NLRB’s Proposed Rule Adopts Pre-Browning-Ferris Joint-Employer Standard

The National Labor Relations Board has announced that it will publish a “Notice of Proposed Rulemaking” in the Federal Register regarding its joint-employer standard. The notice will be published on Friday, September 14. The proposed rule will adopt the pre-Browning-Ferris standard for determining if two or more employers are joint employers of employees.

The “Notice of Proposed Rulemaking,” dated September 14, “provides that an employer may be found to be a joint-employer of another employer’s employees only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine. Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship.”

Board Chairman John F. Ring and Board Members Marvin E. Kaplan and William J. Emanuel formed the majority in favor of the rule. Board member Lauren McFerran dissented. Ring, Kaplan, and Emanuel were appointed to the NLRB by President Donald Trump; McFerran is an Obama appointee.

A 60-day period for commenting on the proposed rule begins on September 14 and ends on November 13. Comments may be submitted electronically to www.regulations.gov or by mail or hand-delivery.

Jackson Lewis is available to assist your organization in preparing comments.

NLRB Invalidates Voluntary Severance Agreements, Orders Reinstatement and Full Back Pay

The National Labor Relations Board has upheld an Administrative Law Judge’s decision to invalidate 11 severance agreements that provided payments to employees laid off shortly after an election in violation of the National Labor Relations Act.  The 11 individuals were awarded full reinstatement and back pay. Terex, 366 N.L.R.B. No. 162 (Aug. 21, 2018). The Board found the factors set out in its decision in Independent Stave, 287 NLRB 740 (1987), weighed in favor of invalidating the severance agreements.

Thirteen permanently laid off employees in the employer’s paint department and welding and fabrication department were offered severance agreements that included severance pay to which they were not otherwise entitled. In exchange, the employees had to sign severance agreements containing broad release language, including that the employees would not pursue NLRB charges. Eleven signed.

Relying on Independent Stave,  the NLRB upheld the ALJ’s decision to invalidate the severance agreements finding that they were “part and parcel of the [company’s] effort, through plantwide threats and a mass layoff, to prevent any of its production employees from winning union representation.” Moreover, the NLRB found that the company “laid off the [employees] with the unlawful motive of defeating the union,” and therefore should not be permitted to “rely on the severance agreements, which at a minimum facilitated its unlawful conduct.”

Independent Stave directs the NLRB to examine four factors when determining whether to give effect to non-Board settlements relating to unfair labor practice allegations. The four factors include:

(1) whether the parties to the Board case have agreed to be bound, and the position taken by the General Counsel regarding settlement; (2) whether the settlement is reasonable in light of the violations alleged, the risks inherent in litigation, and the stage of litigation; (3) whether there has been any fraud, coercion, or duress by any party in reaching the settlement; and (4) whether the respondent has a history of violating the Act or has previously breached settlement agreements.

The ALJ and Board found that factors (1), (2), and (4) weighed in favor of invalidating the severance agreements.

In dissent, Member Marvin Kaplan sharply disagreed with the majority’s application of the Independent Stave factors. Kaplan relied heavily on the fact that the employer had no prior NLRA violations and that the employees voluntarily entered into the severance agreements and, therefore, were free to reject it.

As this decision demonstrates, it is crucial that employers consider the Independent Stave factors prior to entering into any settlement or severance agreements that may include the waiver or release of unfair labor practices. The Board is fully prepared to extend its reach into private severance agreements that may not meet the intent of the NLRA and invalidate those agreements even when they were voluntarily entered into by employees.

Will Filing A Class Action Continue To Be Protected Concerted Activity?

The National Labor Relations Board will reconsider whether an employer can discipline an employee for the act of filing a class action, which has long been held to be protected concerted activity under the National Labor Relations Act. Cordua Restaurants, Inc., 16-CA-161380 (Aug. 15, 2018) (Cordua II).

The Board, sua sponte, vacated its Decision and Order in Cordua Restaurants, Inc., 366 NLRB No. 72 (Apr. 26, 2018) (Cordua I). In that case, the NLRB found the employer had violated the Act when it fired a worker for filing a collective wage and hour lawsuit against the company. The decision was issued prior to the U.S. Supreme Court’s Epic Systems Corp. v. Lewis, 584 U.S. __, 138 S. Ct. 1612 (2018), in which the Court ruled, 5-4, that class action waivers in employment arbitration agreements do not violate federal law.

