It should come as no surprise that recent days have seen a stream of significant decisions and other actions from the National Labor Relations Board as Board Chairman Philip A. Miscimarra’s term moves towards its December 16, 2017 conclusion.  Chairman Miscimarra, while he was in a minority of Republican appointees from his confirmation during July 2013 and as a new majority has taken shape with the confirmation of Members Marvin Kaplan and William Emanuel, has clearly and consistently explained why he disagreed with the actions of the Obama Board in a range of areas, including the 2015 adoption of a much relaxed standard for determining joint-employer status in Browning-Ferris Industries, the standard adopted in Lutheran Heritage Village for determining whether a work rule or policy, whether in a handbook or elsewhere would be found to unlawfully interfere with employees’ rights under Section 7 of the National Labor Relations Act to engage concerted action with respect to their terms and conditions of employment, and his disagreement with the expedited election rules that the Board adopted through amendments to the Board’s election rules.

The Board’s New Standard for Determining Joint Employer Status

In Hy-Brand Industrial Contractors Ltd. and Brandt Construction Co., decided on December 14, 2017, in a 34-2 decision, the Board has discarded the standard adopted in Browning-Ferris, and announced that it was returning to the previous standard and test for determining joint-employer status and returning to its earlier “direct and  immediate control standard.” Under this standard, “A finding of joint-employer status shall once again require proof that putative joint employer entities have exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise control), the control must be ‘direct and immediate’ (rather than indirect), and joint-employer status will not result from control that is ‘limited and routine,’” and once again adopting a test that requires a showing that a putative joint –employer possesses “direct and immediate” control over the terms and conditions of employment of the employees of another employer.

In rejecting Browning-Ferris, the majority returns to a standard based on the common law test for determining whether an employer-employee relationship exists as a predicate to finding a joint-employer relationship.  Under Hy-Brand, a finding of joint-employer will require

proof that putative joint employer entities have exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise control), the control must be ‘direct and immediate’ (rather than indirect), and joint-employer status will not result from control that is ‘limited and routine.’”

The majority, consisting of Chairman Miscimarra and Members Kaplan and Emanuel explained why they were rejecting Browning-Ferris:

We think that the Browning-Ferris standard is a distortion of common law as interpreted by the board and the courts, it is contrary to the [National Labor Relations Act,] it is ill-advised as a matter of policy, and its application would prevent the board from discharging one of its primary responsibilities under the Act, which is to foster stability in labor-management relations.

The Board’s New Standard Governing Workplace Policies

In The Boeing Company, also decided on December 14, 2017, the Board adopted new standards for determining whether “facially neutral workplace rules, policies and employee handbook standards unlawfully interfere with the exercise” of employees rights protected by the NLRA.

In Boeing, the Board establishes the following new test:

when evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the Board will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.”

Boeing offers assistance to employers and others who wish to evaluate the legality of any particular rule or policy, by creating three categories of rules for this purpose:

Category 1 will include rules that the Board designates as lawful to maintain, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule.  Examples of Category 1 rules are the no-camera requirement maintained by Boeing, and rules requiring employees to abide by basic standards of civility.  Thus, the Board overruled past cases in which the Board held that employers violated the NLRA by maintaining rules requiring employees to foster “harmonious interactions and relationships” or to maintain basic standards of civility in the workplace.

Category 2 will include rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.

Category 3 will include rules that the Board will designate as unlawful to maintain because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.  An example would be a rule that prohibits employees from discussing wages or benefits with one another.

While the Board’s setting of these categories offers guidance, it will remain critical for employers and others to carefully assess each proposed rule and policy since the potential for substantial overlap between the categories will exist.

Equally important will be the application of rules and policies that may be facially lawful but subject to unlawful or inconsistent application.

An Assessment of the 2014 Expedited Election Rules

Because the expedited election rules were adopted through administrative rule making under the Administrative Procedures Act, the Board cannot simply discard or revise the 2015 amendments.

Noting that the 2014 Election Rules were adopted over the dissent of Chairman Miscimarra and then Member Harry Johnson, and the fact that these rules have now been effect for more than two years, on December 14th, the Board, over the dissents of Members Mark Pearce and Lauren McFerren, both of who were appointed by President Obama, published a Request for Information, seeking comment on the following three questions:

  1. Should the 2014 Election Rule be retained without change?
  2. Should the 2014 Election Rule be retained with modifications? If so, what should be modified?
  3. Should the 2014 Election Rule be rescinded? If so, should the Board revert to the Election Regulations that were in effect prior to the 2014 Election Rule’s adoption, or should the Board make changes to the prior Election Regulations? If the Board should make changes to the prior Election Regulations, what should be changed?

In explaining its decision to issue the Request, the Board majority has made clear that it is seeking the views of all interested parties, including labor and management, those in government and the Board’s General Counsel.  It has also made clear that while it is possible that it may engage in rulemaking to further amend the election rules and procedures, it may maintain the 2014 Election Rules without change, noting that “the Board merely poses three questions, two of which contemplate the possible retention of the 2014 Election Rule.”

