NLRB Hands Down Five Employer-Friendly Rulings!

The NLRB Does Away with Prior Administration’s “Quickie” Election Rules

On December 13, 2019, the National Labor Relations Board (“Board”) announced a final rule amending the procedures used for elections to determine whether employees desire to be represented by a labor union.  The new election rules are intended to make the process more fair and respond to significant criticism of the rules adopted by the Board in 2014.  The 2014 changes appeared to favor unions by speeding up the election process. For example, under the 2014 changes, pre-election hearings had to be scheduled eight (8) days after the hearing notice was served on the parties, and this (and other changes) effectively reduced the length of an election campaign from about 6 weeks to 3.5. Critics of the rule changes also argued that the rules were unfair to employees because they allowed an election to move forward before disputes over voter eligibility or appropriate bargaining units were resolved, thereby preventing employees from fully understanding the meaning of their vote. Expected to take effect on April 16, 2020, the new rules reverse course from the “quickie” election rules of 2014, and restore reasonableness to election procedures.   

The new rules create a more fair and efficient election process. A summary of the key differences between the new ad old rules is as follows:

  • Pre-election hearings will be scheduled 14 business daysfrom Notice of Hearing instead of 8 calendar days;
  • Notice of Petition for Election must be posted within 5 business daysafter service of notice of hearing instead of 2 business days;
  • Non-petitioning party must file position statement within 8 business daysafter notice of hearing served instead of 1 day before pre-election hearing;
  • Petitioning party mustfile a responsive position statement at noon 3 business days before hearing instead of not being required to file one at all;
  • Disputes concerning scope/voter eligibility litigated at pre-election hearing and resolved prior to direction of election instead of remaining unresolved;
  • Parties permitted to file post-hearing briefs with regional director and after election instead of being permitted to do so only with prior permission;
  • Absent agreement to hold earlier, election scheduled a minimum of 20 business daysafter date of direction of election instead of at the earliest date practicable;
  • Employer must furnish voter list 5 business daysafter issuance of direction of election instead of within 2 business days;
  • If a request for review is filed within 10 business daysafter Direction of Election and the Board does not rule on request or grant request before election, then ballots will be impounded and remain unopened pending decision.

By scaling back some of the current unreasonably tight deadlines, the new rule enables employers to more meaningfully identify and raise unit issues as well as properly prepare to litigate such issues at a pre-election hearing.  Employers are now able to get answers to significant questions prior to an election which should enable them to better avoid allegations of unfair labor practices.

Employers Can Prohibit their Employees from Using their Company E-mails to Organize

In Caesars Entertainment, 368 NLRB 143 (Dec. 16, 2019), the Board allowed employers to block their employees from using the employers’ e-mail systems for organizing purposes.  In doing so, the Board overturned its earlier decision in Purple Communications, 361 NLRB 1050 (2014), which stated that employees had a right to use employer-owned equipment for non-work purposes.  The Board held that employees have no statutory rights to use the employer’s property (i.e. their e-mail and IT systems) and as long as the employers’ e-mail policies do not discriminate against union or other protected concerted communications, they were permissible.  In this case, the Board held that the general restrictions on computing resources were lawful because they were facially neutral and do not discriminate on the content of communications: “Computing resources may not be used to: . . . Convey or display anything fraudulent, pornographic, abusive, profane, offensive, libelous or slanderous . . . Send chain letters or other forms of non-business information . . . Solicit for personal gain or advancement of personal views.”

This holding was purportedly based on Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945), which held that the Board had to balance between an employer’s property rights and employees’ right to organize – and in this case, that employees’ ability to solicit each other face-to-face and to hand out literature was an adequate avenue of communication for organizing purposes.  Although the Board admitted that using the employer’s e-mail system may be a useful, convenient, and effective means for employees to communicate, the NLRA does not require employees to have available the most convenient or most effective means of communicating.

The Board built in an exception for circumstances where an employer’s e-mail system is the only reasonable means for employees to communicate with one another.  The Board inferred that such exceptions would likely be rare due to new technologies such as cell phones and social media.