In Cordua I, the NLRB (Members Mark Gaston Pearce, Lauren McFerran, and Marvin Kaplan formed the majority) held there was no dispute that the filing of the collective wage and hour lawsuit constituted protected concerted activity. The employer defended the termination, maintaining the employee was fired not because of his protected concerted activity, but because he attempted to steal employee wage information from confidential company files and lying about it during investigative interviews. The Board rejected the employer’s defense, noting that requests by employees for information relevant to Section 7 activities are protected, citing Faurecia Exhaust Systems, 355 NLRB 621, 622 (2010). That is the case even if the information is protected. However, the protection is lost if the information is sought or obtained surreptitiously. Ridgely Mfg. Co., 207 NLRB 193, 197 (1973), enfd. 510 F.2d 185 (D.C. Cir. 1975).

In Cordua II, an unpublished decision, Board Chairman John Ring and Members Kaplan and William Emanuel voted to vacate Cordua I, sua sponte. The Board held that it wants to “reconsider the entire proceeding.” The Board’s action signals the majority may hold that an employer may discipline an employee for the act of filing a class action.

Pearce and McFerran dissented, noting that nothing in Epic Systems Corp. warranted reopening the case since that Supreme Court decision addressed “the question of whether an employer’s maintenance of an arbitration agreement barring employees from bringing a collective action violated the Act,” whereas, in the instant case, the Board found the employer violated the Act by terminating an employee in response to his filing of a collective wage-and-hour lawsuit against the employer. Pearce and McFerran noted that it is “well settled that the filing of such a lawsuit constitutes protected concerted activity.”

We will report any further developments. Please contact a Jackson Lewis attorney if you have any questions.

Pearce Nominated for Third Term on NLRB

Mark Gaston Pearce has been nominated by President Donald Trump to serve a third term on the National Labor Relations Board. Pearce, a 2010 recess-appointee under then-President Barack Obama, was reappointed to a second term in 2013. That term expired on August 27, 2018. Pearce’s nomination now heads to the Senate for consideration.

Pearce was instrumental to the Board’s shift toward a labor-friendly approach during the Obama Administration. However, following the Senate’s confirmation of Trump’s Republican nominees Marvin Kaplan on August 2, 2017, William Emanuel on September 25, 2017, and John Ring on April 11, 2018, the Board has established a firm Republican and pro-business majority. Indeed, Trump’s Board has already reversed several significant Obama-era decisions.

In July, industry groups reportedly were urging the Trump Administration not to re-nominate Pearce, one of two remaining Democrats on the Board (along with Lauren McFerran). The Trump Administration’s process, which had already begun, was put on pause at the time.

Bloomberg BNA later reported that the Senate was working on a deal with President Trump that would allow Pearce to be reconfirmed and, consistent with tradition, the minority party would retain two of the five seats on the Board. The deal also would ease the backlog of pending nominees to numerous positions within the Department of Labor and other departments. More than 150 nominees reportedly are awaiting confirmation.

A deal could be reached to confirm Pearce by the end of August.

Jackson Lewis attorneys are available to discuss how these and other developments and trends at the NLRB may affect your organization.

NLRB GC Institutes Changes to Certain Decision-Making Processes

The National Labor Relations Board’s General Counsel’s office has issued an internal Memorandum (“Changes to Case Processing Part 1”) to all regional directors, officers-in-charge, and resident officers announcing immediate enactment of case processing changes.

The six-page memorandum, obtained by Bloomberg BNA, addresses four policies. Memorandum ICG 18-06 (July 30, 2018). According to the Memorandum, the changes are based “almost entirely from suggestions received from all levels of the Agency….”

The first four pages of the memorandum, on “Decision-Writing Centralization,” outline the “streamlin[ing of] the decision-writing process” of pre-election R-Case decisions that arise within each of the four NLRB Districts (each District consists of a number of Regions). The General Counsel wants a dedicated group of decision writers who have “the time, resources, and specialized skills to efficiently draft decisions…” and, therefore, would be able to help achieve quality consistency across all Districts and Regions.

