Management Memo

Management’s inside guide to labor relations

NLRB GC Moves to Permit Disruptive One Day Strikes

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In the waning days of the Obama Administration, the President’s appointed General Counsel to the NLRB took official action this week to permit questionable and disruptive strike activity, including one day strikes that are frequently used by aggressive unions against hospitals and other employers.  Specifically, the GC’s Office issued an Operations-Management Memorandum acknowledging unions and employees “are more frequently engaging in short-term strikes” and seeking to “clarify and modify the law regarding intermittent and partial strikes” to address concern employees face “potential discipline for activities that should be considered protected under Section 7 of the Act.”

The Memo seems to be a transparent attempt to push an agenda to protect the activities of certain unions, mainly in the health care, fast food, and retail industries, which have used multiple one-day strikes as a weapon.

Intermittent Strikes, Partial Strikes and Slowdown Are Not Permitted Under the NLRA

Under current National Labor Relations Act case law work slowdowns, partial strikes and intermittent strikes are not permitted, and therefore employees who engage in them are not protected and may potentially be disciplined or discharged.  The reason for this long standing policy is clear; while employees should be free to withhold their labor as economic leverage, they should not be able to do so without any risk or sacrifice.  For that reason, what the Board has historically referred to as quasi-strikes which are “intentionally planned and coordinated so as to effectively reap the benefit of a continuous strike action without assuming the economic risks associated with a continuous forthright strike, i.e., loss of wages and possible replacement,” have not been entitled to protection under the Act.  WestPac Electric, 321 NLRB 1322, 1360 (1996).

While this principle is sound and well established, its exact contours lack clarity.  While work slowdowns, partial day strikes or work stoppages refusing to do a certain type of work (overtime, weekend, etc.)  fall clearly outside the protection of the Act, to date Board law has been less clear on strikes lasting at least one day, even if repeated in nature.  While most recognize that an announced strategy of multiple one day strikes would be problematic as would many one day strikes, there has been less clarity on how many is many, with many believing two to three one day strikes could be protected but more than that likely loses protection.

Unions Increasingly Use Intermittent and Short Strikes to Improperly Gain Bargaining Leverage

In recent years , taking advantage of the lack of clarity, the California Nurses Association, SEIU, and other unions have used one day strikes against hospitals as a way to force the target hospital to spend millions of dollars in replacement workers and other preparations to ensure proper care for their sick patients while not really impacting the wages of the nurses or other healthcare workers who only lose a day or two of pay.  Similarly, the UFCW, “Fight for 15” and other organizations have used flash strikes or other short term walkouts (often during holidays or other peak times) to obtain publicity and disrupt the operations of fast food restaurants, Wal-Mart and others, without significant or even any loss of wages.

In the case of a hospital, these strikes typically take the form of a strike notice under 8(g) of the Act telling the hospital that the employees will be on strike for a single 24 hour period together with an unconditionally offer to return to work as the end of that period.  This forces the hospital to scramble to find qualified temporary replacement workers, vet them, train them and orient them.  In order to do so, the hospital typically needs to contract with the replacement workers for at least five days and at significant expense.  Once the strike is over, often nothing has been resolved and the parties go back to the table only for the union to threaten to engage in another intermittent strike sometime down the line.

The only saving grace was that unions were hesitant to call more than two or three of these short strikes during any single labor dispute/negotiation because of the lack of clarity noted above left them vulnerable to a claim that the third or fourth short strike was intermittent and unprotected.

GC Seeks an Exception

In acknowledging both the increase of these union tactics and the lack of clear guidance on them, the GC’s Memorandum instructs the NLRB’s Regions to take action to again put their thumb on the scales in favor of unions.  Specifically, the GC Memorandum provided and instructed Regions to utilize an Intermittent Strike Brief Insert that advocates for a loosing of the standard to sanction any intermittent or short time strikes which:

  1. “involve a complete cessation of work [as opposed to a slow down or partial work stoppage];
  2. “are not designed to impose permanent conditions of work [i.e., weekend only strikes, refusal to work overtime, etc.], but rather are designed to exert economic pressure; and
  3. The employer is made aware of the employees’ purpose in striking.”

