NLRB Overrules Browning-Ferris Joint Employer Standard, Reinstates Former Test

The National Labor Relations Board has overruled, 3-2, Browning-Ferris Industries, 362 NLRB No. 186 (2015) and returned to the pre–Browning Ferris standard that governed joint-employer liability. Hy-Brand Industrial Contractors Ltd., 365 No. 156 (December 14, 2017).

The Board wrote:

“We find that the Browning-Ferris standard is a distortion of common law as interpreted by the Board and the courts, it is contrary to the Act, it is ill-advised as a matter of policy, and its application would prevent the Board from discharging one of its primary responsibilities under the Act, which is to foster stability in labor-management relations. Accordingly, we overrule Browning-Ferris and return to the principles governing joint-employer status that existed prior to that decision.

“Thus, a find­ing of joint-employer status requires proof that the al­leged joint-employer entities have actually exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise con­trol), the control must be ‘direct and immediate’ (rather than indirect), and joint-employer status will not result from control that is ‘limited and routine.’”

The decision applies to all future and pending cases.

Please check the Jackson Lewis website for a more extensive analysis of the Board’s decision.

Trump Board Overrules Workplace Rules Analysis

In a stunning development, the National Labor Relations Board has decided that when determining the legality of a facially neutral rule under the National Labor Relations Act, it will consider (i) the nature and extent of the potential impact on rights protected by the Act, and (ii) legitimate justifications associated with the rule.

By a vote of 3-2, the Board overturned Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), under which many seemingly innocuous workplace rules were found illegal. Under the Lutheran Heritage standard, employer rules violated the NLRA if the rules could be “reasonably construed” by an employee to prohibit the exercise of NLRA rights.

In addition, the Board established three categories of rules to provide greater clarity and certainty to employees, employers, and unions.

The first category will include rules the Board designates as lawful to maintain.

The second will include rules the Board designates as requiring individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, but nonetheless lawful to maintain because any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.

The third will include rules the Board designates as unlawful to maintain because they would prohibit or limit NLRA-protected conduct and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.

The Board also expressly overruled decisions finding that it violates the Act to maintain rules requiring employees to foster “harmonious interac­tions and relationships” or to maintain basic standards of civility in the workplace.

Jackson Lewis will have more on the decision shortly.

Hold On! — Democratic Senators Challenge New Labor Board GC’s Plans

Senator Patty Murray (D-Wash.), Ranking Member, Committee on Health, Education, Labor and Pensions, and Senator Elizabeth Warren (D-Mass.) have written to  new NLRB General Counsel Peter B. Robb “to express serious concerns regarding Memorandum 18-02, which [Robb] issued to National Labor Relations Board [] Regional Directors on December 1, 2017.” For more on NLRB General Counsel Memo 18-02, see our article, New Labor Board General Counsel Issues Plans for Reversing Course. The Senators made a number of detailed requests for information and documents regarding Robb’s decision making and thought process and requested that he provide a response by December 22.

The GC Memo instructed Regional Directors to submit to Robb’s Division of Advice cases that relate to numerous “significant” categories. Many of those cases involved precedent overruled by the Obama NLRB. The Memo also rescinded seven Memoranda and three initiatives of the previous General Counsel, Richard Griffin, who was appointed by President Barack Obama.

The Senators said the Memo would interfere with the NLRB’s role, which, in their view, is to help workers “hold companies accountable in court for violations of the National Labor Relations Act” and “to adapt the statute to ever-changing economic conditions.” The Senators stated, “[W]e are deeply concerned that your policy changes will ultimately enable bad actors to violate workers’ fundamental labor rights with impunity.” They also said that the Memo “suggests that your office will scale back its efforts to discharge [what the Senators believe is the NLRB’s] responsibility” to protect employees.

The Senators also said the timing of the Memo needs to be explained. They noted that Robb expressed a lack of a pre-determined agenda during his confirmation hearings, yet issued this guidance “in a mere nine workdays.”

It is unclear what, if any, effect the Senators’ inquiry will have on the General Counsel’s plans laid out in the Memo.

Jackson Lewis will continue to provide updates as this develops. Please contact your Jackson Lewis attorney with any questions.

 

           

 

Labor Board Asks: Retain, Modify, or Rescind ‘Quickie Election’ Rules?

A Request for Information regarding the “Quickie Election” representation regulations (at 29 CFR parts 101 and 102) will be published on December 13, 2017, the National Labor Relations Board has announced. The RFI will seek input on the 2014 amendments to representation case procedures that reduced the opportunities for employers to communicate with their employees about union issues between the filing of a representation petition and the NLRB-conducted election.

