Philip Miscimarra. Credit: NLRB.gov.

On April 24, 2017 President Trump designated Philip Miscimarra as Chairman of the National Labor Relations Board (NLRB or Board). The move follows the President’s late January designation of Board Member Miscimarra as Acting Chairman.

A Republican Chair

Miscimarra, a management-side labor lawyer and a Republican, was nominated to serve on the Board by then President Obama in 2013 and was confirmed by the Senate for a four year term that continues through December 16, 2017.  President Trump can nominate Chairman Miscimarra for another term if he should wish to do so. While Board Members are subject to Senate confirmation, the President may, in his discretion, designate a Member of the NLRB to serve as Chair at his pleasure.

Two Vacancies Remain On the NLRB

The Board is composed of five Members and at this time two of the seats on the Board are vacant. The vacant seats are reserved for Republicans.  The Board is generally composed of three Members of the President’s party and two from the other party.  Board Members Mark Pearce and Lauren McFerran are both Democrats.

What Is Likely To Change With a New Majority

Notably, Chairman Miscimarra, through a series of dissenting opinions taking issue with decisions of the Obama Board’s Democratic majority has offered a significant overview of issues as to which, once there is a new Republican majority on the NLRB, employers, unions and other advocates can expect the Board to likely move, as cases presenting the issues come before it for decision. These include such issues as the NLRB’s test for determining whether joint employer relationships exist, the standards for evaluating whether handbooks and work rules interfere with employees’ rights under the National Labor Relations Act (NLRA), appropriate units for collective bargaining, the question of whether graduate students and research assistants are employees under the NLRA with the right to collective bargaining and a host of other decisions from the past eight years that more expansively interpreted the NLRA.

Election Rules and Procedures

Also notable is the fact that Chairman Miscimarra was a dissenter when the Board adopted its Amended Representation Election Rules that took effect in May 2015. Those rules, often referred to as the “ambush” or ”quickie” election rules that have not only cut the time between the filing of a representation petition and a vote from an average of 40-45 days to approximately 25 days. Since the Amended Rules took effect, Mr. Miscimarra has pointed out that they have placed an undue priority on speed, compromising the rights of employees to make informed decisions when they vote and the right of employers to meaningfully communicate with employees before an election.

Because the Amended Rules were adopted under the Board’s rulemaking authority, any further revisions in the election rules must also be made either through the same lengthy process or by Congress through legislation. For the Board to do so will require a new majority that agrees that change is needed. While various sources have suggested that the new administration is considering who it will nominate for the vacant seats on the Board, only time will tell when the President will submit his nominations and the Senate will consider them.

Steven M. SwirskyOver the past week the U.S. Court of Appeals for the District of Columbia Circuit weighed in on two separate related efforts by the Obama-Board to expand the protections of the National Labor Relations Act (the “Act”) to workers who are not in traditional employer-employee relationships.

One Court – Two Cases

In a March 3, 2017 decision, the Court rejected the National Labor Relations Board’s (“NLRB”) finding that FedEx Home Delivery drivers were employees and agreed with the company that the drivers were independent contractors and therefore did not have the right to union representation under the Act.   On March 9th, the Court heard the much anticipated argument on the challenge by Browning –Ferris Industries of California Inc., to the Board’s 2015 decision adopting a new and much looser standard for determining joint employer status. While it is not certain when the Court’s decision will be released, the questions asked by the judges who heard the appeal suggested that they are by no means convinced that the new test articulated in Browning-Ferris is the correct one and consistent with what Congress intended when it passed the Act.

The Court Found FedEx Ground Drivers Are Independent Contractors, Not Employees

A key question in the gig economy is the relationship between a worker and the company for whom they provide services. Those workers who are employees under the Act have the right to join and be represented by unions; independent contractors do not.  The NLRB has gone so far in its efforts as to hold that misclassification of a worker the Board considers to be an independent contractor commits an unfair labor practice when it does so.  The Board has also argued before the Courts that its views on whether a worker is an employee or an independent contractor should be afforded deference by the Courts.

The D.C. Circuit’s decision in the FedEx case is of particular interest with regard to each of these propositions. First, the Court noted that under the Supreme Court’s 1968 decision in NLRB v. United Insurance Company of America, the “determination of whether a worker is a statutorily protected ‘employee’ or a statutorily exempt ‘independent contractor’ is governed by common law” and “there is no shorthand formula or magic phrase that can be applied to find the answer.” Thus, while the Board argued that the Court should afford great weight to its application and analysis of the common law test for determining whether the drivers were employees or independent contractors, because the question is “a question of pure common law agency principles ‘involv[ing] no special administrative expertise that a court does not possess,” the Court found that deference to the Board’s views was neither appropriate nor required.

