A union’s use of Scabby the Rat (an inflatable rat “approximately 12 feet in height with red eyes, fangs, and claws”) and inflammatory banners targeting a neutral employer, without more, does not violate the National Labor Relations Act (NLRA), the National Labor Relations Board (NLRB) has ruled. Lippert Components Inc., 371 NLRB No. 8 (July 21, 2021).

For more than three decades, unions have displayed Scabby (or other inflatable animals, including gorillas) on public property to protest companies for reasons including doing business with employers the union finds objectionable. Whether Scabby is akin to lawful handbilling or unlawful picketing directed at a neutral employer is the subject of much debate. (See our article, Why Is ‘Scabby the Rat’ a Legal Dilemma?, for legal background on Scabby.)

Republican-appointed NLRB General Counsels have tried to eradicate Scabby when deployed against neutral employers. In the early 2000s, General Counsel Arthur Rosenfeld (a Republican appointee) issued complaints over the use of Scabby, arguing it was inherently a symbol of a labor dispute and its display constituted signal picketing or otherwise coercive conduct in violation of NLRA Section 8(b)(4). The Republican-appointed majority NLRB at that time avoided ruling on the issue, finding it unnecessary to address Scabby due to the other union misconduct. See, e.g., Ranches at Mt. Sinai, 346 NLRB 1251 (2006); Brandon Regional Med. Ctr., 346 NLRB 199, 200 n.3 (2006). Scabby continued to make appearances at union demonstrations.

In Lippert Components, a union displayed Scabby and two large banners near the public entrance of a large trade show in Indiana for a four-day period in 2018. One banner criticized a manufacturer for alleged safety violations. The other criticized a neutral supply company for doing business with that manufacturer. The supply company filed an unfair labor practice charge alleging, among other things, the rat-and-banner display violated NLRA Section 8(b)(4)(ii)(B).

Under Section 8(b)(4)(ii)(B), it is unlawful for a union “to threaten, coerce, or restrain” a neutral employer where an objective is for the neutral employer to cease doing business with another entity. The NLRB’s prior General Counsel Peter Robb (a Republican appointee) issued a complaint against the union, alleging the rat-and-banner display was unlawfully coercive and constituted “signal picketing.”

An administrative law judge (ALJ) found the rat-and-banner display did not constitute picketing or otherwise coercive nonpicketing conduct in violation of Section 8(b)(4)(ii)(B). The ALJ relied on Eliason & Knuth of Arizona, 355 NLRB 797 (2010), and Brandon Regional Medical Center, 356 NLRB 1290 (2011) (“Brandon II”). These decisions, respectively, held displaying banners or an inflatable rat near the entrance of a neutral employer, without something more, does not “threaten, coerce, or restrain” a neutral employer in violation of Section 8(b)(4)(ii)(B). In Brandon II, the NLRB was comprised of three Democrat-appointees and one dissenting, Republican, appointee.

The ALJ’s decision regarding the rat-and-banner display was appealed to the present NLRB, which (currently) is comprised of three Republican-appointees and one Democrat-appointee. In a 3-1 decision, the NLRB dismissed the complaint, holding the display did not violate Section 8(b)(4)(ii)(B). The majority issued two concurring decisions. Chair Lauren McFerran, the only current Democrat-appointee to the NLRB, endorsed the rationale in Eliason & Knuth and Brandon II as the basis for dismissing the case. Members John Ring and Marvin Kaplan agreed that the rat-and-banner display did not violate Section 8(b)(4)(ii)(B), but took issue with Eliason & Knuth and Brandon II, which they believe interpreted Section 8(b)(4)(ii)(B) too narrowly. The majority also summarily agreed the display did not constitute “signal picketing.”

Member William J. Emanuel dissented, arguing that Eliason & Knuth and Brandon II should be overruled and that the rat-and-banner display was tantamount to picketing or, alternatively, was coercive nonpicketing conduct, which violated Section 8(b)(4)(ii)(B). Member Emanuel warned that by deeming lawful the “display of banners and giant, inflatable rats directed at neutral employers” such conduct will proliferate.

Unions likely will be emboldened by this decision in their use of large banners, inflatable rats, and other pressure tactics against neutral, as well as primary, employers. Jackson Lewis attorneys are available to discuss lawful responses to union tactics.