The NLRB Permits Employers to Utilize Blanket Gag Orders During Misconduct Investigations

A recent decision issued by the National Labor Relations Board will give employers increased latitude to require confidentiality from employees during sexual harassment and other disciplinary workplace investigations. In Apogee Retail, N.L.R.B., Case 27-CA-191574, Decision 12/17/19, the Board overruled an earlier decision requiring employers to justify use of nondisclosure rules that ban employees from discussing an ongoing investigation, since such a ban could be construed to infringe upon employees’ rights to engage in “protected concerted activity.” That prior ruling required businesses to make a case-by-case determination of whether an investigation would be compromised if there was not a nondisclosure requirement in place.

Under this new case, blanket nondisclosure rules requiring confidentiality in all workplace investigations are permitted. This new rule also aligns more closely with the Equal Employment Opportunity Commission’s position—the agency has long advocated for confidentiality requirements in sex harassment investigations in particular, saying it encourages victims and witnesses to come forward. Of note, the new rule only requires workers to keep open workplace investigations secret. Such restrictions that are not limited to the life of a probe, however, require a case-by-case determination.

After Three Years of Hearings, the NLRB Punts the Issue of whether McDonalds is a Joint-Employer with its Franchisees to Formal Rule-Making

In McDonald’s USA, LLC et al., 368 NLRB 134 (Dec. 12, 2019), the Board reversed an administrative law judge (“ALJ”) and accepted the informal settlement proposal by the NLRB’s General Counsel to end a long-running case involving McDonalds, several of its franchisees, and the employees of the franchisees.  The ALJ rejected the settlement agreement mainly because it did not reach the core of the General Counsel’s original complaint – whether or not McDonalds was a joint-employer of its franchisees’ employees.  Additionally, the ALJ found it significant that the Charging Parties in this case (the employees of the franchisees) did not agree with the settlement, especially as it came towards the very end of a three-year trial.

The Board disagreed with the ALJ and approved the settlement.  It gave great deference to the current General Counsel’s views, and wrote that although the settlement agreement does not force McDonalds to guarantee payment of joint and several liability as a joint employer, it does place obligations on McDonalds to ensure that the employees are paid.  Regarding the General Counsel’s change of priorities in litigating the joint-employer issue, the Board held that the General Counsel reasonably adjusted its litigation priorities.  The Board also wrote that its proposed, and more employer-friendly, rule-making notice regarding the standard for determining joint-employer status might moot any decision made regarding McDonalds’ joint-employer status with its franchisees.

This decision prevented a potentially wide-sweeping finding that McDonalds was a joint-employer with its franchisees, which could have had wide-spread precedential value.  Additionally, this decision opens a path for the General Counsel to essentially shut down any existing complaint through an informal settlement process, without the complaining employees’ approval.

Once a Union Contract Expires, Employers are Off the Hook for Collecting Union Dues

In Valley Hospital Medical Center, Inc., 368 NLRB 139 (Dec. 16, 2019), the Board reverted back to long-standing precedent to allow companies to cease deducting and remitting employees’ union dues pursuant to a check-off clause after the applicable collective bargaining agreement expires.  The Board re-adopted its precedent in Bethlehem Steel, 136 NLRB 1500 (1962) by reversing its recent decision in Lincoln Lutheran of Racine, 362 NLRB 1655 (2015).  The core rational of the decision is that there is no independent statutory obligation for companies to deduct and remit dues to the union after the expiration of a CBA.  That is, a company’s obligation to remit such dues (an “administrative convenience”), is rooted in contract and a company’s decision to stop remitting dues after the CBA’s expiration is a unilateral change permitted by NLRB v. Katz, 369 U.S. 736 (1962).  Two important issues the Board discussed are that employees’ obligations to pay the union dues are not tied to the CBA; and, that an employer can choose to continue to deduct and forward union dues after the CBA has expired.  Additionally, the Board held that this decision would have retroactive effects over any other pending case.

To overrule Lincoln Lutheran, the Board additionally adopted the rationale of an older Supreme Court case that may have broader effects than just in this opinion: NLRB v. Ins. Agents Int’l Union, 361 U.S. 477 (1960).  Citing to that case, the Board held that the NLRB could not “exclude the cessation of dues checkoff from the arsenal of economic weapons that an employer may legitimately use as leverage in support of its bargaining position.”  Indeed, the Board wrote that this option gives companies an option to exert economic pressure on the union, an option that is less extreme, less disruptive, and less risky than a lockout.