Year 2020 Hindsight Reveals That The Current NLRB Has Overhauled Our National Labor Laws Since 2017

Seyfarth Synopsis: It should be clear to all that the NLRB has taken significant steps to restore the law to a footing that more closely resembles the landscape that existed prior to the Obama Board.  Seyfarth’s Labor Management Relations Practice Group proudly presents the following review of the current NLRB’s key decisions, rule changes, and initiatives impacting employers with unionized workforces and/or traditional labor concerns.  If you have not been following labor developments closely (or even if you have), now is the perfect time to take stock of what is new again in 2020.  Please note that while we have presented a number of key developments, this update does not address all meaningful developments since 2017.

At present, the Board has three Members, given that the 5-year term of Democrat appointee, Member Lauren McFerran, expired on December 16, 2019.  Typically there are five Members - three from the party holding the Executive Branch and two from the minority party.  The three majority Members are Chairman John Ring (term expiring December 16, 2022), William Emanuel (term expiring August 27, 2021), and Marvin Kaplan (term expiring August 27, 2020).  In addition to the Board Members, the Board’s General Counsel, Peter Robb (term expiring November 16, 2021), also serves to provide significant input to the direction of the Board and is appointed by the President.  Shortly after his appointment, Robb released General Counsel Memorandum 18-02, which provided the mandatory advice submission list, and can be viewed here.  What the exact shape and composition of the ongoing Board will be remains to be seen, but there are recent reports of an agreement to reappoint both Member McFerran and Member Kaplan to new terms, subject to confirmation.

No matter your politics, the history of this current Board has been marked by some fairly major drama.  First there were confirmation delays, then there were recusal and ethics accusations, but more recently there has been the business of issuing decisions and mining legal developments.  Indeed, in connection with Member McFerran’s term expiration, and in an apparent effort to permit her to express any dissenting opinions on certain matters of significance, the Board published a host of important decisions, rules, and initiatives.  So as to present the developments of the current Board in one document, we have included a variety of embedded links throughout this review and we credit the multiple previous blogs and alerts authored by our practice group - generally, those items can be found here, and we encourage you to sign up for our blog alerts on that page.

Here are some highlights of precedent that has changed (or returned) under the current Board:

1. No More Ambush Election Rules

The Board’s Amended Election Rules were published in the Code of Federal Regulations on December 18, 2019 and take effect on April 16, 2020.    In addition to other amendments, the rules ease some of the timelines imposed by the so-called “Ambush Election Rules” and return the Board to determining most legal issues before voting takes place (unless the parties otherwise agree).  See our Seyfarth blog, and the NLRB’s fact sheet for more information.

If you would like a handy Seyfarth guide to assist in navigating an election under the new rules click here for a table that will help provide clarity on the new rules.

2. Deferral Is No Longer a High-Wire Act

The NLRB restored historical deferral standards in United Parcel Service, Inc., 369 NLRB 1 (Dec. 23, 2019).  In overruling Babcock & Wilcox Construction Co., Inc., 361 NLRB (2014), it is the case that once again, “the Board will defer to an arbitration award in such cases if (1) the arbitration proceedings were fair and regular, (2) the parties agreed to be bound, (3) the contractual issue was factually parallel to the unfair labor practice issue, (4) the arbitrator was presented generally with the facts relevant to resolving the unfair labor practice, and (5) the decision was not clearly repugnant to the purposes and policies of the Act.”  As in the effectively reinstated decision in Olin Corp., 268 NLRB 573 (1984), if a party opposes deferral, it bears the burden of demonstrating the defects in the arbitration award. 

In addition, the decision restores policies for pre-arbitral deferral established in United Technologies Corp., 268 NLRB 557 (1984), and for deferral to pre-arbitral settlement agreements set forth in Alpha Beta Co., 273 NLRB 1546 (1985).  Importantly, the decision applies retroactively to all pending cases, regardless of their current stage in the proceedings. 

Our practice group released an alert on December 23 highlighting the following three decisions that restated Board law:

1. Employer Email Rights Restored

In Caesars Entertainment d/b/a/ Rio All-Suites Hotel and Casino, 368 NLRB No. 143 (Dec. 17, 2019), the Board returned to employers the right to police email systems and overruled Purple Communications, Inc., 361 NLRB 1050 (2014), as explained here.  Employers again have the right to control the use of their equipment, including their email system, and can lawfully restrict the uses of such equipment, including its email system, provided that in doing so, they do not discriminate against union or other protected concerted communications.

2. Investigation Confidentiality Reinstated

In Apogee Retail LLC d/b/a Unique Thrift Store, 368 NLRB No. 144 (Dec. 17, 2019), the Board overturned a 2015 decision— Banner Estrella Medical Center, 362 NLRB 1108 (2015) —and returns the prospect of employers maintaining and mandating confidentiality in workplace investigations.  Click here for greater detail from the NLRB. Of particular note, the Board emphasized that this new standard better aligns with other federal guidance, including from the EEOC.