The Memorandum states that the number of writers for each District will vary from one to three, based on an analysis of the number of R-Case pre-election decisions issued during fiscal year 2017. During the time an individual is a decision writer, his unfair labor practice case workload will be adjusted to accommodate his writing duties.

The Memorandum contains some interesting statistics. They show a large disparity across the NLRB in the number of pre-election R-Case decisions written in each Region. During FY 2017, 157 decisions were issued across the NLRB. Four Regions wrote at least 12 decisions, and nine wrote three or fewer. The Memorandum also reveals wide disparities in the amount of time it takes Regions to write decisions. The median amount of time two Regions took to write decisions was 15 or fewer days (the lowest regional median was 14 days), while the median amount of time one of the Regions took was 68 days. Thus, another goal of centralized decision-writing is “lower and more consistent medians across Districts and Regions.”

The second policy, on “Streamlining Advice Branch Submissions,” addresses the delays in processing cases submitted to the Advice Division that have “been a cause of criticism” inside and outside of the NLRB. The General Counsel proposes to reduce required paperwork through the submission of “short form memos” to Advice. Additionally, some Advice submissions may be in the form of an email. Further, other submissions may be made by incorporating all of the necessary evidence by reference if it can be found in, for example, the “Agenda Minute.”

The third policy, on “Streamlining Ethics Issues,” states that legal ethics guidance memoranda will be categorized and stored in a searchable format that Regional personnel can access. Consistent with the overall goal of the Memorandum, this should increase consistency and efficiency across the Regions when they deal with ethical issues.

The final policy change is entitled “Team-Decisions.” Regional Directors are instructed to “delegate appropriate case-handling decision-making authority” to supervisors, rather than participating in even “the more mundane case-handling decisions.” The breadth of the “decision-making authority” that may be given to supervisors may include, for example, approving dismissals, withdrawals, or settlements. It also may involve allowing the supervisor and agent to make the final decision about a charge where they agree on the merit or lack thereof. The General Counsel’s office notes that 17 regions allow supervisors to participate in decision-making and have experienced “great success.”

The Memorandum states that delegation is “appropriate in most Category 1 [exceptional impact] cases and some Category 2 [significant impact] and 3 [important impact] cases.” The Memorandum notes that a Regional Director’s appropriate delegation of authority to supervisors and managers will be positively noted in their annual appraisals under “critical element 2 (leading people 10%).” The Memorandum also states “the extent to which a supervisor or manager steps up and assumes these responsibilities will be positively noted in their appraisals.”

Additional changes should be expected. In addition to the Memorandum’s title (“Changes to Case Processing Part 1”), footnote 1 states that “some other items… will be addressed in one or more memos soon to follow.”

Please contact Jackson Lewis if you have any questions.

 

 

 

 

NLRB Revisiting Rule on Employees Use of Employer’s Email System

The National Labor Relations Board has invited briefs on whether it should modify or overrule its rule under the National Labor Relations Act, established in Purple Communications, that employers must permit employees who have been provided access to their employer’s email system to use that system for statutorily protected communications on their non-working time. Rio All-Suites Hotel and Casino, No. 28-CA-060841 (Aug. 1, 2018).

The Board also asked whether the Board’s standard should apply to computer resources beyond email systems, such as instant messages, text messages, postings on social media, and the like.

In Purple Communications, 361 NLRB 1050 (2014), the Board also decided that an employer may restrict the right to use of its email system if it can demonstrate that special circumstances exist to maintain production or discipline.

The Board had overruled Register Guard, 351 NLRB 1110 (2007), in Purple Communications. The Board held in Register Guard that an employee does not have a statutory right to use his employer’s email system for Section 7 activity. It decided that an employer may impose Section 7-neutral restrictions on employees’ non-work-related uses of its email systems, even if those restrictions limit the use of its systems for union or other protected communications.

In Rio All-Suites Hotel and Casino, the rule in question (as promulgated and currently maintained) barred employees from “send[ing] chain letters or other forms of non-business information.” Administrative Law Judge Mara-Louise Anzalone held that, insofar as the rule banned all use of the employer’s email system for non-business distribution and solicitation, it violated Purple Communications. The ALJ further found that no special circumstances existed. The employer excepted (appealed), asking the Board to overrule Purple Communications and, indirectly, to return to the Register Guard standard.

