversal of these precedents are on the agenda, they remain the law of the land.

In with the . . . Old?: Preserving the Levitz Furniture and Tri-Cast Doctrines

GC Robb’s memo also expressly rescinds former General Counsel Peter Griffin’s GC 16-03, which implored the Board to overturn the framework set forth in Levitz Furniture, 333 NLRB 717, 717 (2001), which allows employers to unilaterally withdraw recognition from a union based on objective evidence that the union has lost majority support (i.e., employee signatures).  Griffin advocated for a new rule requiring a Board-sanctioned election before an employer could lawfully withdraw recognition.  With Robb’s rescinding of GC 16-03, employers can sleep somewhat easier in the year(s) ahead knowing that the Levitz framework will remain intact and that the option for employees to quickly rid themselves of an unpopular union will not be impeded through a long and costly election process.

In addition, GC 18-02 announces Robb’s abandonment of GC Griffin’s initiative to overturn the Board’s Tri-cast doctrine regarding the legality of employer statements to employees during organizing campaigns.  In Tri-Cast, 274 NLRB 377 (1985), the Board held that an employer could lawfully inform employees during a union campaign that they will not be able to discuss matters directly with management if they vote for the union and that such statements could not reasonably be characterized as retaliatory threats.

While the Obama Board had indicated its willingness to eventually overturn Tri-Cast, GC 18-02 effectively ensures that the current Board will maintain the status quo in the new year.

Should you have any questions about GC 18-02 or any labor relations issue, please contact the author, your Seyfarth attorney, or any member of the Labor & Employee Relations Team.

  By: Howard M. Wexler, Esq. and Skelly Harper, Esq.

Seyfarth Synopsis: On Friday, December 1, 2017, newly appointed NLRB General Counsel Peter Robb issued a memorandum containing a broad overview of his initial agenda as General Counsel. It previews many anticipated developments during the Trump Administration. Our blog is exploring a different aspect of the memo each day during the first three weeks of December. Click here, here, here, here, here, here, here, here, here, here, here, & here to find prior posts.

In GC Memo 18-02, the new General Counsel announced that his office will try and “remedy” the approach to remedies taken during the Obama presidency. The GC may seek to provide the Board with “alternative analysis” in two Obama Board decisions and has rescinded several initiatives of the prior GC.

Approach to Settlements. Effectively immediately, the GC has reversed course on two issues related to settlements.  He has rescinded Memorandum GC 13-02, which allowed front pay to be part of Board settlements.  Previously, front pay could only be included in “non-Board” side letters.  Perhaps more importantly, he put an end to the requirement set forth in Memorandum GC 11-04, which required the inclusion of certain default language in all informal settlement agreements and all compliance settlement agreements. That change should allow charged parties to reach reasonable settlements more easily.

Interim Employment Expenses. The first Obama Board decision addressed by the GC concerns the controversial Board’s backpay formula set forth in King Soopers, 364 NLRB No. 93 (2016). Previously, those who were unable to find interim employment received no reimbursement for their reasonable search-for-work and interim expenses. The Obama Board found that this was “inadequate to fulfill its fundamental charge to make victims whole following an unlawful termination.” As such, King Soopers held that the Board would compensate employees for reasonable search-for-work and interim employment expenses, even when interim earnings were nonexistent or less than those expenses.

Recoupment of Union Dues. The GC also highlighted the approach to union dues set forth in Alamo Rent-a-Car, 362 NLRB No. 135 (2015). In that case, the Obama Board held that an employer found guilty of violating the Act must pay dues owed the union from its own funds, without recouping the amount from its employees and with interest. This represented a departure from Board precedent, which had allowed employers to recoup from employees any dues that the employer had to pay the union.

Backpay for Salts. Finally, the new GC rescinded an initiative of the prior GC related to salts. During the Obama presidency, the prior GC had an initiative to overturn the burden of proof set forth in Oil Capital  349 NLRB 1348 (2007), and require employers to demonstrate that a salt would not have remained with the employer for the duration of the claimed backpay period.  In Oil Capital, which the GC will not seek to overturn, the Board eliminated the presumption of “indefinite employment” and required that the alleged discriminatee present affirmative evidence that he or she would have worked for the employer for the backpay period claimed.

By: John J. Toner, Esq.

Seyfarth Synopsis: In a decision issued late last week, The Boeing Company, 365 NLRB No. 154 (Boeing), the newly constituted “Trump” National Labor Relations Board (“Board”) announced that employers could once again maintain common sense rules regarding employee conduct at the workplace.

Of all the decisions issued in recent years by the previous Board, none was more baffling than those regarding an employer’s required standards of employee conduct contained in employee handbooks. These decisions were premised on a 13-year old decision in Lutheran Heritage Village-Livonia (Lutheran Heritage) which held that, in addition to an employer’s policy being found unlawful if it explicitly restricted protected, concerted activities under Section 7 of the National Labor Relations Act, a policy would also be found unlawful if :

  • employees would reasonably construe the language to prohibit Section 7 activity,
  • the rule was promulgated in response to union activity, or
  • the rule has been applied to restrict the exercise of Section 7 rights.

The Obama Board used the first test (how would employees “reasonably construe” the language of a policy) to invalidate numerous common sense policies, such as requiring employees not to engage in conduct that impedes “harmonious interactions or relationship” or prohibiting “abusive or threatening language to anyone on company premises.” The Board found these and other policies to be illegal without taking into account an employer’s legitimate justifications or the “real-world complexities” in a workplace.

To further complicate matters, the Obama Board sometimes found policies with the same objective (civility in the workplace) to be lawful. The byzantine nature of these decisions made it nearly impossible for an employer to maintain policies regarding employee conduct with any assurance that the Board would find the policies to be lawful.

In the Boeing decision, the Board majority (Chairman Miscimarra, and Members Emanuel and Kaplan), over a strong dissent (Members Pearce and McFerran), thankfully overruled the Lutheran Heritage “reasonably construe” standard and established a new test for evaluating whether a facially neutral policy, rule, or handbook provision, when reasonably interpreted, would interfere with employee Section 7 rights. Specifically, the Board in evaluating a policy will seek to strike a proper balance between (1) the nature and extent of the potential impact of the policy on employee Section 7 rights and (2) the employer’s legitimate justifications associated with the rule.

To provide greater clarity to all parties, the Board’s majority announced that, in the future, it will analyze the legality of workplace policies based on three categories:

  • Category 1 will include rules that the Board designates as lawful to maintain, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights, and thus no balancing of employee rights versus employer justification is warranted; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule.
  • Category 2 will include rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.
  • Category 3 will include rules that the Board will designate as unlawful to maintain because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule. The Board gave as an example under Category 3 a policy prohibiting employees from discussing wages or other working conditions.

The Board specifically highlighted as examples of policies that would be legal under Category 1, including policies requiring employees to foster “harmonious interactions and relationships” or “rules requiring employees to abide by basic standards of civility,” and overruled previous cases that held to the contrary.

To be sure, there will be some confusion and issues to be addressed as the newly-announced categories are applied to employee handbook policies, but what is certain is that employers can once again lawfully require that employees maintain a reasonable level of civility in the workplace.