unfair labor practices

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.

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.

One of the hallmark initiatives of NLRB General Counsel Richard F. Griffin Jr. has been the pursuit of more aggressive remedies in response to what the General Counsel considers to be egregious unfair labor practices (“ULP’) activity.  While his predecessors and prior Board members spoke of “special remedies” that they would seek to impose in what they deemed extraordinary cases, General Counsel Griffin and today’s National Labor Relations Board (“NLRB” or “Board”) are much more frequently arguing for and directing remedies that go beyond those that the NLRB routinely imposed over the first 75 years following passage of the National Labor Relations Act (the “Act” or the “NLRA”).

The General Counsel Wants Guitar Center Stores to Pay the Union’s Bargaining Expenses

On July 24, 2015, Peter Sung Or, Regional Director Region 13 issued a Consolidated Complaint (pdf) against Guitar Center Stores, Inc., a nationwide retail chain, accusing the company of bargaining in bad faith in its negotiations with the Retail Wholesale and Department Store Union (“Union”) for contracts at the Chicago, New York and Las Vegas locations where the Union represents sales employees.  The Complaint consolidates seven ULP charges involving negotiations at those locations for collective bargaining agreements.  In addition to seeking the traditional remedy of an order directing the employer to bargain in good faith, the Complaint also calls for a Board order that would require the company “to reimburse the Union for its costs and expenses incurred in collective bargaining for all negotiations from July 2013 forward, including for example, reasonable salaries, travel expenses, and per diems” incurred by the Union.  The Complaint does not call for a date when the obligation to pay the Union’s bargaining expenses would conclude, but  apparently the General Counsel wants the employer to pay these costs until negotiations are completed and contracts are reached at each of these locations.

This Case Reflects the General Counsel’s Decision to Pursue “Enhanced Remedies” Much More Routinely

This case reflects decisions by the NLRB and its General Counsel to take a much more aggressive approach in seeking what are arguably punitive remedies against employers who are alleged to have violated the  Act and to more aggressively seek injunctive relief in the federal courts against what the General Counsel and Board believe to be serious ULP activity .  Section 10 of the Act gives the Board broad authority to remedy ULPs in order to effectuate the purposes of the Act and to encourage collective bargaining.  However, the Supreme Court has long interpreted this authority as being entirely remedial– the Board has no authority to issue punitive remedies such as fines or damages other than back pay.  Traditionally, the Board has ordered an employer who violated the Act to: (i) cease and desist the conduct found to be unlawful; (ii) cease and desist from violating the Act in any like or related manner; (iii) take appropriate affirmative action, e.g., rehire, bargain in good faith; expunge records, make employees whole, and (iv) post a notice to employees for 60 days.  In truly egregious and rare cases, the Board has ordered an employer to bargain with a union without an election where an employer commits such serious unfair labor practices that a fair election cannot be held and where the union can show that a majority of employees supported the union before the unfair labor practices– so-called Gissel Bargaining Order (pdf). The Board also has authority to seek Section 10(j) injunctive relief in appropriate cases.  Here too, the General Counsel is continuing to exercise his discretion to recommend (pdf) and pursue such relief far more than in the past.

Starting in 2006, the General Counsel begun  a series of initiatives involving bargaining for  initial contracts and undocumented aliens, in which the General Counsel has sought to expand the scope of the Board’s traditional remedies in cases of “extraordinary and flagrant violations.”  See “NLRB Reiterates Its Position That Undocumented Workers Are Entitled To ‘Conditional Reinstatement’ in Unfair Labor Practice Cases. These new remedies include: (i) extension of the certification year for bargaining with a newly certified union, (ii) gaining access to the employer’s property, (iii) notice reading by Board agents or Company officials, (iv)  imposing a schedule for bargaining; (v) requiring reports of bargaining status, and (vi) reimbursement of bargaining or litigation costs.

As a result of these initiatives, labor unions, as well as the General Counsel are starting to request that the Board award bargaining expenses as part of the remedy in cases where the Board finds that an employer has bargained in bad faith. NLRB General Counsel Griffin recently commented on this trend at the Annual Midwinter meeting of the ABA Labor and Employment Section when he stated that “[t]his is a continuation of previous initiatives by the Office of the General Counsel (citations omitted).  The relief may be requested by the Charging Party or sua sponte by the Regional Director, when the Regional Director believes such relief may be appropriate.” See General Counsel Memorandum GC-15-05, at 25 (pdf).