The amendments, which took effect on April 14, 2015, allowed union organizing to move at an accelerated pace by, among other things, significantly reducing the time between the filing of a representation petition and the election from an average of approximately six weeks to an average of 23 days. Other provisions create substantial burdens on employers by requiring, within seven days, the submission of an onerous Statement of Position addressing all potential bargaining unit issues, the provision of copious amounts of information regarding potential voters, and deferring critical election issues, such as supervisory status issues, until after the election is held.

While the Board’s stated purpose in adopting the 2014 rules was to simplify representation-case procedures, the rules placed substantial pressure on employers to make critical decisions and produce important documentation within tight deadlines. By compressing the time period between the filing of the petition and the election, the rules also eliminated much of an employer’s ability to communicate with its employees about unionization issues.

From December 13, 2017, through February 12, 2018, the NLRB will allow interested parties to respond to three questions about the current rule:

(1) Should the 2014 Election Rule be retained without change?

(2) Should the 2014 Election Rule be retained with modifications? If so, what should be modified?

(3) Should the 2014 Election Rule be rescinded? If so, should the Board revert to the Representation Election Regulations that were in effect prior to the 2014 Election Rule’s adoption, or should the Board make changes to the prior Representation Election Regulations? If the Board should make changes to the prior Representation Election Regulations, what should be changed?

Before April 14, 2015, elections traditionally were conducted approximately six weeks after the filing of a representation petition. A return to this longer period would afford employers a much more reasonable amount of time to communicate with their employees about unionization. In addition, employers would be able to focus on providing critical information to employees about their rights and the advantages and disadvantages of unionization.

It remains to be seen what action, if any, the Board will take after reviewing the answers it receives. Nevertheless, its RFI should be cause for optimism among employers.

Action Items for Employers

Jackson Lewis, a nationwide management labor law firm whose attorneys have represented employers in thousands of NLRB representation case matters, is analyzing the rules to make recommendations to employers or employer groups about the best courses of action. Employers and employer groups who wish to comment will have a full opportunity to do so, either singly or in conjunction with labor counsel experienced in representing employers in representation cases.

If you or an industry group of which you are part desire further information or guidance or representation in submitting comments, please contact Philip Rosen, Jon Spitz, Thomas Walsh, Howard Bloom or the Jackson Lewis attorney with whom you regularly work.

Misclassification of Independent Contractor is Violation of NLRA, ALJ Rules

The misclassification of an independent contractor is an unfair labor practice under the NLRA, according to Administrative Law Judge Dickie Montemayor. Intermodal Bridge Transp., No. 21-CA-157647 (Nov. 28, 2017).

ALJ Montemayor said that, because such misclassification chills future concerted activity and necessarily “deprives and conceals available protections” afforded to employees under the NLRA, misclassification in and of itself is a violation of the Act.

Background

Intermodal Bridge Transportation (IBT) used independent contractor drivers to move shipping containers between customer locations in the Los Angeles area to ports and rail hubs. The drivers leased their trucks from IBT and operated under IBT’s operating authority. Further, drivers were subject to IBT policies, were required to sign a variety of forms, had no control over their customers, and did not negotiate their pay rates. Although drivers could choose which days to work and their start time, they could not choose their shifts. Drivers paid certain costs to IBT and received payment for each container they moved.

The NLRB General Counsel issued a complaint following an organizing campaign by the International Brotherhood of Teamsters alleging violations of the NLRA. All of the GC’s allegations depended on whether the drivers were statutory employees protected by the Act.

ALJ’s Decision

Relying on the Board’s ruling in FedEx, 361 NLRB No. 55 (2014), the ALJ concluded that, under common law agency principles, drivers were misclassified as independent contractors and decided they  actually were employees covered by the Act.

The ALJ then considered whether the misclassification was a mechanism that only triggers the applicability and protections of the Act or whether the misclassification itself can constitute a violation.

Despite noting the lack of decisional authority supporting the GC’s argument that misclassification is a per se violation of the Act, the ALJ agreed that certain conduct can chill future Section 7 activity or can be used as a “preemptive strike” to prevent employees from engaging in protected concerted activity. According to the ALJ, “[F]rom a practical standpoint, misclassification not only serves to chill future concerted activity but deprives and conceals available protections these employees have under the Act.” Further, because interference and restraint of Section 7 rights flows directly from misclassification, the ALJ explained, the misclassification itself rises to the level of a per se violation of Section 8(a)(1).

