NLRB’s New Joint Employer Standard Faces First Legislative Challenge

Two days after returning from a scheduled congressional recess, senior Republican lawmakers introduced the first legislative challenge to the NLRB’s new joint employer standard, which was handed down last month in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015).

The Board’s decision in Browning-Ferris makes a sweeping departure from 30 years of precedent and broadens the definition of a joint employer to include those entities that exercise direct, indirect or even a reserved right to control the employees of another business. The lawmakers stressed the importance of the legislation in a joint press release, which cautioned that the “NLRB’s new joint employer standard would make big businesses bigger and the middle class smaller by discouraging companies from franchising and contracting work to small businesses.”

The Protecting Local Business Opportunity Act (H.R. 3459, S. 2015), introduced by Chairman of the House Committee on Education and the Workforce Rep. John Kline (R-Minn.) and Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-Tenn.), seeks to amend the National Labor Relations Act by defining an “employer” as follows:

Notwithstanding any other provision of this Act, two or more employers may be considered joint employers for purposes of this Act only if each shares and exercises control over essential terms and conditions of employment and such control over these matters is actual, direct, and immediate.

The bills closely track the Board’s previous joint employer standard, which had remained relatively unchanged since 1984. Other efforts supported by the Republican lawmakers to undo recent Board actions include a March, 2015 bill targeted at the Board’s decision in Specialty Healthcare, which split from agency precedent to permit unions to organize “micro” bargaining units, and a legislative challenge aimed at the Board’s “quickie” representation election rule changes, which went into effect on April 14, 2015.

While the proposed legislation is expected to pass the House, and possibly the Senate, it almost certainly will fall to a presidential veto. Despite the setback, the lawmakers are expected to keep up the pressure on the Obama Administration and to challenge what has been touted as the Board’s “pro-union” agenda.

We will keep you apprised of the legislation’s progress.

Fuzzy Math May Be Basis For Labor Secretary’s Claim That Union Workers Earn More, Analysis Asserts

“Join the union, and you’ll make more money!”

It’s a common refrain for unions trying to sell employees on the virtues of union representation. And now, Labor Secretary Thomas Perez has joined the chorus, authoring a blog post entitled, “Stronger Together: Your Voice in the Workplace Matters,” in which he claims that workers represented by unions earn $200 more weekly than non-union workers. He wrote:

“According to data from the Bureau of Labor Statistics, the median weekly earnings for union members last year were $200 a week more than for non-union workers. That’s not pocket change — $200 a week is the difference between paying the bills and worrying about whether the lights will go out.”

However, Diana Furchtgott-Roth of MarketWatch in her September 2, 2015 article, “Opinion: Workers don’t do better in unions,” disputes Secretary Perez’s claim. In brief, she notes the following

  • Fact: 40% of all union workers are government employees. Perez’s data does not separate public and private sector workers. This is significant because “union members are more concentrated in higher-paying” public sector jobs, .
  • Fact: Union workers tend to be older, and thus earn more money as a result of their seniority
  • Fact: More union workers are located in the Northeast where wages are higher to account for the higher cost of living. A worker in Georgia earns less than one in New York, but the cost of living is less there.
  • Fact: With the exception of government workers, jobs in unionized industries are shrinking. Employment in the construction industry, for example, which has a higher percentage of unionized workers, has declined by 13% in the past ten years.
  • Fact: In the professional and business services industry, where there is job growth, union workers earn less—an average of $113/week less.

That union workers earn more than their non-union counterparts may be the “conventional wisdom” in some parts, but it may be a misconception – one that unions don’t hesitate to perpetuate. Organizations whose employees are presented with a union claim that union representation inevitably will increase their “bottom line” may find this analysis helpful in debunking that myth.



