July 7, 2020

Volume X, Number 189

July 06, 2020

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Unwrapping Late Year NLRB Decisions – Next Steps For Your Organization to Consider

Two weeks after newly appointed National Labor Relations Board General Counsel Peter Robb signaled his intent to ask the Board to consider overruling many union-friendly precedents of the Obama-era Board, the Board has beaten him to the punch.  Over the course of two days (December 14 and 15), the Board repudiated three of the Obama Board’s most vexing decisions – on joint employer status (Browning-Ferris industries / HY-Brand Industrial Contractors), micro-bargaining units (Specialty Healthcare / PCC Structurals) and employer workplace rules and policies (Lutheran Heritage-Livonia / The Boeing Company).  The Board’s spate of employer-friendly decisions provides a number of opportunities for the proactive employer.

In Hy-Brand Industrial Contractors, the Board overruled Browning-Ferris Industries, 362 NLRB No. 186 (2015), which held two entities are joint employers where the second employer exercises indirect control over another entity’s employees, or where the second employer has reserved rights of control, even if unexercised.  In Hy-Brand, the reconstituted Board reversed course, returning to prior precedent finding joint employer status only where the second entity has actually exercised control over the other entity’s employees and has done so “directly and immediately.”

In PCC Structurals, 365 NLRB No. 160 (December 15, 2017) the Board overruled Specialty Healthcare, 357 NLRB 934 (2011), which made it easier for unions to organize so-called “micro-units.”  Instead, the Board returned to its prior analysis for assessing “whether a proposed bargaining unit constitutes an appropriate unit for collective bargaining when the employer contends that the smallest appropriate unit must include additional employees.”  Under PCC, the Board no longer will shift the burden to employers to establish excluded employees share such an “overwhelming community of interest” with petitioned-for employees that there is “no legitimate basis upon which to exclude [them] from” the petitioned-for unit because the traditional community-of-interest factors “overlap almost completely.”  Instead, the Board will not carve out a “micro-unit” unless it finds petitioned-for employees “share a community of interest sufficiently distinct from the interests of employees excluded from the petitioned-for group to warrant a finding that the proposed group constitutes a separate appropriate unit.”  The revised standard will make it more difficult for unions to carve out smaller, artificial groups in an effort to disenfranchise employees who are inclined to vote against union representation.

Finally, in The Boeing Corporation, 365 NLRB No. 164 (December 15, 2017), the Board revised its standard for assessing whether workplace rules and policies interfere with employee rights under Section 7.  Boeing overruled Lutheran Heritage-Livonia, 343 NLRB 646 (2004), in which the Board broadly held unlawful rules which employees could “reasonably construe” to prohibit Section 7 activity.  Boeing replaces this assessment with a two-part analysis evaluating (1) the nature and extent of the potential impact of the rule on NLRA rights, and (2) legitimate justifications associated with the rule.  The new test requires scrutinizing rules on several levels: (1) to determine whether, when reasonably interpreted, they would have no tendency to interfere with Section 7 rights; (2) whether any rules that do have a reasonable tendency to interfere with Section 7 rights have been deemed by the Board’s to be lawful because the risk of such interference is outweighed by the justifications associated with the rules; and (3) to determine the justification for certain rules that have a potential adverse impact on NLRA activity and whether that outweighs the potential adverse impact on Section 7 rights.

What Employers Should Do Now

The Board’s holiday-time decisions provide the opportunity for employers to reclaim rights lost to activist decisions of the Obama Board.  Consider the following steps:

1. To the extent your organization has avoided certain ventures or business relationships due to potential joint employer liability, reassess whether joint employer fears remain significant and your risk/reward assessment.  Likewise, reassess situations in which your organization has avoided engaging with third party labor.  While the threat of joint employer status and potential liability remains, employers may have more leeway to run their business without being deemed to be a joint employer.

2. Conduct a bargaining unit analysis to determine whether there are opportunities to reinforce facts and practices which will buttress your organization’s arguments in support of more favorable bargaining unit configurations.  For example, conventional wisdom is that “wall-to-wall” bargaining units are much more difficult for unions to organize than smaller, discrete units which may harbor pockets of discontent. 

