Between August 29 and September 10, the National Labor Relations Board (“NLRB” or “Board”) issued four decisions that resolve important issues that have been the subject of long-running disputes.  It also issued an invitation to submit briefs in a case that provides an opportunity for the current Board majority members to revise the standard for when employee conduct loses protection under the National Labor Relations Act.

Misclassification of Employees As Contractors Alone Does Not Violate Federal Law

On August 29, 2019, the NLRB decided that employers who incorrectly classify employees as independent contractors – who are not subject to the protections and benefits of the National Labor Relations Act (“NLRA”), which applies only to non-managerial, non-supervisory employees – do not violate the NLRA because misclassification “does not, in and of itself, contain any ‘threat of reprisal or force or promise of benefit.’” Specifically, the Board held that an employer only violates the NLRA in misclassifying employees as contractors when it actively relies upon or uses the misclassification to interfere with protected rights under the NLRA; therefore, employers do not interfere with workers’ organizing rights by simply misclassifying them as contractors.  Although a win for employers, employers nonetheless should remain cautious because this decision does not absolve all potential liability relating to misclassification of employees.  Employers should still take great care to avoid misclassification to protect against liability involving the Fair Labor Standards Act, tax requirements, unemployment benefits, and workers compensation.

NLRB Requests Briefing On Standards For Offensive Conduct And Protection Under The NLRA

On September 5, 2019, the NLRB invited briefing concerning whether the Board should reexamine its standard for whether employees lose protection of the NLRA when they use profane or offensive language of a racial or sexual nature while engaging in otherwise protected activity. The current standard, from a case called Atlantic Steel, is a four-factor test which considers the following when determining if an employee should lose protection under the NLRA: (1) the place of the discussion, (2) the subject matter of the discussion, (3) the nature of the employee’s outburst, and (4) whether the outburst was, in any way, provoked by the employer’s unfair labor practices. However, the Board is mindful that this standard has been widely criticized in response to a trio of cases in which the NLRB previously found offensive employee conduct to be nonetheless protected (Plaza Auto Center, 360 NLRB 972 (2014), Pier Sixty, LLC, 362 NLRB 505 (2015), and Cooper Tire, 363 NLRB No. 194 (2016)), and now has invited interested parties to file briefs to help the Board reconsider that standard. Specially, the Board seeks input on the following five issues:

• Under what circumstances should profane language of sexually or racially offensive speech lose the protection of the NLRA?

• To what extent should employees continue to be provided leeway with respect to profanity or language that is offensive to others based on race or sex?

• Should the Board continue to consider particular workplace norms or the employer’s work rules when determining whether the outburst should be protected?

• Should the Board adhere to, alter, or abandon the standard the Board has applied in the past that permits a finding that racially or sexually offensive language on a picket line does not lose NLRA protection?

• To what extent should the Board consider anti-discrimination laws such as Title VII in deciding whether an employee’s statement loses protection under the NLRA?

Interested parties may file amicus briefs on this issue with the NLRB in Washington, D.C. no later than November 4, 2019.

NLRB Expands Employer Rights to Limit Property Access

On September 6, 2019, the NLRB held in a case involving a Kroger grocery store that, under the NLRA, an employer is not required to grant access to its property to nonemployee union representatives so that they may solicit the employer’s customers to boycott the employer’s goods or services, even if that employer has allowed other third parties to engage in civic, charitable, or commercial solicitations on its property in the past. As a general rule, the NLRA does not require an employer to grant nonemployee union agents access to its property; however, under an exception to that general rule, an employer cannot discriminate against nonemployee union agents by excluding them from its property while allowing “other distribution.” The longstanding interpretation of this exception was established in Sandusky Mall Co., which held that employers are required to grant access to nonemployee union agents for any purpose if the employer has previously allowed “substantial civic, charitable, and promotional activities” by other nonemployees on its property. In Kroger, the Board rejected this interpretation and overruled Sandusky Mall and similar cases.

In Kroger, nonemployee union representatives were collecting customer signatures in the store parking lot to protest the company’s decision to close the store and transfer union-member employees elsewhere.  The store called the police to have the union representatives escorted off the premises, and the union filed an unfair labor practice charge against the store, claiming the store’s actions were discriminatory.  The Board disagreed, finding that the store acted lawfully because it had a fundamental property interest in protecting its premises, which allowed it to exclude union solicitors. Further, the NLRB was unpersuaded by the union’s argument that the store’s previous approval of other civil activities on the premises showed discrimination against the union, because the Board found the activities the store had previously approved to be dissimilar to the union’s solicitation, which was directed at attempting to persuade the public not to shop at Kroger. Under this decision, the Board’s new interpretation of the exception is that the discrimination inquiry hinges on whether the activities previously allowed on the premise are the same or similar in character to those that the employer is now prohibiting.  Because boycott and protest behavior is fundamentally different that charitable or civil solicitation, prohibiting one while allowing the other is not, according to the NLRB, improper discrimination.

