Vorys on Labor

Vorys on Labor

Insights for the Labor Relations Professional

Covid-19 and the NLRB: Update No.3 – Rulemaking Continues

Posted in Elections, Rulemaking

While Covid-19 has slowed down certain things at the NLRB, it hasn’t stopped the agency from functioning.  The NLRB announced today that it will publish its final rule on certain employee free choice issues tomorrow, April 1.

The rules will address three major issues:

  1. The NLRB’s “Blocking Charge” Policy.  The term comes from the NLRB’s long-standing rule that if a union filed a ULP charge while an election proceeding was pending, it would usually serve to “block” the election – i.e., prevent it from going forward.  The ULP charge would then need to be resolved before the regional office could hold the election.  The rule is expected to replace the blocking charge with a “vote-and-count” or “vote-and-impound” procedure.
  2. Voluntary Recognition Bar.  The rule is expected to return to the holding in Dana Corporation, a 2007 NLRB decision.  It would apply when an employer, as is its right, voluntarily chooses to recognize a labor union.  In that situation, employees in the voluntarily recognized bargaining unit must receive notification of the recognition and be given a 45-day open period in which to file an election petition.
  3. Section 9(a) Recognition in the Construction Industry.  Employers in the construction industry are subject to some unique rules regarding recognition of unions.  One such rule is the ability to enter into what is known as a “pre-hire” agreement – where the employer and union agree to recognition before a single employee has even been hired.  Where this has occurred, the NLRB’s new rule will require positive evidence of majority support for the union, and not merely union contract language reciting same, before the NLRB will bar a petition for an NLRB-supervised election.  The rule will overturn a 2001 decision holding to the contrary.

Labor professionals should certainly review the rule in full when it is published, particularly if the employer is considering, or a union has requested, voluntary recognition, or there is a pending election petition.  Likewise, labor professionals in the construction industry will need to familiarize themselves with the NLRB’s new standards.

COVID-19 and the Duty to Bargain: Advice from the General Counsel

Posted in Negotiations, NLRB

With COVID-19 disrupting business, employers may be questioning whether the virus has an effect on the duty to bargain with labor organizations.  On Friday, the NLRB’s General Counsel, Peter B. Robb, attempted to answer these questions, issuing a letter to regional officials clarifying employers’ duty to bargain during emergencies.

The General Counsel’s letter summarized nine NLRB decisions involving a variety of emergencies, including hurricanes, 9/11, ice storms, and credit shortages.  The General Counsel explained that it was his “hope that these summaries prove useful to those considering this issue during these challenging times.”  Notably, the letter did not summarize any cases involving shutdowns or closures due to illness or infectious disease.  Nor did the letter provide any advice to employers specific to the current pandemic.

The General Counsel’s letter is divided into two sections.  The first section summarizes cases that involving public emergencies.  For example, the letter summarizes Port Print & Specialties, a case from 2007 in which the NLRB found that an employer did not violate Section 8(a)(5) of the NLRA when it laid off employees in anticipation of an impending hurricane.  The NLRB explained that one exception to the duty to bargain with a labor organization is an “extraordinary event[] which [is] an unforeseen occurrence, having a major economic effect requiring the company to take immediate action.”  The NLRB fit a hurricane into this category.  The NLRB also found that the employer later violated Section 8(a)(5) by failing to bargain over the effects of the layoff and by using non-unit employees to perform unit work after the hurricane had passed. Continue Reading

A Stimulus for Organized Labor

Posted in Union Organizing

Here’s one you may not have heard about yet.  Buried in the last 100 pages or so of the 600+ page CARES Act, the Covid-19 bill the Senate passed this morning, I found this nugget:

(X) that the recipient will remain neutral in any union organizing effort for the term of the loan.

For the lawyers reading this, the provision appears in Title IV, Section 4003(c)(3)(D).

The requirement appears to be applicable to loans made to businesses with between 500 and 10,000 employees.  The quoted provision appears in a list of items that an “eligible borrower” must provide a “good-faith certification” of in connection with an application for a loan under the program.  What the required certification to “remain neutral” actually means is unclear.

