Management Memo

On Thursday, April 20, 2023, the National Labor Relations Board (“NLRB” or “Board”) released a decision in Noah’s Ark Processors, LLC d/b/a WR Reserve, 372 NLRB No. 80, in which it laid out sweeping remedies the Board will consider imposing in cases involving so-called “repeat offenders” of the National Labor Relations Act (“NLRA” or the “Act”).

In Noah’s Ark, the Board affirmed findings made by an NLRB Administrative Law Judge (“ALJ”) that the employer bargained in bad faith with the union representing its employees, implemented its final offer without achieving overall impasse, engaged in regressive bargaining and other impermissible bargaining tactics, and threatened and interrogated employees because of their protected activity, all of which came on the heels of the employer defying a previous federal court injunction related to earlier bad faith bargaining and other unfair labor practice allegations. The Board not only upheld the make-whole remedies ordered by the ALJ, but also announced “the potential remedies the Board will consider in cases involving [employers] who have shown a proclivity to violate the Act or who have engaged in egregious or widespread misconduct.” In doing so, the Board ordered remedies beyond those imposed by the ALJ, noting that the Board “[has] broad discretion to exercise [its] remedial authority under Section 10(c) of the Act even when no party has taken issue with the judge’s recommended remedies or requested additional forms of relief.”

As featured in #WorkforceWednesday:  This week, we examine how several recent pronouncements and actions by the National Labor Relations Board (NLRB) and its General Counsel’s office are creating new challenges for employers, both union and non-union.

The General Counsel (“GC”) of the National Labor Relations Board (“NLRB” or “Board”), Jennifer Abruzzo, has opened the vault and released previously unseen Advice Memoranda from her Obama-era predecessor General Counsel Richard Griffin, in her bid to continue to upend long-standing Board law.  Abruzzo, who was Deputy General Counsel under Griffin, and who now heads the Office of the General Counsel, has released a slew of historic Advice Memoranda that shed light on her legal theory to limit employer’s free speech rights and their ability to communicate with employees about the real-world consequences of unionization on the workplace and the employer-employee relationship.

Approximately a month after the Board issued McLaren Macomb, 372 NLRB No. 58, which left employers scrambling to decipher its unclear impact on both unionized and non-unionized workplaces, Jennifer Abruzzo, the General Counsel (“GC”) of the National Labor Relations Board (“NLRB” or “Board”) released guidance outlining her views on the decision’s implications and meaning in Memorandum GC 23-05 on March 22, 2023. The GC’s Memo contains an FAQ in response to inquiries the NLRB has received about the McLaren Macomb decision and outlines Abruzzo’s plans for enforcement of the decision.

On February 21, 2023, the National Labor Relations Board (“NLRB” or “Board”) continued its aggressive application of the National Labor Relations Act (“Act” or “NLRA”) to workplaces without union representation and lessened the value of severance agreements for all employers by finding it unlawful for an employer to merely proffer a severance agreement that includes broad non-disparagement and confidentiality provisions to an employee. In McLaren Macomb, the Board held that a severance agreement that contains a confidentiality clause and a non-disparagement clause was unlawful because, in the Board’s view, these provisions impermissibly infringe on employees’ rights under the Act. Specifically, the Board found that these two provisions limit employees’ ability to discuss their wages, hours, and working conditions (which could include disparaging remarks) with other employees, prevent employees from assisting other employees seeking assistance, and hinder employees themselves from seeking assistance from the NLRB, unions, and other outside organizations.

On January 17, 2023, the U.S. Court of Appeals for the D.C. Circuit partially reversed and partially upheld a District Court decision that enjoined five rules promulgated by the National Labor Relations Board (“NLRB” or “Board”) in 2019 by the Trump-era Board (“2019 Rule”) to modify the Board’s representation election procedures.  The 2019 Rule attempted to ease some of the “quickie election” rules established in 2014 by the Obama-era Board (“2014 Rule”).  For a further discussion of the 2019 Rule, see “NLRB Issues Proposed Rule to Scale Back 2014 Expedited Election Rules.”

The D.C. Circuit held that because the Trump-era Board did not seek public notice and comment as required under the Administrative Procedure Act (“APA”) when issuing the 2019 Rule, “substantive” rule changes could not take effect, but “procedural” rule changes were valid under the procedural exception to the APA’s requirement for notice and comment.

The General Counsel (“GC”) of the National Labor Relations Board (“NLRB” or “Board”) is urging the Board to upend nearly 60 years of precedent and adopt a new legal standard that significantly limits employers’ ability to hire permanent replacements for striking employees. Under current law, employers have a general right to permanently replace workers who go on strike to obtain economic concessions from their employer, so long as an employer does not hire the replacements for an “independent unlawful purpose.” In an Advice Memorandum released on December 30, 2022, the GC confirmed her intention to push for the Board to impose a more restrictive standard that would require employers to show specific business reasons justifying the decision to replace strikers.

On December 21, 2022, NY Governor Kathy Hochul signed into law the Warehouse Worker Protection Act (“the Act’), which will be effective February 19, 2023. As noted in Governor Hochul’s press release announcing the Act, a major driving force behind the legislation was organized labor, including the Teamsters and the Retail, Wholesale and Department Store Union.

On December 16, 2022, the National Labor Relations Board (”Board”) issued its decision in Bexar County II, which restricts the right of property owners to deny off-duty contract workers access to the property for the purpose of engaging in activities protected under Section 7 of the National Labor Relations Act (“Act”). In line with the current Board’s efforts to undo Trump-era decisions and reinterpret the Act to dramatically expand employees’ Section 7 rights and weaken property owners’ rights to control their property, the Board overturned its own precedent on contract workers’ off-duty access and reinstated its standard first established in the 2011 decision in New York New York Hotel & Casino . The Board’s decision in Bexar County II makes clear that it prioritizes contract workers’ access to a third-party’s property for Section 7 activities over the property owner’s own interests in their property. [1]

On December 14, 2022, the National Labor Relations Board (“Board”) issued a decision in American Steel Construction, Inc., reinstating its “overwhelming community of interest” Specialty Healthcare [1] test that gave rise to micro-bargaining units, which are smaller bargaining units that scored unions numerous victories during the Obama administration.  In so doing, the Board overruled PCC Structurals [2] and The Boeing Co., [3] both of which restored and refined the traditional “community of interest” standard used to evaluate challenges to a petitioned-for bargaining unit on the basis it excluded necessary employees.