NLRB Denies Petitions to Revoke Subpoenas Based on Mere Allegation of Joint Employer Status

The National Labor Relations Board has denied petitions to revoke subpoenas that were issued by an NLRB Regional Director to two companies seeking information about a possible joint employer relationship between the two employers. The subpoenas arose out of the investigation of several unfair labor practice charges filed by a union against the companies, alleging they were joint employers (as well as alter egos and a single employer).

In the unpublished Order, Members Mark Gaston Pearce and Lauren McFerran enforced the subpoenas despite the union’s failure to articulate any facts about the joint employer allegations. RPT Communications LLC, SK Cabling Systems LLC, TekSystems Management, Inc. and Richardson Telecommunications Service, Inc. as Alter Egos/Single Employers and as a Joint Employer and Communications Workers of America, No. 29-CA-182088 (Mar. 16, 2017).

The charges, alleging violations of several sections of the National Labor Relations Act, referred to the employers as alter egos, a single employer, and joint employers, but did not contain any additional information. The NLRB rejected the petitioners’ claim that the subpoenas did not seek information relevant to the matters under investigation. The Board held the subpoenas “lie well within the scope of the Board’s broad investigative authority, which extends not only to the substantive allegations of a charge, but to ‘any matter under investigation or in question’ in the proceeding. . . nothing in Sec. 11 of the Act or Sec. 102.31(b) of the Board’s Rules can be read to impose a requirement that the Regional Director articulate ‘an objective factual basis’ in order to compel the production of information that is necessary to investigate a pending unfair labor practice charge.”

Acting Chairman Phillip A. Miscimarra dissented, writing that a subpoena seeking documents pertaining to an alleged joint-employer or single-employer status of a charged party “requires more . . . than merely stating the name of a possible single or joint employer on the face of the charge.” In particular, the General Counsel must be able to articulate “an objective factual basis supporting such an inquiry.” He found the General Counsel had failed to do so with respect to the possible joint employer and single employer relationship between the petitioners.

Lessons

  • In 2015, the NLRB in Browning-Ferris Industries of California, 362 NLRB No. 186, set a new union-friendly standard for determining joint employer status under the NLRA. Beyond simply broadening the standard for finding two or more employers to be joint employers, Browning-Ferris has emboldened unions to liberally allege that employers are joint employers, and as a result, to require alleged joint employers to comply with burdensome subpoenas seeking information to support that often speculative allegation.
  • There is a substantial possibility that a five-member NLRB, which includes two likely business-friendly members to be appointed by President Donald Trump, will overturn Browning-Ferris. Miscimarra’s dissent also is a window into how a fully-constituted NLRB may rule on similar petitions to revoke in the future. The future Board may refuse to enforce subpoenas where the General Counsel has not articulated an objective factual basis supporting the subpoena’s inquiry.

President Trump has not indicated when he will nominate new Board members, although the names of several possible nominees have become public.

 

 

Unions Winning More Elections, But Organizing Fewer New Workers

Unions won 72% of all representation elections conducted by the National Labor Relations Board in 2016, and 74% when the election involved a small unit of 49 workers or less, according to a Bloomberg BNA report based on NLRB data. These percentages are a four-year high for unions. At the same time, fewer workers were organized — 57,800 (lowest in four years), down from 63,300 new members in 2015.

The number of NLRB-conducted elections also slipped, from 1,626 in 2015 to 1,381 in 2016. Unions also continue to lose members by decertification elections. Between 2012 and 2016, the NLRB conducted 970 decertification elections. Unions lost over 60% (596 of 970) of them.

As the statistics about the number of workers organized and elections held in 2016 suggest, unions are focusing on organizing smaller bargaining units, which generally are easier to organize. As reported by Bloomberg BNA, Maria Sommer, an organizing director with the Steelworkers Union, “credit[s] an approach of focusing on smaller units of workers . . .,” among other factors. This strategy has been made fruitful, in large part, by a union-friendly NLRB decision – Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011) — that endorses union organizing of identifiable “micro-units.” This and the difficulties countering a union organizing drive that are posed by NLRB’s “quickie-election” rules, have created significant challenges for employers.

The Teamsters Union has said it is focusing on “internal organizing” designed to “retain[] employees in bargaining units by communicating and educating them about the benefits . . . [of unionization].” However, that strategy may not be working. Between 2012 and 2016, the Teamsters Union was involved in 231 decertification elections and lost 155 – a 67% loss rate. (On the flip side, the Teamsters were involved in more NLRB-conducted elections in 2016 than any other union and won just under 63% of them.) Overall, unions lost 61.4% of all decertification elections held during that time.

