Management Memo

Management’s inside guide to labor relations

What’s Really in The NLRB’s New Amendments to Its Rules And Regulations and What Do These Changes Mean For Employers?

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On February 23, 2017 the National Labor Relations Board (“Board” or “NLRB”) made public a proposed Final Rule to revise its Rules and Regulations “ (the “Rules”)  to reflect modern technology, such as E-Filing, and eliminate references to telegraphs, carbon copies, and the requirements for hard copy submissions and multiple copies, and to eliminate legalistic terms” from the Rules.

Because the Board contends these amendments to its Rules as “procedural rather than substantive,” it has taken the position that it is not obligated to allow for comment before the amended rules are formally adopted and take effect, and that the amendments to the Rules and Regulations will take effect ten days after their publication in the Federal Register. The Board then published the amendments on Friday February 24th, which means they are to take effect on March 7, 2017, absent any judicial intervention.

An initial reading of the amended Rules and the Board’s summary suggests that most of the changes really are procedural in nature and unlikely to have a material impact on the outcome of representation or unfair labor practice proceedings before the Board. However, given the fact that the Board has demonstrated an increasing tendency in recent actions, particularly since it amended its Rules in representation cases in 2014 to hold parties to increasingly strict compliance standards that can impact substantive rights, it is important for employers who participate in proceedings before the Board and those who represent and counsel them to become familiar with the amended Rules and the changes they include. For that reason we have prepared this summary of what we think are the potentially most significant changes in the Board’s Rules.

Why the Board says it is amending its Rules

The Board has summarized the announcement of its proposed amendments to the Rules and Regulations as being intended to

reorganize the Rules and add headings so that the subject matter is easier to find; incorporate current practices that had not been included in the published Rules, such as the Board’s Alternative Dispute Resolution Program; and update and streamline provisions of the FOIA regulations, . . . clarify the means by which documents are filed and service is made by the parties and the Board, . . .(and) promote the parties’ use of E-Filing, which will facilitate sharing documents with the public.

A Summary of Principal Changes in the These Amendments

The Board has characterized the changes to its Rules in these amendments as falling into five broad categories: I Global Changes, II Definitions, Filing and Service, III “Unfair Labor Practice Cases, IV FOIA, and V Other Sections.

The amended Rules and the Board’s description of the changes run to 167 pages and given the fact that the Board in many circumstances holds the employers, unions and employees who appear before the Board in unfair labor practice and representation cases to strict compliance with its Rules, we have prepared this Act Now Advisory to summarize for readers what, as of now, appear to be the principle changes in the amended Rules.

Notably, although when the Board adopted amendments to the Rules and its procedures in representation cases that took effect in April 2015, the Board published extensive comparative materials for practitioners and members of the public describing how those amendments changed requirements and practice, as of yet no similar analysis has been released by the Board concerning the new amendments to the Rules.

Our review and comments in this Advisory follow the Board’s five categories: Global Changes, Definitions, Filing, and Service, Unfair Labor Practice (“ULP”) Cases, Freedom of Information Act (“FOIA”) matters, and Other Sections of the Board’s Rules.

Notably, and perhaps not surprising given that the existing rules concerning Representation Proceedings were adopted by the Board in 2014 and implemented in 2015, after extensive review and comment, the amended Rules do not specifically address any of the sections of the Rules concerning Representation Cases.

I Global Changes

These changes to the Board’s Rules apply to all types of cases and proceedings. Key changes are as follows:

  • All requirements for filing multiple copies of documents have been removed from the Rules. Under the existing Rules, there were numerous circumstances where parties were required to submit multiple copies of documents. This often caused confusion when a party used the Board’s E-Filing system to electronically file documents.
  • The amended Rules use plain English. The amended Rules have been revised “to use plain English and eliminate terms such as “therefrom,” “thereupon,” “therein,” “herein” and “said.”
  • Time periods have been changed to multiples of 7. While the Summary suggests that all time period calculations have been changed to multiples of 7, this is not actually so. For example, in representation cases, there are still numerous requirements that filings be made and actions taken in shorter time frames. Parties will need to consult the actual section of the Rules to determine what the applicable time requirements are
  • Gender specific language is eliminated in many cases.
  • Ambiguous words are replaced. The word “shall” has been replaced with either the word “must,” ”will” or “may” to make clear whether a particular action is required or discretionary.

II Changes Concerning Definitions, Filing and Service

The Board’s filing and service requirements, contained in Sections 102.111 through 102.114 of the Rules have been reorganized and modified. Rather than placing filing and service requirements in the portions of the Rules that addressed particular types of cases and proceedings, all filing and service requirements are consolidated in Section 102 of the amended Rules.