While, if accepted by the Board and the courts, this certainly would provide some clarity, that clarity would be that unions would be free to conduct as many short, intermittent strikes as they desired so long as they called for a complete walkout and they old the employer what they were seeking.  This would not only sanction the damaging work stoppage above, but would result in increased and expanded use/abuse of such tactics.

Management Missive

Employers must be aware of this development, as well as the fact unions likely will be looking to test this theory, and should prepare accordingly.  While certainly contingency planning is a must, employers may also be able to take advantage of certain bargaining strategies designed to mitigate the impact of these union tactics.  Employers should consult with experienced labor counsel to ensure they are prepared.


Employers Under the Microscope: Is Change on the Horizon? – Attend Our Annual Briefing (NYC, Oct. 18)

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Employers Under the Microscope: Is Change on the Horizon?

When: Tuesday, October 18, 2016 8:00 a.m. – 4:00 p.m.

Where: New York Hilton Midtown, 1335 Avenue of the Americas, New York, NY 10019

Epstein Becker Green’s Annual Workforce Management Briefing will focus on the latest developments in labor and employment law, including:

  • Latest Developments from the NLRB
  • Attracting and Retaining a Diverse Workforce
  • ADA Website Compliance
  • Trade Secrets and Non-Competes
  • Managing and Administering Leave Policies
  • New Overtime Rules
  • Workplace Violence and Active-Shooter Situations
  • Recordings in the Workplace
  • Instilling Corporate Ethics

This year, we welcome Marc Freedman and Jim Plunkett from the U.S. Chamber of Commerce. Marc and Jim will speak at the first plenary session on the latest developments in Washington, D.C., that impact employers nationwide.

We are also excited to have Dr. David Weil, Administrator of the U.S. Department of Labor’s Wage and Hour Division, serve as the guest speaker at the second plenary session. David will discuss the areas on which the Wage and Hour Division is focusing, including the new overtime rules.

In addition to workshop sessions led by attorneys at Epstein Becker Green – including some contributors to this blog! – we are also looking forward to hearing from our keynote speaker, Former New York City Police Commissioner William J. Bratton.

View the full briefing agenda here.

Visit the briefing website for more information and to register, and contact Sylwia Faszczewska or Elizabeth Gannon with questions. Seating is limited.

New York City Mandates “Labor Peace” Agreements – Employment Law This Week®

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Featured on Employment Law This Week® – New York City is trying to force certain employers to sign “labor peace” agreements with unions.

Mayor Bill de Blasio has signed an executive order mandating that a property developer receiving at least $1 million in “Financial Assistance” require its large retail and food service tenants to accept “Labor Peace Agreements.” These agreements would prohibit the companies from opposing union organization and provide what some consider to be affirmative support and assistance to unions. City Development Projects that were authorized or received “Financial Assistance” before July 14, 2016, are exempt from this order.

See the episode below and a recent Act Now Advisory on this topic.


What the NLRB’s Ruling That Graduate Teaching Assistants Are Employees, With the Rights to Organize and Bargain Collectively Means for Employers

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The National Labor Relations Board (NLRB or Board) has ruled that graduate teaching assistants, i.e. graduate students who provide instruction and assist faculty with research as part of their own post-graduate education are “employees” within the meaning of the National Labor Relations Act (NLRA or Act), and thus have the right to join unions and engage in collective bargaining with the universities and colleges where they study.

For those who follow the Board, the 3-1 decision in Columbia University in, 364 NLRB No. 90 (2016) should come as no surprise. This past January, following a Regional Director’s Decision dismissing the representation petition filed by Graduate Workers of Columbia-GWC, UAW, (UAW or Union) because she found that under Board law, the graduate teaching assistants and research assistants the union sought to represent, were not employees as that term has been defined under the Act, but rather were students.