It is not yet clear how the federal courts will view the Board’s increased awarding of enhanced remedies since at this point there have been very few cases in which such Board orders have been subject to judicial review.  While the Supreme Court has long and unequivocally held that the Board cannot impose punitive remedies, recent court of appeals cases appear to cast doubt on where the line is drawn.  On May 8, 2015 the D.C. Court of Appeals in a case entitled FallBrook Hospital Corporation v NLRB  upheld the Board’s authority to award bargaining costs in a case in which the Board had found an employer to have engaged in what it referred to as an  egregious case of bad faith bargaining.  Citing the Board’s discretion in fashioning remedies for violations of the Act, and the great degree of deference that the Courts are to afford the Board’s interpretation of the Act,  the Court noted that the Hospital had not only committed a large number of ULPs but also had acted  in an “obstinate and pugnacious manner” in its negotiations with its employees’ union representative and had bargained with a “closed mind” and, in the course of the parties’ negotiations had “put up a series of roadblocks designed to thwart and delay bargaining.” For these reasons the Court deferred to the Board and enforced its order directing the Hospital to reimburse the union for its expenses and costs over the course of the negotiations.

What’s Next?

Given, all of this, it is no surprise that unions are increasingly asking for the Board to pursue these and other types of enhanced remedies when they file ULP charges and over the course of Board proceedings. Whether and where the Board will draw a bright line differentiating between what it will consider to be an egregious violation which it believes justifies and requires enhanced remedies and more routine hard bargaining cases, in which it will hold traditional remedies are adequate is yet unknown.  Also unknown is whether the Board is prepared to issue orders calling for such enhanced remedies when it is a union, not an employer, that has bargained in bad faith, is also unknown at this stage.

By Kara M. Maciel and Lindsay A. Smith

On March 12, 2014, the National Labor Relations Board (“the Board”) concluded that a beef processing company committed an unfair labor practice in violation of the National Labor Relations Act (“NLRA”) when it terminated three workers for striking in protest of their working conditions (“Greater Omaha Packing Co.”).  More significant, however, was the Board’s decision to reverse an Administrative Law Judge’s finding concerning the employer’s questioning of an employee.  Prior to the strike, one of the terminated employees’ supervisors requested that the employee come to his office, at which point the supervisor asked the employee what he wanted.  The employee responded that he wanted “an increase” and was immediately terminated by the supervisor.  On these facts, the NLRB found a separate violation of the NLRA under Section 8(a)(1) because it determined that the questioning was coercive, separate and apart from the actual termination of the employee.

Board case law surrounding the unfair labor practice of coercive questioning/solicitation became revitalized this past July when the Board reversed almost 30 years of precedent with its decision in Albertson’s, LLC.  Under Section 8(a)(1) of the NLRA, an employer is not allowed to interfere with, restrain, or coerce employees in the exercise of their rights.  The Board has found that an employer’s solicitation of employee grievances can be considered coercive because it “raises an inference that the employer is promising to remedy the grievances” and/or may convey the employer’s displeasure with the employee, as was the case in Greater Omaha Packing, Co.  This treatment of employer questioning has a long-standing basis in Board precedent, however, the Board reversed its precedent in Albertson’s, LLC by finding that such questioning violates the NLRA even if an employee fails to state a grievance or remains silent.  Therefore, the Board in Greater Omaha Packing, Co, reinforced its treatment of grievance solicitation and expanded the possible bases for a violation of Section 8(a)(1).

Although the affected employee in Greater Omaha Packing, Co. did express a grievance in response to his supervisor’s solicitation, the decision is significant in its warning to the Board.  Member Johnson concurred in the decision, but warned that the Board should not take this so far as to adopt a “gag rule” that would discourage employers from discussing the merits of workplace complaints with an aggrieved employee, specifically where those employees are unrepresented.  He asserted that there is actually nothing “more conducive to labor peace” than an employer and aggrieved employee being able to meet and discuss their views as to what is fair and to determine what the employees want.

Management Missives

These recent cases are important because employers must be aware that their ability to solicit grievances directly from an employee is limited by Section 8(a)(1) of the NLRA.  Even straightforward questions such as “what do you want,” may be interpreted by the Board as coercive based on the context of the question and its implications from the perspective of the employee. 

An employer may avoid being perceived as using coercion if they:

  • Establish a policy and practice of open dialogue with employees before and unrelated to union or other protected activity;
  • make certain participation by an employee is completely voluntary;
  • engage in a real discussion with the employee about the opposing views and possible solutions;
  • inform the employee there will be no reprisal based on the employee’s participation in the discussion;
  • avoid linking any discussion with current union or other protected activity, and
  • take steps to address some of the concerns raised by the employee as a part of the regular open dialogue practice. 

By Maxine Neuhauser

As we have discussed on a number of prior occasions (Fifth Circuit Rejects The NLRB’s D.R. Horton Decision On Arbitration Waivers; Obama’s Labor Agenda Continues to Advance – Griffin Confirmed as NLRB GC; NLRB Administrative Law Judge Finds Medical Center’s Technology Usage Policies Violated Employees Rights Under the National Labor Relations Act. and Labor Law vs. Common Sense – NLRB Continues Targeting Non-Union Employers and Common Sense) the National Labor Relations Board (“NLRB” ) and its Administrative Law Judges continue to find that employment policies designed to provide protection to employers and employees may be unfair labor practices (ULPs) under the Act.

