Labor Relations Today

Labor Relations Today

National Labor Relations Board Vacates Earlier Decision Overruling Browning-Ferris Joint Employer Standard

Posted in Joint Employer, NLRB Administration, NLRB Decisions, Obama Board Reversal

In Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (Dec. 14, 2017), a three-Member majority of the Board overruled Browning Ferris Industries of California, 362 NLRB No. 186 (2015) and announced a return to the Board’s long-standing analysis for determining joint employment relationships.  On February 9, 2018, however, the Board’s Office of Inspector General (OIG) issued a report criticizing current Board Member William Emanuel’s participation in that decision, in part, because Member Emanuel’s former law firm represents one of the parties in the Browning Ferris matter.

Although neither that party nor any of the other parties are litigants in the Hy-Brand case, the OIG Report asserted that the

wholesale incorporation of the dissent in Browning-Ferris into the Hy-Brand majority decision consolidated the two cases into the same ‘particular matter involving specific parties.’

In conclusion, the OIG Report stated that Member Emanuel should have recused himself from the Hy-Brand case, and that his failure to do so represented a “serious and flagrant problem and/or deficiency in the Board’s administration of its deliberative process….”

In response, by Order dated February 26, 2018, the Board has vacated and set aside its earlier Decision and Order. 366 NLRB No. 26 (Feb. 26, 2018):

The Board’s Designated Agency Ethics Official has determined that Member Emanuel is, and should have been, disqualified from participating in this proceeding. After careful consideration, and exercising the Board’s authority under Section 102.48(c) of the Board’s Rules and Regulations and Section 10(d) of the Act, we have decided to grant the Charging Parties’ motion in part and to vacate and set aside the Board’s December 14, 2017 Decision and Order.

Because we vacate the Board’s earlier Decision and Order, the overruling of the Browning-Ferris decision is of no force or effect.

Given this result, one should expect that Sen. Elizabeth Warren (D-MA) and other allies of Labor will continue to focus attention on the recusal issue in order to prevent three-Member Board majorities from overruling many of the radical departures from precedent handed down by the Board during the Obama Administration.  Employers should be prepared to continue to operate under these new standards for at least the next year or two of the current administration, as the Board wrestles with this issue in the variety of cases awaiting adjudication.

National Labor Relations Board Extends Time For Submission of Feedback Regarding Quickie Election Rules

Posted in NLRB Rule-Making, Representation Elections

On December 14, 2017, the National Labor Relations Board published a Request for Information in the Federal Register, seeking public comment on these general questions regarding the December 2014 overhaul of its representation election procedures:

  1. Should the 2014 Election Rule be retained without change?
  2. Should the 2014 Election Rule be retained with modifications? If so, what should be modified?
  3. 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?

While comments were initially due February 12, 2018, the Board has extended the time for submission of feedback to March 19, 2018.

NLRB Orders New Election Where Polls Opened Seven Minutes Late

Posted in NLRB Decisions, Representation Elections

One Democrat Member and one Republican Member of the National Labor Relations Board joined together to set aside an election won by the union 14-12 because the Board agent opened the polls seven minutes late and there were four employees–a number that could affect the result–who did not vote.

Members Lauren McFadden and William Emmanuel found in Bronx Lobster Place, LLC, NLRB Case No. 02-RC-191753 (Feb. 2, 2018), “that the late opening of the polls, combined with the possible disenfranchisement of potentially dispositive voters, warrants setting the election aside” despite evidence that there were no employees at or near the polls trying to vote during those seven minutes. Relying on a 2001 Board decision, Pea Ridge Iron Ore Co., 335 NLRB 161 (2001), which also involved a seven minute delay in the opening of the polls, the Board reaffirmed that:

[w]hen election polls are not opened at their scheduled times, the proper standard for determining whether a new election should be held is whether the number of employees possibly disenfranchised thereby is sufficient to affect the election outcome, not whether those voters, or any voters at all, were actually disenfranchised.