  • Separate sections for definitions and service and filing.
  • New provisions addressing notice to the Board of “supplemental authority and signatures on E-filed documents. See Sections 102.6 and 102.7.
  • Time requirements for filings in Board cases have been reorganized. See Section 102.2.
  • The Board has changed the Rules’ “time computation” provisions for filing “responsive documents.” Under the amended Rules, “the designated period” for filing a responsive document will now begin to run “on the date the preceding document was received by the Agency, even if the preceding document was filed prior” to the date it was due to be filed.
  • Calculation of when an E-Filed document must be filed. Under the amended Rules, E-Filed documents must now be filed and received on the due date “by 11:59 p.m. of the receiving office’s time zone.”
  • The amended Rules change the requirements concerning requests for extensions of time to file documents with the Board.
    • Requests for extension of time must generally be filed no later than the date on which the document is dues, but may be filed within 3 days of the due date in circumstances “not reasonably foreseeable in advance.”
    • All requests for extensions of time must be in writing. While such requests have typically been made in writing, the Rules did not actually require this until now.
    • The amended Rules add language encouraging parties to seek agreement from other parties for extensions of time and requiring that any request for an extension of time include the positions of all other parties. Hereto, while most practitioners have typically taken these steps and the Board has encouraged them, they have not been required by the Rules before.
    • The amended Rules require any party opposing a request for an extension of time to file their opposition in writing “as soon as possible following receipt of the request.”
  • Newly added Section 102.2 (d) puts in writing for the first time the Board’s practices and requirements in connection with documents that are not filed or served by the time required and established procedures for requesting permission to file a document after it is due.
    • The amended Rules allow for the late filing of certain documents “within a reasonable time after the time” required under the Rules “upon good cause shown based on excusable neglect and when no prejudice would result.” Significantly the term “excusable neglect” is not defined in the Rules or the Act.
    • The amended Rules indicate that the types of documents that may be filed late in unfair labor practice proceedings are motions, exceptions, answers to complaints and backpay specifications and briefs.
    • The amended Rules indicate that the types of documents that may be filed late in representation cases are exceptions, requests for review, motions, briefs, and responses to each of these types of documents,
    • Under the amended Rules, any request to file one of the specified documents must be made by written motion, and the motion must include the document the party is seeking permission to file late and the grounds for the request, which need to include the “good cause” and the reasons the party asserts that no prejudice would result. These facts must be contained in an affidavit and “sworn to by individuals with personal knowledge of the facts.”
    • A party opposing a request for permission to late file can file an opposition to the request, but not until after a ruling on the request. In other words, a party cannot oppose a request for permission to file late until after the request has been granted.
  • The amended Rules change the methods of service that are permitted.
    • Parties can no longer serve papers by telegraph.
    • The amended Rules give the Board the right to serve any documents by facsimile or email.
    • The amended Rules authorize the service of subpoenas by private delivery service.
    • Section 102.5 (c) provides for much greater use of the Board’s E-Filing system for the electronic filing of documents. Under the new rule, the Board adopts the requirement that all documents other than unfair labor practice charges, representation petitions and showings of interest in representation cases must be filed through the Board’s E-Filing system unless a party submits with its hard copy document a written statement explaining why the party does not have access to the means to use E-Filing or why E-Filing would impose an undue burden on the party.
    • Section 102.5 (e) restricts the ability of parties to file documents with the Board by facsimile. Under the amended Rules, the only documents that may be filed by facsimile are unfair labor practice charges, representation case petitions, objections to conduct affection the outcome of a representation election, and request for extension of time for filing of documents.
  • New provisions for Notice to the Administrative Law Judge (“ALJ”) or Board of Supporting Authority.
    • Section 102.6 adds a formal process for the first time enabling a party to make a supplemental submission, after it has filed a brief to the Board or an ALJ, when it becomes aware of “pertinent and significant legal authority.”
    • A party may bring such authority to the attention of the ALJ or the Board by “promptly filing a letter with the judge or the Board,” and serving copies of the letter on all other parties.
    • The body of such a letter “may not exceed 350 words,” and any reply is subject to the same word limit.
    • In an unfair labor practice case, any response must be filed within 14 days, while in a representation proceeding it must be filed within 7 days after service.
  • The amended Rules allow for electronic signatures on documents filed with the Board.
    • While parties have routinely submitted documents with electronic signatures to the Board in the past, the amended Rules formally recognize the use of electronic signatures and make provision for them.
    • Electronic signatures will now have “the same legal effect, validity, and enforceability as if signed manually.” Section 102.7.
    • The amended Rules define electronic signature as “an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the document.”
    • The Board’s adoption of this rule confirming its acceptance of electronic signatures should come as no surprise, given the announcement by the Board’s General Counsel in September 2015 that the agency would accept employees’ electronic signatures as part of a union’s showing of interest in support of a representation petitions.

III Unfair Labor Practice Cases

  • The changes to the Rules concerning Unfair Labor Practice (“ULP”) cases are primarily procedural and consistent with the administrative-type changes described above.
  • Under revised Section 102.11, a party filing a charge by facsimile will no longer be required to submit the signed original as well. The Board has explained that this change is intended to prevent the docketing a second time of a charge that was filed by E-Filing or facsimile when the hard copy is received by mail.
  • The Board will no longer permit a party filing a charge to submit attachments to the charge form. Section 102.12 (b).
  • Revised Section 102.14 (a) eliminates the requirement that before a party filing a charge serves a copy on the respondent that the respondent’s permission be obtained in advance if the charge is going to served by facsimile. Advance permission will still be required before service of a charge by email.
  • Regional Offices will now be able to serve charges not only by regular mail or facsimile but also in person, by private delivery service, by email or in any other method permitted by Rules 4 and 5 of the Federal Rules of Civil Procedure, or in any other agreed upon manner.
  • The amended rules address the question of when service of a charge is considered to have been made when the charge is served by email.
    • When service is by email, “the date the email is sent” will be considered the date of service.
    • When service is by mail or private delivery service, the date the charge is deposited with the post office or the other carrier will be considered the date of service.
    • In the case of service by facsimile, the date the fax is received will be considered the date of receipt.
    • No explanation is offered for the decision to treat facsimile and email so differently.
  • The amended Rules address the question of when a Regional Director has the authority to change the date, time and place of a ULP hearing, either on his or her own authority or with the agreement of the parties. Under Section 102.16, these may be changed when
    • All parties agree to the change of the hearing date;
    • New ULP charges have been filed which, “if meritorious, might be appropriate for consolidation with” the earlier case or cases;
    • Where there are ongoing settlement discussions which the Regional Director concludes “could lead to settlement of all or a portion of the complaint;’
    • Where there are issues related to the complaint “pending before the General Counsel’s Division of Advice or Office of Appeals;” or
    • Where there are more than 21 days remaining before the scheduled start of the hearing.
    • Note that this gives the Regional Director great discretion as the provisions concerning postponement because of related issues being under consideration by the Division of Advice or the Office of Appeals is not limited to pending cases involving any of the same parties.
  • Section 102.24 (c) codifies what has been the Board’s practice, under D. L. Baker, Inc., 330 NLRB 521, fn. 4(2000) concerning replies to oppositions to motions filed with the Board.
    • A party that has filed a motion with the Board will be permitted to submit a reply to any opposition to that motion within 7 days of its receipt of the opposition, but “in the interest of administrative finality,” no further responses are permitted.
  • The amended Rule 102.31 (a), which concerns subpoenas in ULP cases, now specifically recognizes that Board subpoenas can require the production of “electronic data.”
  • Amended Rule 102.31 (b) codifies that a party adversely affected by a ruling on a petition to revoke a subpoena has the right to make the ruling and related pleadings a part of the record in the ULP hearing.
  • Section 102.45 will for the first time make the Board’s existing Alternative Dispute Resolution (ADR) Program, which is really a mediation program, a part of the Rules.

