In a blizzard of activity late last week, the National Labor Relations Board (“NLRB” or “Board”) delivered a handful of significant employer-friendly decisions that also reversed Obama-era decisions. After many years with a majority of its members having been appointed by a Democratic president, the Board very recently returned to its Republican majority and quickly went about issuing four key decisions in rapid succession.
Return to Prior “Joint Employer” Standard: Browning-Ferris Overruled
On Thursday, the Board overruled its 2015 decision in Browning-Ferris, and returned to the pre–Browning Ferris standard that governed joint employer liability. Under the reinstated test, two or more entities will be deemed joint employers under the National Labor Relations Act (“NLRA” or “Act”) if there is proof that one entity has actually exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control) and has done so directly and immediately (rather than indirectly) in a manner that is not limited and routine. Proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will not be sufficient to establish a joint employer relationship and joint employer liability. This decision will relieve the many concerns resulting from the Browning-Ferris decision, particularly concerns among temporary staffing companies and their customers, franchisors and franchisees, and general contractors and subcontractors. The decision is here.
New Standard for Workplace Policies
Also on Thursday, the NLRB overruled Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), which articulated the Board’s previous standard governing whether facially neutral workplace rules, policies and employee handbook provisions unlawfully interfere with the exercise of rights protected by the Act. Under the prior Lutheran Heritage standard, the Board found that employers violated the NLRA by maintaining workplace rules that do not explicitly prohibit protected activities, were not adopted in response to such activities, and were not applied to restrict such activities, if the rules would be “reasonably construed” by an employee to prohibit the exercise of NLRA rights.
In place of the Lutheran Heritage “reasonably construe” standard, the Board established a new test: when evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the Board will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule. The Board described three categories of policies:
- Category 1 includes rules that the Board designates as lawful because they do not restrict rights under the Act, or because the justifications for the rule outweigh their tendency to restrict such rights;
- Category 2 includes rules that warrant individualized consideration of whether they prohibit or interfere with employee rights, and if so, whether the impact is outweighed by other, legitimate considerations; and
- Category 3 includes rules that the Board designates as unlawful because they would restrict rights protected by the Act in a way that outweighs any justifications associated with them.
Applying this new standard, the majority held that Boeing lawfully maintained a no-camera rule that prohibited employees from using camera-enabled devices to capture images or video without a valid business need and an approved camera permit. The rule potentially affected the exercise of NLRA rights, but the impact was comparatively slight and outweighed by important justifications, including national security concerns, the majority reasoned. The decision is here.
Appropriate Bargaining Unit – Return to Traditional “Community of Interest” Standard
On Friday, the Board issued a decision that reinstated the traditional community-of-interest standard for determining an appropriate bargaining unit in union representation cases. The Act requires that the Board must decide in each case whether the group of employees a union seeks to represent constitutes a unit that is “appropriate” for collective bargaining.
Under the Obama-era decision in Specialty Healthcare, 357 NLRB 934 (2011), if a union petitioned for an election among a particular group of employees, those employees shared a community of interest among themselves, and the employer took the position that the smallest appropriate unit had to include employees excluded from the proposed unit, the Board would not find the petitioned-for unit inappropriate unless the employer proved that the excluded employees shared an “overwhelming” community of interest with the petitioned-for group.
The Board’s decision on Friday abandoned this “overwhelming” community-of-interest standard. Under the reinstated standard, the Board is again permitted to evaluate the interests of all employees—both those within and those outside the petitioned-for unit, without regard to whether these groups share an ‘overwhelming’ community of interests. The decision is here.
Duty To Bargain Over Changes
Also on Friday, the Board issued a ruling affecting bargaining obligations that are required before implementing a unilateral “change” in employment matters. In a return to pre-Obama era precedent, the Board held that actions do not constitute a change requiring union bargaining if they are similar in kind and degree with an established past practice consisting of comparable unilateral actions. The Board also held this principle applies regardless of whether (i) a collective bargaining agreement (“CBA”) was in effect when the past practice was created, and (ii) no CBA existed when the disputed actions were taken. Finally, the Board ruled such actions consistent with an established practice do not constitute a change requiring bargaining merely because they may involve some degree of discretion. The decision is here.
The decision overruled a case decided last year, E.I. du Pont de Nemours, 364 NLRB No. 113 (2016) (DuPont), where held that actions consistent with an established past practice constitute a change, and therefore require the employer to provide the union with notice and an opportunity to bargain prior to implementation, if the past practice was created under a management-rights clause in a CBA that has expired, or if the disputed actions involved employer discretion.
To discuss any of these decisions and their impact on your organization, please feel free to contact the experienced labor and employment attorneys at Clark & Gotzler, Attorneys at Law.