Because there was no evidence that any employees were actually disenfranchised by the late opening, Member Pearce dissented based on the Board’s decision in Arbors at New Castle, 347 NLRB 544 (2006). The Board majority noted, however, that there was actual evidence as to why the employees did not vote in Arbors, unlike the record currently before it, and thus Arbors does not compel a different result.

NLRB General Counsel Mulling New ULP Case Processing Procedures

Posted in NLRB, NLRB Administration

In a January 29, 2018 email, the Office of the General Counsel of the National Labor Relations Board informed its Regional offices of potential changes it is considering with respect to how the NLRB processes unfair labor practice charges. The General Counsel had solicited suggestions “from all levels of the organization,” and compiled a “draft summary of suggestions” in a memo attached to the January 29th email.

The most significant change suggested is to require “institutional charging parties, such as unions, employers, other organizations, and employees who have a personal representative” to file a detailed position statement or affidavit with the unfair labor practice charge. The position statement would have to include a recitation of facts, identification of relevant witnesses, names of all alleged discriminatees, names and titles of relevant managers/supervisors/employer agents, the remedy sought, and relevant documents such as collective bargaining agreements and relevant grievances. Unrepresented individual charging parties would also have to file a position statement, but Regional personnel would be expected to assist them in completing the position statement.

The memo also included suggestions that investigative subpoenas be used sparingly and only after approval is provided by Operations, and that investigations would not seek employer EIN numbers or manuals, policies, handbooks, etc. unless directly related to alleged violations.

Other significant suggestions include:

  • potential dismissal of the charge if the charging party fails to respond to any request from the Region within two business days;
  • when contacting the charged party, the Board agent should go over the allegations, seek resolution including a bilateral resolution, and allowing non-Board resolutions to be memorialized by email;
  • if the Board agent and the supervisor decide to pursue an investigation of the charge, set a deadline for ultimate disposition;
  • prior to the opening of a hearing, Regions may take settlements of any kind that are not inconsistent with the Act.

The General Counsel’s office has requested comments to the suggestions by Friday, February 9.

House of Representatives Passes Bill To Restore Recognition Of Tribal Sovereignty In Labor Law Enforcement

Posted in Filibuster, House of Representatives, Legislation, NLRA, Senate, Unions

Earlier this month, a bipartisan 239-173 majority of the House of Representatives passed the text of the Tribal Labor Sovereignty Act (H.R. 986) as an amendment to a Senate bill amending a 2010 law regarding Apache tribal water rights (S. 140).  The Tribal Labor Sovereignty Act would amend the National Labor Relations Act to expressly clarify the exclusion of tribal employers from the Act’s definition of “employer.”  Specifically, the bill would add “any enterprise or institution owned and operated by an Indian tribe and located on its Indian lands” to the definition’s list of exclusions set forth in Section 2(2) of the Act as follows:

…the United States or any wholly owned Government corporation, or any Federal Reserve Bank, or any State or political subdivision thereof…

Until 2004, the NLRB’s position regarding jurisdiction over Indian tribes as employers was that tribes were exempt from the NLRA.  That year, however, the Board shifted course entirely, asserting jurisdiction over the San Manuel Indian Bingo and Casino — a tribal casino owned and operated by the San Manuel Band of Serrano Mission Indians on tribal land in California.  The Court of Appeals for the D.C. Circuit affirmed.

Proponents of this legislation argue that it simply affords Tribal governments the same respect that the National Labor Relations Act affords state and local governments.  Upon its passage, House Committee on Education and the Workforce Chair Rep. Virginia Foxx (R-NC), and Subcommittee Chair Rep. Tim Walberg (R-MI), issued the following statement:

This is a long overdue solution to protecting the rights of Native Americans, and respecting their laws the same as state and local governments. The bureaucratic overreach by the NLRB costs Native American businesses significant time and money to fight the federal government’s arbitrary intervention in labor relations involving Native American tribes. Today’s bill strips unelected bureaucrats of the power they abused and reaffirms a respect for the sovereignty of Native American tribes.