3. Feel Free to Terminate Dues Checkoff at Contract Expiration

In Valley Hospital Medical Center, Inc. d/b/a Valley Hospital Medical Center, 368 NLRB No. 139 (Dec. 16, 2019), the Board overruled Lincoln Lutheran of Racine, 362 NLRB 1655 (2015) and restored the 1962 precedent providing that dues checkoff obligations terminate when a collective bargaining agreement ends, as detailed by the Board here. This restores some leverage to employers as they will no longer have to finance unions through dues deduction during prolonged bargaining after expiration of a contract. 

Additionally, on November 19, 2019, Seyfarth’s Labor Relations Practice Group released a summary of multiple NLRB developments from the inception of the current Board, which we briefly recount below:

1. The Return of Evaluating Employee Conduct Rules With Some Common Sense

In The Boeing Company, 365 NLRB No. 154 (Dec. 14 2017) The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017), the NLRB overruled Lutheran Heritage Village-Livonia, a 2004 decision that gutted workplace civility policies. In Boeing, the Board determined that it is appropriate to balance an employer’s legitimate interests in maintaining a civil workplace and employees’ rights under the NLRA. Of course, not all work rules fly under Boeing (click here for details not all work rules fly under Boeing), but it is clear that the current Board is not going to read an unlawful restriction on Section 7 rights into every rule an employer issues.

2. Minimizing the Threat of Micro Unit Organizing

In PCC Structurals, Inc., 365 NLRB No. 160 (Dec. 15, 2017) PCC Structurals, Inc. , 365 NLRB No. 160 (Dec. 15, 2017), the Board reversed Specialty Healthcare, 357 NLRB No. 83 (2011), which allowed unions to organize so-called “micro units” (a defining feature of the Obama Board).  In PCC, the Board restored the traditional “community of interest” standard and indicated it will apply a multi-factored test to determine if organizing employees’ interests are sufficiently distinct from those left out of the group.  

As a follow-up to our previous update on this topic, in Cristal USA, Inc. (International Chemical Workers Union Council of The United Food & Commercial Workers, AFL–CIO, CLC), 368 NLRB No. 141 (Dec. 13, 2019), the Board made clear its disdain for micro-units  and also signaled an opportunity for re-litigation of a prior adverse ruling (through a refusal to bargain approach) finding a micro-unit appropriate. There will be more to come on this development as the Region considers the remand on the appropriate unit issue.

3. Independent Contractors are Back

In Supershuttle Dfw, Inc., 367 NLRB No. 75 (Jan. 25, 2019), the NLRB expressly overruled the Obama-era Board’s ruling in FedEx Home Delivery, 361 NLRB 610 (2014), which significantly limited the importance of “entrepreneurial opportunity” in analyzing whether individuals were employees or independent contractors under the NLRA. Instead, the Board returned to the long-standing common law agency test that predated the FedEx decision. 

4. Making Clear What is a “Perfectly Clear” Successor

In Ridgewood Health Care Ctr., Inc., 367 NLRB No. 110 (Apr. 2, 2019), the Board clarified what is necessary for an employer to be considered a perfectly clear successor that is required to follow the predecessor’s contract and what happens if a perfectly clear successor violates the Act. In doing so, the Board narrowed the circumstances of when a successor employer will be a perfectly clear successor, thus allowing most successor employers to freely establish initial terms and conditions of employment prior to bargaining with the union.

5. The Board Seems to Be Returning to a Prior Standard Regarding Discipline Prior to an Initial CBA

The Board seems to be on the cusp of overturning the decision in Total Security Management, 364 NLRB No. 106 (2016), which held that a newly organized employer without an executed collective bargaining agreement must provide the union with a reasonable opportunity to bargain over certain disciplinary issues (discharge, suspension and emotion) prior to reaching a first contract.  A more recent decision in Oberthur Techs. of Am. Corp., 368 NLRB No. 5 (June 17, 2019) complicated this analysis when it held (on facts relating to discipline that occurred prior to Total Security Management), that a newly organized employer without an executed collective bargaining agreement has a duty to bargain before it changes any disciplinary standards - as opposed to when it issues certain discipline.  Because the discipline at issue in Oberthur was prior to 2016, Oberthur did not overrule Total Security Management.  However, in Triumph Aerostructures, (Cases 16-CA-197912, 16-CA-198055, 16-CA-198410, 16-CA-198417; JD-74-19 2019) NLRB LEXIS 549; 2019 WL 4795431 (Sept. 30, 2019), an ALJ dismissed a failure to bargain over discipline allegation and held that the Oberthur standard was the appropriate one.  Counsel for the General Counsel has excepted to the ALJ’s use of the Oberthur standard in Triumph and argues that Triumph violated the NLRA.  Nonetheless, Counsel for the General Counsel has also excepted to the ALJ’s decision by urging that Total Security Management be overturned.  The employer in Triumph has joined in the argument to overturn Total Security Management and also argues that the Board should not hold that Triumph violated the Act by failing to provide the Union with sufficient notice and an opportunity to bargain before disciplining the employees in question.  The Triumph case is fully briefed before the Board, and appears to lay the path for overturning Total Security Management.