The Board Asked Four Questions

After the Regional Director issued her decision, the Union requested review by the Board and asked the Board to overrule its earlier holdings concerning graduate students and researchers such as those in the petitioned for unit. On January 13, 2016, the Board issued a Notice and Invitation to File Briefs, indicating that the Board would consider the Union’s appeal and that it would consider the Union’s argument that the Board should overrule its 2004 decision in Brown University, 342 NLRB 483, in which it had found graduate teaching assistants and research assistants were students and not employees under the Act. The Board invited interested parties to offer their views on the following questions:

  1. Should the Board modify or overrule Brown University, 342 NLRB 483 (2004), which held that graduate student assistants who perform services at a university in connection with their studies are not statutory employees within the meaning of Section 2(3) of the National Labor Relations Act?
  2. If the Board modifies or overrules Brown University, supra, what should be the standard for determining whether graduate student assistants engaged in research are statutory employees, including graduate student assistants engaged in research funded by external grants? See New York University, 332 NLRB 1205, 1209 fn. 10 (2000) (relying on Leland Stanford Junior University, 214 NLRB 621 (1974)).
  3. If the Board concludes that graduate student assistants, terminal masters degree students and undergraduate students are statutory employees, would a unit composed of all these classifications be appropriate?
  4. If the Board concludes that graduate student assistants, terminal masters degree students and undergraduate students are statutory employees, what standard should the Board apply to determine whether they constitute temporary employees?

The very fact that the Board was asking these questions was seen at the time as a strong indication that it would reject Brown and find a way to reclassify graduate teaching assistants as employees. Notably, two years ago, when the Board considered the Steelworkers effort to organize and represent student athletes who played football for Northwestern University on scholarships, the Board found the scholarship students to be “employees” but declined to exercise what it said was its jurisdiction that would have permitted it to conduct an election and require collective bargaining on what it characterized as considerations of public policy.

The NLRB Has Overruled Brown – The Answers to the Four Questions

The decision reverses and rejects the Board’s 2004 decision in Brown University, 342 NLRB 483, which the majority characterizes as “a sharply divided decision.” In Brown, the Board found that “graduate assistants who perform services at a university in connection with their studies are not statutory employees under the National Labor Relations Act.”

In jettisoning Brown, the majority concluded that the Board majority in that case “failed to acknowledge that the Act does not speak directly to the issue posed here, which calls on the Board to interpret the language of the statute in light of its policies.” The majority noted that “the Brown University decision, in turn, deprived an entire category of workers of the protection of the Act, without a convincing justification in either the statutory language of the Act or the policies of the Act.”

A quick read of the majority opinion and the dissent of Member Miscimarra suggest however that what the majority actually meant was that in the absence of express statutory language covering graduate students and research assistants, the majority felt comfortable substituting their views for those of the Brown majority, with whom they disagreed.  Columbia answers the four questions in the following way:

  1. The Board has overruled Brown and held that graduate teaching assistants and research assistants will now be considered to be statutory employees entitled to all of the Act’s protections.
  2. The Board will treat graduate research assistants as employees. Their positions will be examined under a traditional community of interest standard.
  3. The Board will apply its traditional community of interest standards in determining what are appropriate units for bargaining.
  4. While teaching assistants’ relationships with the University “are ‘temporar” in the sense that they are employed for short, finite periods of time averaging about two (not necessarily consecutive) semesters of work,” the Board nonetheless concluded that “all the employees in the unit, which we find to be appropriate, serve finite terms,” but that such finite terms alone cannot be a basis on which to deny bargaining rights.” Thus the Board rejects the argument that the limited duration of the teaching and research assistants means they should not be allowed to vote in representation elections.

Member Miscimarra Notes Real Risks In the Majority’s Approach

In addition to explaining why he believes as a matter of law and statutory construction why he believes the majority got it wrong and that the Brown majority was correct, Member Philip Miscimarra in his lengthy dissent points out a number of important policy considerations that the majority ignored, any and all of which can have profound negative consequences not only for the universities affected by this decision, but also for the students that they educate, both undergraduate and those the majority has now chosen to treat as statutory employees.

They include the following:

  • The Financial Investment Associated With a University Education, and the Mistake of Making Academic Success Subservient to the Risks and Uncertainties of Collective Bargaining and the Potential Resort to Economic Weapons.
    • Strikes
    • Lockouts
    • Loss, Suspension or Delay of Academic Credit
    • Suspension of Tuition Waivers
    • Potential Replacement of Striking Teaching and Research Assistants
    • Loss of Tuition Previously Paid
    • Misconduct, Potential Discharge, Academic Suspension/Expulsion Disputes
  • The many reasons that the “Board’s Processes and Procedures Are Incompatible With Applying the Act to University Student Assistants.”