NLRB Says Beer Dealer’s Refusal-To-Drug-Test Firing Doesn’t Mix With “Weingarten Rights”

Brewing more trouble for workplace drug testing, the National Labor Relations Board has held a New York beer distributor violated the National Labor Relations Act by denying its driver helper, who reported to work with his clothes “reek[ing] of the smell of marijuana” and with “glassy” and “bloodshot” eyes, and was directed to take a drug test immediately despite requesting representation by his union steward, his right to union representation at an “investigatory interview” (the drug test) about his possible substance abuse. The Board also found the employer had unlawfully discharged the employee for refusing to take the test in the absence of his union steward. Manhattan Beer Distributors, LLC, 362 NLRB No. 192 (August 27, 2015).  For more on this important decision, visit our Drug and Alcohol Testing Law Advisor blog.

Quickie Elections Just Got Quicker: Electronic Signatures Okayed to Support Union Petitions

The General Counsel of the National Labor Relations Board has decided to accept electronic signatures in support of a showing of interest, effective immediately. In a September 1, 2015, memorandum (issued on September 2), General Counsel Richard Griffin wrote, “[a]s is reflected in the guidelines which follow, I have determined that the evidentiary standards that the Board has traditionally applied to handwritten signatures apply equally to electronic signatures and that it is practicable to accept electronic signatures in support of a showing of interest if the Board’s traditional evidentiary standards are satisfied.” Memorandum GC 15-08 (September 1, 2015).

As part of the Board’s quickie election rulemaking, the Board determined its regulations are sufficient to permit the use of electronic signatures to support a showing of interest. The Board also decided that Congress wanted “Federal agencies, including the Board, [to] accept and use electronic forms and signatures, when practicable—i.e., when there is a cost-effective way of ensuring the authenticity of the electronic form and electronic signature given the sensitivity of the activity at issue, here the showing of interest.”

Based on this, Griffin wrote, the Board charged him with the responsibility to “determine whether, when, and how electronic signatures can practicably be accepted” and to “issue guidance on the matter.”

Griffin decided that, to be acceptable, a showing of interest supported by an electronic signature had to contain several features. The features are imposed in order “to establish its authenticity and provide a mechanism for the Agency to investigate allegations of forgery or fraud where appropriate.”

According to the memorandum:

  1. Submissions supported by electronic signature must contain the following:
  2. the signer’s name;
  3. the signer’s email address or other known contact information (e.g., social media account);
  4. the signer’s telephone number;
  5. the language to which the signer has agreed (e.g., that the signer wishes to be represented by ABC Union for purposes of collective bargaining or no longer wishes to be represented by ABC Union for purposes of collective bargaining);
  6. the date the electronic signature was submitted; and
  7. the name of the employer of the employee.
  8. A party submitting electronic digital signatures must submit a declaration (1) identifying what electronic signature technology was used and explaining how its controls ensure: (i) that the electronic signature is that of the signatory employee, and (ii) that the employee herself signed the document; and (2) that the electronically transmitted information regarding what and when the employees signed is the same information seen and signed by the employees.3
  9. When the electronic signature technology being used does not support digital signatures that lend itself to verification as described in paragraph 2, above, the submitting party must submit evidence that, after the electronic signature was obtained, the submitting party promptly transmitted a communication stating and confirming all the information listed in la through lf above (the “Confirmation Transmission”).
  10. The Confirmation Transmission must be sent to an individual account (i.e., email address, text message via mobile phone, social media account, etc.) provided by the signer.
  11. If any responses to the Confirmation Transmission are received by the time of submission to the NLRB of the showing of interest to support a petition, those responses must also be provided to the NLRB.
  12. Submissions supported by electronic signature may include other information such as work location, classification, home address, and additional telephone numbers, but may not contain dates of birth, social security numbers, or other sensitive personal identifiers. Submissions with sensitive personal identifiers will not be accepted and will be returned to the petitioner. They will not be accepted until personal identifiers are redacted.

General Counsel Griffin said these requirements are “more stringent” than what is currently required for non-electronic signatures. He noted that, at present, signature lists need not contain any personal contact information. In defense of the electronic signature requirements, however, he wrote that “the contact information (email address, phone number or other social media account) is easy to obtain electronically from the signer and will enable the NLRB to promptly investigate forgery or fraud, where appropriate. Moreover, the Confirmation Transmission will allow an employee, who receives the notification but did not actually intend to sign the document, with the means to alert the Agency, the employer, a union, or others that he or she did not, in fact, electronically sign a showing of interest.”