The Apache Water Rights bill had passed the Senate by unanimous consent.  The amended bill, including the Tribal Labor Sovereignty Act language, will now head back to the Senate.  It is safe to say that it will not pass unanimously this time around.  Twenty-three (23) Democrats from conservative districts and states with significant Native American communities joined the Republican caucus in the House to vote for this bill, and the principles underlying the bill previously found sympathy in some courts and the Obama administration’s Department of the Interior.  The bill’s sponsors will need at least nine (9) Democrat votes to break a filibuster in the Senate — a tall order in this polarized mid-term election year.  Plus, organized labor has kicked its opposition to the bill into overdrive, increasing that challenge.  UNITE-HERE has already cut off campaign contributions to all Democrats who voted for the measure in the House, threatening the same for any Senate supporters — and local media outlets report that Democrat Senators are already expressing opposition to the bill.

Restructuring On The Way For National Labor Relations Board Regional Offices?

Posted in NLRB Administration

Bloomberg News reported last week that NLRB General Counsel Peter Robb may be considering “reorganizing the agency’s 26 regional offices into a smaller number of districts or regions supervised by officials who would report directly to the general counsel.”   Such a change would certainly centralize authority and limit the power of more local officials in the investigation, prosecution and resolution of Board cases. Proponents of this type of consolidation might argue that it would provide greater uniformity of expectations for stakeholders, and could increase efficiency in the administrative process.  When initially pressed for comment, the Board denied that a plan to restructure the Regional Offices “ha[d] been developed.”

Days later, attendees of an American Bar Association meeting with NLRB Chairman Marvin Kaplan indicated that the Chairman took the position that the General Counsel cannot effectuate such a plan Board approval. Bloomberg’s Chris Opfer reports:

Some board observers pegged the proposal as Robb’s attempt to consolidate his power as the NLRB’s lead attorney and reduce the role of directors who may not share his views. Others familiar with the proposal said it’s a response to expected budget cuts.

Kaplan also told the group that the proposal may require public input, according to the sources, who spoke on the condition that they not be identified. Robb attended portions of the meeting but wasn’t in the room when Kaplan made the comments, they said.

Kaplan said “the Board will seek public input and he understands that the General Counsel would seek Board approval consistent with the Board’s longstanding practice,” an NLRB spokesperson told Bloomberg Law.

 

NLRB’s General Counsel Issues Guidance Following Board’s PCC Structurals, Inc. Decision

Posted in Micro Units, NLRB, NLRB Decisions, Representation Elections, Uncategorized

In December 2017, the Office of the General Counsel issued Memorandum OM 18-05. This memorandum followed the Board’s decision in PCC Structurals, Inc., 365 NLRB No. 160 (Dec. 15, 2017), which overruled Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011) and reinstated the traditional community-of-interest standard for determining the appropriateness of a proposed bargaining unit.  The memorandum directs Regions to apply the Board’s new analysis outlined in PCC “at all stages of case processing in currently active cases” and provides the following procedural guidance to ensure that the traditional community-of-interest standard is applied consistently moving forward.

The memorandum first directs Regions to “routinely afford the parties to an R case an opportunity to argue that the PCC decision has now rendered a recently consented, stipulated or directed bargaining unit inappropriate in a currently active case.”  This is true regardless of whether the case is in a pre-election or post-election posture.  If the opportunity to revisit a unit determination is not requested by a party, the memorandum instructs Regions to issue a Notice to Show Cause directing the parties to show, with specificity, why the stipulated or direct bargaining unit is inappropriate under PCC.  The memorandum attaches model notices to show cause both for cases where the unit was determined by stipulated or consent agreement and by decision and direction of election.