Peter B. Robb, the newly sworn in General Counsel of the National Labor Relations Board has issued a memorandum, Mandatory Submissions to Advice, GC Memo 18-02 (the “Mandatory Submissions Memo”), that offers clear information as to how he is likely to proceed in setting the agenda and priorities for the Office of the General Counsel which is “responsible for the investigation and prosecution of unfair labor practice cases and for the general supervision of the NLRB field offices in the processing of cases.” As we have previously noted, such Mandatory Submission memos offer a roadmap of the General Counsel’s priorities on cases and issues that he wants to get before the Board and often present a window into the General Counsel’s thinking about how he is likely to proceed.

“The Past Eight Years Have Seen Many Changes in Precedent”

In something of an understatement, reflecting on the activist Board of the Obama administration, the General Counsel observes that “the last eight years have seen many changes in precedent” from long standing Board holdings, “often with vigorous dissents.”   The Mandatory Submissions Memo identifies a number of the areas in which the Board moved in a more activist manner and identifies issues that the new General Counsel will seek to bring back before the Board.

All Cases Involving Significant Legal Issues Will Now Be Submitted to Advice

The Division of Advice, which is part of the Office of the General Counsel is charged with providing guidance to the Board’s Regional Offices “regarding difficult and novel issues arising in the processing of unfair labor practice charges, and coordinates the initiation and litigation of injunction proceedings in federal court under Section 10(j) and (l) of the National Labor Relations Act.”

Under the Memo, the General Counsel has directed that the following cases be submitted for guidance as cases “involving significant legal issues”:

  • “Cases that involve issues over the last eight years that overruled precedent and involved one or more dissents,”
  • “cases involving issues that the Board has not decided,” and
  • “any other cases that the Regional Offices “believe will be of importance to the General Counsel.”

While the Memo allows the Regional Offices to continue to issue complaints “where issuance is appropriate under current Board law,” the Memo directs the Regional Offices to seek guidance from Advice on how to present such issues to the Board in briefs to Administrative Law Judges and the Courts before filing, so that Advice can “provide appropriate guidance on how to present” or argue the issues.  In other words, Advice and the General Counsel may develop and pursue different legal theories and seek different outcomes and interpretations of the Act in such cases.

The General Counsel Will Not Be Re-Briefing Cases Already Before the Courts and the Board

Many of the most significant decisions of the Obama Board are already before the Supreme Court and the Courts of Appeal, either on applications by the Board for enforcement of its orders, or on requests by employers as respondents appealing from the Board’s decisions. These include cases like Browning-Ferris, the 2015 case in which the Board adopted a new and looser test for determining whether companies are joint employers, and Murphy Oil and D.R. Horton, in which the Board found that requiring employees to waive their rights to bring class claims in wage and hour and other lawsuits and to arbitrate rather than litigate in court, which are before the D.C. Circuit and the Supreme Court respectively.

According to the Mandatory Submissions Memo, “in order to avoid delay,” the General Counsel “will not be offering new views on cases pending in the courts, unless directed by the Board or courts.”

The Memo Identifies Specific Issues and Lines of Cases That Must be Submitted to Advice

The Mandatory Submissions Memo identifies a broad swath of recent Board precedents and topics that must be submitted to Advice, where there is a good chance the new General Counsel will ask the Board to return to pre-Obama Board interpretations of the Act and practices.  These include:

  • Joint –Employer – Browning-Ferris Industries’ holding that joint-employer relationships can be found based on “evidence of indirect or potential control over the working conditions of another employer’s employees.
  • Use of Employer’s Email Systems for Union Activity– The Mandatory Submission Memo calls for the submission to Advice of all cases involving claims based on Purple Communications’ holding that “employees have a presumptive right to use their employer’s email systems to engage in Section 7 activities. The Memo also explains that the new General Counsel is effectively overruling prior Advice Memoranda in which his predecessor noted his initiative “to extend Purple Communications to other [employer owned] electronic systems,” such as the internet, phones and instant messaging systems that employees regularly use in the course of their work.
  • Cases In Which Policies in Employee Handbooks Were Found to Interfere With Section 7 Rights – The Mandatory Submissions Memo indicates the General Counsel will likely be asking the Board to reexamine a broad range of holdings in which policies and conduct standards contained in handbooks and work rules were found to interfere with employees Section 7 rights, in many cases in non-union workplaces. These will include cases finding prohibiting “’disrespectful’ conduct,’ rules prohibiting the use of cameras and recording devices in the workplace, and policies concerning confidentiality in investigations.
  • Cases Involving the Standard For Determining Whether Employees Would Find a Work Rule or Policy to Unlawfully Interfere With Section 7 Rights – Which Board Member Miscimarra – One of the areas in which now NLRB Chairman Philip Miscimarra most frequently disagreed with his colleagues on the Obama Board was over the Board’s use of the Lutheran Heritage test, which he repeatedly described as a test that “defies common sense.” Look for the new General Counsel to ask the Board to adopt the standard which Chairman Miscimarra proposed in his now legendary dissent in William Beaumont Hospital.
  • Cases in Which The Obama Board Expanded the Definition of Concerted Activity For Mutual Aid and Protection In cases such as Fresh & Easy Neighborhood Market the Obama Board expanded the circumstances in which it would find an employee’s actions to be protected, holding that an employee’s actions involving a matter in which “only one employee had an immediate stake in the outcome to be protected.” Such cases must now be referred to Advice and it can be anticipated the General Counsel will ask the Board to reexamine.
  • Cases involving “Obscene, Vulgar or Other Highly Inappropriate Conduct”- The new General Counsel will be considering whether the Board went too far in holding in cases such as Pier Sixty, LLC that even where employees engaged in expletive-laden Facebook post – which hurled vulgar attacks at his manager, his manager’s mother and his family, the employee’s actions remained protected by the Act.