Electronic signatures could be in different forms. As examples, the General Counsel said “an email sent soliciting information and support to which the signer replied” is acceptable, as will be “a copy of a webpage soliciting information along with a spreadsheet showing data received after the electronic signer clicked a ‘Submit’ button.”

The General Counsel’s decision does not come as a surprise in light of the Board’s quickie election rule and its desire to facilitate union organizing. This change will make it easier for unions to convince employees to express their interest in unions without fear of being “discovered” by their supervisors. In the privacy of their homes, employees will be able “sign up” for the union.

Employers, on the other hand, will have a more difficult time getting employees to weigh the arguments for and against union representation. Supervisors will have fewer opportunities to tell the employee the “other side of the union story” before the employee decides whether to sign.

Rats, Pigs and Cats, Oh My: Union’s Display of Large Inflatable Animals and Bannering at Las Vegas Resort was Lawful, Board Judge Holds

Las Vegas, Nevada-based Laborers Local 872 did not violate the National Labor Relations Act by displaying four-foot high banners and inflatable animals 18 to 20 feet high around the perimeter of a casino and resort complex (Westgate), and partially blocking cars and patrons, because Westgate contracted with a non-union contractor (Nigro) to perform renovation work at the complex, an Administrative Law Judge of the National Labor Relations Board has held, rejecting a complaint by the agency’s General Counsel. Laborers Local 872, JD(SF)-32-15 (Aug. 21, 2015).

According to the decision, in early 2015, Westgate contracted with Nigro to perform renovation work at the facility. Nigro, in turn, subcontracted with A&B Environmental to do some of the work. Shortly thereafter, the union, which was not the bargaining representative of any of the three companies’ employees, began protesting at Westgate by stationing large banners and inflatable animals at various locations around the perimeter of the property. The banners stated, “LABOR DISPUTE: NIGRO DEVELOPMENT SUPPORTS IMMIGRANT LABOR ABUSE BY HIRING A&B ENVIRONMENTAL AT THE WESTGATE.” Each banner was held upright; the inflatable animals typically were placed near the banners, standing erect on their hind legs. Up to seven inflatables and approximately the same number of banners were stationed around the perimeter of the property. One of the banners partially interfered with one of Westgate’s wheelchair and scooter ramps and an inflatable rat blocked an employee driveway.

The NLRB’s General Counsel argued that the union’s display was an unlawful secondary boycott. The ALJ disagreed, finding the union’s conduct did not violate the NLRA. Although the union’s banners partially interfered with one of Westgate’s wheelchair and scooter ramps and the inflatable rat blocked an employee driveway, the Judge was unpersuaded. Relying on Carpenters & Joiners of America, 355 NLRB No. 162 (2011), in which the Board held it was lawful for a union to display stationary banners at a neutral employer’s premises in a non-coercive, non-disruptive manner to publicize a labor dispute, the ALJ explained that the union did not directly disrupt, or threaten to disrupt, Westgate’s operations. Westgate had alternative routes to its entrance, and the General Counsel could not establish that anyone actually was blocked or impaired from accessing Westgate’s facilities as a result of the union’s demonstration. The ALJ further dismissed the General Counsel’s argument that the union trespassed on Westgate’s property, noting that the areas accessed by the union were not identified as private or restricted until a week into the union’s demonstrations and that the union stayed off of Westgate’s property once it was put on notice of this.

While an Administrative Law Judge’s decision, such as this, may be appealed and overturned by the NLRB, employers faced with the possibility of union demonstrations should take note. Unless a demonstration actually blocks or impairs access to the employer’s facilities (more than minimally), an unfair labor practice charge alleging the existence of an unlawful secondary boycott may fail. Employers subject to a labor demonstration should document the evidence supporting their position that the demonstration significantly interferes with the conduct of their business, especially where banners and other stationary objects are used.