The Board wants briefs to address the following questions:

  1. Should the Board adhere to, modify, or overrule Purple Communications?
  2. What standard should the Board adopt instead of Purple Communications?
  3. Should the Board return to the holding of Register Guard or adopt another standard?
  4. If the Board returns to the holding of Register Guard, should it make exceptions for circumstances that limit employees’ ability to communicate with each other through means other than their employer’s email system (e.g., because of a scattered workforce or facilities located in areas without broadband access)? If so, should it specify such circumstances or leave them to be determined on a case-by-case basis?
  5. Should the Board apply a different standard to the use of computer resources other than email and what should that standard be?

NLRB Chairman John F. Ring and Members Marvin E. Kaplan and William J. Emanuel joined to issue the Notice and Invitation to File Briefs. Members Mark Gaston Pearce and Lauren McFerran dissented. Briefs must be filed by September 5, 2018. Responsive briefs may be filed by September 20, 2018.

Jackson Lewis is available to file amicus briefs on behalf of employers and employer associations in connection with this Notice and Invitation to File Briefs.

Missourians Reject Right-to-Work

Missouri voters have rejected right-to-work. Senate Bill 19, which would have made Missouri the nation’s 28th right-to-work state, was passed by the Missouri legislature on February 2, 2017, and signed into law by then-Governor Eric Greitens. Labor organizations and their supporters gathered enough signatures to keep the law from going into effect until voters in Missouri had an opportunity to weigh in.

A “right-to-work” law generally prohibits an employer and the union representing its employees from requiring those employees to join the union or pay dues to the union as a condition of their employment.

After Senate Bill 19 was signed into law, labor organizations and their supporters spent millions of dollars to gather enough signatures to put the bill to a vote. Ten days before the law was to become effective (on August 28, 2017), union supporters submitted more than 310,000 signatures (almost three times the 108,467 that were needed) and stopped the law from taking effect. On November 22, 2017, the Secretary of State certified that enough signatures had been submitted and set the right-to-work law for a vote on whether the law should take effect.

The vote was originally scheduled for the November 2018 mid-term general elections. However, on May 17, 2018, the Missouri legislature moved the vote to August 7, when Missouri holds its primaries.

Supporters of “right-to-work” laws generally argue that employees should not be forced to join a union that they do not wish to support. Opponents of “right-to-work” claim that such laws unfairly allow employees to receive the benefits of union contracts and representation without requiring them to contribute financially to the costs of obtaining those benefits.

Reportedly, lawmakers have indicated a willingness to reintroduce right-to-work legislation in 2019, but they have admitted they have to evaluate first where the “political will” is.

Jackson Lewis attorneys are available to discuss how this and other developments affect employers and their businesses.

 

Weingarten Rights Not Violated; Employee Lawfully Terminated for Refusal to Take Drug/Alcohol Test

An employee’s Weingarten rights have limits, especially as to drug and alcohol testing, where time is often of the essence, an NLRB Administrative Law Judge has held. Fred Meyer Stores, Inc., No. 19-CA-206136 (July 2, 2018).

The National Labor Relations Board has long-recognized unionized employees’ right to have a union representative present for investigative meetings that may result in discipline (these “Weingarten rights” do not apply in non-union workplaces). In Fred Meyer Stores, Inc., a cashier was suspected of drinking alcohol on the job after two customers allegedly reported smelling alcohol on his breath. The employee was called in by management for a meeting and once the employee understood the nature of the meeting, he requested his Weingarten right to union representation. Weingarten rights were spelled out to the employee on a union-provided card, which included numbers for individual union representatives, plus a 24/7 “emergency” phone number printed in red. The employee called multiple union representatives, but could not reach one directly. He did not call the “emergency” line.

After about 20 minutes, management asked the employee to submit to a drug/alcohol test, which the employee refused to do without a union representative. The employee was advised that a union representative could attend if available, but the employee continued to refuse to take the test in light of his inability to reach a union representative.

The employee was suspended pending investigation, and his employment was ultimately terminated a few days later.