6. Withdrawing Recognition of a Union Is a Snap

In Johnson Controls, Inc., 368 NLRB No. 20 (July 3, 2019), the current Board overruled Levitz Furniture, 333 NLRB 717 (2001) and made it less risky for an employer to withdraw recognition after receiving evidence demonstrating a loss of majority support.  Because Levitz permitted the union to reestablish its majority status quite easily,  employers faced a much more difficult road when withdrawing recognition from a union.  

7. OK To Bar Non-Employee Agents from Employer Property

Kroger Ltd. P’ship I Mid-Atl. & United Food & Commercial Workers Union Local 400, 368 NLRB No. 64 (Sept. 6, 2019).  In this case, the current Board overruled 20 years of precedent that restricted when employers can bar non-employee union agents from employer property. Now the Board will look at whether the employer allowed activities on its property “similar in nature” to the non-employee union agent activities. If so, then the employer must allow the union activity; if not, the employer is well within its right to remove the non-employee union agent from its property. 

8. It’s Clearly and Unmistakably Easier for an Employer to Make Unilateral Changes

In MV Transportation, Inc., 368 NLRB No. 66 (Sept. 10, 2019), the Board ruled that the “contract coverage” standard is appropriate when evaluating whether the scope of a CBA applies to a waiver argument, effectively relieving employers from having to demonstrate a clear and unmistakable waiver by the union.

What’s next?  Some of the more interesting areas that are likely to be addressed are as follows:

1. Neutrality Agreements May Be Under Heightened Scrutiny

In Embassy Suites by Hilton and Unite HERE Local 8, respectively case numbers 19-CA-227623 & 19-CB-227622, General Counsel Robb overturned dismissal of the charges and ordered the Region to issue complaint in both matters asserting that the neutrality agreement at issue in those matters provided more that “ministerial aid.”  See details here and be on the lookout for upcoming developments.

2. Board’s Final Rule Means The Law Will No Longer Be Disjointed on the Issue of Joint-Employer

On February 25, 2020, the Board released a statement that the final rule on Joint-Employer status is being released and will become effective April 27, 2020.  We will have an alert out shortly with full details.  The final rule follows two plus years of uncertainty.  The current Board’s initial determination in Hy-Brand Industrial Contractors, LTD and Brandt Construction Co., 365 NLRB No. 156 (2017),  was vacated, leaving the holding of Browning Ferris as the law that was followed through 2019.  However, on December 12, 2019, the Board also approved (overruling the ALJ) the McDonald’s settlement of litigation that had been ongoing for several years, thereby signaling a move toward minimizing potential joint-employer liability.  

3. Election Protection - Rule Making on Blocking Charges, Voluntary Recognition, and Construction Industry 9(a) Agreements

The Board recently closed the comment period on the "Election Protection Rule" and is expected to issue final rules that will provide for (A) establishing a vote and impound procedure in elections where a blocking charge has been filed; (B) modifying the recognition bar following a voluntary recognition by imposing notice requirements and providing the opportunity for a competing union to file a petition; and (C) requiring construction industry employers to prove majority status after establishing a Section 9(a) relationship.

4. Undergrad and Grad Students Awaiting A Final Exam

The Board has proposed a rule that would exempt from the NLRB’s jurisdiction undergraduate and graduate students who perform services for financial compensation in connection with their studies. 

5. It’s About Bleeping Time to End Profanity and Abusive Speech

In another rule-making effort, the Board is expected to issue guidelines about the extent to which profane and abusive speech falls within the protection of Section 7.  This review was prompted by such Obama-Board decisions as Plaza Auto Center, 360 NLRB 972 (2014), Pier Sixty, LLC, 362 NLRB 505 (2015), and Cooper Tire, 363 NLRB No. 194 (2016).

6. Addressing Preemption Arguments Against State and Local Laws That Seek to Usurp the Act

Whether you are an employer resident in New York, California, or elsewhere, we have all seen multiple state and local statutes that seek to usurp the Board’s singular responsibility for policing labor laws.  Recently, the NLRB filed suit against the State of Oregon seeking to preempt the state’s law adopted in 2010 that effectively purports to prevent employers from holding captive audience speeches during union organizing campaigns. See this link to the NLRB’s February 7, 2020, declaratory judgment action that follows. This exciting development demonstrates that the current Board and the General Counsel are willing to step in where preemption is at issue.

7. The Resistance Continues

As the election season rolls on, the Protecting the Right to Organize Act of 2019 (H.R. 2474) passed the House of Representatives.  The legislation, which has no future in the Senate or with the President, contains multiple union-friendly or union-supportive concepts that would statutorily re-write the rules for union organizing and bargaining.  See Seyfarth’s Policy Matters update here on the subject. To a certain extent, it appears that one of the purposes behind the PRO Act is a desire to influence union treasuries to make campaign contributions during this election year. 

While this may not cover everything, we hope that it puts a focus on the current Board’s direction and road travelled thus far.  Recently, Seyfarth appointed new leadership for our Labor Management Relations Practice Group as we continue the Firm's 75 years of expertise and focus on traditional labor matters.  If you want to contact one of us or our other practice group members for details on these or any other traditional labor matters, you can view our entire group here.