NLRB Issues New Standard for Determining Joint Employer Status

As expected, the National Labor Relations Board has adopted a new standard for determining whether two employers are joint employers for purposes of collective bargaining. Browning-Ferris Industries of California, 362 NLRB No. 186 (August 27, 2015). In the 3-2 decision (Members Miscimarra and Johnson dissenting), the NLRB held:

We will no longer require that a 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.

The Board held that the decision applies retroactively. Click here to read an extensive analysis of this landmark decision.

Complaint Issued by NLRB’s Acting General Counsel was Unauthorized, Federal Appeals Court Rules

Vacating a Board order adopting an Administrative Law Judge’s decision holding that an employer violated Sections 8(a)(1) and (5) of the National Labor Relations Act by ceasing to pay longevity pay under a collective bargaining agreement between the employer and the union representing its employees, the U.S. Court of Appeals for the D.C. Circuit has held that Acting General Counsel Lafe Solomon could not have lawfully delegated authority to an NLRB Regional Director to issue the underlying unfair labor practice complaint against Southwest Ambulance because Mr. Solomon, at the time, was not lawfully appointed as the Board’s Acting General Counsel. SW General, Inc. v. National Labor Relations Board, No. 14-1107, 2015 U.S. App. LEXIS 13812 (D.C. Cir. Aug. 7, 2015).

The union had filed an unfair labor practice charge against Southwest alleging Southwest unlawfully (under the NLRA) had unilaterally discontinued paying longevity payments called for under the parties’ collective bargaining agreement. Pursuant to a delegation of authority from Mr. Solomon, an NLRB Regional Director issued an unfair labor practice complaint against Southwest. An NLRB Administrative Law Judge found that Southwest’s unilateral action was unlawful. Southwest appealed to the Board. It alleged, as one of its exceptions to the ALJ’s decision, that Mr. Solomon was serving as Acting General Counsel in violation of the Federal Vacancies Reform Act when the complaint issued.

President Barack Obama appointed Mr. Solomon to the position of Acting General Counsel pursuant to the FVRA on June 21, 2010. On January 5, 2011 and May 24, 2013, President Obama submitted and resubmitted Solomon’s nomination to be General Counsel. Solomon’s nomination ultimately was withdrawn and Richard Griffin became General Counsel on November 5, 2013.

Southwest argued that, under the FVRA, Solomon could not serve as Acting General Counsel once President Obama nominated him (in January, 2011) to be General Counsel. Southwest noted that the FVRA prohibited Solomon from serving both as Acting General Counsel and the “permanent nominee” unless Solomon previously served as the “first assistant” to the General Counsel for 90 of the previous 365 days or he was confirmed by the Senate to be the first assistant. According to Southwest, because Mr. Solomon did not serve as the first assistant at any point during the year preceding his appointment as Acting General Counsel, his appointment was invalid. The Board nevertheless upheld the ALJ’s violation finding, and Southwest sought judicial review.

The Court agreed with Southwest, finding the FVRA prevented Mr. Solomon from serving as Acting General Counsel at the time the unfair labor practice complaint issued against Southwest. In reaching this finding, the Court explained that Mr. Solomon served in violation of the FVRA from January 5, 2011, to November 4, 2013. However, it warned that other challengers might not meet with the same success. The Court noted that “this case is not Son of Noel Canning and we do not expect it to retroactively undermine a host of NLRB decisions.” Mr. Solomon’s unlawful appointment was raised by Southwest as an exception “to the ALJ’s decision as a defense to an ongoing enforcement proceeding[,]” and therefore, the Court cautioned, it doubted whether “an employer that failed to timely raise an FVRA objection—regardless whether enforcement proceedings are ongoing or concluded—w[ould] enjoy the same success [as Southwest].”

NLRA Protection Accorded Class or “Collective” Action Brought By Single-Employee

The National Labor Relations Board has decided that “a single employee who files a lawsuit ostensibly on behalf of himself and other employees is engaged in protected concerted activity.” (Emphasis provided.) Beyoglu, 362 NLRB No. 152 (July 29, 2015).