The Administrative Law Judge rejected the employee’s challenge to his termination on Weingarten grounds, recognizing that “alcohol testing is time sensitive.” The Judge also found the company’s actions reasonable in light of the employee’s failure to contact an available union representative through the union’s 24/7 emergency phone number.

In other contexts, the Board has found that an employer’s refusal to allow an employee accused of alcohol or drug abuse union representation violated the employee’s Weingarten rights. The Judge in Fred Meyer Stores distinguished those cases in rejecting the employee’s claim in this case.

Fred Meyer Stores reminds employers that unionized workers must be given a reasonable opportunity to seek and obtain union representation before requiring a drug or alcohol test. However, an employer need not wait indefinitely and risk losing the utility of a time-sensitive drug or alcohol test before testing an employee for suspected substance abuse.

Jackson Lewis attorneys familiar and experienced with this issue are available to discuss this case and how it impacts your workers and business.

NLRB Member Pearce, One of Two Remaining Democrats, May Not Get Third Term

The Trump Administration is being asked not to give Member Mark Gaston Pearce, one of two remaining Democrats on the National Labor Relations Board, another term after his current term, his second, expires on August 27, Bloomberg BNA has reported.

Industry groups reportedly have asked the President to delay re-nominating Member Pearce to a third term, a process the Trump Administration had begun. That process has apparently “been put on hold.” Pearce was sworn in as a Board Member on April 7, 2010.

Trump has re-shaped the NLRB by nominating Republican Members to fill Board vacancies. Last fall, the U.S. Senate confirmed Marvin Kaplan and William Emanuel, which, along with then-Chairman Philip Miscimarra, a Republican, gave the Board a Republican majority for the first time in more than a decade. In December 2017, that Board issued a series of business-friendly decisions that overruled high-profile decisions championed by labor organizations and the Obama Administration. More recently, management-side labor attorney and Republican John Ring was confirmed as a Board Member to replace Miscimarra, whose term ended after the decisions were issued.

Traditionally, the NLRB is made up of three members of the sitting president’s political party and two members of the minority party. That means that the seat Pearce vacates would be filled by a Democrat appointed by Trump. However, Trump also has the option not to fill the vacant seat. The Board could operate with four of the five seats filled – only three Members are needed for a quorum. Although having an even number of Board members could increase the possibility of 2-2 votes, given that three of the four Members would be like-thinking Republicans, that possibility should be minimal.

With or without Member Pearce, or any replacement, Trump’s Republican-controlled NLRB is expected to continue undoing decisions that heavily favored labor organizations.

Jackson Lewis attorneys are available to discuss the most recent developments at the NLRB and how they impact your specific organization.

 

NLRB Expands Its Alternative Dispute Resolution Program

The National Labor Relations Board has announced it will begin a pilot program to encourage parties to use its Alternative Dispute Resolution program.

Under the pilot program, the NLRB’s Office of the Executive Secretary will proactively engage parties with cases pending before the Board to determine whether the case is suitable for ADR. The process is voluntary.

The ADR program began in 2005 as an alternative means for parties to resolve cases pending before the Board. According to the NLRB, since its inception, mediators have assisted parties in reaching settlements in approximately 60 percent of the cases in the ADR program.

The program is available to any party with an unfair labor practice or compliance case pending before the Board. Once the parties enter the program, the ADR Program Director arranges for a neutral to assist the parties. The neutral will conduct a conference, normally in person, to assist the parties in reaching a settlement. The neutral has no authority to impose a settlement; whether or not to settle remains voluntary. NLRB rules provide that all settlement discussions during the ADR process are confidential and that evidence as to what transpired during the ADR process may not be used in any administrative or court proceeding.

The ADR program results in only a minimal delay in the case proceedings. Although entry into the ADR program places all case deadlines on hold, a case may only remain in the ADR program for 28 days, unless the parties and the ADR Program Director agree otherwise. The parties are not responsible for any costs or expenses associated with the program.

Employers should weigh carefully whether ADR may be appropriate in their cases. For example, where a charging party has overvalued its case, an NLRB mediator who is seen by the charging party as a neutral may be helpful. Although not every case is suitable for the ADR program, the program may be a viable alternative to continued litigation.

 

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