The National Labor Relations Board (NLRB) dismissed a union’s push to organize a micro unit of 87 employees at a Nissan assembly plant in Tennessee based on the traditional community-of-interest standards for determining whether a unit is appropriate. Nissan North America, Inc., 10-RC-273024 (June 11, 2021).

The International Association of Machinists and Aerospace Workers (UAW) filed a petition to represent a unit of Tool and Die Maintenance Technicians. However, the employer asserted the only appropriate unit had to include all production and maintenance employees — a total of about 4,300 employees. The Acting Regional Director agreed with the employer, finding the only  appropriate unit included all production and maintenance employees, not just the Tool and Die Maintenance Technicians.

The union argued that the Tool and Die Maintenance Technicians should stand alone as a craft unit because the employees had specialized skills that other plant employees could not perform. The employer maintained that these employees were not sufficiently distinct from other plant employees to warrant separate representation.

The Acting Regional Director agreed with the employer, finding the Tool and Die Maintenance Technicians were not journeyworker craftsmen and thus not a craft unit. Further, she found they share a community of interest sufficiently distinct from employees excluded from the proposed unit to warrant a separate appropriate unit. Relying on PCC Structurals, Inc., 365 NLRB No. 160 (2017), in which the NLRB returned to the traditional community-of-interest standards for determining whether a unit is appropriate, the Acting Regional Director found the Tool and Die Maintenance Technicians shared a community of interest with the remaining plant employees and the only appropriate unit was a plant-wide unit of production and maintenance employees. Under NLRB rules, a petition must be supported by employee signatures amounting to at least 30 percent of the unit. Once the unit was expanded to 495 times the originally requested size (in this instance), the union could not show adequate support and the petition was dismissed.

It was not always thus. For several years, under Specialty Healthcare, 357 NLRB 934 (2011), employers seeking to challenge the scope of the proposed unit had to “demonstrate that the additional employees the proponent [sought] to include share[d] an overwhelming community of interest with the petitioned-for employees, such that there is no legitimate basis upon which to exclude certain employees from the petitioned-for unit because the traditional community-of-interest factors overlap[ped] almost completely.” In many cases this proved to be an insurmountable threshold and enabled unions to organize smaller groups of employees, giving rise to the term “micro units.”

Unions have argued against the traditional community of interest standard and seek a return to the standard under Specialty Healthcare. Here, the UAW has stated it will file a request for review with the NLRB.  If it does, the case might not come up for consideration until there is a more union-friendly Biden NLRB Board that may be willing to return to the Specialty Healthcare standard.

For more information about the appropriateness of bargaining units, please contact a Jackson Lewis attorney.

“Absent threats or promises, § 8(c) [of the National Labor Relations Act] unambiguously protects ‘any views, argument or opinion’ – even those that the agency finds misguided, flimsy, or daft,” the D.C. Circuit has held. Trinity Services Group, Inc. v. NLRB, No. 20-1014 (D.C. Cir. June 1, 2021)

The Court was asked to “decide whether employers are entitled to express opinions that the [National Labor Relations] Board considers baseless” under the National Labor Relations Act (NLRA). Known as its free-speech provision, Section 8(c) of the NLRA provides: “The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice …, if such expression contains no threat of reprisal or force or promise of benefit.”

In Trinity Services Group, Inc., 368 NLRB No. 115 (2019), a  Board panel majority (Members Lauren McFerran and Marvin Kaplan) held a manager’s “patently false” statement blaming the union for confusion over an employee’s paid time off (PTO) bank violated Section 8(a)(1). Then-Chairman John Ring dissented, reasoning the challenged “remarks were a lawful expression of his personal opinion, protected by Section 8(c).” The D.C. Circuit agreed with the Chairman Ring.

The employer maintains a standard PTO plan for its facilities across the country, except for a unionized facility in Arizona.  The company’s  centralized payroll processing sometimes caused confusion, indicating a union employee had PTO to use, but the local management believed they did not. In this a case, an employee requested three days of PTO, which the central payroll system indicated she had. However, the local  manager disagreed. He told her she did not have any PTO available, saying “that is a problem that the Union created regarding paid leave”; “You need to fix that with the Union”; and “that’s the problem with the Union.” Ultimately, the employer gave the employee one day of PTO. This conversation arose while a successor contract was being negotiated. There was a tentative agreement to align the PTO plan with the non-union plan, but no overall agreement had been reached. There were also several open grievances challenging the employer’s PTO calculations.

