Labor Relations Today

Labor Relations Today

Five Practical Issues Browning-Ferris Creates for Employers

Posted in Joint Employer, NLRA, NLRB Decisions

National Labor Relations Board’s decision in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015), will have significant and far-reaching effects as it greatly expands the scope of relationships in which the Board can and will find entities to be joint employers. While the full ramifications of the Board’s decision remain to be seen, here are five issues, which are discussed thoroughly by Members Miscimarra and Johnson in their dissent, that employers will likely face as a result of Browning-Ferris:

1. No Certainty or Guidance On When a Joint Employer Relationship is Formed

Under the Board’s new standard where “all of the incidents of the [business] relationship must be assessed,” it is impossible to predict how the Board will weigh and factor those facts in deciding whether a joint-employer relationship exists. As noted by the dissent, the new test gives the Board the discretion to “give dispositive weight to an employer’s control over any essential term and condition of employment in finding a joint-employer relationship.”

Our colleagues presumably do not intend that every business relationship necessarily entails the joint employment of every entity’s employees, but there is no limiting principle in their open-ended multifactor standard. It is an analytical grab bag from which any scrap of evidence regarding indirect control or incidental collaboration as to any aspect of work may suffice to prove that multiple entities–whether they number two or two dozen–“share or codetermine essential terms and conditions of employment.”

Now, the only guidepost employers have consists of the specific facts in Browning-Ferris, where the Board found a joint-employer relationship existed. The “sum total” of evidence supporting the Board’s joint employer conclusion was: Continue Reading

NLRB Rewrites Decades-Old Joint Employer Test

Posted in Joint Employer, NLRA, NLRB Decisions, Unfair Labor Practices

Today the National Labor Relations Board issued its long-awaited ruling in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015), a 3-2 decision overruling the NLRB’s prior joint-employer standard adopted in 1984. The Board majority, consisting of Chairman Pearce and Members Hirozawa and McFerran, prefaced its need for revisiting the thirty-year-old standard on the fact that “the Board’s view of what constitutes joint employment under the Act has narrowed, [and] the diversity of workplace arrangements in today’s economy has significantly expanded.” By making its joint-employer standard much more encompassing, the Board majority claims that it is:

put[ting] the Board’s joint-employer standard on a clearer and stronger analytical foundation, and within the limits set out by the Act, to best serve the Federal policy of “encouraging the practice and procedure of collective bargaining.”

Under the Board’s new test, it will find that:

two or more statutory employers are joint employers of the same statutory employees if they “share or codetermine those matters governing the essential terms and conditions of employment.” In determining whether a putative joint employer meets this standard, the initial inquiry is whether there is a common-law employment relationship with the employees in question. If this common-law employment relationship exists, the inquiry then turns to whether the putative joint employer possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful collective bargaining.

… We will no longer require that  joint employer not only possess the authority to control employees’ terms and conditions of employment, but also exercise that authority. Reserved authority to control terms and conditions of employment, even if not exercised, is clearly relevant to the joint-employment inquiry. … Nor will we require that, to be relevant to the joint-employer inquiry, a statutory employer’s control must be exercised directly and immediately. If otherwise sufficient, control exercised indirectly–such as through an intermediary-may establish joint-employer status.

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Posted in NLRA, NLRB, NLRB Decisions

In Bellagio, LLC, 362 NLRB No. 175 (Aug. 20, 2015), the National Labor Relations Board concluded that an employer violated the National Labor Relations Act (the “Act”) when it supposedly denied an employee’s request for union representation during a disciplinary interview and also suspended him for refusing to participate in the investigation without union representation.

The employer is a casino operator in Las Vegas, Nevada. The employee is a bellman whose duties included assisting guests with luggage and with hotel check-in and check-out. On May 12, 2013, a hotel guest lodged a complaint against the employee claiming that the employee acted inappropriately in attempting to coax a tip and rudely after the guest withheld the tip. When a supervisor brought the employee for an interview, the employee asked whether discipline was on the table and also requested to contact a union representative. The supervisor could not locate a union representative, instructed the employee that it was the employee’s responsibility to find a union representative, and directed the employee to complete and sign a statement relating to the guest complaint. The employee declined to do so and indicated his desire to return to work. Rather than permit the employee to return to work, the supervisor placed the employee on suspension pending an investigation into the guest complaint. The following day, the employee and his union representative met with hotel management and cooperated with the investigation. Ultimately, the employee did not lose any pay as a result of his suspension.