What Columbia Means Going Forward

While the immediate impact of the decision is that the NLRB will now conduct a representation election in a unit of “All student employees who provide instructional services, including graduate and undergraduate Teaching Assistants (Teaching Assistants, Teaching Fellows, Preceptors, Course Assistants, Readers and Graders): All Graduate Research Assistants (including those compensated through Training Grants) and All Departmental Research Assistants,” to allow them to vote on representation by the UAW, the decision raises troubling questions both within academia and elsewhere and should be seen as part of a broader trend by the Board’s majority appointed by President Obama, to jump start collective bargaining and union organizing and bring unions into settings where until now they have not been found.

As we have previously reported, the NLRB has been broadly examining the nature of the employer-employee relationship, not only in the context of joint employment and co-employment but also in new areas of the gig economy, where unions and employees are arguing that workers traditionally recognized to be independent contractors have been “misclassified” and that such misclassification is in and of itself an unfair labor practice.

Union Organizing at Retail and Food Service Businesses Gets Boost from New York City “Labor Peace” Executive Order

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A new Act Now Advisory will be of interest to many of our readers in the retail and food service industries: “Union Organizing at Retail and Food Service Businesses Gets Boost from New York City ‘Labor Peace’ Executive Order,” by our colleagues Allen B. Roberts, Steven M. Swirsky, Donald S. Krueger, and Kristopher D. Reichardt from Epstein Becker Green.

Following is an excerpt:

New York City retail and food service unions got a boost recently when Mayor Bill de Blasio signed an Executive Order titled “Labor Peace for Retail Establishments at City Development Projects.” Subject to some thresholds for the size and type of project and the amount of “Financial Assistance” received for a “City Development Project,” Executive Order No. 19 mandates that developers agree to a “labor peace clause.” In turn, the labor peace clause will compel the developer to require certain large retail and food service tenants to enter into a “Labor Peace Agreement” prohibiting their opposition to a “Labor Organization” that seeks to represent their employees. …

If the objective of the Executive Order is to assure labor peace by way of insulation from picketing, work stoppages, boycotts, or other economic interference, it is not clear how its selective targeting of retail and food service tenants occupying more than 15,000 square feet of space—and the exclusion of other tenants and union relations—delivers on its promise. There are multiple non-covered tenants and events that could occasion such on-site disruptions as picketing, work stoppages, off-site boycotts, or other economic interference.

As a threshold matter, there is no particular reason why a labor dispute with a tenant occupying space shy of 15,000 square feet—among them high-profile national businesses—somehow is less disruptive to the tranquility of a City Development Project than one directed at a tenant whose business model requires larger space.

Also, the Executive Order does not address the rights or responsibilities of either landlords or their tenants that are Covered Employers bound to accept a Labor Peace Agreement when faced with union demands for neutrality that go beyond the Executive Order’s “minimum” neutrality requirements. There could be a dispute over initial labor peace terms if a union, dissatisfied that the Executive Order’s Labor Peace Agreement secured only a Covered Employer’s “neutral posture” concerning representation efforts, were to protest to obtain more ambitious and advantageous commitments that are coveted objectives of union neutrality demands, such as …

Read the full Advisory here.

What Does Subway’s “Voluntary Agreement” with the US Department of Labor Mean for Joint Employer Status?

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Hoagie Sandwich and ChipsThis past week, Doctor’s Associates Inc., which is the owner and franchisor for the Subway sandwich restaurant chain entered into a Voluntary Agreement (the “Agreement”) with the US Department of Labor’s (DOL) Wage and Hour Division “as part of [Subway’s] broader efforts to make its franchised restaurants and overall business operations socially responsible,” and as part of Subway’s “effort to promote and achieve compliance with labor standards to protect and enhance the welfare” of Subway’s own workforce and that of its franchisees.

While the Agreement appears intended to help reduce the number of wage and hour law claims arising at both Subway’s company owned stores and those operated by its franchisee across the country, the Agreement appears to add further support to efforts by unions, plaintiffs’ lawyers and other federal and state agencies such as the National Labor Relations Board (NLRB or Board), DOL’s own Occupational Safety and Health Administration (OSHA) and the EEOC to treat franchisors as joint employers with their franchisees.

What Is in the Agreement?