IV FOIA

The Board’s summary describes the amendments to the Rules concerning the Board’s processing of requests made under the Freedom of Information Act (“FOIA”) as being intended to “update and streamline procedural provisions of the (NLRB’s) FOIA regulations,” and to reflect organizational changes within the Board’s Headquarters and “centralization” of the Board’s FOIA processing formerly located in the regional offices. The Rules changes are also described as intended to make the Board’s FOIA regulations “more readable and requester-friendly.”

  • Section 102.117 (c)(1)(ii) codifies the existing requirement that FOIA requests be made to the Board’s FOIA Officer in Washington, rather than to the Regional Office where the case that is the subject of the request was processed.
  • The amended Rules express the Board’s “preference” for requests to be made electronically.
  • The amended Section 102.117 (a)(4) no longer includes a lost of the records the Board will produce under FOIA. Instead, the Board refers parties to the text of the amended FOIA Improvement Act of 2016.
  • Under amended Section 102.117(c)(2)(v), parties will have 90, rather than 28 days to file administrative appeals of adverse determinations on FOIA requests.

V Other Sections

According to the Board’s summary, this group of amendments to the Rules are quite limited.

  • The amended Section 102.96 may be of interest to employers as it relates to the circumstances in which the Board, following investigation of a ULP charge alleging unlawful secondary boycott activity by a union in violation of Section 8 (b)(4) of the Act, determines that Section 10(l) injunctive relief is appropriate and should be sought by the Board in district court.
  • Amended Section 102.96 mandates that the Regional Director is to “promptly” issue a ULP complaint, “normally within 5 days of the dates when injunctive relief is first sought” in court.

The Board’s Required Findings Concerning the Amended Rules

  • While President Trump has spoken repeatedly of his intent to slash the number of rules and regulations under federal law and has called for any new rule or regulation to be offset by the elimination of two existing rules or regulations, the Board has not addressed those mandates in either its summary or the amended Rules themselves. The Board has however made required findings concerning rule making under existing federal laws.
  • As required under the Regulatory Flexibility Act, the Board has determined that the amendments to the Rules “will not have a significant impact on a substantial number of small entities.
  • In accordance with the requirements of the Unfunded Mandates Reform Act of 1995, the Board states that the amendments “will not result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year.”
  • The Board has concluded that the adoption of the amended Rules “is not a major rule as defined under the Small Business Regulatory Enforcement Fairness Act of 1996.”

What Employers Should Do Now

It is perhaps ironic that the Board, composed of two Democrats and one Republican, all holdovers from the Obama Administration, has chosen this moment, just a month into the Trump Administration and as rumors have begun circulating as to who President Trump will nominate to fill the 2 vacant seats on the Board reserved for members of the President’s own parties, i.e. Republicans.

No doubt, once those seats are filled a new Republican majority on the Board will begin to address far more substantive matters under the Act, including the many changes in the interpretation of the Act of the past 8 years.

Regardless of the substantive decision making of the Board, it remains critical that employers and all others with business before the Board understand the procedural and statutory framework under which the Board conducts its business. Those who do not study these amendments and follow their dictates risk being undone by not knowing the rules that govern all cases.

D.C. Court of Appeals Highlights Importance of Offers of Proof in NLRB Representation Hearings Under Expedited Election Rules

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A recent decision of the United States Court of Appeals for the District of Columbia Circuit in connection with an employer’s challenge to a National Labor Relations Board (“NLRB” of “Board”) representation election in which the Board certified a “wall to wall” bargaining unit provided clear evidence of just how critical it is for employers to make detailed “offers of proof” concerning issues the Board will not allow them to litigate under the amended election rules which took effect in April 2015.

While this case involved a representation petition filed before the new election rules took effect, its lessons concerning the importance of offers of proof concerning issues that the Board will not permit a party to litigate in a representation case under the amended rules are even more important now.

Judicial Review of the Board’s Representation Case Findings

After the union won the election and the employer challenged the Board’s unit determination by refusing to bargain, the Court recently held that the Board erred in finding that a “wall to wall” bargaining was appropriate because it ignored the facts the employer presented, without challenge, in an “offer of proof” offered at a Board conducted representation hearing.  The Court held that the offer of proof contained facts that supported the employer’s contention that the employees in the unit  the union sought to represent did not share a community of interest, which under the National Labor Relations Act (the “Act”) is necessary. See, NLRB v. Tito Contractors, Inc. (No. 15-1217, D.C. Circuit, February 3, 2017).