The Board majority, through Chairman Pearce and Member McFerran, affirmed the Administrative Law Judge’s conclusion that the employer violated the employee’s Weingarten rights. Under NLRB v. J. Weingarten, 420 U.S. 251 (1975), an employee has the right, upon request, to have a union representative present during an investigatory interview, which the employee reasonably fears may result in discipline. The Board majority concluded that 1) the employer’s supervisor informed the employee at the beginning of the meeting that discipline was a possibility; 2) the employee requested a union representative; and 3) the employer did not grant the employee’s request because the parties could not locate a union representative. According to the Board majority, without a union representative available, the employer should have discontinued the interview. Instead, the employer continued to press the employee for a statement and suspended him as a result of his refusal to provide one. Although the employee suffered no loss in pay and received no discipline other than a brief suspension, the Board majority held that the employer subjected the employee to an adverse employment action when it removed him from the workplace.

In his dissent, Member Johnson disagreed with the Board majority’s summary of the pertinent facts. Specifically, Member Johnson found that the employer did not continue with the interview after failing to locate a union representative. According to Member Johnson, the facts “establish that [the supervisor] informed [the employee] that [the employee] would be suspended pending investigation if he continued to refuse either to locate a representative for himself or to fill out a statement….they do not establish that [the employer] sought to continue the interview after [the employee’s] request [for a representative].” Member Johnson also determined that the employer did not take any adverse employment action against the employee. Member Johnson concluded his dissent by stating:

“As a policy matter, the Board would better fulfill our mission of promoting industrial peace by permitting an employer in a situation like this—where an employee has been accused of a nefarious infraction and circumstances beyond the control of the employer prevent an immediate investigatory interview—to send the employee home pending the prompt completion of the investigation….I regret that my colleagues’ failure to recognize commonsense boundaries for Weingarten obligations here have transformed them into an unworkable stricture for employer that are faced with the sudden need to investigate a workplace incident, a scenario which happens all too frequently in the modern world.”

NLRB Declines to Assert Jurisdiction Over Northwestern University Football Players

Posted in NLRA, NLRB Decisions, Representation Elections

Inspiring a torrent of “punt”-related puns, the National Labor Relations Board on Monday declined to assert jurisdiction over the unionization effort of scholarship football players at Northwestern University.  In Northwestern University, 362 NLRB No. 167 (Aug. 17, 2015), a unanimous decision of all five Board Members held:

…we conclude, without deciding whether the scholarship players are employees under Section 2(3) [of the NLRA], that it would not effectuate the policies of the Act to assert jurisdiction in this case.

In so doing, the Board reversed the March 26, 2014 decision of the Regional Director, and dismissed the petition, thereby rendering moot the sealed results of the balloting held on April 25, 2014.

Much of the Regional Director’s decision, and the arguments of the student-athlete organizers and allies, focused on whether or not the day-to-day experience and grant-in-aid “compensation” of the students rendered them more like “employees” within the meaning of the NLRA.  The Board’s decision, on the other hand, focused on the difficulties in pursuing productive collective-bargaining within the current structure of the Football Bowl Subdivision (“FBS”) of the NCAA.  The top division of NCAA football incorporates conferences containing a mixture of (few) private and (many) public institutions — the latter over which, the Board would have a difficult, if not impossible, time of asserting jurisdiction.  Injecting itself into such a patchwork of regulatory schemes would complicate, rather than promote stability in labor relations:

Some states, of course, permit collective bargaining by public employees, but others limit or prohibit such bargaining. At least two states — which between them, operate three universities that are members of the Big Ten [along with Northwestern] — specify by statute that scholarship athletes at state schools are not employees. Under these circumstances, there is an inherent asymmetry of the labor relations regulatory regimes applicable to individual teams. In other contexts, the Board’s assertion of jurisdiction helps promote uniformity and stability, but in this case, asserting jurisdiction would not have that effect because the Board cannot regulate most FBS teams. Accordingly, asserting jurisdiction would not promote stability in labor relations.

Ultimately, the Board declined to answer the question posited last year by a simple labor law blogger in the WSJ:

“This ruling would potentially be the beginning of the end of the NCAA as we know it,” said Seth Borden, who represents employers in labor-relations matters…. “This ruling can only ultimately apply easily to private universities, so what happens in conferences where you’ve got private universities competing with public universities?” he asked.

This ruling by the Board will likely have no impact on the collective FLSA action recently filed by former student-athletes against the National Collegiate Athletic Association and member institutions. That suit alleges that the student-athletes were “temporary employees” who must be paid the minimum wage under the Fair Labor Standards Act. Now that the traditional union organizing route via the NLRB appears to be a dead end, one would expect the CAPA, student-athletes and their other allies to pursue their goals by forum-selective litigation like this.