The ALJ directed IBT to cease and desist from misclassifying its employees and make employees whole for any losses of earnings and other benefits, including reimbursing employees for consequential harm as a result of the misclassification.

Lesson

If the ALJ’s ruling is appealed by the employer, it is uncertain what action and position the GC will take and how the Board will rule. On December 1, the new General Counsel issued a Mandatory Submissions to Advice memo  in which he withdrew an initiative of his predecessor to argue to the NLRB that an employer’s misclassification of employees as independent contractors in and of itself violates Section 8(a)(1) of the NLRA. In light of the memorandum, if Intermodal appeals the ALJ’s ruling to the Board, the new GC could side with the employer.

Despite this uncertainty, misclassification is a minefield for employers. No matter what happens with this case, employers should review their practices for classifying workers.

Congress One Step Closer to Restoring NLRB’s Joint Employer Standard

The U.S. House of Representatives has passed the “Save Local Business Act” (H.R. 3441), which would add a new, narrow definition of “employer” to the National Labor Relations Act (and the Fair Labor Standards Act) and which clarifies the definition of joint employment under both federal statutes.

H.R. 3441 provides that two or more employers only may be considered joint employers if:

[S]uch person directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over essential terms and conditions of employment, such as hiring employees, discharging employees, determining individual employee rates of pay and benefits, day-to-day supervision of employees, assigning individual work schedules, positions, and tasks, or administering employee discipline.

(H.R. 3441 also amends the FLSA to incorporate the NLRA’s definition of joint employment by reference.)

H.R. 3441 garnered support from eight Democratic leaders who broke with party lines. H.R. 3441 may encounter difficulty in the U.S. Senate, despite the optimism of Rep. Bradley Byrne (R-Ala.), H.R. 3441’s primary sponsor. Byrne announced that “[t]his is a bipartisan bill and we are dead serious about not just passing it through the House but getting it over to the Senate and getting 60 votes to pass it on the floor of the Senate and send it to the president, who we know will sign it.”

H.R. 3441 is the second legislative effort to roll back the new joint employer scheme announced by the NLRB in Browning-Ferris Industries of California, Inc. v. NLRB, 362 NLRB No. 186 (Aug. 27, 2015). The first, “The Protecting Local Business Opportunity Act” (H.R. 3459/S.2686), was introduced approximately one month after the NLRB decision was issued. While that bill failed to gain majority support in either the House or Senate, H.R. 3441 contains nearly identical proposed amendments to the NLRA.

Prior to the issuance of Browning-Ferris, the NLRB determined whether two separate entities should be considered joint employers by analyzing whether the entities co-determined the essential terms and conditions of employment. TLI, Inc. 271 NLRB 798, 99 (1984). Essential terms and conditions of employment were hiring, firing, discipline, supervision, and direction of employees, and entities’ control over these matters had to be “actual, direct and immediate.” Under these conditions, the NLRB rarely found joint employment. Then came Browning-Ferris.

In Browning-Ferris, the NLRB radically overturned a joint employer standard of more than 30 years. Under the new standard, two or more entities could be considered joint employers if (1) there is a common-law employment relationship with the employees in question and (2) the putative joint employer possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful collective bargaining. Significantly, the right to control, even if it is never exercised, constitutes evidence of joint employment.

Browning-Ferris has sought review of the NLRB’s decision in the D.C. Circuit. Oral arguments were heard on March 9, 2017, and a decision is expected soon.

It is unlikely H.R. 3441 will garner enough Democratic support to pass in the Senate. Nevertheless, H.R. 3441 signals keen Congressional interest in rolling back (or attempting to roll back) a standard that was put in place under the Obama Administration. Even if the bill does not become law, employers can take heart from the fact that, when and if presented with an appropriate case, the newly constituted, pro-business NLRB may overturn Browning-Ferris and return to the TLI standard.

We will continue to monitor developments on the joint employer front.

Robb’s Nomination as NLRB GC Approved by Senate

The U.S. Senate has confirmed Republican Peter Robb to replace Democrat Richard Griffin as National Labor Relations Board General Counsel.

Griffin’s term expired on October 31, and Jennifer Abruzzo, who has served as Deputy GC since November 4, 2013, has been serving as Acting GC since. For a review of Griffin’s actions during his four years as General Counsel, see What Did National Labor Relations Board General Counsel Richard Griffin’s Term Mean for Employers?