The Mandatory Submissions Memo also identifies each of the following as issues that must be submitted to Advice:

  • Work stoppages on employer premises;
  • The circumstances in which employers may restrict access to employer property at times when employees are off duty;
  • The recent expansion of Weingarten rights in the context of employer-mandated drug testing;
  • Employer obligations and rights with respect to wage increases during bargaining, where the increases are provided to unrepresented employees but not the employees whose wages and increases are being bargained;
  • Claims by unions that employers are successors by virtue of their hiring a predecessor’s employees as required by local laws;
  • The circumstances in which a new employer will be found to be a “perfectly clear successor” obligated to follow its predecessor’s terms and conditions rather than being free to set new terms and conditions for those it hires from a predecessor’s workforce;
  • Whether an employer must disclose and produce witness statements prior to arbitrations; and
  • Whether employers will be required to continue to honor contractual dues check off provisions after a collective bargaining agreement expires.

The New General Counsel Will Be Looking at Recent Expansions of Remedies

One of the hallmarks of General Counsel Richard Griffin Jr.’s term was an attempt by the General Counsel to expand the range of remedies that could be granted in cases where unfair labor practices were found to have occurred. This was done both through administrative action and through arguments presented before the Board.  Such expanded or enhanced remedies included requiring employers to pay unions’ bargaining expenses, providing front pay to discriminates, reimbursing employees for job search and other expenses that had never before been reimbursable under the Act.  These matters too will be subject to review by Advice under the Mandatory Submissions Memo.

Deferral To Arbitration

The Mandatory Submissions Memo states that General Counsel Memorandum 12-01, issued on January 20, 2012, which laid out new standards to be followed by the Regional Offices for determining whether the Board would defer to an arbitrator’s award, is to be withdrawn and no longer followed. The Board’s website in fact already confirms that this memo and the standards it contained were withdrawn as of December 1, 2017.  While the Mandatory Submissions Memo does not expressly say so, it appears that the Regional Offices will now once again follow the Board’s longstanding Collyer deferral standards.

Graduate Students as Employees

Also withdrawn is General Counsel Memorandum 17-01, which addressed the prior General Counsel’s position on the question of whether graduate students and certain student athletes on scholarships should be treated as employees under the Act, as well as the question of whether faculty at religious affiliated universities and colleges teaching secular subjects would be able to organize and enjoy other protections of the Act.

There is Much More To Come

The above are only some of the most interesting areas covered in the Mandatory Submissions Memo.  With just over one week remaining before the conclusion of Chairman Miscimarra’s term on December 16th, observers are expecting a large number of cases that have been briefed before and considered by the Board to be decided. No doubt the decisions of the Republican majority Board will offer further indication of the direction the Board and the General Counsel will likely pursue.

The Senate has confirmed Peter B. Robb as the next General Counsel of the National Labor Relations Board (“NLRB” or “Board”).  Mr. Robb, a management side labor lawyer perhaps best known for his representation of the FAA during the 1981 air traffic controllers’ strike, will succeed Richard Griffith, Jr., who was appointed to his four year term by President Barrack Obama in 2013.

Although Mr. Griffin’s term concluded on October 31st, and the Senate sent Mr. Robb’s confirmation to the President for his signature, to date President Trump has not signed off, with the result that since November 1st, Deputy General Counsel Jennifer Abruzzo has been serving as Acting General Counsel.

The Board’s General Counsel “is independent from the Board and is responsible for the investigation and prosecution of unfair labor practice cases and for the general supervision of the NLRB field offices in the processing of cases.” In fact, the General Counsel plays a key role in shaping policy by guiding the Board’s Regional Directors in terms of determining priorities for enforcement and shaping the legal arguments and theories that the attorneys in the Regional Offices will argue before the agencies Administrative Law Judges and the Board itself in unfair labor practice cases.  Notably, the General Counsel has the final and unreviewable decision making authority in investigations and in deciding whether a charge will be dismissed or a complaint will issue. Mr. Griffin was known as an advocate of a broad reading of the National Labor Relations Act (the “Act”) and for aggressively applying the Act’s protections to employees in non-union businesses.

It is widely expected that once Mr. Robb takes the helm in the General Counsel’s Office that he will pursue an unwinding of many of the expansive actions of his predecessor in areas such as joint-employer, social media, deferral to arbitration and enforcement of class action waivers and mandatory arbitration of disputes between unrepresented employees and their employers.