DC Circuit Invalidates Most of Lafe Solomon’s Tenure as Acting General Counsel

Posted in Federal Court Litigation, NLRB Decisions, Presidential Appointments

On August 7, 2015, the U.S. Court of Appeals for the District of Columbia held that Lafe Solomon, the former Acting General Counsel of the National Labor Relations Board, served in violation of the Federal Vacancies Reform Act of 1998 (“FVRA”) from January 5, 2011 to November 4, 2013. In SW General, Inc. v. NLRB, the Board found that the employer had violated Section 8(a)(5) of the National Labor Relations Act by discontinuing longevity payments while the parties were negotiating a new collective bargaining agreement. The complaint upon which the violation was found was issued by a Regional Director on January 31, 2013, and the Board affirmed the administrative law judge’s decision in May 2014 without addressing the employer’s FVRA challenge.

The employer contended that since January 2011, Acting General Counsel Solomon served in violation of the FVRA and, thus, the ULP complaint issued against it in January 2013 was invalid.

In June 2010, Ronald Meisburg resigned as NLRB General Counsel. The President directed Lafe Solomon, then-Director of the NLRB’s Office of Representation Appeals, to serve as the Acting General Counsel in Meisburg’s stead….The President cited the FVRA as the authority for Solomon’s appointment….On January 5, 2011–six months into Solomon’s temporary appointment–the President nominated him to be General Counsel….The Senate, however, returned Solomon’s nomination….The President resubmitted Solomon’s nomination on May 24, 2013…but ultimately withdrew it and nominated Richard Griffin instead, who was confirmed by the Senate on October 29, 2013….All told, Solomon served as Acting General Counsel from June 21, 2010 to November 4, 2013.

Consequently, the employer argued that Solomon became ineligible to serve as Acting General Counsel once the President nominated him to be General Counsel. The D.C. Circuit agreed.

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Quick Hits: Friday, August 7, 2015

Posted in Federal Court Litigation, NLRB, NLRB Administration, Quick Hits, White House


Posted in NLRB, NLRB Decisions

In Student Transportation of America, Inc., 362 NLRB No. 156 (Aug. 3, 2015), the National Labor Relations Board concluded that an executive’s statement, shortly prior to a union election, that the employer “could walk away” from a contract with the proposed bargaining unit’s only client if “operations became too costly” might have tarnished the vote. As part of its ruling, the Board ordered a new election if the union did not prevail on a re-tally with challenged ballots added to the existing pool of votes.

The employer is a provider of transportation services to school districts from facilities throughout the United States. The proposed bargaining unit at issue was comprised of all drivers and mechanics employed at a specific township facility. The employer’s only client in that facility was the township. The employer’s contract with the township included a clause through which the township, but not the employer, could terminate the contract if the township determined that it lacked adequate funds to pay for the services under the contract. According to the testimony of an employee, at two employee meetings discussing unionization, the employer’s executive stated that the employer “had it written into [its] contract” with the township that the employer “could walk away” from the contract if operations “became too costly.” The employee also testified that the executive told the employees that he wanted the facility to succeed and “wanted to be in for the long haul.” After the union lost the election by one vote, it challenged the election results based in part on the executive’s statements.

The Board majority, through Members Hirozawa and McFerran, rejected the administrative law judge’s conclusion that the executive’s comments were not improper because the executive neither stated nor implied “that unionization would necessarily cause [the employer] to walk away from the contract and close the facility.” The Board majority further rejected the judge’s reasoning that the executive’s additional statements about wanting the facility to succeed did not mitigate the negative impact that his statement about the township contract may have had.

The Board majority conceded that the executive’s statements did not directly threaten the employees with job loss. Nevertheless, the Board majority characterized the executive’s statements about the township contract as a “veiled threat,” which “implied to the employees that, in the event of a [union] victory, the [e]mployer might respond by terminating the contract with the [t]ownship—its only client—and thereby leave the [employees] without jobs.” According to the Board majority, employees “would have heard the threatening subtext that the employer might well decide to exercise this prerogative [to walk away from the contract with the township] in the event that the [union] was voted in.” Ultimately, the Board majority held that “where…the threat involves one of the most fundamental aspects of employment conditions—i.e., job security—a single, widely disseminated threat can be sufficient to overturn election results in a very close election.”

