United States: More Workers To Organize

Last Updated: January 11 2017
Article by Brian E. Hayes

 In 2016, the National Labor Relations Board (NLRB) continued issuing decisions that significantly expand the organizing opportunities for labor unions. Following up on its groundbreaking "joint employer" decision in Browning-

Ferris Industries of California, Inc. (BFI), subsequent Board decisions have now made it easier for unions to organize the growing ranks of the "contingent" workforce. The Board also issued decisions in which it narrowly construed the definition of "supervisor." By doing so it opened up to potential unionization individuals who play significant roles in managing an employer's operations. However, the Board opened up the largest new area—by far—for potential organizing by finding that graduate assistants at private colleges and universities are statutory "employees," and by asserting Board jurisdiction over schools that are chartered as public schools but not directly operated by government entities.

Permanents and temps together. In another example of its ongoing "contingent workforce" activism, the NLRB last July issued its decision in Miller & Anderson, Inc., in which it found appropriate a single bargaining unit comprised of both workers who are employed solely by a "user" employer and workers who are jointly employed by both the "user" employer and the "supplier" employer—most typically the staffing agency that furnishes those workers to the "user." With the exception of a brief period under a Clinton-appointed NLRB, such "mixed" bargaining units were not permissible because they effectively require two different employers to bargain with the same union on a multi-employer basis. Under the National Labor Relations Act (NLRA), employers cannot be compelled to bargain on a multi-employer basis, but can do so if both employers consent to the arrangement. In Miller & Anderson, the Board majority concluded that requiring the two employers to bargain with respect to a mixed unit is not actually multi-employer bargaining.

The ruling that contingent and permanent employees can be included in the same bargaining unit gives a "home" of sorts to the contingent workers, whose work is often ill-suited to inclusion within a bargaining unit. The decision also forms a predictable bookend to the NLRB's August 2015 decision in Browning-Ferris, which relaxed the NLRB's standards for finding joint-employer status. (The Spring 2016 issue of the Practical NLRB Advisor offers a detailed analysis of the Browning-Ferris decision and its implications.) Indeed, with Miller & Anderson, the other shoe has dropped, representing a significant threat to employers that have achieved efficiencies through the appropriate use of contingent workforces.

In nonunion workplaces that utilize contingent workers, unions now can petition to represent the primary workforce and the contingent workforce in a single bargaining unit, binding the staffing employer and the client employer to a duty to bargain with the union for both groups of employees simultaneously. In workplaces where the primary workforce already is represented by a union, and that primary workforce is supplemented by a contingent workforce from a staffing provider, unions may now have the opportunity to file unit clarification petitions seeking to accrete the contingent workforce into the existing bargaining unit without an election or, more likely, may seek a so-called "Armour-Globe" self-determination election, in which the contingent workforce would vote on whether or not to join the existing bargaining unit.

The consequences of Miller & Anderson for employers utilizing contract employees could be significant. If a staffing contractor manages its own employee relations poorly, and the contractor's disgruntled employees seek recourse through a union, the client employer can now find itself helplessly drawn into an organizing campaign and a bargaining relationship through no fault of its own. Yet, ironically, if a user employer tries to ensure that a staffing contractor with whom it does business is itself

a fair employer—for example, by requiring in the staffing contract that it adopt certain basic employment policies or protections—it will almost certainly be deemed a joint employer with the staffing company on that basis.

The most fundamental problem with the Miller & Anderson model is that user and supplier employers have very different and often conflicting interests in employment and workplace issues. Yet these separate entities will now be forced to bargain together across the table from the union.

Both user and supplier employers should continuously evaluate the nature of their relationship and refine their contracts to clearly delineate and allocate their respective authorities and rights of control, including any potential rights of control. Avoiding a joint-employer finding in the first place will, of course, obviate any problems presented by the Miller & Anderson decision. Employers with union-represented primary workforces that also utilize a contingent workforce that is currently excluded from the bargaining unit should evaluate their existing labor contracts and work practices for any vulnerabilities associated with the contingent workers and assess any accretion or Armour-Globe potential.