While on its face this may sound like a good idea and one that should not be controversial, in reality by entering into this Agreement, which among other things commits Subway to working with both the DOL and Subway’s franchisees, to develop and disseminate wage and hour compliance assistance materials and to work directly with the DOL to “explore ways to use technology to support franchisee compliance, such as building alerts into a payroll and scheduling platform that SUBWAY offers as a service to its franchisees,” and although the Agreement is notable for its silence on the question of whether the DOL considers Subway to be a joint employer with its franchisees, the Agreement is likely to be cited, by unions, plaintiffs’ lawyers and other government agencies such as the NLRB as evidence of the fact that Subway as franchisor possesses the ability, whether exercised or not, to directly or indirectly affect the terms and conditions of employment of its franchisees’ employees, and as such should be found to be a joint employer with them.

Notably, while the Agreement does not specifically address the exercise of any such authority on a day to day basis, it does suggest an ongoing monitoring, investigation and compliance role in franchisee operations and employment practices by Subway and a commitment by Subway as franchisor to take action and provide data to the DOL concerning Fair Labor Standards Act compliance.  In the past, courts have in reliance on similar factors held that a franchisor could be liable with its franchisees for overtime, minimum wage and similar wage and hour violations.

Of particular interest to many will be the final section of the Agreement, titled “Emphasizing consequences for FLSA noncompliance.”  This section not only notes that “SUBWAY requires franchisees to comply with all applicable laws, including the FLSA, as part of its franchise agreement,” but also what action it may take where it finds a franchisee has a “history of FLSA violations”:

SUBWAY may exercise its business judgment to terminate an existing franchise, deny a franchisee the opportunity to purchase additional franchises, or otherwise discipline a franchisee based on a franchisee’s history of FLSA violations.

Will Subway’s “Voluntary Agreement” with the DOL Have Any Impact Beyond Wage and Hour Matters?

As we approach the one year anniversary of the NLRB’s decision in Browning Ferris Industries, it is abundantly clear that not only the Board itself but unions and others seeking to represent and act on behalf of employees are continuing to push the boundaries and expand the application of Browning Ferris.  In fact the Board has been asked to find that policies and standards such as those evidencing a business’s commitment to “socially responsible” employment practices, the very phrase used in the Subway-DOL Agreement, should be evidence of indirect control sufficient to support a finding of a joint employer relationship between a business and its suppliers.

Moreover, the NLRB and unions such as UNITE HERE and the Service Employees International Union continue to aggressively pursue their argument that the terms of a franchise agreement and a franchisor’s efforts to ensure that its franchisees, who conduct business under its brand, can also be sufficient to support a finding of joint employer status.  No doubt they will also point to the Subway Agreement with the DOL as also being evidence of such direct or indirect control affecting franchisees’ employees’ terms and conditions.

What Should Employers Do Now?

Employers are well advised to review the full range of their operations and personnel decisions, including their use of contingent and temporaries and personnel supplied by temporary and other staffing agencies to assess their vulnerability to such action and to determine what steps they make take to better position themselves for the challenges that are surely coming.

Equally critical employers should carefully evaluate their relationships with suppliers, licensees, and others they do business with to ensure that their relationships, and the agreements, both written and verbal, governing those relationships do not create additional and avoidable risks.

Can Your Corporate Social Responsibility Policy Make You a Joint-Employer With Your Suppliers? The NLRB May Find That It Does

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The National Labor Relations Board (NLRB or Board), which continues to apply an ever expanding standard for determining whether a company that contracts with another business to supply contract labor or services in support of its operations should be treated as a joint employer of the supplier or contractor’s employees, is now considering whether a company’s requirement that its suppliers and contractors comply with its Corporate Social Responsibility (CSR) Policy, which includes minimum standards for the contractor or supplier’s practices with its own employees can support a claim that the customer is a joint employer.

Unions are Pursuing Joint Employer Claims Based On CSR Policies

My colleague Dan Green and I recently examined a case  in an article published in Epstein Becker Green’s most recent Take Five in which the Temporary Workers Of America, (TWOA) argued just that, seeking to require the client of the Lionbridge Technologies, the company that actually employs the workers it represents, to participate in negotiations for an initial collective bargaining agreement after the TWOA was certified by the NLRB as the representative of a unit of agency temporaries. Notably, TWOA describes itself as “a start up union devoted to defend and promote the interests of workers classified as ‘temporary.’” Notably, when the TWOA filed its petition for a representation election, it did not claim at that time that the temporary employer’s client was a joint employer with it and only did so after it won the election and was certified.