The NLRB GC is the Board’s chief prosecutor. The GC enjoys significant power to direct, among other things, whether and when unfair labor practice charges are pursued to resolution by the five-member NLRB. The GC also decides the issues on which his office will focus its resources (including what legal theories to pursue or abandon), directly affecting how his and local NLRB offices scrutinize certain issues.

It is possible Robb may instruct Regional Offices to hold in abeyance further processing of some cases that raise issues about which he intends to ask the Board to reverse its position, such as joint employer issues. It also is likely Robb will shepherd cases to the NLRB that raise issues through which the NLRB may reverse some of the employer-leaning precedent of the Obama Board.

The Thrill of Victory and the Agony of Defeat: Illinois Home Health Aides Must Sue Individually To Recoup Fair Share Fees

Home health aides who successfully objected to the collection of “fair share” fees without their consent may not proceed as a class, a panel of the U.S. Court of Appeals for the Seventh Circuit has ruled, affirming a lower court’s determination. Riffey v. Rauner, No.16-3487 (7th Cir. Oct. 11, 2017).

The home health aides had prevailed at the U.S. Supreme Court on their claim that the deduction of “fair share” fees violated their rights under the First Amendment. Harris v. Quinn, 134 S.Ct. 2618 (2014).

On remand to the trial court, the aides sought class certification for their claim seeking a full refund of all fair share fees collected without their consent. The U.S. District Court for the Northern District of Illinois denied the request.

The three-judge panel of the Court of Appeals affirmed the trial court’s ruling. The panel focused on the over-breadth of the proposed class, the resulting “highly individualized” inquiries that would be required to determine whether any individual class member had suffered an injury, and the extent of any such injury. Accordingly, the home health aides, who obtained a landmark victory in in the Supreme Court, must sue individually.

 

 

 

 

 

 

 

 

 

Senate Committee Approves Trump’s NLRB General Counsel Nominee

A critical National Labor Relations Board nomination was approved by the Senate’s Committee on Health, Education, Labor and Pensions on October 18, 2017, according to Bloomberg BNA. Management-side labor attorney Peter Robb’s nomination to be the Board’s next General Counsel has been long-anticipated by those interested in seeing changes in the agency’s doctrinal jurisprudence. The HELP Committee’s approval of Robb positions him for consideration by the full Senate.

The General Counsel decides which unfair labor practice cases the Board should pursue, and which issues to prioritize. The term of current General Counsel Richard Griffin, Jr., a Democrat appointed by former President Barack Obama, expires on November 3.

Republicans have been highly critical of the Obama-era Board’s rulings and decisions that, they argue, are too union-friendly and burdensome on businesses.

Robb was nominated in September, and he is widely expected to work to reverse many of the Obama-era Board’s labor-friendly rulings and decisions. He will be assisted by the NLRB’s first Republican majority in a decade, with Republicans William Emanuel and Marvin Kaplan seated.

Bloomberg BNA also has reported that California agriculture attorney, and outspoken opponent of Hillary Clinton, Mike Stoker tops President Donald Trump’s list to replace current Republican NLRB Chairman Phil Miscimarra when Miscimarra’s term expires in December. Miscimarra had declined consideration for a second term.

The HELP Committee’s approval of Robb’s nomination is another step in a process which employers hope will result in the reversal of several union-friendly decisions.

Quickie Election Rules, Thumbs Up Or Down?: Board Member Kaplan Again Says No Comment

In what appears to be the second unpublished decision in which he has participated since becoming a Board Member, Member Marvin E. Kaplan once again has “expresse[d] no view with respect to whether he agrees or disagrees with revisions [to the NLRB’s election procedures] made by the [“quickie] Election Rule….” Garda CL Atlantic, Inc., Case 29-RC-197242 (Oct. 3, 2017).

In Garda, the Special and Superior Officers Benevolent Association petitioned to represent a unit of the employer’s employees. An intervening union (United Federation of Special Police and Security Officers) requested that the representation election (scheduled for October 4, 2017) be stayed. The Board unanimously denied the intervening union’s request. Chairman Philip Miscimarra noted his continuing disagreement with the NLRB’s “quickie” elections rules, but Member Kaplan expressly declined to comment on where he stands.

Despite Member Kaplan’s declination to comment on the rules thus far, employers remain hopeful that the five-member Board’s three Republican members (Member Kaplan, newest Member William Emanuel, and Chairman Miscimarra) will find a way to blunt the impact of the rules.

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