The Board panel majority held the manager’s statements violated the NLRA. They reasoned these “statements were patently false …. There was no objective basis to blame the Union” for its PTO calculations. Giving significant weight to the context of contract negotiations and outstanding grievances, the Board found this “misrepresentation … would undermine the Union’s status as bargaining representative and reasonably tend to cause an employee to lose faith in the Union’s representation on the PTO issue.”

The D.C. Circuit noted the NLRA does not contain “this misstatement rule” and that no NLRB precedent had created it. Accordingly, it found substantial evidence did not support a finding these statements of opinion violated the NLRA. The Court ended its decision recognizing that it is up to Congress to change the NLRA in such a fashion, expressing no opinion on whether change is warranted: “Perhaps a no-misstatement rule would be good labor policy. Or perhaps not.”

The Court’s holding is reminiscent of the NLRB’s controversial decisions between 1977 and 1982, in which it considered whether a false statement uttered during a pre-election campaign would be deemed “objectionable conduct.” Ultimately,  in Midland National, 263 NLRB 127 (1982), the Board held that it “will no longer probe into the truth or falsity of the parties’ campaign statements” and would not automatically set aside elections because of misrepresentations during the lead up to an election, with a limited exception for forged documents. This position has not changed for the past 39 years.

Please contact a Jackson Lewis attorney with any questions as we continue to monitor NLRB decisions and all proposed legislation.

Complying with statutory workplace requirements does not necessarily excuse an employer from its bargaining obligations. A panel of the National Labor Relations Board (NLRB) upheld an Administrative Law Judge’s (ALJ) finding that an employer violated the National Labor Relations Act (NLRA) when it refused to bargain over the effects of requiring  employees to submit new I-9 forms. Frontier Communications Corp., 370 NLRB No. 131 (May 26, 2021).

The Board’s affirmation highlights the sensitive interaction between mandatory compliance with federal statutes and an employer’s obligations under the NLRA.

In late-2018 or early-2019, the employer conducted an I-9 audit and uncovered extensive noncompliance with the I-9 forms it had on file. To resolve the issues, the employer determined that it would need to obtain new I-9 forms from approximately 95% of its workforce hired after November 6, 1986, and before March 31, 2018. On July 19, 2019, the employer notified its employees by email that they would need to submit new I-9 forms. Soon thereafter, the union  complained that it did not receive prior notice of the communication or of the announced I-9 requirement and demanded bargaining on the issue. Ultimately, the employer refused to bargain on the issue, arguing it was not obligated or permitted to bargain over its efforts to comply with federal immigration laws. In response, the union filed an unfair labor practice charge.

The ALJ held, and the NLRB affirmed, that the employer’s directive that employees submit new I-9 forms was a mandatory subject of bargaining because the requirement affects terms and conditions of employment. The ALJ explained that the I-9 forms “clearly affects the terms and conditions of employment, as employees who (for whatever reason) have difficulty completing the I-9 forms risk losing their jobs, among other potential consequences.” The ALJ flatly rejected the employer’s argument that I-9 compliance was not subject to mandatory bargaining because the employer is required to comply with the Immigration Reform and Control Act of 1986 (IRCA). The ALJ explained that IRCA compliance was subject to mandatory bargaining because the employer had discretion over how to comply with IRCA. For example, the ALJ asserts that the employer had discretion on “the amount of time [employer] would give an employee to obtain and present documents that establish the employee’s identity.” Accordingly, the ALJ found the employer violated the NLRA when it refused to bargain with the union concerning how to complete the I-9 forms.

The ruling in this case is not that an employer must bargain over whether to comply with the law, but it must bargain over the impact compliance with the law could have on employees’ terms and conditions of employment.

The NLRB’s affirmation of the ALJ’s findings illustrates the fine line between federal compliance and NLRA obligations. Employers must be cautious of how federal or state compliance affects the NLRA obligation to bargain. When  an employer is considering updating its personnel files or changing its onboarding process, it should consider whether it implicates any NLRA obligations. Please contact a Jackson Lewis attorney with any questions.

President Joe Biden has nominated Gwynne Wilcox, a partner in a New York law firm specializing in employee rights, to the National Labor Relations Board (NLRB).

