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.

Conclusion:

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.

By Bryan M. O’Keefe

Seyfarth Synopsis: In a long-awaited decision with significant impact for the private equity industry, in Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, the United States Court of Appeals for the First Circuit held that two Sun Capital private equity investment funds did not create an implied partnership-in-fact in their purchase and management of a portfolio company.   As a result, pension fund withdrawal liability incurred as part of the portfolio company’s bankruptcy was not imposed against the investment funds.

Any labor lawyer worth his or her salt knows of the National Labor Relation Board’s Browning- Ferris decision, which radically changed the definition of a “joint employer” under NLRB case law [Full Disclosure: Seyfarth Shaw represents Browning-Ferris in this proceeding].   Similarly, any private equity lawyer worth his or her salt is aware of several rulings emanating from the United States Court of Appeals for the First Circuit and District Court of Massachusetts involving private equity firm Sun Capital Partners which threatened to hold several Sun affiliated investment funds responsible for withdrawal liability imposed at a bankrupt portfolio company.

As one of the rare lawyers whose practice straddles both of these areas, I have been intently following each case for some time now. While Browning-Ferris is still up in the air while the NLRB determines through rulemaking and a DC Circuit remand what the Board considers the proper joint-employer standard is, the First Circuit delivered the likely final word on Sun Capital this past Friday, finding that the two Sun Capital controlled funds were not a partnership-in-fact under tax law and thus were not jointly responsible for the portfolio company’s withdrawal liability.

The Sun Capital case was a significant one in private equity for the same reasons that Browning-Ferris has reverberated so much in traditional labor law. In both cases, courts and governmental agencies have arguably eviscerated core principles of corporate law and tax law to find “deeper pockets” for alleged labor and employment related liabilities, potentially at the expense of deterring private investment in failing businesses.

In its decision, the First Circuit immediately recognized this tension, noting that imposing withdrawal liability on investment funds “would likely dis-incentivize much-needed private investment in underperforming companies with unfunded pension liabilities.” The Court went on to note that “this chilling effect could, in turn, worsen the financial position of multiemployer pension plans.” On the other hand, if no withdrawal liability was imposed on the investment funds and the pension fund becomes insolvent, then the workers themselves, some with as much as 30 years of service, would receive a greatly reduced pension payout (totaling a maximum of $12,870 annually) through the Pension Benefit Guarantee Corporation.   Suffice to say, cases such as these can present difficult public policy questions.

Whether the two Sun affiliated investment funds constituted a “partnership-in-fact” was critical because a parent-subsidiary control group is jointly and severally liable for pension fund liabilities only when at least eighty percent of the subsidiary is owned by the parent. Neither fund affiliated with Sun ultimately owned 80 percent of the portfolio company, but if the funds were in partnership together then the resulting “partnership-in-fact” would have owned 100% of the portfolio company and thus would have been jointly and severally liable for the portfolio company withdrawal liability— the deep pockets found.

Ultimately, the First Circuit did not draw a bright-line rule that PE investment funds can never be liable for withdrawal liability at a portfolio company.   Rather, the First Circuit borrowed a multi-factor test from a fifty-five year old tax law case (Luna v. Commissioner, 42 T.C. 1067 (1964)) (which, it should be noted, was decided before a single PE firm was ever founded!) and held that Sun Capital’s two investment funds did not create a partnership-in-fact such that there was common control of the portfolio company sufficient to require the imposition of withdrawal liability.

To be sure, the First Circuit found that some of the Luna factors supported finding a de facto partnership. For instance, the funds jointly developed restructuring and operating plans for target companies before acquiring them. In addition, the same two individuals essentially ran both the funds and the management company in charge of the portfolio company. The Court also noted that there was a pooling of resources and expertise that both the funds and the portfolio company utilized.

Yet, the Court held that other facts rebutted partnership-in-fact formation. First, the funds expressly disclaimed any partnership between themselves. Moreover, most of the limited partners in each fund were not the same. Additionally, the funds filed separate tax returns, had separate books, and maintained separate bank accounts. Also, the funds did not operate in parallel, showing some independence in operations and structure. Finally, because an LLC was formed to actually acquire the portfolio company, the Funds were prevented from conducting business in their “joint names” and were limited in how they could “exercise[] mutual control over and assume[] mutual responsibilities for” the portfolio company.

What’s most interesting is that even though many of the “day to day” activities of the funds—developing restructuring plans, two individuals running the funds, pooling resources and expertise, etc.—seemed to weigh in favor of a partnership-in-fact finding, the Court ultimately gave more weight to the Luna factors more closely associated with corporate formalities—an express disclaimer of partnership, separate books, setting up an LLC to acquire the portfolio companies, etc. The Court also seemed uneasy with striking down core tenets of corporate law without at least some input from Congress or the PBGC on the issue, even saying in its closing paragraphs that its decision was partially based on a “reluctance” to impose withdrawal liability without a “firm indication of congressional intent to do so and any further formal guidance from the PBGC.”   The Court further noted that the lack of congressional intent meant that “two of ERISA and the MPPAA’s principle aims—to ensure the viability of existing pension funds and to encourage the private sector to invest in, or assume control of, struggling companies with pension plans—are in considerable tension here.”

The case is a strong reminder that corporate formalities do matter and that PE funds, like Sun Capital, which respect corporate formalities and treat their businesses as separate entities in the way that corporate and tax law intends can find themselves shielded from unwanted liabilities at their investments; other investment funds which are not as careful in the way that they operate may not find themselves in as fortunate a position, even under the First Circuit’s otherwise PE-friendly decision.