The House of Representatives recently passed the Save Local Business Act (H.R. 3441), which marks an important step in the campaign to reverse the Board’s controversial loosening in Browning Ferris Industries of the long standing tests for determining whether two businesses are joint employers expansion and share bargaining obligations and liability for each other’s actions.  The measure seeks to protect businesses with staffing, franchise and other contractual relationships from liability and union bargaining obligations for another business’ workers unless one business exercises direct control over the employees of the other.

Browning Ferris Expanded Liability for Franchises and Contractors

As we have previously reported, the Board fashioned a new joint employer standard in its 2015 Browning Ferris decision, which expanded joint employer status to any entity that merely possesses, but does not actually exercise, direct or indirect control over the working conditions of another business’ employees.   Browning Ferris jettisoned decades of Board precedent, which formerly required putative joint employers to not only possess the means to control terms and conditions of employment, but to also exercise that control in some meaningful way.  This decision widely impacted franchises as well as businesses that utilize contractors or retain personnel employed by staffing or temporary employment agencies.  If found a joint employer, the business can be required to bargain with any union representing its contractors employees and found liable for any unfair labor practices it or the contractor commits.

Citing a statistic that more than 2.87 million workers are now employed through temporary employment agencies, the Board and labor unions hailed the decision as a critical refinement that better reflects the economic realities of the modern workplace given the rise of nontraditional employment arrangements and complex franchise and contractual relationships  in which two or more independent businesses often arguably co-determine working conditions.  Opponents, however, say the revised standard hurts small businesses and creates liability for employers who, in reality, have absolutely no actual influence over the other employer’s employees’ working conditions.  In just the short time since Browning-Ferris, some of these fears have ostensibly materialized as the Board has sanctioned mixed bargaining units comprised of “solely employed workers” and “jointly employed workers,” and now requires separate businesses to bargain jointly over working conditions even though one or more of the businesses may have no actual influence or control over the working conditions of the other business’ employees.

Next Steps For The Save Local Business Act

Although Browning-Ferris is currently on appeal before the United States Court of Appeals for the District of Columbia, the Save Local Business Act represents an attempt to forge a path forward by amending the Act itself to clarify who may be considered a joint employer.   The bill passed the House with a vote of 242-181, with eight Democrats voting in favor of the measure.  Republicans have been touting the bill as a bipartisan success, but the measure may have a difficult road ahead in the Senate.  A similar bill died in the Senate last year after it failed to garner enough support from Democrats.  There is a good chance that the Save Local Business Act will meet a similar fate if it fails to secure bipartisan support in the Senate, which it is not likely to receive.  That is because although Republicans would have the votes to pass the Act, if it reached the floor for a vote, they do not at this time have the 60 votes they would need to overcome an effort to filibuster by Senate Democrats.

In what may be a harbinger of good things to come, the NLRB recently reversed an Administrative Law Judge’s (“ALJ”) finding that Macy’s, Inc.’s confidentiality policies unlawfully interfered with employees’ Section 7 rights.  Unlike many employer policy decisions issued by the Board in recent years, this case does not break new ground or saddle employers with new, unrealistic onuses.  It merely reinforces well-established rules regarding the use of sensitive customer information obtained from an employer’s records and actually reaffirms the right of employers to protect “information their employer lawfully may conceal.”

What is refreshing about this case, though, is what the Board, in a two-to-one decision by Chairman Miscimarra and Member McFerran, with Member Pearce dissenting, did not do.  Namely, it did not attach an excessively broad interpretation to rules that, while theoretically susceptible to such a construction, were clearly not intended to have such an overreaching effect.  In an era of Board decisions that have ostensibly transformed the Lutheran Heritage “reasonably construe” standard into a micromanagement weapon wielded against employers to invalidate commonplace personnel policies based on uber speculative constructions untethered to industrial realities, this case may mark the apex of this aggressive push and the beginning of a more rational Board jurisprudence.  The decision returned focus on the original intent of Lutheran Heritage.  That is, rules will only be held to per se violate employees’ rights under the Act if they explicitly restrict Section 7 rights and just because a rule could be interpreted that way does not mean it’s reasonable.

The Board reaffirmed that where a rule does not explicitly restrict Section 7 rights, it will only be found to violate the Act if it can be shown that “(1) employees would reasonably construe the language [of the rule] to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity, or (3) the rule has been applied to restrict the exercise of Section 7 rights.”

Board Finds That Employees Have No Right to Use Customer Data Acquired from Employer’s Records

At issue in this case were three rules confidentiality rules. One restricted the use of “Confidential Information,” which was defined to include “social security numbers or credit card numbers – in short, any information, which if known outside the Company could harm the Company or its business partners, customers or employees or allow someone to benefit from having this information before it is publicly known.”  The other two prohibited the disclosure of “personal data,” including customers’ “names, home and office contact information, social security numbers, drivers’ license number, account numbers and other similar data.”