Three of the five members of the NLRB are traditionally members of the president’s party. At present, there are four members seated, three of whom are Republican because of the staggering of terms. The term of Republican member William J. Emanuel will expire on August 27, 2021, enabling the Biden Administration to nominate another member, presumably, establishing a 3-2 Democrat majority. If the Senate approves Wilcox, she will take her position immediately.

Wilcox has had a distinguished labor career, including (among other roles) working as a field attorney in NLRB Region 2 in New York and as counsel for 1199SEIU United Healthcare Workers East. She is a board member of the Brandworkers, a group working with the International Workers of the World to organize food workers. She is also on the national board of the Workers Defense League. Wilcox has been accorded numerous accolades for her work.

However, the activism of attorney Wilcox and her firm raises some interesting questions. In 2018, Board member William Emanuel was criticized for participating in a case regarding the NLRB’s definition of “joint employer” – a hot issue for both employers and labor – because of his former law firm’s representation of clients in related cases. Ultimately, due to the controversy, the NLRB withdrew a decision and later issued a formal rule defining “joint employer.” It is widely expected that once the NLRB majority shifts, Board decisions will take a pro-labor turn. It is believed that the joint employer issue will be revived, possibly by issuance of a new rule. Wilcox and her firm represented litigants arguing for a broader interpretation of “joint employer.” Senate confirmation hearings reportedly are expected to focus on the potential recusal of Wilcox from this and other issues if seated.

For more information, contact the Jackson Lewis attorney with whom you work.

The NLRB has the authority to order an employer to reopen a business it finds was closed for discriminatorily anti-union reasons. In RAV Truck & Trailer Repairs, Inc., 369 NLRB No. 36 (Mar. 3, 2020), the NLRB did just that. However, upon review, the D.C. Circuit held that it “cannot decipher how the Board determined that the closure of [the business] constituted an unfair labor practice,” that the NLRB did “not purport to explain how restoration [of the operation] is even factually possible,” and remanded the case. RAV v. NLRB, No. 20-01090 (D.C. Cir. May 11, 2021).

RAV Truck and Trailer Repairs and Concrete Express of NY (a concrete supplier), although two separate entities, were found to constitute a single employer.   RAV operated from a large garage but in  February 2018 the building owner terminated RAV’s lease. RAV temporarily leased a much smaller space for a brief period to complete unfinished work projects but this space lacked state-mandated safety and environmental features.  That lease ended on May 31, 2018.

During this same period, the Teamsters Local 456, International Brotherhood of Teamsters was attempting to organize workers at both Concrete Express and RAV.

  • Concrete Express. On April 19, 2018, the Union filed a petition to represent Concrete Express drivers and mechanics. The NLRB held an election on May 10, 2018, which the Union lost. Subsequently, the Board found the employer committed multiple unfair labor practices leading up to the election and ordered a re-run election (in which the Union was again defeated).
  • On May 14, 2018, the Union filed a petition to represent the two mechanics who worked for RAV, but incorrectly listed “RAV Trucking Corporation” (a different entity) as the employer. The next day, RAV told its mechanics that ICE agents were in the area, and asked if they had papers authorizing them to work. RAV discharged the mechanic who said no, and later laid off the remaining mechanic for lack of work. The Union filed an unfair-labor-practice charge regarding the discharges. The Union then filed a corrected petition. However, that  same day, the employer informed the NLRB and the Union that RAV “will be shutting its doors …. It is now officially out of business.”

Eventually, the NLRB determined the employer’s discharge of the undocumented mechanic, the layoff of the other mechanic, and the closure of RAV were in retaliation for organizing or to chill remaining employees from engaging in union activity. In addition to other remedies, the Board ordered the employer to “reopen and restore the business operation of [RAV] as it existed on May 14, 2018.”

On review, the D.C. Circuit upheld the main thrust of the decision that the “discharge and layoff of these employees reflected impermissible retaliation for their pro-union activities.” However, it held “the record indicates that the Company closed the RAV operation because it could not exist without the leased space, not because of the Union activities.” The Court noted that while the Board could find the employer closed RAV to chill employees’ union activity at both RAV and Concrete Express, its conclusion was based only on the proximity of events. “Without a better explanation from the Board, we are constrained to remand.” As to the order to reopen, the Court found, “The Board’s decision fails to properly consider whether its restoration order is legally permissible, feasible, necessary, or unduly burdensome, as the law requires.” Even if it was unlawful to close RAV, it said, “the Company had no lawful, suitable location in which to house the RAV operation on May 14. And the Board has failed to cite any authority to support the legal legitimacy of an order that purports to compel a company to ‘reopen’ an operation that no longer exists due the loss of a lease and for which there is no adequate space to house the operation within the existing company facilities.” The D.C. Circuit remanded with the instruction, “as with any remedial order, the Board must justify its action.”