The Union Sought a Wall To Wall Unit

The union in this case petitioned for an election in in a single “wall to wall” unit, including workers in diverse job classifications at multiple facilities..  The employer argued that the proposed unit was not an appropriate unit under the Board’s unit determination standards and asked for a hearing on the issue.  The employer argued that a hearing was necessary because the  petitioned for unit was inappropriate because the employees performed different jobs at different locations and under different terms and conditions of employment and sought a hearing on that issue. While the Regional Director scheduled a hearing, the Hearing Officer refused to permit the employer to call witnesses and present its evidence on the issue. The Region instead directed the employer to make an offer of proof, describing what its witnesses and evidence would show, if it were permitted to present its evidence, to rebut the presumption under Board law that an employer wide unit was an appropriate unit.

The Hearing Officer’s Refual to Accept the Employer’s Offer of Proof Into Evidence

The employer made a detailed offer of proof showing that it operates a diverse contracting business comprising “two discrete halves”- one side that involves labor, and a second side that involves recycling. It explained that (1) the labor side employed painters, tile installers, masons and carpenters who performed work for customers, (2) the recycling business involved three separate recycling contracts with a different customer and (3) the recycling work is performed at multiple sites, located many miles from each other and under differing working conditions.

Upon the employer made its offer of proof, the Hearing Officer went off the record and consulted with the Acting Regional Director, and then summarily rejected the employer’s offer of proof and denied any hearing on the issue. An election was then directed in the wall to wall unit the union requested.

While the employer requested review of the Decision and Direction of Election (“D&DE”) and the Hearing Officer’s ruling on the offer of proof, the Board affirmed the Hearing Officer’s rulings including the refusal to accept the offer of proof into evidence and denied the employer’s request for review of the Acting Regional Director’s decision directing an election in the unit the union had requested in a perfunctory two line denial.

The Court’s Decision

After the election, the employer sought review by the Court of Appeals and the Board sought to have its findings affirmed and the order directing the employer to bargain with the union enforced.

The Court rejected the Board’s decision. The Court held that the requirement that the Board’s decision be supported by substantial evidence included a requirement that the Board consider and analyze contrary evidence as well.  The Court concluded that the offer of proof plainly showed evidence that countered the conclusion of a community of interest for three reasons.  First, neither the union nor the Board challenged the employer’s assertion that its business was comprised of two separate and discrete operations—labor and recycling – performing different types of work at different facilities.  Second, the Court concluded the Board erred when it ignored the facts contained in the employer’s offer of proof, which evidenced a lack of interchange among the employees in the two operations, a fact the Acting Regional Director acknowledged and cited as a justification for a mail ballot election.  Third, the Board ignored the significant differences among the employees’ wages, hours and working conditions.  Based on the Board’s failure to address the contrary evidence, the Court granted the employer’s Request for Review and remanded the case to the Board for further proceedings.

Judge Karen L. Croft Henderson, who authored the decision, added a separate concurrence in which she admonished the Board for issuing a two sentence order which, like the Region, failed to adequately consider the evidence outlined in the Offer of Proof.

What This Case Means For Employers

Although this case was decided under the Board’s pre-2015 expedited election rules, it offers a number of important lessons for cases under the new expedited rules which include increased reliance on offers of proof to avoid lengthy hearings.

First, the Court of Appeals held that the Board’s responsibility to base findings on substantial evidence included the responsibility to review and analyze contrary evidence, even if that evidence is only in an offer of proof that is rejected.

Second, employers, faced with the requirement of presenting an offer of proof, should include in such offer as much specific factual detail as necessary to support its arguments. By so doing, the employer may be able to establish a sufficient record for an appellate court to determine whether the Region and the Board gave the offer adequate consideration.

Finally, under the new election rules, the Board takes the position that an employer waives any issues that it does not raise in the Statement of Position that must be filed with the Regional Director and served on all other parties by noon on the business day prior to the eighth day after the petition is filed.  For that reason it is critical that an employer identify with as much particularity as possible all issues that it intends to raise at the hearing including all issues as to which it may seek to make offers of proof.

Labor Department Backs Away from Permitting Unions at OSHA Safety Inspections

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As we reported last week, the U.S. District Court refused to dismiss a challenge to OSHA’s controversial 2013 Fairfax Memorandum, which allowed for the participation of union representatives in OSHA safety inspections at workplaces where the union did not represent the workers.   We asked at the time whether the Trump Administration would continue to defend that change in policy.  This week, we saw the first concrete evidence suggesting that OSHA is at least reconsidering and may at a minimum drop its defense of the practice.

On Monday February 13th, OSHA filed an Unopposed Motion For Extension of time, requesting an additional 30 days to file an answer to the complaint, which otherwise would have been due today, February 17th. As OSHA’s lawyers explained in the Motion, the agency stated that “the extension of the deadline for defendants to answer is necessary to allow incoming leadership personnel at the United States Department of Labor adequate time to consider the issues.”

While it may be risky to predict with assurance what the outcome will be of the incoming leadership’s assessment of the issues, there is a strong likelihood that the new leadership may abandon not only the defense of this legal challenge but that they will also return to the interpretation of the OSHA regulation allowing for an employee representative at such Safety Walkarounds until 2013. As OSHA’s own rules make clear, while employees have the right to an employee representative present, the “authorized representative(s) shall be an employee(s) of the employer,” unless “good cause is shown why accompaniment by a third party who is not an employee of the employer (such as an industrial hygienist or a safety engineer) is reasonably necessary to the conduct of an effective and thorough physical inspection of the workplace, such third party may  accompany the Compliance Safety and Health Officer during the inspection.”

With the new administration’s nomination of R. Alexander Acosta, it appears that the new incoming leadership may be taking shape at the Department of Labor.  No doubt, the question of union representation at OSHA safety walkarounds will be only one of many issues that the incoming leadership personnel at the United States Department of Labor will be taking time to reconsider.

Could Employee Choice End Labor Unions’ Influence?

