1. Compensation in non-union jobs is outpacing compensation in union-represented jobs. A Bureau of Labor and Statistics report indicates the total wage and benefit costs for private-sector nonunionized employers was 3% higher than unionized employers for the 12-month period ending June 2022. Overall, total wage and benefit costs for private-industry firms increased 5.5%, but non-unionized companies accounted for most of the bump. In fact, pay for non-union workers rose 6%—the highest since the early 2000s—compared to 3.4% for union workers. Read more here.

On August 29, 2022, the National Labor Relations Board (NLRB) issued a decision finding that absent special circumstances, employers may not enforce dress codes or uniform policies that interfere with employees’ right to display union insignia. 371 NLRB No. 131 (Aug. 29, 2022). The NLRB’s decision is a return to a more restrictive precedent for analyzing whether an employer’s dress code or uniform policy unlawfully interferes with employee rights under the National Labor Relations Act (NLRA).

Background

Since the U.S. Supreme Court’s 1945 decision in Republic Aviation Corp. v. NLRB, 324 U.S. 793, 801-803 (1945), the NLRB generally has determined that even if work rules and uniform policies are facially neutral, employers cannot prohibit the wearing of all union buttons and insignia unless the employer showed “special circumstances” for the prohibition. This standard changed during the Trump Administration, however, when the Trump Board held in Wal-Mart Stores Inc., 368 NLRB No. 146 (2019) that employers may maintain facially neutral dress codes. Under Wal-Mart, an employer only had to show “special circumstances” if its policies explicitly prohibited wearing union apparel or insignia. As a result, the “special-circumstances” test applied only when an “employer completely prohibited union insignia,” and restrictions could be deemed lawful depending on certain employer interests.

The Decision

In a 3-2 split along party lines, the Board overturned Wal-Mart and now returns to the pre-Trump analysis under which facially neutral work rules may restrict the display of union insignia only if the employer shows “special circumstances” justifying the prohibition. Such special circumstances include “when their display may jeopardize employee safety, damage machinery or products, exacerbate employee dissension, or unreasonably interfere with a public image that the employer has established, or when necessary to maintain decorum and discipline among employees.”

The Board stated, “when an employer interferes in any way with its employees’ right to display union insignia, the employer must prove special circumstances that justify its interference.” The decision shows that any type of ban or restriction on union insignia, absent special circumstances, may violate the Act unless the rule is necessary to “maintain production or discipline.”

Implications

An employer’s prohibition of an employee’s display of union insignia on their uniform or apparel is presumed to be unlawful. As a result of this heightened burden, employers will need to establish “special circumstances” warranting interference, even if such restriction or limitation is part of a neutral uniform policy and does not restrict union insignia entirely.

The decision highlights the numerous changes under the Biden Administration, as the more union-friendly Board seeks to limit perceived infringement on protected speech. Accordingly, employers may need to revisit their uniform or apparel policies and the reasons behind them in order to withstand Board scrutiny. Employers should contact their Jackson Lewis attorney to determine how the ruling affects them and what to be mindful of when enforcing dress codes.

The National Labor Relations Board clarified its rerun election procedures in cases of uncontested election misconduct. Dynamic Concepts, 371 NLRB No. 117 (July 22, 2022). After losing an election to represent the employer’s workers, the union filed objections alleging unlawful employer election conduct. The employer agreed to a rerun election, but the parties could not agree on stipulated election agreement language setting the rerun election terms.  Read more…

Strikes have been in the news recently. Employers faced with a strike, or a possible strike, often wish to know their legal options, including whether they may seek injunctive relief. The short answer is that federal law prohibits courts from enjoining employees’ exercise of their right to lawfully strike. However, courts may enjoin unlawful strike conduct, depending entirely on the facts of the labor dispute. This is illustrated in Warrior Met Coal Mining, L.L.C. v. United Mine Workers of America International, et al., No. CV-2021-900285.00 (Ala. Cir. Ct., Tuscaloosa Cnty. Oct. 27, 2021 ). There, an Alabama state court judge took a relatively unusual action in a violent labor dispute: temporarily prohibiting all picketing at the employer’s properties.

