NLRB’s Budget Slashed: What Could It Mean To Your Business?

President Donald Trump has released a budget proposal reducing the National Labor Relations Board’s funding in fiscal year 2018 by nearly six percent. It also calls for significant staff reductions at a time when the agency’s caseload is projected to increase.

Under the proposal, the Board’s funding would be reduced by $16 million, from $274 million to $258 million, which would result in the lowest total operating budget for the Board since 2009. The reduced budget will require the Board to reduce staff from approximately 1,596 to 1,320 – well below the 15-year average of 1,700 full-time employees.

The NLRB had sought additional funding to “efficiently and effectively” process “comprehensive and complex cases,” such as “nationwide efforts to improve the wages … of retail and fast food workers,” “expanded use of mandatory arbitration clauses in employment” agreements, and the expanded use of technology and social media by employees to discuss employment outside the workplace, among other things.

The budget also includes an “administrative provision” prohibiting use of appropriations to adopt electronic voting in union representation elections. In the past, the NLRB had asked vendors to submit possible solutions on secure methods for electronic balloting, but had not acted on the subject.

What could the budget cut mean for your business? The budget has not been passed by Congress, and there likely will be significant congressional debate over funding of the NLRB (and other agencies, such as the Department of Labor, which also may face significant budget cuts). If the budget passes with significant cuts, expect the following:

  • The NLRB to ramp up the pressure on employers, unions, and employees to settle unfair labor practice charges early to avoid NLRB personnel having to travel to speak to potential witnesses.
  • The NLRB to loosen its time targets for deciding whether unfair labor practice charges have merit in the hopes that, given more time, a case can be settled.
  • The possibility of less-prepared NLRB witnesses in unfair labor practice trials because possibly overtaxed NLRB attorneys will not have been able to meet with witnesses as much as in the past.
  • Requests by the Board to administrative law judges to permit witness testimony by video to avoid having to pay witness travel costs.
  • The NLRB to struggle to process representation petitions quickly, which has been a key focus of the agency since the “quickie” election rules were implemented in April 2015.

Employers must adapt to these and other possible changes if the budget cut is approved. We will monitor the budgetary process and report on significant developments.

 

 

Labor Board Allows Evidence to Explain Employee Handbook Ban on Video Recording

The National Labor Relations Board has denied a motion for summary judgment by the NLRB’s General Counsel in a case involving Mercedes-Benz U.S. International Inc.’s maintenance of an employee handbook rule prohibiting the use of cameras and video recording devices without prior approval.

The 2-1 decision allows MBUSI to attempt to prove that: (1) the rule “furthers legitimate business interests, including the protection of proprietary and confidential information, the maintenance of safety and production standards, and open communication” by employees; (2) the rule is not per se unlawful under Section 8(a)(1) of the National Labor Relations Act because employees at the plant “did not understand the camera rule to restrict Section 7 activity” under the NLRA; and (3) “its business interests outweigh any Section 7 rights” that may be implicated by its maintenance of the rule.

The Board majority — Chairman Philip A. Miscimarra and Member Lauren McFerran — made it clear that it was expressing “no view” on the merits of the case. Thus, whether the company’s evidence at trial will be sufficient to win the day remains to be seen. Nevertheless, citing previous Board decisions reaching the same conclusion, the majority in the Mercedes-Benz U.S. International Inc. case rejected a lengthy dissent by Member Mark Gaston Pearce that would have found the no-recording rule unlawful on its face.

Employers with similar handbook rules that may be considered unlawful by the NLRB’s General Counsel, which has been waging war against common workplace rules of all types, may take comfort in the majority’s decision. Employers should review their handbooks and policy manuals carefully to make sure the rules within them do not “reasonably tend to chill employees in the exercise of their Section 7 rights” under the NLRA.

President to Nominate Republican Attorneys to Fill Labor Board Vacancies

Attorneys Marvin Kaplan and William Emanuel will be nominated by President Donald J. Trump to fill the two openings on the five-member National Labor Relations Board, according to the Daily Labor Report. Trump plans to nominate Kaplan and Emanuel by June, following completion of their FBI background checks.

If Kaplan and Emanuel are confirmed, the Board will have a 3-2 Republican majority. Emanuel is a labor attorney and Kaplan is counsel to the Commissioner of the Occupational Safety and Health Review Commission. For more, see Short List of Possible Trump NLRB Candidates Reported.

Following Senate confirmation of the new Board members, expect the Board to revisit and, perhaps, reverse its Obama-era rulings on class action waivers, joint employer, temporary workers, quickie elections, expansion of protected concerted activity (e.g., its impact on workplace policies), definition of appropriate bargaining units, the  status of college/university faculty and student athletes, among others.

In Fastest Elections, Union Victory Rate Soars

Unions fare better in the quickest elections under the National Labor Relations Board’s April 2015 “quickie” election rules, according to a Bloomberg BNA report. Unions have continued to win elections about 67 percent of the time overall since the implementation of the rules, according to the report. However, two years after the rules went into effect, in the fastest elections (i.e., those with less than two weeks between petition and the vote), the union “win rate” jumps to a staggering 82 percent.

The NLRB’s amendments to its election procedures have significantly reduced the average time between the filing of a representation petition by a union and the date of the election, from 39 days to 24 days, according to the report.

While advocates for management and labor disagree as to the intent and overall effect of the rules, the data makes clear unions fare better when employers have less time to discuss the possible effects of unionization with their employees. As the average time between petition and election falls, it is more important than ever for employers to educate supervisors about their rights and responsibilities in the event of a union organizing attempt and to create an environment where employees feel well-treated and therefore see no need for union representation.