3. Consider a full review of policies and procedures.   Some rules found unlawful under the Obama Board’s expansive reading of Section 7 are once again lawful and may be reinserted in employer policies.  Of particular focus are rules addressing “respectful conduct,” prohibiting “insubordination,” and prohibiting use of cameras and recording devices.  Boeing greatly increases the right of employers to implement justified, facially neutral rules which can be read to interfere with Section 7 rights only through a tortured reading.

4. Continue to train managers and supervisors.  While the Trump Board has scaled back some of the excesses of its predecessor, the new focus on protected concerted activity in non-union workplaces cannot be put back into the proverbial bottle.  Training for management employees on Section 7 rights and positive employee relations remains essential.

Laura A. Pierson-Scheinberg also contributed to this post.

Jackson Lewis P.C. © 2020National Law Review, Volume VII, Number 350


About this Author

Jonathan J. Spitz, Jackson Lewis Law Firm, Labor Employment Attorney, Atlanta

Jonathan J. Spitz is a Principal in the Atlanta, Georgia, office of Jackson Lewis P.C. He is Co-Leader of the firm’s Labor and Preventive Practices Group.

Mr. Spitz lectures extensively, conducts management training, and advises clients with respect to legislative and regulatory initiatives, corporate strategies, business ethics, social media issues and the changing regulatory landscape. He understands the practical and operational needs of corporate America, helping design pragmatic strategies to minimize risk and maximize performance. He has represented...

Philip B. Rosen Jackson Lewis  Preventive Practices Lawyer & Collective Bargaining Attorney

Philip B. Rosen is a Principal in the New York City, New York, office of Jackson Lewis P.C. He is a member of the firm's Board of Directors and co-leads the firm's Labor and Preventive Practices Group. He joined the firm in 1979 and served as Managing Partner of the New York City office from 1989 to 2009.

Mr. Rosen lectures extensively, conducts management training, and advises clients with respect to legislative and regulatory initiatives, corporate strategies, business ethics, social media, reorganizations and reductions-in-force, purchase/sale transactions, sexual harassment and other workplace conduct rules, compliance with the Americans With Disabilities Act, wrongful discharge and other workplace litigation, corporate campaigns and union organizing matters, collective bargaining, arbitration and National Labor Relations Board proceedings. He has been quoted by the press on many labor matters, including the National Labor Relations Board’s recent initiatives on protected concerted activity and the proposed Notice Posting requirements.

Mr. Rosen has extensive experience advising clients developing integrated corporate-wide labor relations strategies - whether the organization is union-free, partially unionized or entirely unionized. He has led teams conducting multi-facility labor-related legal assessments where clients are seeking to develop creative, strategic legal approaches which anticipate major issues and achieve a company’s labor relations goals. Mr. Rosen also has advised clients being confronted with corporate campaigns and requests for neutrality agreements. He has represented organizations seeking to maximize management rights through their development of pro-active employee relations approaches to remain union-free. He also has advised unionized organizations on lawful negotiating strategies – in situations ranging from “hard bargaining” to recapture management rights to more “cooperative” negotiations – in all cases, providing legal advice designed to assist clients in achieving their primary goals.

Howard Bloom, Jackson Lewis, labor union attorney, unfair practice investigations lawyer, employment legal counsel, bargaining law

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues. He trains and advises executives, managers and supervisors on union awareness and positive employee relations, and assists employers in connection with union card-signing efforts, traditional union representation and corporate campaigns, and union decertification...

Chad P. Richter, Jackson Lewis PC, Alternative Dispute Resolution, Attorney

Chad Richter is a Principal in the Omaha, Nebraska, office of Jackson Lewis P.C.

Mr. Richter’s practice is divided into three areas: (1) preventive counseling and training; (2) traditional labor law; and (3) workplace litigation. With regard to Mr. Richter’s preventive practice, he routinely provides day-to-day advice and counseling to management on a variety of employment law matters including human resource management, traditional labor relations, employment discrimination, wage and hour, privacy, disability leave management, and reductions in force. Mr....

Richard Greenberg, Jackson Lewis, workplace grievances lawyer, arbitrations litigation attorney

Richard Greenberg is a Principal in the New York City, New York, office of Jackson Lewis P.C. He advises both unionized and union-free clients on a full-range of labor and employee relations matters.

With respect to traditional labor matters, Mr. Greenberg represents clients in collective bargaining negotiations, labor disputes, grievances and arbitrations, proceedings before the National Labor Relations Board, and in state and federal court. Mr. Greenberg also advises clients on the legal aspects of remaining union-free....