Courts have limited injunctive authority in labor disputes, with specific differences between state and federal laws. Federal law prescribes rigid procedural requirements for issuing an injunction in a private sector labor dispute. Under federal law, courts are prohibited from enjoining the following (among others): (i) striking or refusing to work in protest; (ii) becoming a union member; (iii) paying or withholding unemployment benefits, insurance, money, or things of value to a person participating in a labor dispute; (iv) providing legal assistance to those involved in a labor dispute; (v) picketing or other public displays of support for or opposition to labor practice; (vi) peacefully assembling in public or private; and (vii) agreeing to or urging others to engage in or refrain from any of these activities. See 29 U.S.C. § 104. However, a strike may be unlawful if it has an unlawful objective or if unlawful means are employed. Unlawful objectives include inducing or engaging in a strike for secondary purposes, striking for jurisdictional or work-assignment purposes, and striking for recognition of a union as bargaining agent under certain conditions. Unlawful means include sit-down strikes, minority strikes, partial strikes, work slowdowns, and picket line misconduct or violence, among others. Courts may also enjoin strikes that are in contravention of a no-strike agreement, or in some circumstances work stoppages over disputes subject to a grievance and arbitration procedure in a collective bargaining agreement.

When an employer seeks injunctive relief in federal court prohibiting any of the above labor activity, it must show why the conduct at issue should be enjoined. A court can issue an injunction only where it finds: (i) the unlawful acts will continue unless restrained; (ii) substantial and irreparable injury will occur if the action is not enjoined; (iii) the balance of hardships between the parties favors the injunction; (iv) there is no adequate remedy at law; and (v) public officers are unable to furnish adequate protection to protect complainant’s property. See 29 U.S.C. § 107. Injunctions are not granted lightly.

Despite the onerous federal requirements, employers may have the option to seek an injunction in state courts if strikers engage in unlawful conduct. States can use their police powers to regulate behavior and enforce order within their territory to protect the health, safety, morals, and general welfare of their inhabitants. State courts can issue injunctions prohibiting unlawful conduct during a labor dispute to protect the public without enjoining the labor dispute itself.

Employers may seek injunctions in state court for conduct such as mass picketing, violence, threats of violence, property damage, blocking or attempting to block ingress or egress of vehicles at employer’s facilities, and acting recklessly on public roads, as they are areas of traditional state concern not generally subject to preemption principles. For example, in Warrior Met a state court judge issued a temporary restraining order prohibiting the union and striking employees from picketing outside Warrior Met’s properties. The judge issued the order based on video evidence showing picketers attacking non-strikers, personal vehicles, property, and uninvolved community members and interfering with company operations. While state courts still rarely issue injunctions relative to labor disputes, they have broad authority when labor activity poses a threat to the public’s health and safety.

Lawful strikes and picketing cannot be enjoined; but, where a strike or picketing includes dangerous or threatening conduct, there may be possible grounds for injunctive relief. Of course, such unlawful conduct does not occur in most labor disputes.

For more information about injunctions related to labor disputes, please contact a Jackson Lewis attorney.

 

The Build Back Better Act passed the House on November 19, 2021. It contains controversial provisions on many subjects, including new employer penalties under the National Labor Relations Act (NLRA). On December 11th, the Senate Committee on Health, Education, Labor, and Pensions released its version of the provisions of the Build Back Better bill on subjects within its jurisdiction, including amendments to the NLRA. The panel retained the new, severe employer penalties for unfair labor practices (ULPs), but the bill does not include other far-reaching changes which were in the original House version.

The bill contains unprecedented penalties for employer ULPs. Today, ULPs by either unions or employers are remedied by requiring backpay and reinstatement to prior employment and employment terms. The bill would add new “civil penalties” (fines). These fines would apply only to employer violations, however, not those committed by unions.

Under the bill, any ULP violation by an employer would additionally be subject to a penalty “not to exceed” $50,000 for each violation. However, for employers found to have committed certain violations, and any that results in the discharge or “serious economic harm” to an employee, the penalty can be doubled to $100,000 if the employer had been found to have committed a similar violation within five years.