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In 2016 private sector union membership dropped to its lowest level in history – a dismal 6.4%. Given the laws and systems in place related to union membership, this means that at least 94.6% of all American private sector workers currently choose not to be union members. The drop, recently reported in a routine annual report issued by the U.S. Department of Labor’s Bureau of Labor Statistics, also was the largest year over year percentage drop in recent years, dropping 0.3%, from 6.7% in 2015.

While the percentage of union members as a portion of the total workforce saw a steep drop, possibly more disturbing to union bosses is the fact that the actual raw numbers of union members also dropped over 100,000 members from 7.554 million to 7.435 million dues paying members. This loss of dues revenue could hurt unions’ efforts to organize members as well as lobby and elect politicians.

Report reveals employees choosing to reject unions.

What is remarkable about these numbers is what is behind them. All of the above numbers are based on union membership, individuals who are dues paying members either by choice or as a result of a compulsory union security clause in a non-right-to-work state. What the above numbers do not show is the numbers and percentages of the employees represented by unions.

The percentage represented remained relatively stable, only dropping 0.1% from 7.4% to 7.3% of all private sector employees. More striking, the raw number of employees represented actually slightly increased from 8.411 million to 8.437 million. The fact that there are actually more total employees represented by the unions but less total employees who are union member may be the biggest news of the recent report. It indicates that more employees are choosing to reject joining a union, even though the union represents them.

This fact has import not only in analyzing how union membership fell to a record low, but also what could be on the horizon for unions. Specifically, this drop seems caused by the growing support for the “Right-to-Work” movement.

The Right-to-Work resurgence.

 Right-to-Work refers to statutes which are adopted for the express purpose of allowing employees the right to choose to join and pay dues to a union or choose not to be a union member. At their heart is employee choice – employees having the choice to decide whether they want to be a member of the union or decide they want to keep their job but not be a union member.

While the movement is far from new, it has enjoyed a resurgence in the recent years. This resurgence did not start in the typical Right-to-Work strongholds of the South, but bubbled up from historically union strongholds in the Rust Belt; possibly getting its genesis with the very public brouhaha over the 2011 Wisconsin public sector reforms instituted following the election of Governor Scott Walker.   Shortly thereafter the Right-to-Work movement’s renaissance began as in 2012 Michigan and Indiana became Right-to-Work states; shocking the labor community and freeing private employees in those states from compulsory union membership. Wisconsin followed, extending Right-to-Work to its private sector employees in 2015. West Virginia passed Right-to-Work in 2016 and already this year both Missouri and Kentucky have joined the ranks for a total of 28 states now guaranteeing private sector employees the right to choose whether or not to become dues paying union members. New Hampshire seems poised to join the others as the 29th state soon. Add to this the counties and municipalities which have recently passed local Right-to-Work laws; a practice under dispute but sanctioned in late 2016 by the 6th Circuit Court of Appeals in UAW v. Hardin. Together, the Right-to-Work movement is experiencing its greatest success since the 1950s.

The new BLS report shows this resurgence has had real impact on the labor movement. Not just in the loss in the national percentage or even in the loss in raw number of members; rather by delving into the report, the true scope and possibly future can be ascertained. For example, Wisconsin, in its first year following giving employees the Right-to-Work, saw its total (public and private, BLS does not separate on a statewide basis) union membership dropped from 8.3% down to 8.1%.   Michigan dropped from 15.2% down to 14.4%. Moreover, when you look all the way back to 2011, the year before Michigan passed Right-to-Work, Michigan’s union membership rate was 17.5%. In just 5 years, Michigan unions have lost 3.1% and dropped from 671,000 down to 605,000 dues paying members. This is a remarkable 10% plus loss in their ranks. Indiana likewise as dropped from 11.3% in 2011 down to 10.4% in 2016 despite tremendous job growth in traditionally unionized industries. Obviously, it is too soon to understand the true impact of Wisconsin, let alone West Virginia, Missouri and Kentucky, but if their precursor states are an indication, 6.4% may not be the historic low for long.

What this analysis also suggests is that 6.4% is not lily fully reflective of the percentage of American private sector workers who want to be dues paying members. With 22 states still allowing compulsory union membership through union security clauses and with those states actually having the majority of remaining union members, the true number of individuals who actually want to be union members is possibly far less.

National Right-to-Work, a real possibility?

This currently trapped group of American forced union members and their potential liberation is what could be even more concerning for unions and their coffers than the recent report of the historic low. Until very recently the Right-to-Work movement had realistically only been a state by state movement. For the first time, however, there is a real possibility that national Right-to-Work legislation could pass. In January Representatives Steve King of Iowa and Joe Wilson of South Carolina introduced the National Right-to-Work Act which would prohibit compulsory union membership for private sector employees covered by the National Labor Relations Act and the Railway Labor Act. While similar legislation has been proposed consistently in years passed, President Trump has stated he is a supporter of Right-to-Work (while President Obama would have swiftly vetoed it). With majorities in both the House and Senate, potentially the only thing stopping the Act would be a Democrat filibuster in the Senate. If Republicans held firm and could convince 8 Democrat Senators to join with them to break a filibuster and allow a vote, the US could have a national Right-to-Work law. Given the current division in Washington this may seem unlikely but 25 Democrat face election next year and 9 of those are from Right-to-Work states, including Michigan, Indiana, Wisconsin, Missouri and West Virginia plus another one from the teetering state of New Hampshire. Certainly it is possible.

As if these legislative threats were not enough, the battle over employee choice is being fought in the courts as well. Unions sighed collectively in relief last year when the Supreme Court deadlocked on the issue of whether compulsory dues collection from public sector employees was constitutional in Friedrichs v. California Teachers Association allowing the pro-union decision of the 9th Circuit to stand. However, in February the same lawyers who brought the Friedrichs case filed a new, virtually identical, suit in Yoon v. California Teachers Association. Likewise the case of Illinois public sector workers rights to choose to be union free is currently pending before the 7th Circuit in Rauner v. American Federation of State, County and Municipal Employees, Council 31. While these cases deal with public sector employees, many labor unions fear that an adverse ruling could be the first step towards a judicial determination that the NLRA’s sanctioning of union security clauses unconstitutionally violates individual employees’ free speech and freedom of association rights. Such a ruling would effectively make a national Right-to-Work law by judicial declaration.