When the client declined the union’s request to participate because it was not an employer, the TWOA filed unfair labor practice (ULP) charges alleging that the client was unlawfully refusing to bargain. The Board has been aggressively investigating that assertion, including issuing investigative subpoenas to the alleged joint employer demanding extensive documentation and information from it concerning its business relationship with its supplier.

The NLRB Is Aggressively Using Its Subpoena Power to Investigate Joint Employer Allegations

While the customer moved to revoke the investigative subpoenas, the Board denied its motion to revoke the investigative subpoena, noting its “broad investigative authority, which extends not only to substantive allegations of a charge, but to ‘any matter under investigation or in question’ in the proceeding.” (emphasis in original).  Referring to its broad investigative powers, Members Hirozawa and McFarren went on to say that nothing in the Board’s Rules “can be read to impose a requirement that the Regional Director articulate ‘an objective factual basis’ in order to compel the production of information that is necessary to investigate” a pending ULP charge.

Dissenting, Member Miscimarra challenged the use of investigative subpoenas by the Regional Director to pursue the TWOA’s bare faced assertion that the contractor-employer’s client was a joint employer of its personnel. “I believe that a subpoena seeking documents pertaining to an alleged joint-employer and/or single employer status of a charged party requires ‘more . . . .than merely stating the name of a possible single or joint employer on the face of the charge,’” and that, as Section 10054.4 of the Board’s own Casehandling Manual holds, documentary evidence such as that which the Board’s subpoena called for should only be pursued if “consideration of the charging party’s evidence and the preliminary information from the charged party suggests a prima facie case.” (emphasis in original).  Here Member Miscimarra points out the TWOA merely claimed Lionbridge Technologies and its client were a “’joint employer’ without additional factual information about the joint employer allegation.”

What This Means For Employers Now

Since the Board issued its decision in Browning Ferris Industries last August, lowering the threshold for finding a joint employer relationship, it has continued to open the gates for increased organizing and union activity, including announcing it will hold elections and certify unions to represent units made up of both directly employed and secondarily employed employees in its Miller & Anderson, Inc. decision this past June.

As with the TWOA and its pursuit of Lionbridge and its client as joint employers, unions are now taking advantage of these opportunities in a number of ways, both in representation cases and by demanding that putative joint employers come to the table for bargaining.

Employers are well advised to review the full range of their operations and personnel decisions, including their use of contingent and temporaries and personnel supplied by temporary and other staffing agencies to assess their vulnerability to such action and to determine what steps they make take to better position themselves for the challenges that are surely coming.

NLRB Requires Specific Waivers During Bargaining – Employment Law This Week

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Featured on the new episode of Employment Law This Week: Employers must have specific waivers to make unilateral policy changes when bargaining with a union.

That’s according to the NLRB, which once again clarified its “clear and unmistakable” waiver standard to restrict employers’ midterm changes. In this case, an employer relied on a broad management rights clause in its contract with the union to make unilateral changes to specific policies. The NLRB found that the union had not waived its right to bargain over those changes because the contract did not refer to the policies with sufficient clarity.

See the episode below and read Mark Trapp’s blog post on this topic.

NLRB Finds “Discharge” Is an “Actual Discharge” and Violates the National Labor Relations Act Even If It Is Immediately Reversed and Employee Suffers No Harm

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The National Labor Relations Board (“NLRB” or “Board”) has reversed the findings of an Administrative Law Judge (“ALJ”) who found that an employee who was told he was fired and then almost instantly told by the owner of the company he worked for that he was not fired and continued to work without any loss of compensation or working time had in fact been unlawfully discharged in violation of the National Labor Relations Act (“NLRA” or the “Act”). It would seem that if “discharge is the ‘capital punishment’ of employment,” this case presents a rare example, in the Board’s eyes of an out of body after death experience, in which the executioner is held liable for killing someone who is unquestionably still alive.

Complaints About a Supervisor of Non-Union Employees: Concerted Protected Activity

The case involved employees who were neither represented by a union nor seeking to become represented who did paving and related work for a paving contractor that was performing work at the University of Arizona’s Tech Park location. Over time the employees had a number of complaints about what they considered to be rude, demeaning and unprofessional remarks and treatment by the supervisor of their crew. They sought out the owner and met with him to express their concerns and to ask him to reign in or replace the supervisor. Under the Act, this was deemed to be concerted and protected activity concerning their terms and conditions of employment.