Next, the memorandum emphasizes the wide range of discretion afforded to Regional Directors in handling representation cases and encourages the use of that discretion to delay hearings where necessary to fully engage in the fact intensive community-of-interest analysis. Regional Directors have the discretion to set the hearing beyond the eighth day after service of the notice of hearing in cases involving unusually complex issues.  The memorandum recognizes that a case involving the PCC community-of-interest analysis would qualify as an unusually complex issue and might require additional time to ascertain the appropriate unit and prepare evidence for hearing.  The memorandum also acknowledged the Regional Director’s discretion in setting an election date for the “earliest date practicable” and described the PCC decision as a “substantial change in law” which might require additional time to set an election date.

Finally, the memorandum provides guidance on how to streamline hearings in light of the PCC decision.  It directs Hearing Officers to explore detailed stipulations of fact in an effort to avoid lengthy testimony.  It further provides the following guidance on the level of detail that must be included in Statements of Position (“SOP”) if a proposed unit is challenged:

[I]f a party contends as part of its SOP that the proposed unit is not appropriate, the party will be required to state the basis for its contention that the proposed unit is inappropriate, and state the classifications, locations, or employee groupings that must be added to or excluded from the proposed unit to make it an appropriate unit. Mere claims or rote citations to PCC will not be sufficient.  Rather, parties should be strongly encouraged to provide in the SOP specific details in order to warrant consideration for hearing.  For example, where community-of-interest factors are at issue, such as in a PCC scenario, the Regional Director should advise the parties to include in their SOP a specific description of those factors, along with the evidence which will be provided in support.  As part of their SOP, the parties must also identify any other individuals whose eligibility they intend to challenge at the pre-election hearing and the basis for such contention.  It is equally imperative that the petitioner be prepared to respond at hearing with specificity to each issue that is raised in the SOP.

Labor Relations Today Issues ‘Labor Law 2017: Year in Review’

Posted in Department of Labor, Executive Orders, Expedited Elections, Federal Court Litigation, Government Contracts, House of Representatives, Joint Employer, Legislative Strategy, Micro Units, MLA Media, Negotiations, NLRB Administration, NLRB Decisions, NLRB Rule-Making, Obama Board Reversal, Persuader Rules, Presidential Appointments, Representation Elections, Right to Work, SCOTUS, Senate, Social Media, Unfair Labor Practices, Unions, White House, Workplace Rules

McGuireWoods labor attorneys and the editors of Labor Relations Today are pleased to announce the publication of Labor Relations 2017: Year in Review.

As a new administration took the reins for the first time in eight years, employers, employees, unions, labor lawyers and observers alike all wondered what to expect from President Donald J. Trump.  Would he govern much like the traditional Republican politicians he so soundly dispatched during his unconventional run through the primaries?  Or would his labor agenda be less doctrinaire and more pragmatic – as his relationships with organized labor often seemed throughout his career as a real estate developer, builder and business operator? In some ways, 2017 brought more questions than answers. In the intense last few weeks of the year, the Board’s new General Counsel and outgoing Chairman helped tee up the answers to some of those questions.

We submit this Year in Review to summarize the most noteworthy developments in 2017 – a year in which disruption, intense partisan struggle and political intrigue was woven through nearly every legal change.  Additional information on these topics and more is available at our Labor Relations Today blog (laborrelationstoday.com), where we will continue to chronicle and alert readers to significant changes in the law as they unfold in 2018 and beyond.

We hope you find it a helpful resource as we head into what will undoubtedly be another interesting year in labor-management relations.

Click here to download Labor Law 2017: A Year in Review.

To order hard copies of Labor Law 2016: A Year in Review, e-mail John Williams here.

Busy Board Overrules Specialty Healthcare; Restores Traditional Community of Interest Standards Disfavoring Micro-Units

Posted in Expedited Elections, Micro Units, NLRB Decisions, Obama Board Reversal, Representation Elections

National Labor Relations Board Chairman Phil Miscimarra’s term expired today, but he did not coast into “retirement.”  In addition to the late flurry of decisions which include the Board’s overruling of the Browning-Ferris joint employer standard and the Lutheran Heritage Village-Livonia standard used recently to attack neutral workrules, the Board today issued a decision undoing the radical departure announced in the 2011 Specialty Healthcare decision. That decision announced new standards for determining whether the bargaining unit proposed by a petitioning union is appropriate. It cast aside presumptions which were the result of decades of practical experience and case law development, and opened the door to so-called “micro-unit” organizing, whereby unions can gerrymander a larger workforce and cherry-pick smaller units best suited to organizing success.

In PCC Structurals, Inc., 365 NLRB No. 160 (Dec. 15, 2017), the Board held:

Today, we clarify the correct standard for determining 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. In so doing, and for the reasons explained below, we overrule the Board’s decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011) (Specialty Healthcare), enfd. sub nom. Kindred Nursing Centers East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013), and we reinstate the traditional community-of interest standard as articulated in, e.g., United Operations, Inc., 338 NLRB 123 (2002).

For decades prior to 2011, the Board made these unit determinations by analyzing a number of factors to determine whether the employees in a petitioned-for unit shared a sufficient “community of interest” to make their representation in a single bargaining unit reasonable and effective. The factors that the Board generally considered in unit determinations included:

whether the employees are organized into a separate department; have distinct skills and training; have distinct job functions and perform distinct work, including inquiry into the amount and type of job overlap between classifications; are functionally integrated with the Employer’s other employees; have frequent contact with other employees; interchange with other employees; have distinct terms and conditions of employment; and are separately supervised.

Specialty Healthcare, 357 NLRB at 942, quoting United Operations, Inc., 338 NLRB 123 (2002).  Formal rulemaking in 1989 established industry-specific rules for determinations in acute care hospitals only; and, Park Manor Care Center, 305 NLRB 872 (1991) clarified and differentiated the standards for non-acute care facilities only.  In the Specialty Healthcare case, although neither party requested it, the Board discarded the Park Manor standards for non-acute healthcare facilities.

Despite the very narrow and industry-specific focus of the rule at issue, the Board subsequently expanded the holding in Specialty Healthcare and applied the micro-unit standard in a wide variety of industrial settings well beyond non-acute healthcare facilities — including private aviation services, beverage manufacturing, telecommunications, wine production, military equipment manufacturing, and retail sales.

In PCC Structurals, the Board announced a return to the traditional standards, and remanded the case to the Regional Director to apply those standards to determine whether the petitioned for unit of 102 welders — and excluding some 2,463 other production and maintenance employees — was appropriate.

As with the other significant reversal cases this week, Members Pearce and McFerran filed a vigorous dissent, concluding:

As reflected by its favorable reception in the federal courts, the Specialty Healthcare framework—itself based on an earlier decision of the U.S. Court of Appeals for the District of Columbia Circuit—represented a major improvement to the Board’s approach in this area. It brought greater clarity and predictability to unit determinations, while vindicating the goals of federal labor law. There is simply no justifiable reason—certainly not a change in the Board’s membership alone—to reverse course and abandon a doctrine that has been so widely accepted and praised.

If the spate of decisions issued in the last couple of days are to be challenged, this theme woven through all the minority’s strident dissents will likely form a significant basis for the effort.  It would seem the Board’s return to standards, which were accepted for decades before their radical overhaul just a few years ago, would survive challenge in the federal courts.  But time will tell.  Earlier this year, Rep. Tim Walberg (R-MI), introduced the Workforce Democracy and Fairness Act (H.R. 2776) which would amend the NLRA to expressly incorporate the traditional “community of interest” standards, and preclude future Boards from reversing course again on this issue.  The bill passed a committee vote in September 2017, but has not gone any further.

National Labor Relations Board Restores Longstanding Joint Employer Rules

Posted in Joint Employer, NLRB Decisions, Obama Board Reversal

In the closing days of Chairman Miscimarra’s term, the Board has restored the longstanding rules for finding joint employment that were cast aside by the Obama Board in the 2015 Browning-Ferris decision. In Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (Dec. 14, 2017), the Board overruled Browning-Ferris Industries of California, Inc., dba BFI Newby Island Recyclery, 362 NLRB No. 186 (2015), and returned to the standard applied for decades prior to that decision:

Thus, a finding of joint-employer status shall once again 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.”

As a result, companies which employ a variety of business models potentially targeted by Browning-Ferris may rely upon a clearer, more objective standard in determining whether they might have some responsibility for each other’s conduct or shared bargaining obligations.

For at least thirty years prior to 2015, the Board found a joint employer relationship if two or more separate entities “share[d] or codetermine[d] the essential terms and conditions of employment” of a group of employees. TLI, Inc., 271 NLRB 798, 798 (1984); Laerco Transportation, 269 NLRB 324, 325 (1984).  Under this standard, the Board appropriately required “a showing that [each] employer meaningfully affects matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction” and analyzed  both “form” (i.e., the contractual relationship between the putative joint employers) and “substance” (i.e., the actual practice of the putative joint employers). Id.; AM Property Holding Corp., 350 NLRB 998, 1000 (2007) (“In assessing whether a joint employer relationship exists, the Board does not rely merely on the existence of such contractual provisions, but rather looks to the actual practice of the parties.”). As provided by common law, the “essential element” of joint employer status required “a putative joint employer’s control over employment matters [to be] direct and immediate.”  Airborne Freight Co., 338 NLRB at 597 (emphasis supplied); see also AM Property Holding Corp., 350 NLRB at 1000-02.

In Browning-Ferris, the NLRB drastically expanded the standard for joint employment holding that the Board may find that two or more entities are joint employers of a single work force if they (1) are both employers within the meaning of the common law, and (2) “share or codetermine those matters governing the essential terms and conditions of employment.” The second factor tracked the language of the traditional test, but unlike the Board’s traditional joint employer test, the Board no longer required that the putative joint employer exercise control over the putative joint employees directly and immediately.  As criticized by the Board in yesterday’s Hy-Brand ruling:

In Browning-Ferris, the Board majority held that, even when two entities have never exercised joint control over essential terms and conditions of employment, and even when any joint control is not “direct and immediate,” the two entities will still be joint employers based on the mere existence of “reserved” joint control,or based on indirect control or control that is “limited and routine.”

The majority decision in Hy-Brand expands in significant length upon the Browning-Ferris dissent filed by then Member Miscimarra and Member Harry Johnson. Applying the restored standard, however, the Board still found the employers at issue in the case to be joint employers:

Applying the joint-employer standard that existed prior to Browning-Ferris, we find that the record establishes that Brandt and Hy-Brand constitute a joint employer, which means they are jointly and severally liable for remedying the unfair labor practices committed in the instant case. Substantial evidence supports a finding that the two entities exercised joint control over essential employment terms involving Brandt and Hy-Brand employees, the control was direct and immediate, and it was not limited and routine. … [T]he record establishes that the joint control described above was actually exercised, not merely re- served, and that it had a direct and immediate impact on Brandt and Hy-Brand employees.

It remains to be seen what impact this ruling will have on the pending McDonald’s litigation, which has necessitated nearly 200 days of hearing to date, and is nowhere near resolution. In 2014, the Board undertook prosecution of 13 complaints involving 78 charges filed against McDonald’s and numerous franchisees as joint employers. At the commencement of the litigation, the General Counsel urged adoption of the standards eventually announced in Browning-Ferris. Now that there is a new General Counsel and restored legal standard, we might wonder whether the case will be discontinued.

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