Unions will not go quietly into the night.

Union’s will not take this existential threat without a counter offensive. Not only will they fight in Congress, the state houses and the courts, spending millions on lawyers and politicians, but they will fight in the workplace as well. With their backs to the wall employers should expect unions to be aggressively organizing, trying to use the Obama era gains they got through the Ambush Election rules and scores of pro-union NLRB decisions as the foundation for organizing drives. Unions will continue to try to grow their ranks in already heavily Democratic and more unionized states like New York (23.6%), California (15.9%), New Jersey (16.1%) and elsewhere where they can use their ranks, dues base and political clout to target employers. They will also continue to target industries where they have had more success like hospitals and other healthcare providers as well as industries where they are actually currently gaining like hospitality/accommodations (where membership is up from 7.4% to 7.6%) and telecommunications(where membership is up from 13.3% to 14.6%). They also will continue to push the traditional boundaries of the employment relationship, targeting franchisors in the fast food and other industries as well as the gig economy and companies such as Uber and Lyft utilizing independent contractors.

While the impact of the Right-to-Work resurgence and recent union membership reporting certainly indicates that giving employees a choice is a threat to labor unions; equally certain is that this threat is likely to cause more activity and challenges for employers who may be a target of unions seeking to replace lost revenue.

F17 and the General Strike Movement – Best Practices for Addressing Political Activity in the Workplace

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This week, an activist group calling itself “Strike4Democracy” has called for a day of “coordinated national actions” – purportedly including more than 100 “strike actions” across the country – on February 17, 2017. The group envisions the February 17th strike as the first in “a series of mass strikes,” including planned mass strikes on March 8 (organized by International Women’s Day and The Women’s March) and May Day, and a general “heightening resistance throughout the summer.” The organizers are encouraging people not to work or shop that day.

What Is Strike4Democracy Planning?

The February 17th strikes appear intended to be “community-based events,” and so while Strike4Democracy apparently intends for these strikes to serve as an overall protest against President Trump’s actions and policy pronouncement since taking office, the specific message of each strike may vary at the local level. For example, one organizing website in Cleveland describes the “demands” of its local February 17th strike to include “No Ban, No Wall,” “Healthcare For All,” “No Pipelines,” “End the Global Gag Rule,” and “Disclose and Divest” (including demands that President Trump release his tax returns and sell his businesses). According to Strike4Democracy, people are being encouraged to participate on “official strike days” by refusing to work, or they can use their lunch breaks “to disrupt and participate” by, for example, posting social media messages “that support democracy . . . to show how you #BreakLunch.”

What Does This Mean For Employers?

Employers may find themselves with some very difficult questions to answer on February 17th (and potentially after that): Do I have to grant a request for time off by one (or many) employees to attend these events? Can I discipline an employee who does not show up to work because he or she has chosen to participate in a mass strike action? Should I send out a message ahead of time to my employees regarding this event? If so, what can I (or shouldn’t I) say? The answers to these questions are largely going to depend on the particular facts of each case. While in many respects these are uncharted waters, the case law developed under the National Labor Relations Act (the “Act”) over the past 80 years does however offer some potentially meaningful guidance for analyzing these questions.

When employees take action to “improve their lot as employees through channels outside the immediate employee-employer relationship,” that activity is protected concerted activity under Section 7 of the Act so long as it has a direct connection to the employees’ working conditions. GC Memorandum 08-10 (2008), pgs. 1, 10 (citing Eastex, Inc. v. NLRB, 437 U.S. 556, 565 (1978)). There are, of course, some limitations on employees’ right to engage in concerted political activity. In 2008, the National Labor Relations Board’s (the “Board”) General Counsel issued a “Guidance Memorandum” that is relevant to the current situation, after the Board considered a series of unfair labor practice charges involving employees who missed work to attend nationwide and local protests concerning proposed legislation to restrict employers’ hiring of immigrants as employees. In GC Memo 08-10, the General Counsel concluded that under existing Supreme Court and Board precedent, when employees exert economic pressure on their employer by leaving work to support a political cause, that activity may not be protected if the employer has “no control over the outcome of that dispute.” GC Memo 08-10, pg. 10.

As an initial matter, therefore, the question whether an employee engages in protected activity by attending a February 17th rally or demonstration may largely depend on the cause or “demand” at the center of that that local event. A local rally focused on trying to convince the President to release his tax returns likely will not be found to have a direct connection to most employees’ working conditions. Protests concerning issues like immigration reform or opposing repeal of the Affordable Care Act with its implications for employer-provided health benefits, by contrast, might be found to have a more direct nexus to employees’ working conditions – particularly if those employees are immigrants or work in an industry that relies heavily upon immigrant employees.

However, even if employees’ participation in these mass strikes is considered protected concerted activity (as it concerns a specific issue directly connected to their work conditions and terms), an employer may still regulate that activity through its “lawful and neutrally-applied work rules.” GC Memo 08-10, pg. 13. Therefore, an employer can discipline an employee who violates a work rule by improperly using her cell phone on the work floor to tweet with the hashtag #BreakLunch so long as that work rule is lawful (i.e., it would not be found to violate the Act for some other reason) and has been uniformly applied to impose equivalent discipline on other employees in similar circumstances.