While the D.C. Circuit refused to enforce the Board’s order to reopen, in an appropriate case, the NLRB has the authority to take the extreme action of directing an employer to reopen. Such instances are relatively rare, and the facts in this case are unusual. For more information about NLRB remedies, contact the Jackson Lewis attorney with whom you work.

President Joe Biden was sworn into office on January 20, 2021. In just the first 100 days, the Biden Administration has begun its return to more labor-friendly policies, rules, and decisions, similar to those issued under the Obama Administration.

For example, on Day 1, immediately upon taking office, President Biden demanded that Trump-appointed National Labor Relations Board General Counsel Peter Robb resign from his post, and then summarily terminated him when Robb refused. The next day, Biden removed Robb’s replacement, the Deputy General Counsel, who had been named by the NLRB as Acting General Counsel. Biden also replaced Republican Board Member John Ring with Democrat Member Lauren McFerren as Chairperson of the NLRB.

By Day 5, Biden named Peter Sung Ohr to be Acting General Counsel. On February 1 (Day 12), Ohr issued Memorandum GC 21-02, rescinding multiple Trump-era NLRB General Counsel Memoranda, including GC 18-04 pertaining to handbook rules and GC 20-13 regarding neutrality agreements during union organizing drives. Ohr also signaled more changes were to come “in the near future.”

On February 4 (Day 15), the “Protecting the Right to Organize Act of 2021,” or the “PRO Act,” was introduced in the House of Representatives, seeking to legislate a host of labor-friendly rules and policy changes. It passed on March 9th, and awaits its fate in the Senate. Biden has promised to sign it, if given the opportunity.

In the meantime, on February 17 (Day 28), Biden nominated former union lawyer and NLRB Deputy General Counsel Jennifer Abruzzo as the new NLRB General Counsel.

Then, on February 24 (Day 35), new NLRB Chairperson McFerran explained that she believes the NLRB under the Trump Administration interpreted employee   rights under the NLRA in “the wrong direction.”

In addition, on March 31 (Day 71), Acting General Counsel Ohr issued a memorandum stating that his office will seek “vigorous enforcement” of employees’ Section 7 rights to engage in protected concerted activity.

President Biden has also issued dozens of Executive Orders, including one raising the minimum wage for federal contractors, and another Executive Order issued on April 26, 2021 (Day 97), regarding “Worker Organizing and Empowerment.” In that Executive Order, President Biden stated that, “[i]n the past few decades, the Federal Government has not used its full authority to promote” union organizing, and declares it “the policy of my Administration to encourage worker organizing and collective bargaining.” A task force was also established “to make recommendations regarding changes to policies, practices, programs, and other changes.”

The Biden Administration continues to quickly and decisively demonstrate its intent to reverse the prior Administration’s policies, rules, and decisions. Included among the Board’s priorities are issues concerning the lawfulness of handbook rules, the Board’s “joint employer” doctrine, company property and union access rights, “micro-units,” the Board’s “quickie election rules,” and the extent to which employees have a right to use company systems to engage in protected concerted activity. It is anticipated that after Republican Member William J. Emanuel’s term expires on August 27, President Biden will have a Democrat-majority NLRB, likely to expedite the Administration’s agenda.

Contact your Jackson Lewis attorney with any questions.

An Administrative Law Judge’s (ALJ) findings that an employer engaged in bad faith bargaining and unlawfully withdrew recognition from the union has been overruled 2-1 by a panel of the National Labor Relations Board (NLRB). District Hospital Partners, L.P. d/b/a The George Washington University Hosp., 370 NLRB No. 118 (Apr. 30, 2021). While the Board’s interpretation will be welcomed by employers, there is a question as to how long it may last.

The union and the employer had a decades-long collective bargaining relationship. After meeting 30 times over two years without reaching a new agreement, the employer received a petition signed by a majority of unit employees stating their desire to end representation by the union. The employer ceased bargaining and withdrew recognition from the union.