In addition, the bill would add civil fine personal liability for any company officer or director who “directed or committed the violation,” established the policy that led to the violation, or had actual or constructive knowledge of the events and the authority to prevent it but did not act to prevent it. Personal liability has never been part of the NLRA.

On the other hand, the Committee draft no longer contains certain other new employer violations that were in the original House draft. These were provisions would have applied the same civil penalties to employer actions that have long been held to be lawful, including:

(1)       Permanent replacement of economic strikers

(2)       Employer lockouts

(3)       Mistakenly advising employees that they are “supervisors” or “independent contractors” and, thus, not covered by the NLRA

(4)       Mandating employee attendance at employer group campaign meetings

(5)       Entering or requiring employees to enter agreements not to engage in collective actions (such as class action litigation)

The Committee language will become part of the version of the bill that will ultimately be voted on by the Senate. The bill is framed as a budget “reconciliation” bill – allowing it to avoid a Senate filibuster requiring passage by a supermajority, which is unlikely. As a reconciliation bill, it would need a mere 51 votes for passage.

However, there remains a question as to whether the various elements of the bill relating to NLRA amendments meet the standards for a budget reconciliation bill, meaning, they must be limited to budgetary matters. The Senate Parliamentarian decides (in an advisory capacity) whether specific terms of a reconciliation bill meet that standard. In September, the Parliamentarian rejected certain immigration provisions of the original bill on that basis. Senate Republicans reportedly will challenge the remaining NLRA civil penalty amendments as beyond the scope of a reconciliation bill.

Jackson Lewis attorneys will keep a continuing eye on developments. Please contact a Jackson Lewis attorney with any questions.

The media has been covering the budget bill – the Build Back Better Act – which contains controversial provisions on many subjects. Among them are provisions that include new employer penalties under the National Labor Relations Act (NLRA).

The political roadblock on the bill is a probable Senate filibuster which would prevent passage. The Biden Administration is attempting to utilize a Senate rule enabling this legislation to be passed as a “budget reconciliation bill,” sidestepping a filibuster and passing with a simple majority – which the Democrats could accomplish on a straight party line vote. However, to use this vehicle, a reconciliation bill must relate only to budget issues.

Versions of this bill have been pending for months. The current iteration is 1,684 pages long (reduced from September’s 2,465 pages). Often overlooked by the press are the bill’s amendments to the NLRA. The bill proposes severe new penalties for employer unfair labor practices (ULPs).

Today, ULPs by either unions or employers are remedied by requiring backpay and reinstatement to prior employment and employment terms. The Build Back Better Act would add new “civil penalties” (fines) in addition to the traditional remedies. But these fines would apply only to employer violations, not unions.

Under the bill, any ULP violation by an employer would additionally be subject to a penalty “not to exceed” $50,000 for each violation.

However, for employers found to have committed certain violations, and any which results in the discharge or “serious economic harm” to an employee, the penalty can be doubled to $100,000 if the employer had been found to have committed a similar violation within five years.

In addition, the bill would add civil fine personal liability for any company officer or director who “directed or committed the violation,” established the policy that led to the violation, or had actual or constructive knowledge of the events and the authority to prevent it but did not act to prevent it. Personal liability has never been part of the NLRA.

It is not surprising that employer groups strenuously oppose these provisions. It appears that they have made some headway, considering the provisions that have been deleted from the original bill. In addition to the civil penalties above, the original bill would have banned employer acts long held lawful under the NLRA, including:

(1)      Permanent replacement of economic strikers

(2)      Employer lockouts

(3)      Advising employees (mistakenly) that they are “supervisors” or “independent contractors” and thus not covered by the NLRA

(4)      Mandating employee attendance at “captive audience” employer campaign meetings

(5)      Entering or requiring employees to enter agreements not to engage in collective actions (such as class action litigation)

Further, the bill would have applied the same severe civil penalties to these would-be violations.

However, the Build Back Better Act is still subject to scrutiny as to whether it meets the standards for a budget reconciliation bill – meaning it must be limited to budgetary matters. The Senate Parliamentarian decides (in an advisory capacity) whether specific terms of a reconciliation bill meet that standard. In September, the Parliamentarian rejected certain immigration provisions of the original bill on that basis.  Senate Republicans reportedly will challenge the remaining NLRA civil penalty amendments as beyond the scope of a reconciliation bill.