This is not the only union-related requirement.  A loan recipient is required to give a similar certification that it will not “abrogate existing collective bargaining agreements” during the term of the loan and for a period of two years after completing repayment of the loan.

Labor professionals will certainly want to take note of these provisions.  If the employer seeks a loan under the applicable program, there could be some clear implications for labor relations strategy, whether or not the employer is unionized.

Covid-19 and the NLRB: Update No. 2 – Election Rule Delayed

Posted in Elections, Rulemaking

Today, the NLRB announced that it will delay its new election rule.  This follows on the heels of the NLRB’s decision last week to delay election proceedings generally due to the Covid-19 situation.

As readers of this blog know, the NLRB published its final election rule in December last year.  The rule’s net effect was to substantially alter the so-called “quickie” or “ambush” election rule adopted by the Obama NLRB in 2014.  The new rule extended various deadlines in a union election to provide for more time for the parties to take certain actions required to process an election petition.

In announcing the delay, the NLRB explained that it was doing so to “facilitate the resolution of legal challenges” to the rule.  The AFL-CIO has filed a lawsuit in federal court in Washington, D.C. contesting the rule.  The rule is now set to go into effect on May 31, rather than April 16, 2020.

The NLRB and Covid-19: An Update

Posted in NLRB, Rulemaking

Covid-19 has disrupted the operations of many employers and governmental functions.  The NLRB is no different.  Here is a summary of where things stand tonight.

Regional Offices

Many regional offices have been closed for varying periods of time.  The NLRB is sending out updates on these events as they occur and has devoted a page on its website that labor professionals can use to quickly determine the status of a particular regional office.  As of the end of the day Friday, there were 12 regional offices closed, with staff working remotely.  One of the closed offices is Region 8 in Cleveland, Ohio.

Elections

The NLRB has suspended all representation elections until April 3.  Interestingly, this even includes mail ballot elections.

Rulemaking

The NLRB is working on a few proposed rules.  The NLRB website summarizing them is here.  So far, the NLRB has not announced any specific delays or extensions related to this rulemaking activity.  The comment period on all of the proposed rules is closed, with the most recent one closing on February 28 for the rule regarding student assistants.

NLRB Decisions

The NLRB continues to issue decisions notwithstanding Covid-19.  Most recently, the NLRB held that an employer’s severance agreement containing certain common provisions was lawful.  The employer, after lawfully terminating numerous employees, offered them a severance agreement that contained various provisions.  Three provisions in the agreement were at issue:

  1. Non-disparagement;
  2. Confidentiality; and
  3. “No Participation in Claims.”

The NLRB held that the employer’s offer of a severance agreement containing these terms was lawful.  The NLRB rejected the use of its Boeing decision, saying it applied only to mandatory work rules, not to the terms of an agreement that an employee could voluntarily decide not to sign.

 

Recent NLRB Decision Reminds Employers to Tread Lightly When Employees Begin Unionization Discussions

Posted in Negotiations, Union Organizing

On Tuesday last week, the NLRB ordered a New York local business owner to reopen his doors and rehire the workers he terminated after he shut down his truck repair shop to prevent union organization at both his truck repair shop, RAV, and his concrete retail business, Concrete Express.

This infrequently used order, known as a Gissel bargaining order, allows the NLRB to force a business to skip the union election process and proceed directly to bargaining.  The name comes from a 1969 Supreme Court decision, NLRB v. Gissel Packing Co., which gave the NLRB the power to issue this order when it discovers that an employer unlawfully suppressed union organization.

In this most recent case, the repair shop owner fired two mechanics after learning from the NLRB that Teamsters Local 456 was looking to represent them.  The judge determined that RAV terminated the mechanics and closed the business as a warning to his employees at Concrete Express that they should not join the union.

The closing of RAV was found to be in violation of Section 8(a)(3) of the NLRA, which prohibits discrimination against employees for their involvement with a union.  As a result, RAV was forced to reopen, rehire the mechanics with back pay, and begin union negotiations with the Teamsters.

