United States: NLRB Issues A Flurry Of Decisions Overturning Employee-Friendly Board Law

On December 14 and 15, 2017, the National Labor Relations Board issued several decisions rejecting employee-friendly rules previously adopted by the Board. The decisions, which address Obama-era Board rules on employer policies, joint employment and the appropriateness of bargaining units, were expected after Republicans regained majority control over the Board this fall. The flurry of decisions was triggered by the expiration of Chairman Philip Miscimarra's term on December 17, 2017, and with it, the temporary loss of a Republican majority on the Board.

The Board Adopts a New Test for Reviewing Employer Policies

During the Obama Administration, the Board, to the alarm of some employers, took the view that a number of common policies employers have routinely included in their employee handbooks unlawfully prohibited employees from engaging in protected Section 7 activity. The justification that the Obama Board used was the standard it had adopted years earlier in its Lutheran Heritage Village-Livonia decision, in which the Board held that employer rules that employees could "reasonably construe" as prohibiting Section 7 activity were unlawful. The Obama Board expanded the Lutheran Heritage standard significantly, resulting in the rejection of handbook policies adopted for reasons wholly unrelated to employees' protected concerted activity.

In a case involving The Boeing Company, however, the Board reserved course. In a 3-2 vote, it overturned its Lutheran Heritage decision. The Board concluded that the Lutheran Heritage test was flawed because it focused singularly on the employees' ability to organize and failed to take into account the challenges employers face in the workplace. The Board held that, going forward, in evaluating whether an employer rule unlawfully restricts protected employee activity under Section 7 of the NLRA, it will consider the employer's reasons for instating the rule, in addition to employee perceptions of the rule. Furthermore, the Board created three categories to classify employer rules. Category 1 includes rules that do not interfere with employees' Section 7 rights, or do so in a way that is minimal compared to the justification for the rule, such that they are presumptively valid. Category 2 includes rules that are close calls and require close scrutiny in each case. Category 3 consists of rules that are clear violations of Section 7 rights and are presumptively invalid.

Many are heralding this decision as the end of the Board's close second-guessing of routine employment policies.

The Board Overturns the Browning-Ferris Joint Employment Standard

In Hy-Brand Industrial Contractors, the Board voted 3-2 to reverse its decision in Browning-Ferris Industries, holding that a company must have "direct and immediate control" over workers to be a joint employer for the purposes of federal labor law. In so holding, the Board rejected the less demanding standard adopted by the Board in 2015.

For decades prior to Browning-Ferris, joint employer status under federal labor law required "direct and immediate control" over essential terms and conditions of employment. Crucially, the joint employer had to not only possess such power but also exercise it. In Browning-Ferris, the Board eliminated that rule and instead held that an entity that exercises indirect control or has reserved but unexercised control over the terms and conditions of employment could qualify as a joint employer. This more relaxed standard subjected many more entities to joint-employer status and related obligations and, according to critics, created uncertainty surrounding companies' potential liability as a result of joint employment relationships.

In Hy-Brand Industrial Contractors, Inc., the Board excoriated the Browning-Ferris decision, arguing that the decision exceeded the Board's statutory authority and upended a longstanding and stable rule for a vague and unpredictable one. The Board also stated that Browning-Ferris lacked adequate justification in law and policy and adopted the rule without the "clear congressional command" needed to make such a significant change in the Board's precedent. Accordingly, the Board returned to the pre-Browning-Ferris standard, requiring "direct and immediate control" to find a joint employment relationship.

The Board's decision, along with the Secretary of Labor's June 7, 2017 withdrawal of the Department of Labor's 2016 Administrator's Interpretation on joint employment regarding enforcement of the Fair Labor Standard Act, indicates that federal agencies in the Trump era will be taking a narrower view of joint employment than they took during the Obama Administration.

The Board Eliminates the "Overwhelming Community of Interest" – a/k/a "Micro-Unit" – Standard for Determining Appropriate Bargaining Units

With its 3-2 decision in PCC Structurals, Inc., the Board overturned an Obama-era standard for determining appropriate bargaining units for collective bargaining. In its 2011 decision in Specialty Healthcare & Rehabilitation Center of Mobile, the NLRB held that if the Board concluded that the workers in the petitioned-for unit shared a traditional community of interest, then the unit was appropriate, and the burden shifted to the party seeking a larger unit (usually the employer) to show that excluded employees share "an overwhelming community of interest" with the petitioned-for employees. This heightened standard made challenging the bargaining units chosen by unions extremely difficult. As a result, unions were increasingly petitioning to organize small units of employees, referred to as "micro-units," because the Specialty Healthcare standard made it difficult for employers to successfully challenge them.

In PCC Structurals, Inc., the Board dispensed with Specialty Healthcare's heightened burden for challenging petitioned-for bargaining units, and returned to the traditional community of interest standard that had long been in place before Specialty Healthcare. Now the Board will determine if petitioned-for employees "share a community of interest sufficiently distinct from employees excluded from the proposed unit to warrant a separate appropriate unit." This standard considers not just commonalities between the petitioned-for employees, but also whether excluded employees share those same commonalities. Going forward, unions will have a more difficult time organizing small, "micro-units."

* * *

With Chairman Miscimarra's term expired, the Board now has two members from each party. As a result, the Board is not expected to issue any significant decisions until President Trump's nominee to the Board is confirmed some time in 2018. However, once Trump's pick is confirmed, it is expected that a more conservative interpretation of federal labor law will continue to prevail at the Board.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Morrison & Foerster LLP
Troutman Sanders LLP
Duane Morris LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Morrison & Foerster LLP
Troutman Sanders LLP
Duane Morris LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions