Surprising all pundits including ASE, the National Labor Relations Board (NLRB or Board) came out with three decisions last week that were not expected until 2018.
The first case allowed the NLRB to overrule the Obama Era’s NLRB controversial Browning Ferris decision on joint employment The second decision involved the overturning of the NLRB’s approach to handbook rules under the Lutheran Heritage case. The third overturned the Specialty Healthcare micro-union organizing.
The case overturning Browning Ferris concerned an NLRB judge’s finding that two entities – Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co. – are collectively joint employers and/or a single employer for purposes of the NLRA. In this case, five HyBrand employees and two Brandt employees were discharged after they engaged in work stoppages based on concerns involving wages, benefits, and workplace safety. The NLRB judge used the Browning Ferris approach to determine joint employment.
In the Browning Ferris case the NLRB ruled on party lines that Browning Ferris was a joint employer of recycling workers provided by staffing agency Leadpoint Business Services Inc. at a BFI-owned recycling facility in Milpitas, California. The Board ruled 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 significance of this case was that the union was trying to organize Leadpoint employees and because they were being placed in similar positions at Browning Ferris, the Browning Ferris employees could also organize. It was a backdoor approach to organize Browning Ferris workers.
The NLRB ruled that the Browning Ferris approach to joint employment was overruled, and then reverted back to the traditional “direct and immediate” control standard to determine joint employment. In this situation a joint employer situation would arise if they both can “meaningfully affect matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction.” The NLRB then ruled that the two companies were joint employers (incidentally had common ownership among other things) and that the workers were fired in violation of their Section 7 concerted activity rights.
It should be noted that Browning Ferris was appealed to the DC Court of Appeals, yet no ruling was made.
The second case that reversed Obama era NLRB interpretations was the Boeing case. In the Boeing case, Boeing maintained a no-camera rule to protect company trade secrets and confidentiality of its manufacturing process. Boeing’s no-camera rule also played a key role in ensuring that Boeing complies with its federally mandated duty to prevent the disclosure of export-controlled information or the exposure of export-controlled materials to unauthorized persons. A complaint was filed that the rule constituted unlawful interference with the exercise of protected rights. An NLRB judge ruled against Boeing because employees could reasonably construe that the policy violates their rights.
The NLRB overturned the judge’s decision. The NLRB reviewed a 2004 case that had set the standard for handbook policy reviews, Lutheran Heritage Village – Livonia. The Lutheran case in 2004 involved a policy that prohibited “abusive and profane language,” “harassment,” and “verbal, mental and physical abuse.” The policy was upheld by the NLRB as it did not explicitly or implicitly prohibit Section 7 activity.
The Board stated at the time that it if a rule or policy did not specifically violate Section 7 rights, it would review whether “(1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.” The Obama administration used the “reasonably construe” prong to overturn termination of employees who swore at bosses. They considered policies that promote “harmonious workplaces” as violations of the NLRA.
The current Board overruled Lutheran Heritage “reasonably construe” precedent. The Board thought it was too simple to use for an evaluation process in today’s employment environment, and it was contrary to previous Supreme Court rulings. The Board then ruled that “when evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the Board will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.”
The Board further stated that handbook policies will be classified under three categories: Category 1 will include rules that the Board designates as lawful to maintain, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule; Category 2 are those policies that require further scrutiny; or Category 3 are those the Board finds unlawful.
The final case that was just decided overturned the Obama era Specialty Healthcare ruling for micro-union organizing. Under Specialty Healthcare, if a union petitioned for an election among a particular group of employees, and the employer took the position that the smallest appropriate unit had to include employees excluded from the proposed unit, the Board would not find the petitioned-for unit inappropriate unless the employer proved that the excluded employees shared an “overwhelming” community of interest with the petitioned-for group. The Board’s decision in PCC Structurals, Inc., decided last Friday, reinstated the traditional community-of-interest standard which permits the Board to evaluate the interests of all employees – both those within and those outside the petitioned-for unit – without regard to whether these groups share an “overwhelming” community of interests.
The impact to employers is substantial. First, employers using staffing agencies will not be liable for a variety of issues from unionizing to pay disparities to discrimination unless joint employment is shown. This also means that employers using staffing agencies should follow processes that give control over the employment conditions and requirements to the staffing agency.
Second, employers should be able to have reasonable workplace policies from harmonious workplace to no camera to no use of employer emails for solicitation to social media policies. For example, an employee cussing out a manager could be fired.
Finally, employers do not have to worry as much about unions organizing small group of employees within a larger nonunion employer population.
The Obama administration did its best to provide unions with greater capabilities to organize and frustrate management. These rules are now being turned back to before the Obama administration or revised to meet today’s work environment. Therefore, employers can expect that reasonable rules will again be allowed in the workplace and that employees who violate these rules can be terminated without “violating” their Section 7 rights.
Source: Law360 12/14/17, NLRB 12/15/17, Jackson Lewis 12/16/17