The NLRB’s won-loss statistics do not take into account situations where unions filed petitions for elections at the NLRB, but withdrew before the election, or where unions were unable to garner enough employee support to file petitions at all with the NLRB.

Help may be on the way for employers. There are two vacancies on the NLRB that almost assuredly will be filled by President Donald J. Trump with pro-business members. This will create a 3-2 pro-business NLRB majority, perhaps paving the way for a decision, given the appropriate case, overruling Specialty Healthcare. However, the appointment process will take time, and, even following confirmation, change at the NLRB will not be automatic. This means that, as always, employers should focus on their best defense to union organizing — creating an issue-free workplace where employees feel listened-to and well-treated and see no need for union representation.

NLRB’s New Joint Employer Standard Receives Chilly Reception During Court of Appeals Hearing

The National Labor Relations Board’s new, expanded “joint employer” standard faced sharp criticism during oral argument at the United States Court of Appeals for the District of Columbia Circuit.

In Browning-Ferris, the Board created a broad new standard for determining whether two entities are joint employers. The case involved Browning Ferris Industries of California, Inc. (BFI) and a staffing agency that provided workers for BFI, Leadpoint Business Services, Inc. (Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015). [hyperlink to our article])

The Board held that “control” by an employer over employees necessary to establish it as a joint employer can be established directly or indirectly (such as through an intermediary or through contractual provisions that preserve the right to control, whether or not that right is ever exercised). The Board’s decision was appealed to the United States Court of Appeals by BFI.

During oral argument, the new standard was referred to by the panel as “unworkable” and “unclear.” Judge Patricia Millett said the Board “dropped the ball” in setting the new standard. She noted the Board did not clearly state how much weight would be given to the indirect and “right to control” elements of the standard.

Judge A. Raymond Randolph pointed to an unenforced six-month limitation on employee assignments in the contract between BFI and Leadpoint as an example of what the Board might consider preserved right to control. But Judge Randolph noted that that provision suggests an attempt to avoid having permanent employees and said it seemed to favor BFI’s position.

It is not certain how the Court of Appeals will rule, but the questions and comments during oral argument certainly suggest the decision may be overturned. We will continue to watch this case and provide updates as it unfolds.

 

House Bill Spotlights Paid Union Activities By Federal Employees

A House bill would require federal agencies to report annually on the amount of “official time” (i.e., taxpayer-paid time) that federal employees spend on union activities rather than working at their regular job duties. H.R. 1293 (the “Official Time Reform Act of 2017”) was introduced by Rep. David Ross (R-Fla.) on March 1, 2017, and reported out of the House Committee on Oversight and Government Reform on March 8.

The bill defines official time as time “which may be granted to an employee … (including [pursuant to] a collective bargaining agreement …) to perform representational or consultative functions … during which the employee would otherwise be in a duty status.”

Under the bill, federal agencies must report annually, at a minimum, the total amount of “official time” granted to employees, the employees to whom official time was granted, the total compensation paid to employees for official time, the activities engaged in by those employees while on official time, and the square footage of agency space used by employees engaged in official time. The federal agencies would report their responses to the Office of Personnel Management (OPM), which, in consultation with the Office of Management and Budget, would then prepare reports for the House and the Senate.

Not surprisingly, the AFL-CIO opposes the bill. Although the  legislation seeks to impose a reporting requirement, in a letter to Chairman Jason Chaffetz (R-Utah) of the House Committee on Oversight and Government Reform and Ranking Member Elijah Cummings (D-Md.), the union argued the “legislation would impose a penalty of reduced pension accrual on those who agree to serve as employee representatives[,]” that “[e]mployees do not use official time for union business . . . [and t]he use of official time is a longstanding, necessary tool that gives agencies and their employees the means to expeditiously and effectively use employee input to address mission-related challenges. It also helps to bring swift closure to conflicts that arise in all workplaces.” The letter continued, “The law limits official time to that which the union and the agency both agree is reasonable, necessary, and in the public interest. Therefore, agency officials are able to oversee the use, management, and scheduling of official time based on the immediate needs of the workplace.”

The OPM last reported on official time in 2012. Then, the OPM’s report stated that federal employees conducted about 3.4 million hours of union business during regular duty hours at an approximate cost of $157 million to the taxpayers. If the bill passes, President Donald Trump can be expected to sign it. A similar bill passed the House last summer, but the Senate did not act on it.