The union filed unfair labor practice charges asserting that many of the employer’s aggressive contract proposals were designed to avoid reaching agreement, and thus evidenced bad faith bargaining. If the employer engaged in bad faith bargaining, the employee petition would be deemed “tainted,” and the employer could not lawfully withdraw recognition. The complained-of proposals included:

  • A management rights clause giving the employer unilateral discretion to modify many contractual terms;
  • Elimination of the union security and dues checkoff clauses;
  • Exclusion of arbitration for any discipline short of discharge; and
  • Removal of the just cause requirement for discipline and discharge.

The employer also proposed a new, exclusively merit-based wage structure.

The ALJ determined the employer had bargained in bad faith and its subsequent withdrawal of recognition was unlawful. An NLRB panel, comprised of a 2-1 Republican majority, reversed the ALJ, finding the employer’s hard bargaining proposals alone could not be  evidence of bad faith because the employer had shown its willingness to consider the union’s proposals and made concessions on other issues. The majority also found the union responded to many proposals with nothing more than a “no,” along with many examples of profanity in complaints about the employer’s proposals. The union’s failure to make counterproposals, said the Board majority, meant it did not actually test the employer’s willingness to compromise on the proposals at issue. Further, the union itself contributed to delays in bargaining. The majority held that the NLRB will not find an employer’s proposals in themselves to constitute bad faith bargaining without a showing of some intent, under the circumstances taken as a whole, to frustrate reaching an agreement. Moreover, there was no surface bargaining, and the employer lawfully withdrew recognition from the union after receipt of the employee petition.

Perhaps signaling where the NLRB may be headed later this year once President Joe Biden’s future nominees are confirmed and the Board has a Democratic majority, current NLRB Chair Lauren McFerran filed a strong dissent. McFerran deemed the employer’s proposals to be clear evidence of bad faith surface bargaining. She viewed the employer’s proposals as leaving employees with fewer rights than they would have without a contract. Ms. McFerran said employer proposals giving the management near unfettered discretion over wage increases, eliminating longstanding union security and dues-checkoff clauses, and regressive proposals concerning the arbitration process all demonstrated the  employer’s intent to frustrate bargaining and oust the union. She also argued the union negotiator’s poor behavior, while boorish, did not excuse the employer’s unlawful bargaining tactics.

During contract negotiations, the employer provided employees summaries of bargaining from its point of view. These often blamed the union for a lack of progress and were critical of many of the union’s positions. The ALJ found these communications with employees were lawful. McFerran contended that, although lawful, the employer’s communications demonstrated its motivation to frustrate agreement, and thus should be evidence the harsh proposals constituted bad faith bargaining. Significantly, the NLRB majority flatly rejected this argument, stating that lawful communications are protected under Section 8(c) of the NLRA and “cannot be used as evidence of an unfair labor practice.”

It remains to be seen whether the majority’s view of bargaining and employer communication rights will survive a revamped NLRB under the once President Biden Administration.  Please contact a Jackson Lewis attorney with any questions.

 

In an interesting turn foreshadowing a coming change in its leadership, the National Labor Relations Board (NLRB) has withdrawn the rule it proposed in September 2019 to exclude student workers at private colleges and universities from coverage under the National Labor Relations Act (NLRA). The proposed rule would have excluded students whose studies included working as teaching or research assistants at private higher education institutions from the definition of “employees” under the NLRA.

“Employees” under the NLRA have protected rights to unionize and engage in collective bargaining. The proposed rule would have categorically excluded student workers from these protections.

The NLRB has repeatedly shifted its position on the status of student workers. However, since 2016, the Board has held that an employment relationship can exist under the NLRA between a private college or university and its employee, even when the employee is simultaneously a student. Columbia University, 364 NLRB No. 90. The proposed rule would have reversed Columbia University and, as a rule, would have placed the non-employee status of student workers beyond the reach of NLRB case decisions. With the withdrawal of the proposed rule, Columbia University will remain controlling precedent.

Further, following the expiration of NLRB Member William Emanuel’s term in August 2021, President Joe Biden will have the authority to establish a new (presumably Democratic) majority of the NLRB. Perhaps in light of that, the Board “decided to withdraw this rulemaking proceeding … to focus its time and resources on the adjudication of cases currently in progress.”