News reports suggest there will be more political wrangling to come, in addition to any possible adverse report by the Parliamentarian. Will the remaining civil penalties survive to be voted on? We will keep a continuing eye on developments.

 

On October 8, 2021, the National Labor Relations Board (NLRB) West Los Angeles regional office issued an unfair labor practice (ULP) complaint against the Daily Grill for allegedly violating section 8(a)(5) of the National Labor Relations Act (NLRA) by engaging in a pattern of delay intended to frustrate the bargaining process, according to the NLRB press release.

The allegations arise from the employer’s first contract negotiations with UNITE HERE Local 11, the union certified to represent Daily Grill’s employees. Negotiations allegedly ran from November 13, 2019, through December 11, 2020, but since then, the employer has allegedly refused to meet and bargain with the union.

This complaint is notable for the remedial actions it seeks. Here, among other remedies, the complaint asks for an order requiring the employer to bargain in good faith with the union for a minimum of 24 hours a month (for at least six hours per session) until a collective bargaining agreement or lawful impasse is reached and to reimburse the expenses incurred by the union in unproductive bargaining expenses from November 19, 2019, until the employer begins bargaining in good faith. Given the specificity of the remedy sought, this complaint is an early example of the aggressive prosecution policies of new General Counsel (GC) Jennifer Abruzzo (as outlined in her September 8, 2021, Memorandum 21-06). It also portends probable forthcoming changes to the legal landscape under a Biden-appointed NLRB.

Section 8(a)(5) of the NLRA requires employers to bargain in good faith with the certified bargaining representative of its employees; however, “good faith” is not defined by a specific template of the number, frequency, or duration of bargaining sessions.   The complaint against the Daily Grill demonstrates GC Abruzzo’s initiative to introduce strict remedies for NLRA violations, including imposing bright-line rules on the negotiation process when an employer is found to have violated the Act. The complaint exemplifies the region’s eagerness to push forward GC Abruzzo’s goals through burdensome new remedies. Employers should accordingly take caution in assessing their bargaining and labor relations strategies as the complaint demonstrates the regions are ready to quickly push forward on the GC’s month-old goals.

Please contact a Jackson Lewis attorney with any questions.

As we discussed in our recent report on National Labor Relations Board General Counsel (“GC”) Jennifer Abruzzo’s August 12th agenda for the direction of NLRB case law, employers should be ready for an aggressive expansion of remedies that the NLRB will seek. In the short time since the GC’s memorandum was published, NLRB Chairman McFerran expressly stated her willingness to explore new remedies for unfair labor practice violations.

If there were any doubts about how quickly the GC would act to expand penalties that employers may face, they were put to rest with the issuance of the GC’s newest memorandum published on September 8, 2021 (NLRB GC Memo 21-06).  GC Abruzzo  instructs NLRB regions to immediately seek expanded remedies in a wide array of cases. The memorandum directs regions to take aggressive positions on remedies to prepare cases for NLRB consideration regarding expansion of the scope of damages.

The GC instructs regions to seek the following types of remedies that would significantly increase the risks faced in any alleged unfair labor practice (“ULP”) litigation:

  • Consequential damages and front pay for discharged employees. The GC previously advised regions to refer cases involving these potential remedies to the Division of Advice. Now, the GC has instructed regions to affirmatively seek these expanded remedies in discharge cases.
  • Expanded union access. In cases involving employer ULPs during union organizing, the GC requires remedies such as providing unions with employee contact information and allowing unions to hold “captive audience” employee meetings on company property.
  • Reimbursement of union organizing costs. New cases may seek to require employers pay business agent wages, attorney fees, travel costs, and other costs unions incur where an employer’s objectionable conduct causes an election to be re-run.
  • Damages based on speculative contract terms. In refusal to bargain cases, the GC is considering an extraordinary remedy enabling the Board to premise a monetary damages on what the employer speculatively would have agreed to in bargaining, had it bargained in good faith. As this is the GC’s second explicit reference to this novel theory in the matter of weeks, this will likely by a significant objective for the GC and the Board.
  • Public publishing of remedial notices in newspapers, websites, and on social media. Posting notices regarding resolution of ULP charges has long been standard practice. Now, the GC is encouraging mandates to publish these notices in local newspapers, company websites, or social media pages, reaching audiences far beyond those employees who may have been impacted by any alleged violation.
  • Hiring individuals selected by the union. In the event an unlawfully discharged employee chooses not to return to work, the GC wants regions to require the company hire a qualified applicant selected by the union.
  • Regional oversight of bargaining. Bad faith bargaining claims should be remedied by (among other things)
    • a rigorous bargaining schedule imposed by the region,
    • employer-submitted progress reports,
    • compelled mediation,
    • managerial training,
    • reinstatement of unlawfully withdrawn bargaining proposals,
    • reimbursement of a union’s negotiation expenses, and
    • regions should seek a ban on challenges to a union’s majority status (such as decertification or withdrawal of recognition) for at least one year.
  • Increased remedies and protections for undocumented workers. In cases involving undocumented workers, regions may seek U or T visas or deferred immigration actions to permit those workers to remain employed, and employer sponsorship for work authorizations to remain in the United States. Regions could also seek additional make whole damages, such as the establishment of a fund that employers must pay to ensure employers are not “unjustly enriched” due to the status of undocumented workers.

The GC also instructs regions to secure visits for inspections and discovery rights to monitor compliance, longer posting periods, NLRA training for all employees, broader cease and desist orders, and public reading of notices by management officials to all employees. The GC promised that she will issue another memorandum on settlements that could modify litigation strategies as well.

Over the next four years, it appears inevitable that the NLRB will expand its view of what constitutes an unfair labor practice and simultaneously increase penalties on employers based on those new precedents. It is important for  employers to carefully assess their labor relations strategies.  If you have any questions about these topics, potential risks before the Biden Board, or your workplace rules and policies, please contact a Jackson Lewis attorney.

The National Labor Relations Board (NLRB) must reconsider its newest ruling on the rights of certain employees to access private property to engage in activity on behalf of a union, the U.S. Court of Appeals for the District of Columbia has directed in an August 31, 2021, decision remanding NLRB v. Local 23, American Federation of Musicians. If the Board changes its holding on remand it will be the third time the rule on access to private property has changed in the last 10 years. This case comes to the NLRB at a time opportune for change.

The Court recognized that rights of access to private property to engage in union-related activities have traditionally depended on the connection of the person to the property. Traditional employees who work on the employer’s property have the greatest access rights and generally cannot be prohibited from engaging in union activity on the employer’s property during non-work time and in non-work areas of the property.  On the other hand, a property owner can generally deny non-employees, such as union organizers, access to its premises.

Local 23 dealt with a third category: employees of a contractor who work on premises owned by a third party. Musicians represented by Local 23 were employed by the San Antonio Symphony, which had a contract to provide 22 weeks of performances at a facility owned by the Bexar Performing Arts Center Foundation, known as the Tobin Center. The musicians also performed for the Ballet San Antonio at the Tobin Center. To cut costs, the Ballet switched from live to recorded music, which reduced the number of paid performances for the musicians.

To protest the use of recorded music, the musicians distributed leaflets at the Tobin Center criticizing the Ballet and urging patrons to insist upon live music. The Tobin Center informed the leafleteers that they were not permitted on Center property and should move to the public sidewalk. They complied, but Local 23 filed an unfair labor practice charge.

The rule that existed at the time of the charge was filed was that a third party property owner could not deny access to contractor employees who are “regularly employed on the property” unless the property owner could establish that the activity substantially interfered with its use of the property. Applying that rule, and administrative law judge found the musicians had a right to engage in leafleting on Tobin Center property.

The NLRB reversed the judge. The Board held  a property owner could exclude contractor employees from its property unless they work “regularly and exclusively on the property” and the property owner could not show they had “one or more reasonable alternative means to communicate their message.” Applying its new rule, the Board found the contractor musicians had no right of access.