The Court in its analysis and application of the common law test found that the NLRB was wrong to place greater weight on certain factors than others. Because the facts in the FedEx case were virtually identical to an earlier case the Court had considered with the same parties in 2009, the Court held the Board was not entitled to the deference that would be due “between two fairly conflicting view,” because the Court had previously considered and decided the issue.

The Board’s Browning-Ferris Joint Employer Test

The Board’s 2015 Browning-Ferris decision held that an employer could be deemed a joint-employer of another employer’s employees if it was found to exercise or even just has the right to exercise “indirect control” over the other employer’s employees. The D.C. Circuit heard argument on March 9th on the company’s challenge to this standard.  While it is too early to say whether the Court will defer to the Board in this case, the Court’s questions suggested that it at least has doubt as to the Board’s new standard.  For example, Judge Patricia Millet questioned the practicality and future application of the indirect control standard, asking the Board’s attorney “What assurance do we have that this test and particularly indirect control is going to continue to police the line properly between genuine joint employers and [contractors]?

As in the FedEx decision, the application of the common law standards was before the Court, this time in connection with the common law test for determining the existence of an employer-employee relationship, which is one of the requirements of the Browning-Ferris standard. Counsel for Browning-Ferris argued that “the notion of exertion control dovetails with Congress’ understanding of the essence of a common-law employment relationship as direct supervision.” If the Court agrees with this proposition, then it would seem questionable that the Court will accept the Board’s view that possession, without exercise, of indirect control is sufficient to find a joint-employment relationship.

What Do These Cases Tell Us?

Since last November’s election, there has been a great deal written and said about what a Trump Labor Board will likely mean for the legacy of the Obama Board. However, in examining that legacy it is important not to lose sight of the fact that the Board’s decisions are not self-enforcing and are subject to review and enforcement by the Courts of Appeal.  While the Board continues to follow its Doctrine of Non-Acquiescence, meaning it will not accept the holdings of any court other than the United States Supreme Court as binding upon it if it disagrees with the Court’s interpretation of or views concerning the application of the Act, the D.C. Circuit and other Courts have continued to take serious issue with the Board’s position.

It will be interesting to see, once a new Board with a majority of members is appointed by the new President, not only how it addresses the myriad of representation and unfair labor practice precedents that are the product of the Obama Board, but also whether it continues to stand by the Doctrine of Non-Acquiescence and how this shapes its relationship with the judiciary.

On February 16, 2017, tens of thousands of individuals across the country stayed home from work as part of the “Day Without Immigrants,” a social activism campaign organized in response to President Donald Trump’s recent executive orders concerning immigration and increased enforcement, deportation actions, and raids by Immigration and Customs Enforcement. The “Day Without Immigrants” action was apparently not coordinated by any centralized organization, but was promoted on social media and by word-of-mouth just days before.

Now, the same groups that organized the January 21, 2017 Women’s March on Washington – an action participated in by millions of individuals across the county – has called for a “Day Without Women” to be held on Wednesday, March 8, 2017. Organizers are encouraging women to participate by taking the day off from paid and unpaid labor, and by wearing red – which the organizers note “may be a great act of defiance for some uniformed workers.”

Employers should be prepared to address any difficult questions that might arise in connection with the upcoming “Day Without Women” strike: Do I have to give my employees time off to participate in Day Without events? Can I still enforce the company dress code – or do I need to permit employees to wear red? Can I discipline an employee who is “no call, no show” to work that day? Am I required to approve requests for the day off by employees who want to participate? As we explained in our prior blog post, guidance from the National Labor Relations Board’s General Counsel suggests that an employer can rely on its “lawful and neutrally-applied work rules” to make decisions about granting requests for time off, enforcing its dress code, and disciplining employees for attendance rule violations. An employer’s response, however, to a given employee’s request for time off or for an exception to the dress code, may vary widely based upon the individual facts and circumstances of each case.

As we previously noted, participation in events such as these may be protected concerted activity under the National Labor Relations Act (the “Act”). 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 GC Memo 08-10, issued in 2008, the Board’s 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.

However, even if employees’ participation in these mass demonstrations and 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.

Similarly, an employer can rely on its lawful, uniformly-applied policies to evaluate whether to grant a request for time off to participate in Day Without Women activities – 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.

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.

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.

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.