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NLRB Issues Final Rule Clarifying Joint Employer Standard

Posted in NLRB, Rulemaking

Today, the NLRB announced their final rule on how to analyze joint-employer status under the NLRA.  This is good news for employers, as the final rule makes it harder to prove that workers are jointly employed by affiliated businesses.  By publishing this final rule, the NLRB is revitalizing the joint-employer standard that the NLRB applied for several decades prior to the 2015 decision in Browning-Ferris, which relaxed the test for determining joint employment.

Joint employment is typically found when a business possesses and exercises substantial direct and immediate control over one or more essential terms and conditions of employment of another business’ employees.   The final rule expands on the definition of essential terms and condition to not only include hiring, firing, discipline, supervision, and direction, but also wages, benefits, and hours worked.  The final rule also defines what constitutes substantial direct and immediate control and makes clear that control exercised on a sporadic, isolated, or de minimis basis is not substantial enough to prove joint employment.

Unlike the holding in Browning-Ferris, the final rule does not allow for a finding of joint employment by showing indirect control over the essential terms and conditions of the worker’s employment.  Rather, indirect control may be a factor to consider when analyzing a joint employer status, but that factor alone will not prove a joint employer relationship exists.  Additionally, the NLRB’s discussion of the final rule expresses its intent that an arm’s-length contract alone cannot turn a contractor into a joint employer.

In a press release, NLRB Chairman, John F. Ring (R), expressed confidence that the final rule will provide much needed clarity to businesses:  “This final rule gives our joint-employer standard the clarity, stability, and predictability that is essential to any successful labor-management relationship and vital to our national economy.” He added, “With the completion of today’s rule, employers will now have certainty in structuring their business relationships, employees will have a better understanding of their employment circumstances, and unions will have clarity regarding with whom they have a collective-bargaining relationship.”

The final rule comes after the NLRB issued a proposed version back in late 2018 and subsequently reviewed and considered nearly 30,000 public comments before settling on the final version.  The rule will be published in the federal register on February 26, 2020, with an effective date of April 27, 2020.

Labor professionals, particularly important those working for employers who have relationships with other employers to use or provide employees, will certainly want to review the regulations.  But the regulation is also important in a number of different contexts, including franchise operations, industries with frequent subcontracting, and where an employer has another employer’s employees on the employer’s premises and involved in the employer’s productive work.

 

Employers Get their Email Systems Back: NLRB Overrules Purple Communications

Posted in Employee Handbooks, Property Rights, Union Organizing

Nearly eighteen months ago, this blog asked whether employers will get their email system back. Last month, the NLRB answered with a resounding “yes”! In Caesars Entertainment, 368 N.L.R.B. 143 (2019), the NLRB overturned its prior decision in Purple Communications.  In doing so, the NLRB returned to its rule that employers may limit employee’s use of the employer’s IT resources if it does so in a non-discriminatory fashion.

For those who have followed this issue, the regulation of the use of employer’s email is a fine example of the “pendulum” effect in NLRB precedent, particularly over the last decade, or maybe even two. The NLRB has long recognized that employers have the right to regulate the use of their property and equipment. The NLRB has always balanced that right against employees’ right to engage in protected, concerted activity.

The NLRB was originally presented this question in 2007, during the Bush II Board. The NLRB held then, in case called Register Guard, that an employer could prohibit non-business use of its email system. Seven years later, the Obama Board reversed Register Guard in Purple Communications.  The Obama Board weighed the interests differently.  It believed that an employer’s property interests had to yield to the employee’s right to utilize those systems for union or other concerted purposes.

In its most recent decision, the NLRB has returned to the Register Guard rule. It did so after considering amici briefs submitted by a number of employer and labor organizations. The Trump Board viewed employer email systems as similar to employer-owned televisions, bulletin boards, copy machines, telephones and public address systems. The NLRB has previously ruled that employers may prevent employees from using all of this equipment for union organizing or other concerted activities.

Significantly, the NLRB majority did recognize that there may be situations in which the employer’s rights must yield. For example, the majority acknowledged that there may be cases in which the email system is the only reasonable means for employees to communicate with one another. In such a case, employees may have a right to utilize the employer’s email system. The NLRB left the nature and extent of that exception, however, to future cases.

Member McFerran (D) wrote a dissenting opinion. McFerran argued that Purple Communications was properly decided and, importantly, recognized the realities of the modern workplace in which email has “effectively become a ‘natural gathering place’ pervasively used for employee-to-employee conversations.”

