United States: Don't Like That NLRB Ruling? Just Wait, It May Change!

Last Updated: December 28 2017
Article by Marc K. Sloane and Elisabeth M. Koloup

As 2017 and Chairman Phillip Miscimarra's term drew to an end, the National Labor Relations Board ("NLRB" or "Board") issued a flurry of decisions overturning several Obama-era NLRB decisions. Because Board members are appointed by the President, the political make-up of the Board (5 members), and its overall view of employer-employee-union behavior, changes on a fairly regular basis. However, the scope of the recent decisions is unusually broad and has resulted in many labor practitioners telling their clients, "Remember when I told you [fill in the issue]?—Well, never mind." Here is a brief book at some of them.

Micro-Units

In 2011, the Board's decision in Specialty Healthcare (Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011), enfd. sub nom Kindred Nursing Centers East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013).), allowed for the creation of micro-units for the purpose of a union election. Under that decision, if an employer decided to challenge a union's proposed unit, the employer was required to show that the employees the employer sought to add to the petitioned-for unit shared an "overwhelming community of interest" with the petitioned-for unit—an almost impossible burden. In practice, this meant that the petitioned-for unit was almost always approved. In PCC Structurals, Inc, 365 NLRB No. 160 (2017), however, the Board recently overruled Specialty Healthcare, completely eliminating the "overwhelming community of interest" standard, and restoring the law in this area to the traditional "community of interest" standard, which entails a lesser burden on the employer. This new standard was most recently applied in Trustees of the Univ. of Penn., NLRB Reg'l Dir., 2017 BL 453414, direction of election 12/19/17, in which the Regional Director (Dennis Walsh) ruled that the petitioned-for unit did not meet the traditional "community of interest" standard and accordingly, ordered an election in a broader unit.

Ambush Election Rules

In December 2014, the NLRB published new union election rules which greatly shortened the amount of time an employer had to respond to a union's election petition and allowed regional directors to preclude parties from litigating certain issues, such as a petitioned-for employee's supervisory status. On December 13, 2017, the NLRB published in the Federal Register a request for information concerning the December 2014 Rule. The request seeks to address the following questions:

  1. Should the 2014 Election Rule be retained without change?
  2. Should the 2014 Election Rule be retained with modifications? If so, what should be modified?
  3. Should the 2014 Election Rule be rescinded? If so, should the Board revert to the Representation Election Regulations that were in effect prior to the 2014 Election Rule's adoption, or should the Board make changes to the prior Representation Election Regulations? If the Board should make changes to the prior Representation Election Regulations, what should be changed?

Responses to the Board's request are due by February 12, 2018.

Although the request for information does not necessarily mean that the rules will change (or if they were to change, what the new rules would look like), portions of the Board's holding in PCC Structurals seem to suggest a desire to return to the Board's pre-2014 approach. For example, the PCC Structurals holding provides:

In short, the Board's role "in each case" should be to undertake a broader and more refined analysis, and to play a more active role, when determining whether or not a proposed unit is "appropriate" than is allowed under the Specialty Healthcare standard.

365 NLRB No. 160 at *8.

Duty to Bargain About Past Practices

In 2016, the NLRB held that an employer was required to bargain with unions representing its employees over certain changes in terms and conditions of employment, even if the employer had a clear history of unilaterally making such changes. In Raytheon Network Centric Systems, 365 NLRB No. 161 (2017), the Board reversed course and held that the employer was permitted to make changes to its health care benefits without bargaining with the union because such action was in line with unilateral changes the employer had consistently made over the past 10 years. This is seen as a welcome change for employers, especially in the area of health benefits, because the previous bargaining requirement created delay and extra work for HR.

Handbook Rules

A particularly frustrating issue for employers over the past several years has been determining which behaviors they may prohibit through handbook policy without running afoul of employees' NLRA rights. Until recently, the Board took a very restrictive view on the types of behavior that may be prohibited in employee handbooks, including bans on civility provisions and policies prohibiting cameras in the workplace. See Lutheran Heritage Village-Lovinia, 343 NLRB 646 (2004). In the Board's view, even facially neutral policies were not allowed if they could be reasonably construed by an employee to prohibit NLRA protected activity. In The Boeing Co., 365 NLRB No. 154 (2017), however, the Board created a new test. Going forward, the Board will now focus on two factors in evaluating such policies—the nature and extent of the potential impact on NLRA rights, and the employer's legitimate justifications associated with the rule.

In balancing the asserted business justifications for a challenged policy with employees' NLRA rights using the above-described test, the Board will place the policy into one of three categories:

Category 1 will include rules that the Board designates as lawful to maintain, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) outweighed by justifications associated with the rule. Examples of Category 1 rules are the no-camera requirement in this case, the "harmonious interactions and relationships" rule that was at issue in William Beaumont Hospital, and other rules requiring employees to abide by basic standards of civility.

Category 2 will include rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.

Category 3 will include rules that the Board will designate as unlawful to maintain because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule. An example of a Category 3 rule would be a rule that prohibits employees from discussing wages or benefits with one another.

365 NLRB No. 154 at *5.

Joint Employment

In 2015, the Board's holding in Browning-Ferris Industries, 362 NLRB No. 186 (2015), significantly expanded the test it previously used to determine joint employer status. Specifically, the Board held that two employers would be deemed joint employers for the purposes of the NLRA if a company had indirect or potential control over workers who were actually employed by another entity. Despite its prior holding, the Board recently stated in Hy-Brand Indus. Contractors, Ltd., 365 NLRB No. 156 (2017), that "...the Browning-Ferris standard is a distortion of common law as interpreted by the Board and the courts, it is contrary to the Act, it is ill-advised as a matter of policy, and its application would prevent the Board from discharging one of its primary responsibilities under the Act, which is to foster stability in labor-management relations." 365 NLRB No. 156 at *2. Since the Hy-Brand decision, the Board has returned to using the pre-Browning-Ferris test, under which a "... finding of joint-employer status shall once again require proof that putative joint employer entities have exercised joint control over essential em¬ployment terms (rather than merely having "reserved" the right to exercise control), the control must be "direct and immediate" (rather than indirect), and joint-employer status will not result from control that is 'limited and routine.'" 365 NLRB No. 156 at *5.

The New General Counsel

Although not a change to existing law, the NLRB's new General Counsel, Peter B. Robb, issued General Counsel Memorandum GC 18-02 on December 1, 2017, which listed specific cases that must be submitted to his office for advice. The memo, which also rescinded 7 previously issued general counsel memos, is focused on cases involving significant legal issues, particularly those establishing precedent in the last eight years and involving one or more dissents. The memo also included 15 different examples of the types of matters that should be submitted to Robb's office for advice. Interestingly, some of those matters have already been addressed in recent Board decisions (including some discussed in this article). With the memo's broad sweep, it seems likely that the new GC is seeking cases through which to undo precedent in a number of areas.

Although covering a wide range of topics, the recent actions taken by the NLRB signify a shift towards pre-Obama era standards. It is unknown just how far the Board will go to further this agenda or whether the current trend expired along with Chairman Miscimarra's term. In the meantime, employers should continue to watch for the next decision causing their lawyer to say, "Remember when I told you [fill in the issue]?—Well, never mind."

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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