Similarly, an employer can rely on its lawful, uniformly-applied policies to evaluate whether to grant a request for time off to attend a February 17th rally – by asking, for example, whether the employee has sufficient accrued time, or has given enough advance notice, or has found someone to cover his work shift if that is ordinarily required. An employer may also apply its neutral attendance policy (which complies with all applicable leave laws, including local paid sick leave laws) to discipline an employee who simply fails to report to work without calling out.

An employer considering whether to distribute a message to employees in advance of the February 17th events must remain mindful that Section 7 of the Act also protects communications about political matters.  Accordingly, a rule prohibiting communications about political matters without clarifying context of examples may be unlawfully overbroad because employees could reasonably construe it to cover communications protected by the Act.

Similarly, a broad admonition against missing work could be considered by the Board to be an unlawful interference with employees’ rights to engage in otherwise protected concerted protected activity. For example in GC-Memo 15-08, which offered guidance on a broad range of employee handbook provisions, the Board’s General Counsel wrote that Memorandum notes that “one of the most fundamental rights employees have under Section 7 of the Act is the right to go on strike,” and therefore “rules that regulate when an employee can leave work are unlawful if employees reasonably would read them to forbid protected strike actions and walkouts.” As we noted at the time, GC-Memo 15-08 recognized that not all rules concerning absences and leaving the workstations are unlawful, and that a rule would be lawful if “such a rule makes no mention of ‘strikes,’ ‘walkouts,’ ‘disruptions’ or the like” since employees should “reasonably understand the rule to pertain to employees leaving their posts for reasons unrelated to protected concerted activity.”

What Employers Should Do Now

All employers should be prepared to address these issues as they arise – if not this week, then in the coming weeks and months if these types of mass protests continue. As described above, an employer’s reaction to its employees’ expressed desire to participate in these events will vary widely based on the individual circumstances at issue.

Court Refuses to Dismiss Challenge to OSHA Practice Allowing Unions to Accompany OSHA Workplace Investigations

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A United States District Court in Texas has refused to dismiss a law suit challenging OSHA’s practice of allowing union representatives and organizers to serve as “employee representatives” in inspections of non-union worksites. If the Court ultimately sustains the plaintiff’s claims, unions will lose another often valuable organizing tool that has provided them with visibility and access to employees in connection with organizing campaigns.

The National Federation of Independent Business (‘NFIB”) filed suit to challenge an OSHA Standard Interpretation Letter (the “Letter”), which sets forth the agency’s position that an employee of a union that does not represent the workers at the site may accompany the OSHA representative conducting an inspection. The Federation argued on behalf of itself and one of its members because OSHA had permitted a representative of the Service Employees International Union (“SEIU”) to accompany him despite the fact the SEIU did not represent the workers at the facility. The lawsuit asserts that in allowing this, OSHA had violated its own rules and gave the union rights that it did not have under the law. In the Letter, issued in February 2013, OSHA gave a new definition of “reasonably necessary,” which supported its holding, for the first time, that a third party’s presence would be deemed “reasonably necessary,” if OSHA concluded that the presence of the third party “will make a positive contribution” to an effective inspection. The NFIB’s lawsuit contradicted both the OSHA statute itself and OSHA regulations issued in 1971 following formal rulemaking.

While OSHA asked the Court to dismiss the lawsuit, claiming that the NFIB lacked standing to bring the lawsuit because it could not demonstrate that it had been harmed, and that the lawsuit was procedurally flawed for a number of other reasons as well, Judge Sidney A. Fitzwater denied the U.S. Department of Labor’s Motion to Dismiss, finding that “NFIB as stated a claim upon which relief can be granted,” and that “the Letter flatly contradicts a prior legislative rule as to whether the employee representative” in such a walk-around inspection “must himself be an employee.”

The rule Judge Fitzwater referred to, 29 U.S.C Section 1903.8(c) contained OSHA’s policies for what are referred to as “safety walk-arounds,” which are on site workplace inspections. The Letter gives employees in the workplace the right to have a representative present during such an inspection. OSHA’s own rules make clear that such “authorized representative(s) shall be an employee(s) of the employer,” but that when “good cause is shown why accompaniment by a third party who is not an employee of the employer (such as an industrial hygienist or a safety engineer) is reasonably necessary to the conduct of an effective and thorough physical inspection of the workplace, such third party may accompany the Compliance Safety and Health Officer during the inspection.” (emphasis added)

If the ultimate outcome of the case, which seems likely, is a finding that OSHA does not have the authority to permit union representatives to participate in OSHA inspections of workplaces where they do not represent the workers, the effect would be to deny unions a potentially potent tool for organizing. As Judge Fitzwater described in his Memorandum and Order, unions such as the UAW in its ongoing organizing campaign at Nissan in Tennessee have come to rely upon participation in OSHA inspections as a valuable tool.

While it is too soon to say whether the Department of Labor will continue to defend the 2013 Letter and the position that OSHA has the right to permit union representatives to participate in safety and health inspections, Judge Fitzwater’s denial of the motion to dismiss raises serious doubt as to the long term viability of OSHA’s position.

Obama’s NLRB Legacy Remains: New GC Memo Locks Active Arbitration Agreement/Class Action Waiver Cases to Murphy Oil Holding

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Kat PaternoFollowing on the heels first of the U.S. Supreme Court’s January 13, 2017 announcement that it granted certiorari in NLRB v. Murphy Oil USA, along with Epic Systems Corp. v. Lewis (7th Circuit) and Ernst & Young, et al. v. Morris (9th Cir.), and then of President Trump’s January 26, 2017 appointment of Philip A. Miscimarra as Acting Chair of the National Labor Relations Board (“NLRB” or “Board”), there is yet another new development in the ongoing fight over the NLRB’s challenge of class action waivers in arbitration agreements.