The ALJ found that these rules unlawfully restricted employees’ Section 7 right to communicate with customers about their work-related concerns. The Board reversed the ALJ on the grounds that the rules only prohibited employees’ use or disclosure of sensitive data (i.e., customers’ social security and/or credit card numbers) or information obtained from the employer’s own confidential records. While the Board reaffirmed the proposition that “employees indisputably have a Section 7 right to concertedly appeal to their employer’s customers for their support in a labor dispute,” the Board held that this right did not usurp their employer’s right to protect and prevent the disclosure of “information their employer lawfully may conceal.” Neither of the Board’s justifications is particularly controversial – the Board has long recognized that employees have no right to use sensitive data or information drawn from the employer’s confidential records.

What is also notable, though, is that the majority rejected the much broader construction advocated by Member Pearce in his dissent, which would have expanded the scope of these rules beyond their apparent lawful parameters, because such a construction, while possible, was not reasonable.

Board Rejects Unreasonable Construction That Parses Out Certain Language from Entire Policy

First, the dissent argued that, as defined, “Confidential Information” would encompass customer contact information because such data could certainly benefit outside entities and/or its disclosure could harm the Company.  The Board majority rejected this contention on contextual grounds because the language attacked by the dissent was preceded by an exemplary list of sensitive personal and proprietary data.  These contextual elucidations, the majority reasoned, effectively precluded employees from reasonably interpreting the prohibition as embracing benign customer data such as names and addresses.  The majority emphasized that just because a rule may be susceptible to a particular construction does not make that construction reasonable.

Board Rejects Speculative Scenario Not Grounded In Evidence

Second, Member Pearce’s dissent argued that an employer cannot restrict the use of customer information maintained in files the employer designates as “confidential” because this information is likely available to all employees in the normal course of their employment duties.  The majority rejected this on two grounds.  First, they pointed out that the Act does not protect employees’ use of information drawn from an employer’s records merely because employees have access to it as part of their duties.  Second, “there is…no evidence in this case that the Respondent’s customer contact information was available to ‘all employees’ as the dissent contends, much less that it was used by them in the course of their normal employment duties…Our colleague’s unsupported speculation as to the Respondent’s ‘likely’ practices cannot substitute for evidence not in the record.”

In recent years, employers have reeled from the Board’s frequent unwillingness to acknowledge the reasonable and obvious intent of ordinary workplace rules and to instead concoct speculative scenarios out of whole cloth to justify finding such policies violative of the Act.  Chairman Miscimarra has long argued that this increasingly frequent approach contradicts the true intent of the Lutheran Heritage “reasonably construe” standard and has imposed impossible burdens on employers trying to craft lawful policies that protect their legitimate business interests.  Chairman Miscimarra has continuously advocated for the Board to repeal and replace the Lutheran Heritage standard because this standard is inherently susceptible to widely varying application and does little to promote the certainty and predictability employers need when promulgating workplace policies.  While the majority in Macy’s did not adopt Chairman Miscimarra’s proposed replacement, Member McFerran did agree to reject the ALJ’s interpretation of the rules and policies in question based on the constrained parsing and overreach that dominated the Obama Board’s application of the “reasonably construe”  standard.

With newly sworn in Member Marvin Kaplan and likely soon to be confirmed William Emanual, in September Chairman Miscimarra will have the first Republican majority of the Decade. However, with Chairman Miscimarra’s announced intention not to seek a second term, he will only have a couple of months in which to lead a newly construed Board in its move to the new standards and tests he has been advocating.

In Midwest Division-MMC, LLC, d/b/a/ Menorah Medical Center v. NLRB, the D.C. Circuit rejected the Board’s unprecedented application of Weingarten rights to voluntary meetings, by reversing the Board’s Decision that would have extended the right of employees to have union representation at meetings at which the employees’ attendance is not compelled.

Kansas state law requires hospitals to establish an internal mechanism to monitor the standard of care provided by nursing professionals.  Pursuant to this law, Menorah Medical Center (“Menorah” or “Hospital”) established a Nursing Peer Review Committee (“Committee”) to investigate alleged violations of the prevailing standard of care.  If substantiated, the Committee reports the violation to the state licensing agency, but the Committee itself does not impose discipline.  If a violation is reported, the state, not the employer, may suspend or revoke a nurse’s license.

In May 2012, two nurses received letters alleging that they had engaged in unprofessional conduct. The letters advised that the nurses could address the Committee at a hearing “if you choose,” but also gave the nurses the option to submit a written statement in lieu of a personal appearance.  Both nurses requested union representation at the Committee hearing, but the Hospital denied their requests.  Their union subsequently filed an unfair labor practice charge alleging that the Hospital violated the National Labor Relations Act (“Act”) by denying the nurses’ requests for union representation at the hearing.

The D.C. Circuit Court Finds There Is No Right to Union Representation at Voluntary Meetings

The Board found that the Hospital’s denial violated the Act because employees have a right to union representation under Weingarten in “interviews where there is a reasonable belief that the employee will be disciplined,” regardless of whether the employees’ attendance is compulsory or voluntary.  This was an overt expansion of employees’ Weingarten rights which only apply to a unionized employee’s right to representation at a mandatory meeting an employer requires them to answer potentially incriminating questions which may result in disciplinary action by the employer.