DOL Chief Nominee Acosta’s Hearing Scheduled for March22

The hearing on Alexander Acosta’s nomination to become Secretary of Labor has been scheduled for March 22. The hearing, in front of the Senate Health, Education, Labor and Pensions Committee, originally was to take place on March 15. 

For more on the nominee’s background, click here.

 

Short List of Possible Trump NLRB Candidates Reported

President Donald J. Trump has narrowed his list of candidates to fill the two open seats on the five-member National Labor Relations Board to Marvin Kaplan, William Emanuel, and Douglas Seaton, according to Bloomberg BNA. Emanuel and Seaton are labor attorneys and Kaplan is counsel to the Commissioner of the Occupational Safety and Health Review Commission.

A full NLRB is expected to result in a pro-business 3-to-2 majority – the first such majority since December 16, 2007, when Republicans Peter C. Schaumber, Peter N. Kirsanow, and Robert J. Battista were Members. Nominees to the NLRB require Senate confirmation.

According to his resume, as Workforce Policy Counsel on the House Education and Workforce Committee from January 2012 to September 2015, Kaplan “led efforts to fight DOL overtime and 2012 unconstitutional NLRB recess appointments” and “[d]rafted … the Workforce Democracy and Fairness Act,” legislation that sought to overturn the Board’s 2012 Specialty Healthcare bargaining unit decision and “quickie election” rulemaking by amending the National Labor Relations Act.

Emanuel describes himself as having “extensive experience representing employers in traditional labor matters….”

Seaton’s views on labor issues are clear. In an interview with Bloomberg BNA, he said, “the board [sic] has gone very, very far to the left or to the pro-union side of things, and I’d be happy and honored if I could help bring it back to the middle.”

The new Board, once appointed and confirmed, likely will revisit recent NLRB rules and decisions, including those covering (1) class action waivers, (2) joint employer, (3) temporary workers, (4) quickie elections, (5) expansion of protected concerted activity (e.g., its impact on workplace policies), (6) definition of appropriate bargaining units, and (7) status of college/university faculty and student athletes.

 

 

 

R. Alexander Acosta Picked to Head Department of Labor

President Donald Trump has nominated R. Alexander Acosta to be Secretary of Labor. His nomination comes one day after Andrew Puzder, Trump’s first pick to lead the Department of Labor, withdrew his nomination.

Acosta, currently the Dean of Florida International University’s law school, is the son of Cuban immigrants. If confirmed, Acosta would be the first Hispanic member of Trump’s Cabinet.

Acosta is a graduate of Harvard College and Harvard Law School. He clerked for Justice Samuel A. Alito, Jr. when Alito was a Judge on the U.S. Court of Appeals for the Third Circuit, in Philadelphia. Acosta then went into private practice at the Washington, D.C. law firm Kirkland & Ellis and taught law at the George Mason School of Law.

Acosta has been confirmed by the Senate three times — to become a National Labor Relations Board member, then to become Assistant Attorney General for the Civil Rights Division of the U.S. Department of Justice, and finally when he was nominated to be U.S. Attorney for the Southern District of Florida.

He was appointed by President George W. Bush as member of the National Labor Relations Board, and served as a Board member from December 17, 2002, through August 21, 2003. Acosta reportedly authored approximately 125 opinions during his tenure on the Board.

Thereafter, Acosta served as Assistant Attorney General for the Department of Justice’s Civil Rights Division under President George W. Bush until June 2005. He later was appointed U.S. Attorney for Southern District of Florida, where he served until becoming the Dean of FIU Law in 2009.

DOL Chief Nominee Puzder Withdraws

According to reports, Andrew Puzder, President Donald J. Trump’s nominee for Department of Labor Secretary, has withdrawn his name from consideration. This comes on the heels of a Washington Post report that seven Republican Senators were set to vote against his nomination.

DOL Nominee’s Confirmation Hearing To Take Place Next Week

The confirmation hearing for Secretary of Labor-nominee Andrew Puzder before the Senate Health, Education, Labor and Pensions (HELP) committee will take place on February 16, according to Politico.

The hearing has been delayed four times. The last one, scheduled for February 7, was put off “indefinitely” because the HELP committee had not received the required paperwork from the Office of Government Ethics. The Committee now has.

In a nine-page letter dated February 7 to Robert Shapiro, an ethics official with the Department of Labor, Puzder explained how he intends to handle possible conflicts of interest. Among other things, Puzder pledged to resign from his positions with CKE Restaurants Holdings, Inc.and forfeit his 2016 bonus if he does not receive it before he takes over as Secretary. Puzder also disclosed that, in January, he had resigned his positions with the International Franchise Association and the American Enterprise Institute.

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