For more details on the Board’s action, see our article published by Jackson Lewis’ Higher Education Industry Team, or contact our attorneys in the Labor Relations Group or Higher Education Industry Team about the NLRA and its application to student workers.

With President Biden charting a fundamentally different course in labor relations, employers should monitor developments taking place. In less than three weeks, Washington saw President Biden’s firing of National Labor Relations Board (“NLRB”) General Counsel Peter Robb, removal of Robb’s Deputy General Counsel Alice Stock, and appointment of Peter Sung Ohr as acting General Counsel (seen as a step to creating a more union-friendly NLRB). Mr. Ohr promptly announced rescission of 10 individual policy directives issued by his predecessor.

On February 4, 2021, Congressional Democrats followed these actions by introducing  the Protecting the Right to Organize Act of 2021 (“PRO Act”), which is almost identical to a similar bill passed by the House last March. The 2021 version of the PRO Act retains many of the controversial and far reaching amendments to the National Labor Relations Act (“NLRA”).

Among the proposed amendments:

  • Joint Employer. The bill restores the controversial joint employer test set forth by the NLRB 2015 Browning-Ferris decision (362 NLRB 1599). Browning-Ferris expanded employer liability by broadly interpreting joint employer status to include situations involving “direct and indirect control” including “reserved authority” in contracts and conduct. The Trump NLRB reversed Browning-Ferris, codifying its decision in a formal rule (NLRB Rules & Regulations §103.40), which the PRO Act would nullify.
  • Adoption of the Independent Contractor “ABC” Test. Despite widespread criticism of California’s strict “ABC” test – which significantly expands the likelihood of independent contractors being deemed “employees” – the PRO Act incorporates the test into the NLRA. Under the Act, an individual would be classified as an “employee” unless: “(A) the individual is free from control and direction in connection with the performance of the service, both under the contract for the performance of service and in fact; (B) the service is performed outside the usual course of the business of the employer; and (C) the individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.”
  • Supervisory Status. The PRO Act would also expand coverage of the NLRA by changing the definition of “supervisor” under the NLRA, requiring putative supervisors to engage in supervisory duties for a “majority” of their time. The bill removes supervisory authority to assign work and direct employees responsibly as indicia of supervisory status.
  • NLRB Election Rule Rollback. The proposed law codifies the NLRB’s previous “micro-unit” rule (Specialty Healthcare, 357 NLRB 934 (2011)), statutorily establish “quickie” elections, allows the union to decide if the election will be manual or by mail ballot, among other far-reaching changes.
  • Preempt State “Right to Work” Laws. Although 27 states have adopted a “right to work” statute, the PRO Act pre-empts right to work laws by permitting contract terms requiring all employees to pay to the union fees for the cost of representation, collective bargaining, contract enforcement, and “related” expenditures.
  • Bar class action waivers in arbitration agreements. The bill would also bar class action arbitration waivers in mandatory arbitration agreements despite the Supreme Court’s ruling approving such clauses. See 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 (May 21, 2018).The Supreme Court ruled arbitration agreements providing for individualized proceedings as enforceable and are not barred under the NLRA. Subsequently, the NLRB broadly construed the Epic Systems cases, confirming that an employer may lawfully issue a new or revised mandatory arbitration agreement containing a class- and collective-action waiver specifying that employment disputes are to be resolved by individualized arbitration, even if it was in response to employees opting into a collective action (such as a wage lawsuit). See Cordúa Restaurants, Inc., 368 NLRB No. 43 (Aug. 14, 2019). The NLRB also concluded that the NLRA does not prohibit an employer from threatening to discharge an employee who refuses to sign such an agreement.
  • Compulsory Interest Arbitration. The Act mandates immediate collective bargaining for 90 days and, if no agreement is reached, requires binding interest arbitration of contract terms, thus directing an arbitrator to determine the terms of a two-year collective bargaining agreement.
  • Work Stoppages. The PRO Act bans employer lockouts and the permanent replacement of strikers while allowing intermittent strikes.
  • Enhanced Unfair Labor Practice Remedies. The bill allows “unfair labor practice” (ULP) claims to be brought as civil actions in court. It also adds fines and liquidated damages (into the six figures) as remedies for UPL, including imposing personal liability on corporate directors and officers

 

The Pro Act poses numerous challenges for most employers, including some unionized employers. Its progress is bound to be a major political event. For more information on the bill, contact your Jackson Lewis attorney.