The Board Reversed Its Own Administrative Law Judge

In Bates Paving & Sealing, Inc., 364 NLRB No. 46 (2016), Chairman Mark Pearce and Member Kent Hirozawa, acting on Exceptions filed on behalf of the Board’s General Counsel reversed the decision of ALJ Amita Baman Tracy who had found, based on her review of the evidence including the credibility of witnesses including employee Juan Marana (“Marana”), that the evidence did not support the General Counsel’s claim that Bates Paving had discharged Marana in a heated meeting between employees and the owner of the company about concerns the employees had expressed about their treatment at the hands of their immediate supervisor, Robert Padilla (“Padilla”) and what the owner told the workers were problems with their work on a recent paving project. Marana claimed that as tempers rose in the meeting, the owner told him he was “f***ing fired,” and that he should leave.   The ALJ found that Marana’s testimony was not credible and was in fact contradicted by the sworn affidavit he provided to the NLRB during the investigation of the unfair labor practice charge. In fact, the ALJ pointed out in her decision that in his affidavit, the owner “told him that he was not fired,” and that Marana’s “responses changed throughout his testimony.”

Marana admitted that after the meeting where he exchanged words with the owner, the owner made it clear to him that he was not fired and that he should work the next day as scheduled. Marana also admitted, as both the ALJ and the Board found, that he did not lose even a single hour’s pay.

The ALJ did not however give the company a clean pass on its actions at this and found that the owner had in fact told Marana to leave and to stop his statements about the supervisor. However while she that the owner’s statements about firing Marana “would tend to restrain or interfere with employees in the exercise of their Section 7 rights.” Because she concluded that Marana was not discharged, whatever the employer may have said, the employer could not be found to have unlawfully discharged him because he did not lose his job.

Why The Board Disagreed With the ALJ

Although the Board did not expressly overrule the ALJ on the facts, in reality they did just that. While the ALJ found Marana not to be credible, essentially because she concluded that he knew he was not fired and in reality never lost even an hour’s worth of pay, the Board took what can be described as an absolutist view of the facts, and concluded, perhaps in a subconscious channeling of Donald Trump’s trademark line from The Apprentice (“You’re fired!”), that the very act of saying the words constitutes a discharge, the “capital punishment” of employment. However it seems that at most what the employer here did was threaten to invoke the industrial death penalty, and not the act of execution.

The Board tried to justify its overriding of the ALJ’s credibility determination, i.e. her finding that Marana did not really believe he was actually fired, by focusing not on what he thought but on what message the other employees who were present in the meeting or heard of it later would take away. In this regard the majority wrote

An employer cannot avoid Board sanction simply by reversing the discharge before an employee suffers financial costs. The message has been sent that the employer is willing to take this extreme action and the employee victim is likely to understand that a “change of heart” may not come so quickly, if at all, if he again engages in protected concerted activity.

What Does This Mean For Employers

There are a number of important takeaways in the Board’s decision in Bates Paving & Sealing. They include not only a reminder that the Act applies and employees are protected in a wide range of circumstances where there is neither union representation in the picture nor any suggestion that employees may be seeking to bargain or to designate a union to bargain on their behalf.

The decision clearly demonstrates that the Board is continuing to aggressively apply the concept of protected concerted activity. It also delivers the message that the adage “No Harm, No Foul,” does not apply in labor law. Innocent or momentary lapses in judgment are likely not to be excused even where an employer quickly undoes any potential harm, if the matter gets to the Board’s attention.

NLRB Again Deprives Employer of the Benefit of a Bargained-for Management Rights Clause

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The National Labor Relations Board (“NLRB” or “Board”), in its recent decision in Graymont PA, Inc., 364 NLRB No. 37 (June 29, 2016), has fired the latest salvo in its long running dispute with the United States Court of Appeals for the District of Columbia Circuit concerning the issue of what legal standard should be applied when a union claims that an employer has made a unilateral change in terms and conditions of employment during the term of a collective bargaining agreement and the employer claims that the union waived its right to bargain over the topic in question in a management rights clause or a “complete agreement” clause.