The Kroger decision comes on the heels of another NLRB decision addressing property owners’ ability to limit non-employee access to their premises. On August 23, 2019, the Board solidified an employer’s right to prohibit off-duty contractor employees from invading private property in order to exercise Section 7 rights when those employee have a reasonable alternative that does not require entry onto the property. This case involved the Tobin Center, a performing arts center where the San Antonio Symphony and Ballet San Antonio perform under a license granted by the owner of the center. In the case, off-duty employees of the Symphony wanted to engage in informational leafleting on Tobin Center property to inform the general public that the San Antonio Ballet was using recorded music in its show rather than live music performed by the Symphony’s union-represented members. The center refused to permit the off-duty employees of the Symphony to leaflet on Tobin Center property. An unfair labor practice proceeding ensured, and the Board held that the Tobin Center, as the owner of the property, had the right to prohibit the off-duty Symphony employees – even though the Symphony was a licensed user of the center – from accessing a sidewalk located on its private property to engage in the leafleting.  The Board explained that property owners can limit such access so long as the employees seeking access do not work both regularly and exclusively on the property, and there is at least one nontrespassory option for communicating their message. The Board reasoned that the Symphony employees did not work exclusively on Tobin Center property and their employer, the Symphony, did not regularly conduct business or perform services there as it used the property only during 22 weeks of the year. Further, the Board found that the Symphony employees had a reasonable alternative, nontrespassory channel of communicating their concerns to the theater-going public by leafleting on public property directly across the street from the Tobin Center.  Therefore, the NLRB found that it was permissible under the NLRA for the Tobin Center to exclude the off-duty Symphony employees from leafletting on its property.

These decisions strengthen property owners’ rights to exclude certain people and activities from their premises, as long as they act consistently and abide by the Board’s requirements.

NLRB Clarifies the Community-of Interest Standard

On September 9, 2019, the NLRB issued its decision in The Boeing Company, clarifying the traditional community-of-interest standard used to assess the appropriateness of proposed bargaining units, and ultimately held that the smaller subset of jet mechanics at Boeing’s South Carolina plant cannot organize separately from their colleagues because the employees in the smaller proposed bargaining unit do not share an internal community of interest and because their interests are not sufficiently different from the interests of the excluded employees. The Board explained that, when a party asserts that the smallest appropriate unit must include employees excluded from the petitioned-for unit, it applies the traditional community-of-interest factors to “determine whether the petitioned-for employees share a community of interest sufficiently distinct from employees excluded from the proposed unit to warrant a separate appropriate unit.”

Importantly, as a follow-up to its decision in late 2017 in PCC Structurals, which overruled the Board’s earlier decision in Specialty Healthcare which permitted these so-called “micro-units” (see our post here) the Board provided in Boeing much-needed clarification by establishing a three-step process for determining an appropriate bargaining unit under the community-of-interest test.  First, the proposed unit “must share an internal community of interest.” Second, when comparing the employees proposed to be excluded and included in the unit, the excluded employees must have “meaningfully distinct interests in the context of collective bargaining that outweigh similarities with unit members.”  Finally, guidelines established for specific industries with regard to appropriate unit configurations should be examined. Ultimately, the Board held in Boeing that the interests of the employees in the petitioned-for unit were too disparate to form a community of interest, and that even if the petitioned-for unit had shared an internal community of interest, the interests of the excluded employees are not meaningfully distinct from and do not outweigh similarities with the interests of the petitioned-for employees. Therefore, the Board held that the petitioned-for unit was inappropriate.

NLRB Makes it Easier for Employers to Implement Unilateral Changes

On September 10, 2019, the NLRB issued a decision changing its standard for determining whether a unionized employer violates the NLRA when it makes a unilateral change to a term or condition of employment. The Board abandoned its long-standing “clear and unmistakable waiver” standard and replaced it with a “contract coverage” standard, which allows employers to update some workplace policies unilaterally without first consulting or bargaining with the union.

Under the new “contract coverage” standard – which is the standard the US Court of Appeals for the District of Columbia Circuit has long applied and frequently criticized the Board for not following – the NLRB will assess the plain language of the parties’ collective bargaining agreement to decide if the action taken by the employer was “within the compass or scope of contractual language granting the employer the right to act unilaterally.” When it is, the Board will honor the parties’ agreement and the employer will not violate the NLRA if it makes changes unilaterally. However, if the employer’s actions are outside the scope of the collective bargaining agreement, the NLRB will find that the employer violated the NLRA unless it is able to show that the union clearly and unmistakably waived its right to bargain over the change or that that it was legally permitted to make such changes for another reason.  The new standard is much more employer-friendly than the old “clear and unmistakable waiver” standard, under which the Board would find that an employer violated the NLRA by making any unilateral changes, unless a collective-bargaining agreement provision unequivocally and specifically referenced the type of employer action at issue.

This decision makes it easier for employers to implement unilateral changes, and employers should consult with counsel to ensure that the plain language of their collective bargaining agreements allows them to benefit from this new standard.