For the labor professional, the NLRB’s decision brings the issue of employer restrictions on use of its IT equipment full circle. Indeed, the NLRB recognizes that its rule in Caesars Entertainment applies not only to email resources, but other IT resources. Employers with a concern about limiting the use of their IT equipment, therefore, should review their policies to determine whether the NLRB’s decision is one that suggests any changes to their policy or approach.

NLRB Concludes Pending Workplace Investigations May Be Kept Confidential

Posted in Employee Handbooks, NLRB

As many employers know, confidentiality can be essential to performing workplace investigations.  Last month, in Apogee Retail, LLC, a 3-1 decision, the NLRB agreed.  Applying the test for facially neutral rules established in The Boeing Company, 365 N.L.R.B. No. 154 (2017) (discussed here), the NLRB held that workplace rules that require employees to keep pending workplace investigations confidential while the investigation is open are generally legal.  The decision arose after a thrift store retailer, Apogee Retail, prohibited its employees from discussing investigations in its Code of Business Conduct and Ethics and in its Loss Prevention Policy.

In finding that confidentiality rules are generally legal, the NLRB overruled a 2015 Obama Board decision.  In that decision, Banner Estrella, the NLRB had concluded that employers could not require employees to keep investigations confidential unless they could show a legitimate and substantial business justification that outweighed its employees’ Section 7 rights.

The NLRB explained that Banner Estrella had inappropriately placed the burden on employers to establish that its interests outweighed their employees’ Section 7 rights.  According to the NLRB, the reasoning of Banner Estrella not only contradicted Supreme Court and NLRB precedent but also “failed to recognize and weigh the importance of employers in providing, and of their employees in receiving, assurances that reports of incidents of misconduct . . . will be held in the strictest confidence by all concerned, management and workers alike.”  The NLRB further noted that its new decision aligns the NLRB’s stance on confidentiality of investigations closer to other federal guidance, including guidance from the EEOC and OSHA.

Labor professionals should note, however, an important caveat to the NLRB’s holding.  If a confidentiality rule is not limited to an open investigation, the NLRB will treat the rule as a Category 2 rule under Boeing.  Thus, an employer will need to prove that legitimate justifications outweigh any post-investigation adverse impact on NLRA-protected rights.  The NLRB remanded the case to an ALJ to conduct the required balancing of the competing interests because the rule at issue was silent as to the duration of the confidentiality obligation.

Member McFerran (D) dissented.  McFerran argued that the NLRB’s decision will prevent employees from seeking the help of their coworkers, union, and the NLRB.  McFerran called the decision “out-of-touch with realities of the modern American workplace and the goals of federal labor law” and warned that it could even prevent victims of sexual harassment in the workplace from seeking help.

The NLRB’s decision means that employers have more ability to provide instructions to those involved in workplace investigations to keep them confidential.  This should improve an employer’s ability to address effectively workplace misconduct of many types, including sexual and other forms of unlawful harassment.  But, as a result of the caveat noted above, a prudent employer will revisit any confidentiality instructions to ensure that they will pass muster under the Boeing test, as the NLRB applied in Apogee Retail.

NLRB Returns to Former Stance on Employers’ Obligations to Continues Dues Checkoff after CBAs Expire

Posted in Strikes, Union Negotiations

On Monday, the NLRB reinstated its long-standing position that the NLRA does not require employers to continue dues checkoff after the expiration of a collective bargaining agreement. The case, entitled Valley Hospital Medical Center, 368 N.L.R.B. No. 139 (“Valley Hospital”), came after a four-year-long departure from that long-standing position.

Many labor professionals may see the NLRB’s ruling as a return to normalcy. The NLRB’s position on this issue dates back over half a century to a case entitled Bethlehem Steel, 136 N.L.R.B. 1500 (1962). In Bethlehem Steel, the NLRB held that dues checkoff provisions fell into the category of terms and conditions of employment which an employer may unilaterally change following the expiration of a collective bargaining agreement.  Accordingly, employers were not required to continue dues checkoff following the expiration of a collective bargaining agreement. Continue Reading