In Graymont, the Board adhered to its “clear-and-unmistakable” waiver approach to analyzing claims under Section 8(a)(5) where the employer claims that the union waived its right to bargain over a particular matter during the term of a collective bargaining agreement (“CBA”). The three-member majority rejected  the employer’s argument that the  “contract coverage” standard applied by the D.C. Circuit and several other Courts of Appeal was the correct standard for assessing such claims.

This decision comes on the heels of an unpublished decision by the D.C. Circuit in which that court again rejected the Board’s “clear and unmistakable” waiver standard as being applicable to such disputes. In Heartland Plymouth Court MI LLC v. NLRB, No. 15-1034 (May 3, 2016), the D.C. Circuit laid out its disagreement with the NLRB concerning the so-called “contract coverage rule”:

As we have noted several times, there is a “fundamental and long-running disagreement” between this court and the Board as to the appropriate approach by which to determine “whether an employer has violated Section 8(a)(5) of the National Labor Relations Act when it refuses to bargain with its union over a subject allegedly contained in a collective bargaining agreement.” The Board insists such questions turn on whether the Union “clearly and unmistakably” waived its bargaining rights on the subject through the CBA, but we have repeatedly held “the proper inquiry is simply whether the subject that is the focus of the dispute is ‘covered by’ the agreement.” Under our precedent, if a subject is covered by the contract, then the employer generally has no ongoing obligation to bargain with its employees about that subject during the life of the agreement.

The dispute regarding the appropriate standard made all the difference in the Graymont decision. There, a Board majority held that the Union did not clearly and unmistakably waive its right to bargain over unilateral changes made by the Employer to its work rules, absenteeism policy, and progressive discipline schedule.

In Graymont the employer unilaterally implemented various changes to its work rules, absenteeism policy and progressive discipline schedule; believing it had the management right to do so under it CBA.  There the employer sought to rely  on a negotiated management rights clause under which it retained “the sole and exclusive rights to manage; to direct its employees; … to evaluate performance, … to discipline and discharge for just cause, to adopt and enforce rules and regulations and policies and procedures; [and] to set and establish standards of performance for employees.” . The union initially filed a grievance, but then withdrew it and filed an unfair labor practice charge with the NLRB alleging that the employer had made unilateral changes and failed to bargain.

The Board applied its “clear and unmistakable” waiver standard, and found that the Union did not waive its rights to bargain when it entered into the CBA, because the Board concluded that the CBA’s management rights clause did not “specifically reference” the rules and policies changed – i.e., the work rules, absenteeism policy and progressive discipline policy.

The majority ruling is just the latest example of how the Board’s waiver analysis operates to deprive employers of the benefits of their negotiated agreements – particularly in management rights clauses – and force further bargaining over rights employers understandably believe they have already secured, often in return for other concessions, at the bargaining table. In bargaining with the Union, the employer in Graymont secured the clear right “to adopt and enforce rules and regulations and policies and procedures.” Yet the majority found this language insufficiently clear to constitute a “clear and unmistakable” waiver by the union of its right to bargain, during the term of the CBA, over such changes.

Dissenting, Member Miscimarra noted that “Management-rights language may be general and, at the same time, clear and unmistakable.” Thus, in agreeing to the broad language, “the Union clearly and unmistakably waived its right to bargain over the changes.” He also agreed that therefore the union “had already bargained and agreed that Graymont had the right to make these changes unilaterally.”

The NLRB’s Graymont decision once again demonstrates the uphill battle employers face in asserting their rights, even those secured in writing after bargaining. In effect, the Board’s waiver approach can ignore even clear language, and render rights secured at the bargaining table illusory.  We often encounter employers who believe they have negotiated a strong broad management rights clause only to feel they are victims to a bait-and-switch type attack from a union filing an unfair labor practice charge based on the employer exercising the very rights it thought it had secured.

Combined with the its recent disinclination to defer such matters to arbitration, where they belong, the Board’s decision highlights the danger of an employer acting unilaterally, even with what may appear to be clearly-established rights. Employers should bear this in mind when negotiating, and seek to make management rights clauses as specific as possible. Employers should also bear in mind the Board’s approach to such actions when contemplating unilateral moves, and plan accordingly.