The D.C. Circuit Court, however, unanimously reversed the Board’s decision. The Circuit Court, quoting the Supreme Court’s Weingarten decision, held that an employee’s Weingarten rights are infringed only when an employer compels an employee’s attendance at an interview that might reasonably be expected to lead to discipline and denies his or her request for union representation.  Specifically, the Supreme Court in Weingarten delineated the limited representation right as:

…the employee’s individual right to engage in concerted activity by seeking the assistance of his statutory representative if the employer denies the employee’s request and compels the employee to appear unassisted at an interview which may put his job security in jeopardy.

Here, the Hospital’s letters to the nurses clearly conveyed their attendance at the hearing was voluntary and even allowed them to submit a written statement as an alternative to attending.  Accordingly, the right to union representation under Weingarten was not triggered.

The Court also rejected the Board’s finding that, after denying a request for union representation in these circumstances, the employer must discontinue the interview unless the employee voluntarily agrees to continue after the employer explains to the employee that he or she has a choice to continue the interview without a representative present or not have the interview at all.  The Court explained that the letters sent to the nurses made it clear that their attendance was voluntary, and Weingarten “contains no suggestion that the NLRA requires an employer to renew advice to an employee that her attendance at a hearing is optional.”  The Court distinguished the precedent relied upon by the Board on the ground that all the cases involved compulsory attendance at interviews.

The Concurrence Suggests Weingarten Rights Do Not Apply Outside Interviews Conducted by Employers

Notably, in a concurring opinion, Circuit Judge Kavanaugh emphasized that the majority’s opinion assumes arguendo that Weingarten rights could apply to peer review committees without deciding this threshold question.  Judge Kavanaugh explained that, were the Court to decide this threshold question, he would hold Weingarten rights do not apply in peer review committee interviews.  Rather, Weingarten rights exist “to redress the perceived imbalance of economic power between labor and management,” and therefore apply primarily in the context of disciplinary investigations conducted by the employer.  When the interview is conducted by a state-mandated peer review committee that is not part of the employer’s disciplinary process, Weingarten rights do not apply.

The DC Circuit Court, in its August 11th decision in Rhino Northwest, LLC v NLRB has found that the NLRB’s 2011 Specialty Healthcare decision revisiting the Board’s standards for determining whether a bargaining unit a union seeks to represent is appropriate, where the employer claims in excludes other classifications of employees who share a community of interest with the petitioned for employees, is supported by the National Labor Relations Act and that the “overwhelming community of interest” standard that the Board adopted in that case is entitled to deference and should be followed.

The Specialty Healthcare Holding

The NLRB’s 2011 Specialty Healthcare decision is frequently referred to as the “micro-unit” case. In Specialty Healthcare, the Board held that for an employer to establish that a unit is not appropriate and must include other classifications, the employer must prove the petitioned for unit is “truly inappropriate” and that the additional classifications the employer contends must be included in the unit share “an overwhelming community of interest” with the petitioned for classifications.   Many saw this as a contradiction to the long standing proposition that the extent of organizing or support could not be the basis for finding a group of employees to be an appropriate unit and a results driven decision by the Obama Board, intended to allow unions to gain footholds within employers’ workforces by achieving bargaining rights for small pockets of workers.

The Facts in Rhino Rigging

In Rhino, which is a concert equipment setup company, a local of IATSE, a union representing stagehands and theatrical professions, petitioned for an election in a group of “riggers” employed by the company at a location in Washington State. The employer argued that a unit of just riggers, employees who use motors to hoist and position overhead equipment at concerts and theatrical events, was not an appropriate unit, and that the “overwhelming community of interest” standard adopted by the Board in Specialty Healthcare was inconsistent with the National Labor Relations Act (NLRA or Act”) and that in any case, that the riggers shared an overwhelming community of interest with the other classifications they worked with– camera, lighting, and forklift workers – and that a unit composed only of riggers was “truly inappropriate.” The Regional Director disagreed and directed an election in the rigger unit, the union won the election, and Rhino refused to bargain, in order to test the certification and, ultimately have its arguments considered by the D.C. Circuit.

The DC Circuit’s Rhino Rigging Decision

In short, the DC Circuit rejected all of Rhino Riggings’ arguments, finding that “Because a legitimate basis exists for excluding non-riggers from the bargaining unit,” it would sustain the Board’s order, in which it held that the company was obligated to bargain with the union for the unit of riggers.

As the Court pointed out, under the Board’s unit determination case law, “two considerations determine the prima facie appropriateness of a proposed unit.”

First, the employees must be “readily identifiable as a group” based on factors such as “job classifications, departments, functions work locations [or] skills. Second, the petitioned-for employees must share a “community of interest.” The Board “weigh[s] all relevant factors on a case-by-case basis” to determine whether a set of employees are sufficiently alike to constitute an appropriate bargaining unit.