 

 

 

NLRB Won’t Create Rule Extending to Nonunion Workers Right to Have Union Rep at Disciplinary Interview

The National Labor Relations Board has decided not to exercise its discretionary authority to engage in rulemaking at this time to reverse the Board’s decision in IBM Corp., 341 NLRB 1288 (2004), and extend Weingarten rights to nonunion employees. In Weingarten, the Supreme Court held that an employee has a right to re­quest the attendance of a union representative in any in­terview that he or she “reasonably fears may result in his discipline.”

The issue was before the Board as a result of a request by NLRB attorney Charles S. Strickler, Jr.

The Board’s action does not foreclose the possibility that it will reverse IBM Corp. if an appropriate case is presented to it.

Spending Bill Leaves NLRB Budget Unchanged From 2016, Nixes Electronic Voting

The National Labor Relations Board’s wish that its budget for fiscal year 2017 be increased over its FY 2016 budget apparently will not be granted.

According to Politico, at $274.2 million, Congress has left the NLRB’s budget unchanged from FY 2016. This is despite NLRB General Counsel Richard Griffin’s view, stated in a March 10, 2017, Memorandum to management personnel in the NLRB’s regional offices, that “years” of “flat fund[ing]” has had a “detrimental effect on the public.” Memorandum GC 17-02.

The NLRB had sought additional funding to “efficiently and effectively” process “comprehensive and complex cases” such as “nationwide efforts to improve the wages … of retail and fast food workers,” “expanded use of mandatory arbitration clauses in employment” agreements, and the expanded use of technology and social media by employees to discuss employment outside the workplace, among other things.

The spending bill also prohibits the NLRB from spending any money on issuing “any new administrative directive or regulation that would provide employees any means of voting through any electronic means in an election to determine a representative for the purposes of collective bargaining.”

Solicitor General Reviewing Government’s Position in Class Action Waivers Cases

Last week, the Supreme Court extended the deadline for initial briefs from April 28, 2017 to June 9, 2017 in three consolidated cases raising the issue whether arbitration agreements between individual employees and their employers that bar the employees from pursuing work-related claims on a collective or class basis are lawful under the National Labor Relations Act. Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP, et al. v. Morris, et al., No. 16-300; National Labor Relations Board v. Murphy Oil USA, Inc., et al., No. 16-307. The Court granted the extension pursuant to a request by the Acting Solicitor General of the United States.

Raising the possibility the government may decide to change its position on whether such agreements are unlawful, in his request, the Acting Solicitor General wrote, “[T]he current briefing schedule is no longer adequate for the government [because] . . . [t]he Acting Solicitor General is engaged in a process of reviewing the position of the United States in these cases” and that he “must . . . consult with new leadership within the government.”

Senate Approves Acosta To Head DOL

Alexander Acosta was confirmed on Thursday to serve as President Donald J. Trump’s Secretary of Labor.  Acosta was approved by a vote of 60-38, according to Employment Law360.

Acosta has held several government positions, having been an NLRB Member, head of the Department of Justice’s Civil Rights Division, and United States Attorney in South Florida.  Most recently, he has been dean of Florida International University Law School for the past eight years.

NLRB Ruling on Joint Employers Should be Reversed, Congressional Republicans Urge

Two years after the National Labor Relations Board’s decision in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015), which overturned 30 years of precedent, 57 members of Congress, mostly Republicans, supported by business owner advocacy group Workforce Fairness Institute, are urging the Subcommittee on Labor, HHS & Education Committee on Appropriations “to include a one-year hold on the NLRB’s harmful and confusing definition of joint employers [in Browning-Ferris] in the FY18 Labor, Health and Human Services, Education, and Related Agencies Appropriations legislation.” In a letter dated April 5, 2017, to the subcommittee Chairman and Ranking Member, the 57 legislators cited a report by the U.S. Chamber of Commerce that warned the decision will result in decreased business values, increased operational and legal costs, less growth, and fewer jobs.

The NLRB had ruled a company could be held liable for the management and actions of workers employed by another employer, even if the company does not directly control those employees. For example, under the Browning-Ferris standard, liability for actions taken by individual franchisees could be imputed to franchisors even if they do not directly supervise or control the franchisee’s employees. Similar liability could be imposed upon contractors in connection with a subcontractor’s employees.

Browning-Ferris has been appealed to the U.S. Court of Appeals for the D.C. Circuit; a decision should be issued during 2017.

A one-year hold on the NLRB joint employers standard likely will require the support of 60 Senators in order to avoid a filibuster, a difficult task in the current Congress. More likely is reversal of Browning-Ferris by a fully constituted NLRB with a 3-2 pro-business majority after the two existing vacancies are filled by President Donald Trump’s nominees.

Jackson Lewis attorneys are available to answer questions about this and other legal developments.

Miscimarra Named NLRB Chairman

The National Labor Relations Board has announced that Republican Philip A. Miscimarra has been named NLRB Chairman by President Donald J. Trump.  Miscimarra had been designated Acting Chairman by President Trump on January 23, 2017. Miscimarra has served as a Board Member since August 7, 2013, and is the sole Republican Member currently serving on the Board.

The Board currently has three Members, including Democrats Mark Gaston Pearce, and Lauren McFerran. Two Board seats are vacant; President Trump is expected to nominate pro-business members to fill them.

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