Local 23 sought review at the Court of Appeals. The Court found the NLRB had acted arbitrarily in drafting its new rule. The terms “regularly” and “exclusively” were poorly defined – indeed, the NLRB’s examples were in conflict with the very words themselves. The Court remanded the case to the Board “to proceed with a version of the test it announced … or develop a new test altogether.”

The Board’s newly constituted Democrat majority and current General Counsel Jennifer Abruzzo have articulated a desire to expand access rights for unions and employees. Because the case has been remanded to a Board with a Democratic majority, we think the likelihood is that the Board will develop a new test which will expand the rights of employees to access private property for the purpose engage in union activity. Employers should stay tuned.

The Senate confirmed two union lawyers – David Prouty and Gwynne Wilcox – to seats on the National Labor Relations Board (NLRB) on July 28, 2021, ensuring a Democratic majority for the first time in almost four years.

This follows the Senate’s confirmation of Jennifer A. Abruzzo, President Joe Biden’s nominee for General Counsel of the NLRB.

With these key nominees in place, expect the Board to continue its shift to a pro-union view.

The Senate voted 52-47 to confirm Wilcox’s nomination. Prior to her appointment to the Board, Wilcox was a partner at Levy Ratner P.C., a union-side law firm in New York, and served as associate general counsel for 1199SEIU United Healthcare Workers East, the largest health care union in the United States. She fills the seat that has been vacant since former Chair Mark Pearce’s term expired in 2018.

Prouty was confirmed by a slightly higher 53-46 margin. Like Wilcox, Prouty has a long background serving unions – he most recently was General Counsel of SEIU 32BJ, the largest union of property service workers in the United States.

Both Prouty and Wilcox will serve five-year terms, though Prouty will not be seated until Republican member William Emanuel’s term expires on August 27, 2021. Once Prouty is seated, the Board will have a 3-2 Democratic majority.

In a statement released on July 29, the AFSCME praised Wilcox as a “preeminent labor rights attorney” and noted she “will be instrumental in guiding the development of federal labor law and upholding workers’ freedom to form unions.” SEIU 32BJ’s statement noted it was “excited to see how [Prouty’s] righteous advocacy for workers will help build back up the NLRB as a robust defender of the rights of workers in our country,”

These confirmations come only a week after the Senate’s razor-thin 51-50 confirmation of Abruzzo to the General Counsel position. Abruzzo will serve a four-year term overseeing the investigation and prosecution of unfair labor practice cases and supervising NLRB field offices in their processing of cases. As General Counsel, Abruzzo will have the power to shape the interpretation and application of the National Labor Relations Act (NLRA) by determining which cases to bring to trial and which legal theories to present. It is expected this will pose challenges for employers, given her public statements that she believes “vigorous enforcement of the [NLRA] will help level the playing field for workers and their freely chosen representatives.”

Abruzzo worked for the NLRB for over two decades in various capacities, including as Deputy General Counsel and Acting General Counsel under President Barack Obama. Abruzzo also served as Special Counsel for Strategic Initiatives for the Communications Workers of America (CWA). Abruzzo is likely to push for pro-union policies and interpretations of the NLRA, aligning with President Biden, who has been on record stating he will be “the most pro-union president you’ve ever seen.”

Following her confirmation as General Counsel, Abruzzo appointed Peter Sung Ohr to serve as Deputy General Counsel. Ohr previously served as Acting General Counsel under President Biden following the early firing of former General Counsel Peter Robb (by President Biden), who had nearly 10 months left in his four-year term. Due to legal challenges to his authority arising from Ohr’s sudden appointment as Acting General Counsel (following Robb’s arguably premature dismissal), Abruzzo is expected to ratify the General Counsel actions taken by Ohr to resolve any open questions on his authority.

This pro-union shift will present challenges to employers that just began embracing Division of Advice opinions, General Counsel memoranda, and Board case law decisions under the President Donald Trump administration. Under President Biden, along with a General Counsel that previously worked for the CWA (and the NLRB) and a Democratic majority on the Board, employers can expect to see pro-union and pro-employee opinions, memoranda, and decisions that will further promote employee Section 7 rights, the rights for employees attempting to organize in the workplace, and more.

Please contact a Jackson Lewis attorney with any questions.