Acting swiftly, on January 26, 2017, the same day that Miscimarra was appointed, the NLRB’s Office of the General Counsel (“General Counsel”), Division of Operations-Management, distributed to all NLRB Regional Directors, nationwide, Memorandum OM 17-11 (“Memo OM 17-11” or “Memo”), which provides guidance to Regions handling pending cases involving employment arbitration agreements prohibited by Murphy Oil, essentially protecting all active cases under the former Obama administration’s NLRB.

While citing to commitment to “judicial economy and avoiding undue litigation” while awaiting the Supreme Court’s review as the reason for the guidance Memo, the Memo effectively ensures active cases remain subject to the Obama-appointed General Counsel’s militant opposition to such arbitration agreements under its holding in Murphy Oil—before President Trump’s appointees take control.

Memo OM 17-11 provides specific guidance to Regional Directors regarding the handling of the varying scenarios relating to such agreements under Murphy Oil.  For instance, in cases where the Regions find merit that an employer is either maintaining and/or enforcing an arbitration agreement prohibited by Murphy Oil, the General Counsel in Memo OM 17-11 directs Regions to propose the parties enter into settlement agreements conditioned on the NLRB prevailing before the Supreme Court.

Perhaps most interesting is the broad phrasing used in Memo OM 17-11; it carefully avoids narrowing the issue taken under review by the Supreme Court as being “whether arbitration agreements that bar employees from pursuing work-related claims on a collective or class basis in any forum violates Section 8(a)(1) of the Act.” Glaringly absent from the issue is the hot topic term mandatory, which instead appears solely in a sentence toward the Memo’s end, which states:  “In situations involving opt in/opt out clauses in mandatory arbitration agreements or where it is argued that some other feature of these agreements renders them distinguishable from Murphy Oil, Regions are directed to hold such cases in abeyance.”

On whole, Memo OM 17-11 provides hope for employers. The General Counsel’s Office has, for the moment, temporarily plugged the holes in the Obama Administration Board’s reasoning for its Murphy Oil holding.  But it reveals that the General Counsel is aware that there are, indeed, holes worth questioning.

President Trump Appoints Philip A. Miscimarra Acting Chair of National Labor Relations Board – The Beginning of the End of the “Obama Board”

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By appointing Philip Miscimarra, who has served as a Member of the National Labor Relations Board (“NLRB” or “Board”) since August 2013, to serve as Acting Chair of the agency, President Donald Trump has taken the first step in what will undoubtedly be an ongoing process to change the National Labor Relations Board. Chairman Miscimarra is the only Republican currently serving on the Board. Mark Gaston Pearce, who has served as chairman, a Democrat who has served as chairman since 2011 and as a Board Member since 2010, will continue to serve under his appointment which expires in August 2018.

Significantly, there are two vacancies on the five member Board at this time. This means that President Trump will now be able to fill the two vacant seats with Republicans, giving the Board a Republican majority.  By tradition, Presidents have filled three of the five seats on the Board with members of their own political party and two seats with members of the other party.  Thus, once the President nominates and the Senate confirms two new Board members, the Board will likely revisit many of the decisions of the past eight years, in which the Obama Board took an expansive view of the National Labor Relations Act’s (“NLRA” or the “Act”) meaning and its application to a wide range of representation and unfair labor practice law, including the Board’s expansion of its definition of joint employer status, and the Board’s recent holding that graduate students and teaching assistants are employees with the right to join and form unions, to cite but two examples.

Notably, since joining the Board in 2013, Mr. Miscimarra has frequently been in the minority, dissenting from many of the changes in the interpretation and application of the Act that came to be a hallmark of the Obama Board. Many of his dissents were from what were seen by many observers as an attempt to expand the Act’s definitions of protected activity, in the realm of employee handbooks and workplace rules, in a manner that did not reflect the real world challenges that employers face. Particularly noteworthy have been his dissents in a group of Board decisions that addressed the challenges that employers face in conducting workplace investigations and the conflicting obligations under the NLRA and other statutes.

An even more seismic change will come to the NLRB in November 2017, when the term of the Board’s General Counsel, Richard F. Griffin, Jr. expires and the new President gets to nominate his successor.

Five Issues Employers Should Monitor Under the Trump Administration

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A New Year and a New Administration: Five Employment, Labor & Workforce Management Issues That Employers Should MonitorIn the new issue of Take 5, our colleagues examine five employment, labor, and workforce management issues that will continue to be reviewed and remain top of mind for employers under the Trump administration:

Read the full Take 5 online or download the PDF. Also, keep track of developments with Epstein Becker Green’s new microsite, The New Administration: Insights and Strategies.

Epstein Becker Green to Participate in the 11th Annual National HR in Hospitality Conference & Expo

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Epstein Becker Green is pleased to be participating in the 2017 National HR In Hospitality Conference & Expo at the Aria Hotel in Las Vegas on March 27-29, 2017.  EBG is sending two of its hospitality industry focused attorneys to represent the Firm, Jeffrey H. Ruzal and Steven M. Swirsky.

Jeff and his co-panelists will discuss the topic of new wage and hour regulations, which will be held on Monday, March 27, 2017.  This panel of hospitality employment law professionals will cover changes associated with the minimum salary for exempt employees, managing challenges of off-duty work like email and texts; setting up bonus structures, tracking hours; and responding to flexible workweek requests.   Panelists will detail their successes and challenges related to these topics, and offer up valuable actionable insights for your company.

Steve is participating on a panel which will focus on labor management relations –  “Union 2017: Recent Developments.”   The panel discussion will take place on Tuesday, March 28, 2017 and cover  new organizing efforts, tactics and law, and renewed emphasis on elections. Session takeaways include identifying what law changes have occurred and how they affect employers; a description of how employers react to these changes; and understanding whether unionization is poised to increase or decrease in the hotel industry.

Jeff and Steve look forward to sharing their knowledge in hospitality law and discussing best practices to avoid many of the recurring legal issues plaguing the hospitality industry.