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.

NLRB Has Republican Majority: Emanuel Confirmed By Senate

Management-side lawyer William Emanuel was confirmed late on September 25, 2017 by the United States Senate to fill the last vacant seat on the National Labor Relations Board. Republican Marvin Kaplan was confirmed on August 2, 2017.  

According to Bloomberg BNA, the Senate voted along party lines, 49-47, in confirming Emanuel and giving the Board its first Republican majority in more than a decade.  

Emanuel’s experience representing clients before the Board was touted by Republicans, while Democrats accused him of trying to undermine employees’ rights and protections afforded by the National Labor Relations Act.  

Republican lawyer Peter Robb also has been nominated to replace the NLRB’s current Democrat General Counsel, Richard Griffin, after his term expires on November 3, 2017. Robb has argued against the Board’s decisions finding work rules unlawful, as well as the Board’s “quickie” election rules and expanded “joint employer” doctrine. If confirmed as General Counsel, Robb will be in a position to direct the Board’s priorities.  

President Donald Trump’s Board is widely expected to reverse a wide range of labor-friendly rulings and decisions issued by the Obama-era Board, but significant change may take several months.

New Board Member Kaplan Sides With Pearce In First NLRB Decision

In what appears to be the first time he has participated in a National Labor Relations Board decision, new NLRB Member Marvin E. Kaplan, a Republican, has voted to deny an employer’s request to stay an election. He voted with Democrat Mark Gaston Pearce and contrary to Republican Philip Miscimarra. Kaplan was sworn in on August 10, 2017, for a term ending August 27, 2020.

In PCC Structurals, Inc., Case 19-RC-202188 (Sept. 22, 2017), an unpublished decision, the employer requested to stay an election scheduled for September 22, 2017, or, alternatively, to impound the ballots. The Board panel, consisting of Chairman Miscimarra and Members Pearce and Kaplan, denied the request by a two-to-one vote, with Miscimarra dissenting. Kaplan sided with Pearce to deny the request.

In his dissent, Miscimarra noted his continuing disagreement with the Board’s quickie election rule, which became effective in April 2015. Kaplan explicitly noted that he was expressing “no view with respect to whether he agrees or disagrees with revisions made by the Election Rule….”

Kaplan has been a member of the NLRB for more than a month, and so we can expect him to participate in more Board decisions soon. Whether Kaplan agrees or disagrees with the decisions and rules issued by the Obama Board remains to be seen.

Management-Side Labor Law Attorney Peter Robb Nominated for NLRB General Counsel

As expected, Peter B. Robb has been nominated by President Donald Trump to become the National Labor Relations Board’s next General Counsel. Robb is a long-time management labor law attorney. If confirmed, Robb will succeed Richard F. Griffin, Jr., who has been GC since November 2013. Griffin’s term expires in November 2017. Among other responsibilities, the GC investigates and prosecutes unfair labor practice cases. Through the process of deciding which unfair labor practice cases should be litigated and potentially reach the five-member NLRB for decision, the GC controls which cases the Board prioritizes and pursues.

When a case reaches the NLRB for decision, the GC can ask the NLRB to change existing precedent. Robb has been critical of the Board’s “tenacity to find neutral policies … unlawful,” such as employers’ social media policies and values statements. Robb also has argued that the NLRB’s new “quickie” representation election procedures give unions “a distinct advantage” (e.g., by shortening the time in which an employer has to react to a union election petition). Further, he has signaled that he would seek to undo the Obama Board’s expansion of the Board’s “joint employer” doctrine.

Since Robb, if confirmed, will not take office until November, changes in Obama-Board precedent likely will not begin to happen until 2018.

Discharge of Employee Who Protested Illegal Policy By Himself Ran Afoul of NLRA, Federal Appeals Court Rules

An employee who was discharged after protesting an admittedly illegal policy was entitled to reinstatement and back pay despite having acted on his own, the federal appeals court in New York has ruled, enforcing a National Labor Relations Board order. National Labor Relations Board v. Long Island Ass’n for AIDS Care, Inc., No. 16-2325 (2d Cir. Aug. 31, 2017). The Court stressed that “even one individual employee” may not be required “to abide by unlawful restrictions as a condition of employment.”