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. 

By Nick Geannacopulos and Timothy M. Hoppe

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. The Board seems to be on the cusp of overturning the decision in Total Security Management, 364 NLRB No. 106 (2016), which held that a newly organized employer without an executed collective bargaining agreement must provide the union with a reasonable opportunity to bargain over certain disciplinary issues (discharge, suspension and emotion) prior to reaching a first contract.  A more recent decision in Oberthur Techs. of Am. Corp., 368 NLRB No. 5 (June 17, 2019) complicated this analysis when it held (on facts relating to discipline that occurred prior to Total Security Management), that a newly organized employer without an executed collective bargaining agreement has a duty to bargain before it changes any disciplinary standards – as opposed to when it issues certain discipline.  Because the discipline at issue in Oberthur was prior to 2016, Oberthur did not overrule Total Security Management.  However, in Triumph Aerostructures, (Cases 16-CA-197912, 16-CA-198055, 16-CA-198410, 16-CA-198417; JD-74-19 2019) NLRB LEXIS 549; 2019 WL 4795431 (Sept. 30, 2019), an ALJ dismissed a failure to bargain over discipline allegation and held that the Oberthur standard was the appropriate one.  Counsel for the General Counsel is urging that the Triumph case be used to overturn Total Security Management.

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.

By Ashley K. Laken and Kyllan B. Kershaw

Seyfarth Synopsis: As the future of work continues to take shape, labor unions are taking notice and adjusting their strategies and their focus in response.  To the extent they haven’t already, companies both large and small should take heed and consider adjusting their employee and labor relations approaches accordingly.   

Just over two years ago, the AFL-CIO formed its own Commission on the Future of Work and Unions.  In announcing the Commission’s formation, the AFL-CIO stated that “[t]he rich and the powerful are driving large-scale changes in the nature of work, including digitization, automation, deindustrialization, deprofessionalization, autonomous operations, globalization, offshoring and the impact of trade agreements—all of which threaten to leave working families with even less clout and economic security,” and that this makes “the mission and values of the labor movement more important than ever.”  The Commission has various subcommittees corresponding to particular sectors of the economy, including health care, energy, service and retail, transportation, and professionals.

Recently, the Commission published its first written report, which is available on the AFL-CIO’s website.  The report makes a number of sweeping assertions, including the following:

  • “[A]nti-worker interests are trying to wipe unions out of existence…The labor movement is the last line of defense standing in the way of total corporate control.”
  • “Emerging business models have encouraged management to wash its hands of any responsibility for workers.”
  • “America’s workers, particularly young people, are tired of being silenced, working harder and harder and still falling behind. We are hungry for connection to each other, so we can influence the decisions that will shape the future of our workplaces, our communities, our nation and our world.”
  • “[T]hriving unions are good for America, and at this moment of massive inequality, technological revolution and historic collective action, our role has never been more important.”
  • “Whether our future is one of shared prosperity or rising inequality, and social and economic dysfunction, depends on the strength of working people’s bargaining power.”

The report states that key aims for the labor movement should be to strengthen worker bargaining power and to make sure the benefits of technological change are shared broadly.  On this latter point, the report says that predictions that artificial intelligence and other new technologies will make workers more productive have generated interest in the prospect of a “leisure dividend” that allows for the reduction of overall work hour without any reduction in pay.  The Commission’s service and retail subcommittee therefore recommends mobilizing around issues such as bargaining or legislating four-day workweeks, paid time off, and the “right to disconnect” from digital services and work.

The report also notes that a key action plan for the labor movement is to dramatically expand union membership, and that new and diverse forms of cooperation and multi-union focus on coordinated, sectoral strategies are needed to organize more workers.  Sectoral bargaining, which is aimed at collective bargaining covering entire industries rather than individual companies, is aggressively being pushed by the SEIU, which is behind the Fight for $15 movement.  As it happens, the President of the SEIU was recently named by California’s Governor as co-chair of the California Future of Work Commission, which was established just a few months ago with the goal of developing “a new social compact for California workers, based on an expansive vision for economic equity that takes work and jobs as the starting point.”

The AFL-CIO Commission report also recommends that unions collectively form an advisory task force aimed at deploying the most sophisticated data collection, analysis, and experimental techniques “to understand what working people want and to suggest how we retool to meet those needs and desires.”  The report also notes that new forms of social media and digital communications have made identifying, communicating with, and assisting potential union supporters easier, and that unions have made major investments in digital staff and resources to keep up with new technologies and new ways to engage working people.  The report also recommends that unions develop a coordinated public narrative about union members and union representation, including in new and expanding sectors.

In light of the increased focus by unions on the future of work and their stated goal of dramatically expanding union membership, including in new and expanding sectors, companies of all sizes and in all industries should take heed and consider adjusting their employee relations strategies accordingly.  To the extent that workers at non-unionized companies don’t have much of a voice in issues that affect their day-to-day working lives, companies should consider establishing initiatives aimed at giving them more of a voice.  This will potentially avoid the prospect of workers seeking assistance on such matters from unions, or of falling prey to promises by union organizers to fix such issues.  Many workers also don’t understand all of the negative aspects that can come along with bringing in a union.  Non-union companies should therefore consider implementing strategies to educate their workers on these subjects.  Managers and supervisors should also be trained to recognize the signs of union organizing activity, and on what to do if they see such signs.  And finally, companies should consider providing positive employee relations training for their managers and supervisors, which can head off union organizing activity before it starts.