Browning-Ferris applied, and challenged. The reverberations from the Board's 2015 decision in Browning- Ferris continue to be felt by employers. For example, in Retro Environmental, Inc./Green Jobworks, LLC, a divided NLRB panel last August applied the Browning-Ferris standard to reinstate an election petition predicated on the existence

of a joint-employer relationship between two employers. However, even as the Board, its regional offices, and its administrative law judges continue to apply the Browning- Ferris test in deciding new joint-employer cases, the legal soundness of the standard is by no means resolved. The employer in Browning-Ferris has petitioned the United States Court of Appeals for the D.C. Circuit for review of the NLRB decision, and the case remains pending before the appellate court.

Apart from possible appellate court reversal, several bills have been introduced in Congress seeking to roll back Browning-Ferris, by amending the text of the NLRA itself to reaffirm that an employer must have "actual, direct and immediate" control over an employee to be considered a joint employer—not merely the reserved or theoretical right to exercise such control. House Republicans also have sought to attach a policy rider to the NLRB's annual appropriation that would effectively kill the Browning-Ferris decision.

While the effort was not successful in the last round of appropriations measures, recent election results could materially alter the legislative landscape.

Franchise fallout. Meanwhile, the Browning-Ferris decision continues to cause major disruptions in the franchise industry, fueled by the fact that the agency set its sights on one of the nation's most venerable fast-food corporations.

In a dispute currently pending before the agency, the NLRB General Counsel alleges that the national corporation is a joint employer with its franchisees even though it plays no role in hiring, firing, disciplining, paying, or supervising its franchisees' employees.

Given the elasticity of the Browning-Ferris standard, franchisors are justifiably concerned about what terms of a particular franchise relationship may be enough to make them a joint employer with their franchisees and expose them to new obligations and liabilities. A finding of joint-employer status in the pending NLRB case would not only render the franchisor liable for any alleged labor law violations committed by its franchisees' supervisors and agents, it would make the corporate franchisor a party to any local negotiations, make it the object of union information requests, and strip it of any secondary activity protections. Little wonder critics charge that a finding of joint-employer liability in the pending case could seriously damage or destroy the franchise model itself and have decidedly negative economic consequences. Franchising has long provided an opportunity for individuals with entrepreneurial drive but limited capital to start their own businesses by benefiting from the significant branding value a franchisor can provide. As such, the practice has been a leading driver of jobs and growth. However, the NLRB's recent actions render the franchise structure decidedly less attractive, with potentially profound repercussions.

Finally, the NLRB in 2016 appeared poised to assert that "gig" economy participants—whose entrepreneurial role is decidedly unlike that of the industrial master-servant dynamic contemplated when the NLRA was enacted—are also statutory employees covered by the Act. Taken together, the NLRB's attacks on the contingent workforce, franchise models, and other nontraditional work relationships reflect a concerted effort by the Board to pull within its dwindling orbit the growing number of individuals who work under new types of models in a rapidly evolving economic landscape.

Supervisors aren't "supervisors." A more traditional labor law issue which the NLRB routinely decides is whether a particular individual or group of workers are "supervisors" under Section 2(11) of the NLRA and thus not "employees" within the meaning of the statute. The definition in Section 2(11) is elastic and the Board has articulated varying modes of factual analysis to determine supervisory status. Obviously, if the statutory exclusion is read narrowly it means fewer individuals are "supervisors," and more are subject to union organizing efforts. A narrow reading also means that individuals who play important roles in the operation of a business, and upon whom an employer justifiably relies, may nonetheless be deemed a statutory employee included in a potential bargaining unit with rank and file employees. The current Board majority has a history of reading the statutory exclusion narrowly, and it continues to find that individuals are not supervisors under the Act—even when they appear to meet the historical statutory criteria.

For example, under well-established precedent, an individual is a supervisor if he or she exercises or effectively recommends one or more of the indicia set forth in Section 2(11). However, in its February 2016 decision in G4S Government Solutions, Inc., the Board narrowed the definition of "supervisor" and concluded that nuclear power plant security lieutenants were not statutory supervisors.