Background

LIAAC provides HIV/AIDS prevention counseling and treatment. Marcus Acosta had been a community outreach specialist at LIAAC about one year when he was discharged.

Confidentiality was a high priority for LIAAC. It required all employees to sign a “Confidentiality Statement” at the time of hire. The Confidentiality Statement directed employees to keep information concerning clients and their medical conditions confidential and prohibited employees from disclosing information such as wages, salaries, and working conditions and from speaking to the media about LIAAC.

Acosta had signed the Confidentiality Statement without incident at the time of hire. During his employment, Acosta had performance problems and had several conflicts with his supervisors. Shortly after his one-year anniversary, LIAAC asked him to sign the Confidentiality Statement again. He signed it, but indicated on the document that he was doing so “under duress” in protest of the requirements to keep wages and working conditions confidential. He was discharged. Acosta then filed an unfair labor practice charge challenging the discharge under the National Labor Relations Act.

Unlawful Policies

The NLRB concluded LIAAC’s prohibitions on discussion of wages and working conditions and on speaking with the media were unlawful. These types of rules have long been held to violate employee rights under the NLRA. It ruled that LIAAC’s discharge of Acosta for protesting those prohibitions was unlawful and ordered that he be reinstated with back pay.

On appeal to the Second Circuit Court of Appeals, LIAAC claimed Acosta was discharged for insubordination, i.e., refusing to the sign the Confidentiality Statement without the “under duress” qualifier. It argued that, since he engaged in insubordination on his own, not with any other employee, he was not engaged in “concerted activity” protected by the NLRA, and therefore, LIAAC may discharge him.

The Court disagreed. It stated:

An employer may not require even one individual employee to abide by unlawful restrictions as a condition of employment. That the employees have not yet organized to protest the unlawful nature of the restriction at issue does not make it any less unlawful. The contrary rule urged by LIAAC, that an employee can be required to comply with by an unlawful policy and the employee is only protected from the unlawful policy if he or she actively organizes with other employees against it is illogical and untenable.

Lesson

The decision demonstrates the risks employers run when their personnel practices and policies are not carefully vetted to ensure legal compliance. It is critically important to ensure that employment policies are not only carefully and thoughtfully drafted to meet the needs of the business, but also that they are fully legally compliant.  Policies which are lawful and properly and uniformly applied go a long way toward substantially reducing the risk of liability from employment-based claims.  Had the policy here been lawful, the employer’s argument that the employee was lawfully discharged because he acted alone may have been accepted by the Court.

Employers Take Note: Public’s Approval of Unions Goes Up, Gallup Reports

Apparently, reports of the demise of organized labor are greatly exaggerated. According to a Gallup poll conducted from August 2 to 6, 2017, 61% of adults answered that they approve when asked, “Do you approve or disapprove of unions?” This is the highest percentage since 2003, when 65% said they approve.

While only 22% of respondents believe unions will become stronger in the future and 46% believe they will become weaker, 39% of respondents would like unions in the United States to have more influence. This is the highest figure recorded in the 18 years Gallup has asked the question.

According to Gallup.com, the poll results are based on telephone interviews conducted among a random sample of 1,017 adults at least 18 years old, living in the 50 states and the District of Columbia. The margin of error is ±4%.

Employers should make note of this result. A likely significant reason for the decline in the number of unionized employees in the private sector (now at 6.6%) has been Americans’ negative view of unions. Indeed, unions know this. Not long ago, the AFL-CIO spent millions of dollars on an advertising campaign touting the slogan “Union Yes,” which was designed to promote a positive view of unions (hence, the “Yes”). Now that six out of 10 Americans view unions positively, a window has opened for unions to regain some of the strength they once had.

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