Noting that there can in many circumstances be more than one appropriate bargaining unit, the Court reaffirmed that a unit need not be the most appropriate unit, and that under the Board’s overwhelming community of interest standard, for an employer to successfully challenge a petition seeking a unit it considers “underinclusive,” it must demonstrated that the proposed unit is “truly inappropriate” because the excluded employees share an overwhelming community of interest under the standard adopted in Specialty Healthcare.

The Court rejected Rhino’s argument that the “overwhelming community of interest” standard “runs afoul of the Act,” and its contention that even under that standard, the riggers shared an overwhelming community of interest with the other classifications.

What Happens Next?

With the DC Circuit’s decision, a total of eight Circuit Courts have rejected claims that the Board exceeded its authority in Specialty Healthcare and that the standards adopted in it are not supported by the Act.

For employers that were holding out hope that the DC Circuit was going to turn the tide on Specialty Healthcare and reject or redefine the “overwhelming community of interest” standard, the Rhino decision is a setback. It is certainly possible that a Court in another circuit which has not yet passed on Specialty Healthcare could still find that the test is not supported by the Act.

That said, at this point, the most likely way that change will come will be from the Board itself, once a Republican majority is in place, which should be this year. On May 10, NLRB Chairman Miscimarra issued a dissent in Cristal USA, Inc., in which he explicitly articulated his belief that “Specialty Healthcare was wrongly decided.” He went on to note that the unit in certified in Cristal was one he did not believe was an appropriate unit, and that this was concerning to him because it “promotes instability by creating a fractured or fragmented unit.”

As the Board moves to a new Republican majority, there is every reason to believe that the holdings in Specialty Healthcare will be reexamined from the point of view articulated in the Chairman’s dissent in Cristal and other cases.

When: Thursday, September 14, 2017 8:00 a.m. – 4:30 p.m.

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

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

  • Immigration
  • Global Executive Compensation
  • Artificial Intelligence
  • Internal Cyber Threats
  • Pay Equity
  • People Analytics in Hiring
  • Gig Economy
  • Wage and Hour
  • Paid and Unpaid Leave
  • Trade Secret Misappropriation
  • Ethics

We will start the day with two morning Plenary Sessions. The first session is kicked off with Philip A. Miscimarra, Chairman of the National Labor Relations Board (NLRB).

We are thrilled to welcome back speakers from the U.S. Chamber of Commerce. Marc Freedman and Katie Mahoney will speak on the latest policy developments in Washington, D.C., that impact employers nationwide during the second plenary session.

Morning and afternoon breakout workshop sessions are being led by attorneys at Epstein Becker Green – including some contributors to this blog! Commissioner of the Equal Employment Opportunity Commission, Chai R. Feldblum, will be making remarks in the afternoon before attendees break into their afternoon workshops. We are also looking forward to hearing from our keynote speaker, Bret Baier, Chief Political Anchor of FOX News Channel and Anchor of Special Report with Bret Baier.

View the full briefing agenda and workshop descriptions here.

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

On Wednesday, the U.S. Senate confirmed Marvin Kaplan, a former Occupational Safety and Health Review Commission lawyer, to fill one of the two open seats on the National Labor Relations Board, moving the agency a step closer to a Republican majority. Kaplan was confirmed on a 50-48 party-line vote by the GOP-controlled Senate.

The Senate has yet to schedule a vote for President Trump’s second nominee for the Board, William Emanuel, a long time management-side labor and employment lawyer. The Senate is expected to vote for cloture on Emanuel’s nomination after the August recess. The cloture vote kicks off a 30-hour period of debate. A final confirmation vote will then be scheduled.

The delay in moving forward on Emanuel’s nomination is the result of several Democrats stalling by raising partisan concerns that Emanuel’s history as a management-side lawyer somehow creates a conflict of interest, notwithstanding their prior support of Board nominees who have had lifelong careers as attorneys for unions, and indeed in numerous other instances, attorneys who represented employers. For example, current Member Mark Gaston Peace was longtime union lawyer and the current NLRB General Counsel Richard Griffin, Jr. was the General Counsel of the International Union of the Operating Engineers and a member of the board of directors of the AFL-CIO Lawyers Coordinating Committee.

Emanuel is expected to be confirmed in September despite the delays.

As discussed in our earlier advisory, if the nomination of Emanuel is confirmed by the Senate, which seems likely as of now, the NLRB will not only have its first Republican majority in nine years, it will return to full strength at five members. As cases come before the Board for its consideration, the NLRB will likely reconsider many of the decisions of the Democratic majority Obama Board. However, as we have noted, NLRB General Counsel is expected to serve out his four year term and remain in that critical post, in which he decides in many respects, which issues are litigated and presented to the Board, through November 3, 2017.

As we noted in our earlier blog, the Board is likely to consider a number of significant legal issues once the final vacancy is filled, including the NLRB’s standards for determining whether joint employer relationships exist, the standards for evaluating whether handbooks and work rules unlawfully interfere with employees’ rights under the National Labor Relations Act (“NLRA”), the Board’s standards for determining what are appropriate units for collective bargaining including a review of the so-called “mircro-units” approved by the Obama Board, the status graduate students and research assistants as 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.