Marjan (Mario) Arsovski was discharged after he filed a Fair Labor Standards Act collective action lawsuit. Arsovski then filed an unfair labor practice charge alleging he had been terminated for engaging in protected concerted activities.

At trial, Arsovski testified he told a co-worker he was going to file a lawsuit and asked him to join the case. The co-worker refused. There was no evidence Arsovski told anyone else or acted on behalf of any other employee when he filed the lawsuit, purportedly on behalf of himself and others who elected to opt in. The Administrative Law Judge who presided over the trial dismissed the charge, finding, “[c]learly, the evidence in this case does not establish that Arsovski acted in concert with, or on the authority of any of the other employees. His lawsuit was not filed with their consent, or except perhaps in one case, even with their knowledge.”

The decision was appealed to the NLRB, which reversed the ALJ, holding, for the first time, that “a single employee who files a lawsuit ostensibly on behalf of himself and other employees is engaged in protected concerted activity.” Chairman Mark Pearce and Member Lauren McFerran comprised the Board panel majority.

The Board relied on two recent Board decisions, D.R. Horton, 357 NLRB No. 184, slip op. at 3 (2012), where the Board wrote, “[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,” and Murphy Oil USA, 361 NLRB No. 72 (2014), where the agency said it had “rejected . . . the argument that the filing of a class action lawsuit is not protected concerted activity if only one employee is immediately involved.”

Thus, despite the absence of any consent, approval, authority, or involvement whatsoever by any other employee, the Board decided the employer had unlawfully discharged Arsovski for engaging in protected concerted activity because, it reasoned [citing Meyers Industries, 281 NLRB 882 (1986), a seminal decision on protected concerted activity], the mere filing of “an employment-related class or collective action by an individual employee is an attempt to initiate, to induce or to prepare for group action and is therefore conducted protected by Section 7.”

Dissenting, Member Philip Miscimarra argued that Congress intended Arsovski’s claim to be redressed under Section 15(a)(3) of the FLSA, which prohibits retaliation against an employee for filing a complaint under that law, and not in this case under the NLRA. Here, there was no evidence of concerted activity necessary to implicate the Board’s statute, because such activity is “triggered only where the evidence proves that the ‘concerted’ activities – defined as conduct that, at the least, looks toward ‘group action’ – is being undertaken for the ‘purpose’ of ‘mutual aid or protection’” and a lawsuit filed by single employee – regardless of the procedural label – may or may not be concerted activity depending on the facts.

As the Board continues to expand the scope of protected concerted activity, employers must proceed cautiously. They should conduct thorough investigations when considering discipline for any employee involved in a lawsuit or who raises a complaint about working conditions.

Are Americans Falling Back In Love … With Unions?

American workers’ attitudes toward unions have improved strikingly since 2009. Although only 6.6% of private sector workers belonged to a union in 2014 (down from 7.2% in 2009), according to a Gallup poll released on August 17, 2015, 58% of Americans now “approve” of labor unions, an increase of 10 percentage points since 2009. The figures include a jump of five percentage points in the last year.

Support for unions is higher among women (63%) than men (52%), and support is higher among younger people (aged 18-34) (66%) and older people (over 55) (58%) than those who are middle-aged (aged 35-54) (53%). Not surprisingly, approval of unions is lowest, geographically, in the South (45%) and, politically, among Republicans (42%).

The reasons for the change in the perspective of Americans toward unions are unclear. However, the focus on income inequality, the “one percenters,” and organized labor’s push for a minimum “living wage” of $15 per hour likely have contributed to this change in attitude.

NLRB Declines to Exercise Jurisdiction In Northwestern Case

The National Labor Relations Board has declined to assert jurisdiction in the case involving Northwestern University football players who receive grant-in-aid scholarships. As a result, the Board did not determine if the players were employees under the National Labor Relations Act.  Instead, the Board exercised its discretion not to assert jurisdiction and dismissed the representation petition filed by the union. This means that the ballots cast on April 25 and impounded by the NLRB pending its review of Regional Director Peter Ohr’s decision finding the athletes to be employees under the Act will not be opened and counted.

For more on this decision, click here.