KULLMAN FIRM NEWSLETTER (THE NLRB EDITION!)
FAREWELL TO “MICRO-UNITS”
On December 15, the National Labor Relations Board overturned an Obama-era ruling which allowed “micro-units” of workers to unionize. The 3-2 ruling in PCC Structurals, Inc., 365 NLRB No. 160, was split along party lines and lowers the bar for employers to expand bargaining units past the limits proposed by workers. In a case involving a metal casting company, the Republican majority overturned the Board’s 2011 Specialty Healthcare standard, which had required employers to show that workers they wanted to be included in a unit share an “overwhelming” community of interest with the union’s proposed organizing group. The majority stated that Specialty Healthcare gave unions too much power to decide the makeup of bargaining units.
Specifically, the NLRB noted that it “believe[s] Specialty Healthcare effectively makes the extent of union organizing ‘controlling,’ or at the very least gives far greater weight to that factor than statutory policy warrants, because under the Specialty Healthcare standard, the petitioned-for unit is deemed appropriate in all but rare cases.”
Under the old framework, an employer that opposed a proposed bargaining unit on the basis that it improperly excludes certain employees had to prove that the excluded workers shared “an overwhelming community of interest” with those included in the proposed unit. Now, the Board is returning to its prior approach, which was to examine whether petitioned-for employees share a community of interest “sufficiently distinct” from excluded employees to warrant their own unit. The newly-readopted traditional test considers factors such as functional integration, employee skill, employee interchangeability, working conditions, wages and benefits, common supervision, and bargaining history to determine whether a proposed unit of workers shares a community of interest.
NLRB BOARD MEMBERS INDICATE INTENTION TO MODIFY THE BOARD’S BLOCKING CHARGE RULE
Under the NLRB’s 2014 Amended Election Rules, the Board holds that when an unfair labor practice charge is filed during the pendency of a representation petition, the Board will not conduct the election if the party that has filed the charge, typically the petitioning union, or in the case of a decertification petition, the incumbent union facing a vote to decertify it as the representative, alleges actions by the employer that the union claims prevent or interfere with a fair election. Many observers believe that such blocking charges are used tactically by unions that are concerned they face defeat at the polls.
A footnote in a December 20, 2017 unpublished Board decision in a case involving a decertification petition filed by an employee of ADT, states that:
Member Kaplan agrees with the decision to deny review here. He notes, however, that, consistent with the Petitioner’s suggestion, he would consider revisiting the Board’s blocking charge policy in a future appropriate case. Member Emanuel agrees that the determination to hold the petition in abeyance in this case was permissible under the Board’s current blocking charge policy, but he believes that the policy should be changed. Specifically, he believes that an employee’s petition for an election should generally not be dismissed based on contested and unproven allegations of unfair labor practices.
Interestingly, both Chairman Kaplan and Member Emanuel, although not disagreeing with the Regional Director’s application of the rule in the case before them, each expressed their view that the Blocking Charge Rule, which is not a rule at all but rather a Board-created doctrine or policy, “should be changed.”
NLRB PUTS “QUICKIE” ELECTION RULES ON THE CHOPPING BLOCK
The National Labor Relations Board’s newly-minted Republican majority said it would seek public comment on existing rules designed to speed up the union election process, the first step in revising or repealing them.
The amendments, which took effect on April 14, 2015, significantly tilted the NLRB’s election procedures in favor of unions by dramatically speeding up the timeframe between the filing of a petition for an election to the holding of an election, from an average of approximately six weeks to an average of 23 days. Under the amendments, it is easier for unions to organize unrepresented employees because a shorter period of time between a union’s filing of a representation petition and the holding of an election makes it harder for employers to present their arguments against union representation and lawfully persuade employees that a union may not be in their best interests.
The Board said employers and business groups have raised many issues with the rules since their adoption, and the agency has a duty to periodically review the effectiveness of its rules. The board noted that it would publish a request for information (“RFI”) in the Federal Register, kicking off a 60-day public comment period.
The rules have been a top target for business groups, which say they are unfair to employers and give them little time to respond to union campaigns. Republicans in the U.S. Senate and House of Representatives have introduced bills that would repeal them. The election rules require that challenges to the makeup of bargaining units and other legal issues be resolved after an election, which allows elections to take place more quickly.
The Board’s RFI asks for public input on the following three questions:
- Should the 2014 Election Rule be retained without change?
- Should the 2014 Election Rule be retained with modifications? If so, what should be modified?
- 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?
The Board will allow interested parties to submit comments on the above questions through February 12, 2018.
NLRB OVERTURNS EMPLOYEE HANDBOOK STANDARD
In a recent split decision in The Boeing Company, 365 NLRB No. 154, the National Labor Relations Board (NLRB) overturned the 2004 “Lutheran Heritage” standard, which governed the legality of certain employment policies. Under the Lutheran Heritage standard, an employment policy was considered illegal if employees could reasonably construe it to bar them from exercising their rights to engage in protected concerted activity under the National Labor Relations Act (NLRA).
Since 2004, the NLRB had used the Lutheran Heritage standard to invalidate a number of employment policies, including policies blocking workers from criticizing their employers on social media or making recordings in the workplace.
Since its inception, the Lutheran Heritage standard had been viewed as highly controversial as Board members had regularly disagreed on the legality of employment policies under the standard, and courts had frequently overturned Board rulings involving its application.
In overturning the Lutheran Heritage standard, the Board will now consider the nature and extent of a challenged employment policy’s potential impact on NLRA rights and the legitimate business justifications associated with the policy. The Boeing decision also lays out three categories into which the board will classify policies:
- Policies that are legal in all cases because they cannot be reasonably interpreted to interfere with workers’ rights or because any inference is outweighed by business interests; and
- Policies that are legal in some cases depending on their application; and
- Policies that are always illegal because they interfere with workers’ rights in a way not outweighed by business interests.
NLRB DITCHES BROWNING-FERRIS JOINT EMPLOYER TEST
In a recent split decision in Hy-Brand Industrial Contractors Ltd., 365 No. 156, the NLRB overturned the test for determining joint employer as set forth in the landmark Browning-Ferris decision of 2015. Under the Browning-Ferris test, a company and its contractors or franchisees could be deemed a single joint employer even if the company had not exerted overt control over workers’ terms and conditions, so long as that company had indirect control or the contractual ability to exert control over workers’ terms and conditions.
By discarding the Browning-Ferris test, the Board will revert back to the old standard/test where a finding of joint-employer status will require proof that putative joint employer entities have exercised joint control over essential employment 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.