Lieutenants regularly lead teams under their command in training exercises to prepare for any armed attacks on the plant and command the truck convoy when nuclear material is transported within the site. During nights, weekends, holidays, and any other times when nonessential personnel are away from the site, lieutenants are the highest-ranking officers at the site. Still, the Board majority held the lieutenants lacked authority to "responsibly direct" other guards using independent judgment, and rejected the employer's evidence of supervisory status, which focused on the criteria of responsible direction, assignment, and discipline.

In subsequent rulings, the NLRB continued to restrict the number of individuals that fall within the definition of a "supervisor" under the NLRA. In a May 2016 decision,

the Board in Veolia Transportation Services, Inc. held that road supervisors for a van shuttle service were not statutory supervisors, contrary to the employer's assertion. The road supervisors observe drivers, ensure they abide by the policies and procedures of the local transit authority, and prepare written reports if the drivers breach these policies. Nonetheless, the Board majority reasoned that these reports were nothing more than "counselings" or "warnings," and did not amount to meaningful discipline sufficient to establish supervisory status.

Therefore, the Board held, a Regional Director should not have dismissed a representation petition encompassing these individuals within a proposed bargaining unit.

Dissenting in Veolia Transportation, Board Member Philip Miscimarra asked the critical and perhaps obvious question: "If the road supervisors were not supervising the van drivers, who was supervising them?" He urged, to no avail, that the question should be considered in determining supervisory status as a matter of policy. As evidenced by subsequent decisions, his colleagues declined to take up

that recommendation. For example, in Peacock Productions of NBC Universal Media, LLC, the Board held that freelance and run-of-show producers for a television production company were not supervisors because they did not assign or effectively recommend the assignment of other employees to their production. Additionally, the Board observed that the employer failed to establish that the producers responsibly directed other employees or had authority to hire, or effectively recommend the hiring, of actors on productions.

These decisions are cautionary tales suggesting that employers may be required to provide an abundance of evidence in support of any supervisory claims and may be required to establish that the individuals in question actually exercise supervisory authority. If an employer wants to ensure that the NLRB will find that its supervisors are indeed "supervisors," it should take steps to ensure they do, in fact, exercise independent authority in supervising and directing other employees and should carefully document the exercise of such authority.

Managers aren't "managers." Similarly, in Wolf Creek Nuclear Operating Corp., a divided Board held that security training instructors (again, at a security-critical nuclear power plant, no less) were not managerial employees, and reversed a Regional Director's order finding that that an Armour-Globe self-determination election of instructors was inappropriate. In the Board's view, any discretion that they exercised in developing training programs, overseeing threat-response drills, and other functions was severely restrained by Nuclear Regulatory Commission regulations. Thus, just as it further constrained the meaning of "supervisor" under the Act, the Board also narrowed the scope of the Act's "managerial exception," opening up yet another subset of trusted employees to union organizing efforts.

Student-"employees." Finally, the NLRB in a divided 3-1 decision held that Columbia University "student assistants who perform work at the direction of their university for which they are compensated are statutory employees." In its August 2016 ruling in The Trustees of Columbia University in the City of New York, the Board applied a new standard that graduate and undergraduate teaching assistants who have a common- law employment relationship with their private university are statutory employees. The Board majority reasoned that statutory coverage under the NLRA exists by virtue of an employment relationship; it is not foreclosed by the existence of some other, additional relationship that the Act does not reach—such as the primarily educational relationship between the students and the university here. Thus, the Board reversed its holding in Brown University, which, according to the majority, had deprived an entire category of workers of the protections of the Act without a convincing justification. As anticipated, the decision has resulted in a significant amount of organizing activity at private colleges and universities.

Expanding its jurisdiction. In addition to expanding the type of educational workers covered by the NLRA, the Board also expanded the type of institutions it deems to be covered. Thus, in two cases it asserted jurisdiction over nonprofit corporations that operate charter schools under an agreement with a public school district. A divided Board concluded that these entities were more akin to government contractors, which fall within the Board's jurisdiction, than to political subdivisions of the state, which fall outside the agency's jurisdiction. The Board majority held the charter schools were unlike political subdivisions, since they were not created by the state nor administered by individuals responsible to public officials or the general electorate.

Further still, the majority argued in The Pennsylvania VirtualCharter School and Hyde Leadership Charter School–Brooklyn that there were no persuasive reasons to decline to assert jurisdiction as a matter of discretion.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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