In Boch Imports, Inc. d.b.a. Boch Honda and International Ass’n of Machinists, Case No. 1-CA-83551 (Jan. 13, 2014), the ALJ ruled that multiple provisions in the employee handbook of a retail automobile dealership (“Boch” or “Company”) constituted ULPs in violation of of the National Labor Relations Act (“Act”) because they impinged on the employees’ rights to discuss their conditions of employment and to engage in concerted activities.  The ALJ targeted the following policies:

  • Confidential  and Proprietary Information. This provision included a prohibition barring employees “from disclosing or authorizing the disclosure or use of any “Confidential Information,” including “compensation structures and incentive programs.”
  • Discourtesy. This provision included a prohibition of employees ,“use of profanity or disrespect to a … co-worker  or engaging in any activity which could harm the image of the Company. . .      .”
  • Inquiries Concerning Employees. This provision included a  prohibition barring employees from providing, “personal information of any      nature concerning another employee (including references) to any outside      source unless approved by the Human Resources Department and authorized,      in writing by the employee . . . .”
  • Social Media Policy.This policy included provisions  that:
    •  prohibited employees from disclosing any information about the Company’s employees or customers;
    •  required employees to identify themselves when posting comments about the Company or its business;
    •  prohibited employees from referring to the Company in postings that would negatively impact the Company’s reputation or brand;
    •  prohibited employees from engaging in activities that could have a negative effect on the Company, even if occurring off Company property or off the clock;
    •  prohibited employees from using the Company’s logos for any reason;
    •  prohibited employees from posting videos or photos recorded in the workplace;
    •  required employees to contact the Company’s Vice President of Operations before making statements to the media;
    •  required employees to provide the Company with access to any commentary posted by employees on social media sites; and
    •  required employees to write and post respectfully.
  • Solicitation and Distribution. This provision restricted non-employees from soliciting and distributing literature or other materials at any time on property adjacent to the Company’s premises.
  • Dress Code and Personnel Hygiene. This provision barred, “Employees who have contact with the public” from wearing “pins, insignias, or other message clothing which are not provided to them by the Company . . . .”

The ALJ upheld the ban on the wearing of pins because of the potential for pins to cause accidental damage to vehicles (e.g., by falling into an engine or scratching a vehicle’s interior or exterior). The ALJ ruled, however, that the blanket prohibition to insignias on clothing constituted a ULP because customer exposure to insignias, “alone, is not a special circumstance allowing the employer to prohibit the display.” Rather, “There are numerous factors that need to be weighed to determine whether a displayed item constitutes special circumstances and should be permitted, including size and the message thereon.”

The Boch decision addresses many, but not all, of the employer policies that the NLRB has been targeting recently. In December 2013, for example, an ALJ found that an employer’s “No Gossip Policy” constituted a ULP. In Laurus Technical Institute and Joslyn Henderson, Case 10-CA-093934 (Dec. 11, 2013). The employer, a school, had fired an employee for violating the school’s no-gossip policy, which defined “gossip” as including:

  • talking about a person’s professional life without his/her supervisor present;
  • negative, or untrue, or disparaging comments or criticisms of another person or persons; and
  • creating, sharing, or repeating a rumor about another person.

The ALJ in that case had no difficulty in finding that the no-gossip policy was overbroad and that the employee’s discharge for violating the policy likewise violated the Act.

The Boch and Laurus decisions illustrate the increased scrutiny that the NLRB has been giving to employee handbooks over the past few years. These and other recent cases show that the NLRB is taking aim at employee handbooks and broadly interpreting whether an employer’s policies and prohibitions would reasonably tend to chill employees in the exercise of their statutory rights under the Act. Accordingly, employers that have not done so recently may wish to consider a handbook review.

 

 

Steve M. SwirskyOn Friday, November 16, I participated in a free 75-minute webinar discussion with Lafe E. Solomon, Acting General Counsel of the National Labor Relations Board.  The webinar was moderated by Terence H. McGuire of the Practical Law Company.  We discussed:

  • Factors that the NLRB considers when deciding whether to prosecute unfair labor practices based on these employment practices.
  • Legal considerations surrounding these employment practices besides compliance with the National Labor Relations Act.
  • The NLRB’s stance on what is and is not a lawful at will disclaimer.
  • Social Media and communications policies.
  • The NLRB’s position on employer requirements for confidentiality in connection with workplace investigations.
  • Waivers of the right to pursue claims in class actions.
  • What’s next on the NLRB’s prosecutorial agenda and how employers can prepare.

Click here to view this complimentary webinar, “Employment Practices Facing NLRB Scrutiny.”