Member Johnson dissented, noting that the executive’s “vague, abbreviated comment—which merely misstated a provision of the [e]mployer’s contract with the [t]ownship and does not mention unionization, layoffs, or closure—is insufficient to constitute a threat of reprisal if the employees voted for the [u]nion.”

Board Finds Filing a Putative Fair Labor Standards Act Collective Action To Be Concerted Activity

Posted in Uncategorized

In 200 E. 81st Rest. Corp., 362 N.L.R.B. No. 152 (July 29, 2015), the National Labor Relations Board concluded that an employee’s filing of a putative collective action under the Fair Labor Standards Act (“FLSA”) constituted concerted activity under the National Labor Relations Act (“NLRA”), even though the employee filed the lawsuit without the consent of any other employee.

On June 25, 2013, the employer received notice that one of its employees filed a lawsuit in federal court on behalf of himself and others similarly situated, alleging violations of the FLSA. Although the employee filed his complaint as a putative collective action, he did not obtain any authorizations or consents from any current or former employees to file the lawsuit. That same day, when the employee arrived at work, he noticed that his name was not on the work schedule. His supervisors met with him and informed him that they removed him from the schedule because he had filed a lawsuit. The employee went home after the meeting and never returned to work. The employer conceded that it terminated the employee on June 25, 2013.

The Board majority, through Chairman Pearce and Member McFerran, agreed with Administrative Law Judge Green’s conclusion that the employer terminated the employee because he filed a putative collective action under the FLSA. The Board majority also affirmed Judge Green’s finding that the employee engaged in concerted activity when he filed an FLSA lawsuit related to wages, even though “the evidence in this case [did] not establish that [the employee] acted in concert with, or on the authority of any of the other employees.”

In holding that a single plaintiff putative collective action lawsuit qualifies as concerted activity, the Board majority relied on its language in two recent decisions. In the first decision— holding that an employer’s mandatory arbitration agreement was unlawful on its face—the Board noted, “[c]learly, an individual who files a class or collective action regarding wages, hours or working conditions, whether in court or before an arbitrator, seeks to initiate or induce group action and is engaged in conduct protected by Section 7.” D.R. Horton, 357 NLRB No. 184 (2012). In the second decision—similarly invalidating another arbitration agreement—the Board stated that “the filing of [a putative collective] action contemplates—and may well lead to—active or effective group participation by employees in the suit….” Murphy Oil USA, Inc., 361 NLRB No. 72 (2014) (emphasis in original). Extending the reasoning in D.R. Horton and Murphy Oil, the Board majority concluded in no uncertain terms that “the filing of an employment-related class or collective action by an individual is an attempt to initiate, to induce, or to prepare for group action and is therefore conduct protected by Section 7.”

In dissent, Member Miscarra found that the majority’s decision incorrectly overextended the reach of the NLRA to all non-NLRA class or collective action claims. According to Member Miscarra, because the employee acted alone in filing his lawsuit, he did not engage in concerted activity. Member Miscarra also noted that the employee was not without remedy for his termination, as the FLSA expressly prohibits termination of an employee based on the filing of an FLSA complaint.

Board Finds Deferral to Arbitration Inappropriate Where Employer Clearly Violated the Express Terms of the Collective Bargaining Agreement

Posted in NLRA, NLRB, NLRB Decisions, Uncategorized, Unfair Labor Practices

In Oakland Physicians Medical Center, LLC, 362 NLRB No. 129 (July 22, 2015), the National Labor Relations Board both rejected the employer’s request for deferral to arbitration and found that the employer violated the National Labor Relations Act by making unilateral changes to employee health care coverage, including the premiums paid by the employees, during the term of the collective bargaining agreement (“CBA”).

Article 16.4 of the CBA gave the employer the right to select and change insurance carriers and administrators, as long as similar health coverage was maintained. Article 16.1 of the CBA gave the employer the right to amend the plan design of health insurance benefits with prior notice to the Union, but required employee premiums as listed in a schedule to remain the same.

During the term of the CBA, the health insurance provider terminated its contract with the employer, requiring the employer to obtain new health insurance coverage. The employer obtained new insurance without prior notice to the Union. Employee premiums increased under the new health insurance plan, and the Union refused to agree to the proposed health care changes. Although the employer paid 100% of the employee premiums in the first month of the new health insurance plan, it began deducting the new increased premium amounts thereafter.

The Union filed grievances claiming that the employer’s conduct violated the CBA’s health care provision and filed an unfair labor practice charge challenging the unilateral change mid-contract.  The employer requested deferral to arbitration.