Since the National Labor Relations Board’s (“NLRB” or the “Board”) 2015 decision in Browning-Ferris Industries, 362 NLRB No. 186, in which it adopted a new, far less stringent test for determining joint-employer status under the National Labor Relations Act (“NLRA”),  employers have been left wondering whether they may be held to be a joint employer of temporary or contract workers that they retain through staffing and temporary agencies.

These concerns have been echoed by employers in other contexts as other agencies, such as the United States Department of Labor (“DOL”) and the Equal Employment Opportunity have taken similar positions, seeking to expand the concept of joint employer with respect to statutes and regulations they enforce. Notably, both the DOL and the EEOC filed amicus briefs in support of the NLRB’s position with the D.C. Circuit Court of Appeals, which is considering whether the NLRB exceeded its statutory authority in Browning-Ferris.

While the loosened standards for determining joint employment remain under consideration by the courts, members of Congress are now seeking to use the power of the purse strings to force the NLRB to discontinue its use of the relaxed standards it adopted in Browning-FerrisLegislation considered yesterday by House Republicans would do away with this expansion of joint employer liability and provide much needed clarity for employers on this issue.

What is the NLRB’s Browning-Ferris Standard for Finding Joint-Employer Status?

The Browning-Ferris decision expanded the definition of joint-employer to hold that if an employer, referred to as the primary employer, merely possesses, but does not exercise, the right or ability to directly or indirectly codetermine the terms and condition of employment of the employees of another employer, referred to as the secondary employer, the primary employer will be held to be the joint-employer of the secondary employer’s employees.

This holding impacts a wide range of workers, such as employees of business arrangements including the use of contractors, retention of personnel through staffing agencies and temporary employment services, and, if the “primary employer is a franchisor, personnel employed by the franchisor’s franchisees. As the Board pointed out when it decided Browning-Ferris, in its view “the current economic landscape,” which includes some 2.87 million people employed by temporary agencies, warrants a “refined” standard for assessing joint-employer status. As the majority put it: “If the current joint-employer standard is narrower than statutorily necessary, and if joint-employment arrangements are increasing, the risk is increased that the Board is failing what the Supreme Court has described as the Board’s ‘responsibility to adapt the Act to the changing patterns of industrial life.’”

While the National Labor Relations Board’s ruling in Browning-Ferris is now before the United States Court of Appeals for the District of Columbia Circuit, where the court has been asked to find that the NLRB’s test is not supported by the terms of the NLRA or the common law definition of employer, which is an element of the Browning-Ferris standard itself, recent activity from House Republicans may result in legislative action establishing a new, far narrower standard for determining joint-employer status.

Congress Seeks to Use the Appropriation Process to Force the Board to Discard Browning-Ferris’s Indirect Control Standard

House Republicans have introduced new language in a draft spending bill – that among other things, would set the NLRB’s appropriation for 2018 – to direct the Board to set aside what many in the business community find to be one of the most objectionable parts of Browning-Ferris.

The House Education and Workforce Committee held a hearing on Wednesday, July 12, 2017 to discuss the barriers to job and business growth created by the “indirect control” standard of joint employer liability. Small business owners and other employer representatives testified that the joint employer standard threatens their ability to expand, and encouraged the committee to introduce legislation that would define employees as those workers that the employer has direct or actual control over.

On Thursday, July 13, 2017, the House Appropriations Committee on Labor, Health and Human Services, and Education voted along strict party lines to approve a markup of their draft spending bill for FY 2018, which would prohibit the NLRB from using the “indirect control” standard in making joint employer determinations and would require the Board to revert to the “direct control” standard. The Appropriations Committee describes the legislation in its press release and on its website as including

two policy provisions to stop the NLRB’s harmful anti-business regulations. The provisions include: A provision that prohibits the NLRB from applying its revised “joint-employer” standard in new cases and proceedings; A provision that prevents the NLRB from exercising jurisdiction over Tribal governments.

This provision, along with the Committee’s proposal to reduce the NLRB’s budget by $25 million (from $274 million to $249 million) will face strong opposition from the Democratic minority, organized labor, unions, and employee lobbying groups. Of course at this point it is not at all clear whether in fact there will actually be a budget for the new fiscal year or, instead, Congress will again adopt a continuing resolution to keep the government running.

What Should Employers Do Now?

Employers and their representatives should of course continue to pay close attention to the budget process and other legislative action, while waiting for Congress to take action on the President’s nominees to the two vacant seats on the NLRB.   There is every reason to believe, assuming Willian Emanuel and Marvin Kaplan are confirmed and take their seats on the Board, that they, like Chairman Philip Miscimarra, who wrote a vigorous dissent in Browning-Ferris, will share the Chairman’s belief that the standard adopted in that case was incorrect and should be set aside. At this time, however, it would be nothing more than speculation to predict when the new Board majority will have an actual case before it in which these issues are present.

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

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

This post was written with assistance from Sean Winker, a 2017 Summer Associate at Epstein Becker Green.