Through its decisions, the five-member National Labor Relations Board interprets the National Labor Relations Act. These decisions set rules that regulate unionized and non-unionized workplaces, including the relationship between employers and organized labor and the rights of employees to engage in concerted activities. With President Joe Biden’s appointees taking their seats, the Board’s Democratic majority is expected to make changes that would likely benefit organized labor. (Read full article here)

Labor Day 2022 comes at an optimistic time for U.S. labor unions. Prior to the COVID-19 pandemic, representation petitions and elections were declining steadily. However, National Labor Relations Board (NLRB) election filings have increased by 58% in the first nine months of 2022, compared with the same time period in 2021, according to a Board press release.

Many organizing campaigns are being led by younger workers leveraging social media to gain mass followings and attract national attention at a rapid pace. The use of social media has helped these new generations of workers to mobilize support quickly across other employers. Such campaigns frequently grab the attention of workers across all industries, leading to a wave of unionization efforts as more workers look to be part of the movement and increasingly see unionization as a path to social justice.

This summer, the country has seen workers at high-profile employers petition to unionize for the first time. For example, employees at a Chipotle Mexican Grill in Lansing, Michigan, voted to be represented by the International Brotherhood of Teamsters (IBT), making Lansing the chain’s first location of nearly 3,000 to do so. The uptick in unionizing also is affecting other non-traditional union targets. For instance, on September 1, 2022, architects at a private firm in New York organized one of the first private sector unions in the industry.

Further changing the landscape, the Biden NLRB has issued decisions that will have far-reaching impact on both unions and employers. In fact, the Board made a potential precedent-shifting change when it announced a proposed rule that would broaden the test of what entities constitute a “joint employer.” The proposed rule, if it takes effect, will almost certainly increase the number of employees deemed to be jointly employed by two or more employers. Additionally, on August 29, 2022, the Board overturned long-standing precedent by ruling a company cannot enforce dress codes or uniform policies to the extent such policies interfere with employees’ right to display union insignia in any way, unless an employer demonstrates “special circumstances.”

However, despite an increase in union campaigns and a Biden NLRB, not all workers may jump on the trend. According to a Gallup poll, public support for unions is at 71%, the highest it has been since 1965. Only 7% of private sector workers, however, currently belong to a union. Further, the Gallup poll reported that 58% of non-union workers are “not interested at all” in actually joining a union. This shows a majority of workers recognize that unions may be unnecessary in the enlightened workplace of an employer of choice.

Additionally, according to a Bureau of Labor Statistics report, compensation in non-union jobs is outpacing compensation in union-represented jobs. The total wage and benefit costs for private-sector non-unionized employers was 3% higher than unionized employers for the 12-month period ending June 2022. From 2018 to June 2022, non-union employee compensation has risen dramatically while union employee compensation has remained steady.

It is more important than ever to focus on being an employer of choice. Please speak with your Jackson Lewis attorney about your organization’s labor relations goals and strategies.

The California Court of Appeal for the Second Appellate District upheld the construction industry collective bargaining agreement exemption to the Private Attorneys General Act (PAGA) in Oswald v. Murray Plumbing and Heating Corporation.

Labor Code Section 2699.6

Under Labor Code section 2699.6, construction employees who perform work under a valid collective bargaining agreement (CBA) in effect any time before January 1, 2025, that meets specific requirements, are not covered under PAGA. To be exempted from PAGA, the CBA must expressly provide for the wages, hours of work, and working conditions of employees, premium wage rates for all overtime hours worked, and for the employee to receive a regular hourly pay rate of not less than 30 percent more than the state minimum wage rate, and the agreement must do all of the following:

(1) Prohibit all of the violations of this code that would be redressable pursuant to this part and provides for a grievance and binding arbitration procedure to redress those violations;

(2) Expressly waive the requirements of PAGA in unambiguous terms; and

(3) Authorize the arbitrator to award any and all remedies otherwise available under PAGA.

Read the full article on Jackson Lewis’ California Workplace Law Blog.

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.