The Board majority, through Chairman Pearce and Member McFerran, rejected the employer’s deferral request. The majority found that the case presented no issue of contract interpretation because of the unambiguous language in the health care provision preventing the employer from increasing employee premiums and requiring prior notice to the Union for any permissible changes.

By altering premium co-shares, and otherwise “amend[ing] the plan design of health insurance benefits,” without notice to the Union, the Respondent engaged in conduct expressly prohibited by the collective-bargaining agreement. These clear violations of the express terms of the parties’ agreement make deferral inappropriate. Further, as the Union refused to give its consent to these changes, it is clear that the Respondent’s conduct constituted an unlawful mid-term contract modification.

In dissent, Member Johnson found that the case should be deferred to arbitration. He relied on Article 16.4 as the operative provision because the employer changed providers and did not simply amend the plan design. Unlike Article 16.1, Article 16.4 did not expressly require prior notice to the Union or prevent the employer from changing employee premiums. It simply required the employer to maintain “similar coverage.”

This contractual provision, even though it directly pertains to the operative facts, is not entirely clear and unambiguous on its face; the term “similar coverage” can reasonably be interpreted as open to at least two plausible interpretations. On the one hand, it is reasonable to construe “similar coverage” to include the level of health benefits. . . . Conversely, the [employer’s] assertion that similar coverage refers to the types of benefits provided under the health plans is equally plausible . . . . Because the term “similar coverage” is susceptible to different reasonable interpretations, an arbitrator is needed to determine what the parties intended by the term . . . .

GOP House Committee Chairpersons Ask DOL and FAR Council to Withdraw Proposed Blacklisting Regs

Posted in Department of Labor, Executive Orders, Government Contracting, House of Representatives

On May 28, 2015, the U.S. Department of Labor and the Federal Acquisition Regulatory (FAR) Council proposed regulatory amendments and guidance to implement the President’s Executive Order 13673, entitled “Fair Pay and Safe Workplaces.”  What the Order and proposed regulations subject government contractors to a broad new set of record-keeping, reporting and compliance requirements. Failure to fulfill these obligations and exhibit compliance with all applicable federal and state labor laws would expose the contractor to the prospects of disqualification, suspension, or debarment.  In sum, the regulations would require all covered contractors and subcontractors to report all unadjudicated administrative rights determinations, arbitral awards and civil judgments against it under a wide variety of federal and analogous state labor laws.  Somewhat shockingly, despite having been directed by the Executive Order to propose regulations almost a year ago, the DOL and FAR Council have not even been able to identify all of the laws that this proposed system would cover.  Yet, the agencies still expect the public comment period to close at the end of this month.

Last week, the Republican chairs of various House Committees and Subcommittees called upon the agencies to withdraw the problematic proposals. In the alternative, they requested an additional ninety days for analysis and submission of comments by stakeholders:

Agencies must have strong foundations on which to propose new guidance of a new regulation and must afford interested parties the opportunity to assess the changes and provide substantive and informed comments on those proposals. To ensure compliance with the spirit of the Administrative Procedure Act (APA), the comment period should allow for a deliberative process to ensure that interested parties have a complete understanding of how current and future proposals work together so that they can provide meaningful input to the agencies. This is especially true when proposals threaten due process, impose onerous reporting burdens and limit competition by favoring certain competitors while blacklisting others, resulting in significant job losses.

The proposed regulations and guidance do all these things — as well as represent an unauthorized and unconstitutional exercise of powers reserved to the Congress. Moreover, there is the real possibility that they will actually increase government cost, despite their publicly proclaimed intent. It is difficult to see how the original sixty days is near enough time to deliberate over such extensive amendment of the federal labor laws.

The letter is signed by: Reps. John Kline (R-MN), Chairman, Education and the Workforce Committee; Steve Chabot (R-OH), Chairman, Committee on Small Business; Jason Chaffetz (R-UT), Chairman, Committee on Oversight and Government Reform; Jim Jordan (R-OH), Chairman, Subcommittee on Health Care, Benefits and Administrative Rules; Richard Hanna (R-NY), Chairman, Subcommittee on Contracting and Workforce; Crescent Hardy (R-NV), Chairman, Subcommittee on Investigations, Oversight and Regulations; Phil Roe, M.D. (R-TN), Chairman, Subcommittee on Health, Employment, Labor and Pensions; and Tim Walberg (R-MI), Chairman, Subcommittee on Workforce Protections.  Comments on the proposals were originally due July 27, 2015.