National Labor Relations Board

The White House has announced that John Ring, co-chair of the Labor & Employment Law practice at a management side law firm, is the President’s choice for the vacancy on the National Labor Relations Board created last month when Board Chairman Phillip Miscimarra completed his term on December 16, 2017. Mr. Ring’s nomination to the Board is subject to Senate confirmation. No date has been set for hearings on the nomination.

The Board is Now Split 2-2

Since Mr. Miscimarra’s departure from the Board, where he was part of a 3-2 Republican majority following the confirmation of Marvin Kaplan, who has now been named Chairman, and William Emanuel, the Board has been composed of 2 Republicans and 2 Democrats, Members Mark Pearce and Lauren McFerran, both appointed by President Obama.

When Mr. Ring is Confirmed A New Republican Majority is Expected to Continue to Revisit Obama Era Decisions Overruling Long Standing Precedents  

During December 2017, the Board issued a number of significant decisions, overruling Obama-era decisions including overturning Browning-Ferris Industries and returning to a more traditional test for determining whether two businesses are joint-employers, adopting new standards for determining whether facially neutral employer policies and handbooks unlawfully interfere with employees’ Section 7 rights, overturning  which opened the doors to organizing in so-called micro-units, and other decisions seen as tilting the Board’s administration and interpretation of the National Labor Relations Act in favor of unions.  Since Member Miscimarra’s departure however, the Board has been split between 2 Democrats and 2 Republicans, resulting in an inability to form a majority to reverse Obama era holdings.  Provided Mr. Ring is confirmed, the Board will once again return to a 3-2 Republican majority.

There Are a Significant Number of Important Issues the Board’s General Counsel Plans to Ask the Board to Reexamine Once Member Ring Is Confirmed and a Republican Majority Is in Place

In December, General Counsel Peter B. Robb issued GC Memorandum 18-02, Mandatory Submissions to Advice, identifying those issues that he had identified as ones the Board’s Regional Offices should refer to the Division of Advice in the Office of the General Counsel.  These include “cases that involve significant legal issues,” including “cases 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 Region believes will be of importance to the General Counsel.”

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 (then) 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 (then) 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 Majority Can Be Expected to Examine these and Other Questions

It is expected that once Mr. Ring is confirmed and the new majority is in place, the Board will be reconsidering existing precedents concerning these and other issues and looking at the 2014 Amended Election Rules adopted by the Obama Board

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 and as a new majority has recently taken shape with the confirmation of Members Marvin Kaplan and William Emanuel.  Chairman Miscimarra, while he was in a minority of Republican appointees from his confirmation during July 2013 until last month, has clearly and consistently explained why he disagreed with 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 as we as  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, 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 3-2 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.”

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.

On March 21, 2017, the National Labor Relations Board (“NLRB” or “Board”) found that a Teamsters local violated Section 8(b)(1)(A) of the National Labor Relations Act (“Act”) by failing to provide sufficient information about the financial expenditures of the local and its affiliates to two workers employed in a bargaining unit who exercised their rights to object to paying union dues and fees pursuant to Communications Workers v. Beck, 487 U.S. 735 (1988).

Teamsters Local 75 – Schreiber Foods

In Teamsters Local 75, affiliated with the International Brotherhood of Teamsters, AFL-CIO (Schreiber Foods) the NLRB issued its Second Supplemental Decision and Order following up on prior Board decisions in the case’s long history and unanimously held that Teamsters Local 75 unlawfully sought to collect union dues and fees from two employees who invoked their Beck objector rights.  Specifically, the Board ruled that the Union failed to provide adequate and detailed financial disclosures because, in addition to the providing the details about the local’s own expenditures of employees’ dues, the Board ruled the local must also provide details about its affiliates’ financials resulting from the local’s “per capita tax” expenditure—that is the portion of dues money that the local shares with its affiliates.  With respect to the Teamsters, the “per capita tax” is the amount that a local of the Teamsters union pays, using a portion of each employee members’ dues money, to three affiliated entities—the International Brotherhood of Teamsters (International), the relevant Conference of Teamsters (Conference), and the relevant Teamsters Joint Council (Jt. Council).

The Board’s Reasoning

The Board relied in part on its rationale and holding in Teamsters Local 579 (Chambers & Owen), 350 NLRB 1166, 1170-1171 (2007), wherein the Board overturned its prior holding that a union that pays per capita taxes to its affiliates is not required to provide Beck objectors with information regarding “how its affiliates determined the chargeability to the objectors of the per capita taxes that the affiliates received and spent.” Id. at 1168.  Rather, in Chambers & Owen, the Board not only held that “this affiliate information must be furnished to a Beck objector so that he or she can determine whether to file a challenge” id. (emphasis in original), but it also found that the union’s failure to provide such information violated Section 8(b)(1)(A) and its duty of fair representation. Id. at 1169, 1171.

What the Board Will Now Require

Here, the Board reached the same conclusion—and went a step further—noting that Teamster Local 75 must provide the Becks objecting employees with the following detailed expenditure information:

[T]he major categories of its expenditures, the percentage of each category that it considers chargeable and nonchargeable, and a detailed explanation of how it calculates its allocation of expenditures; the names of its affiliates and other entities with which it shares income from dues and fees, the amounts of income shared, the major categories of expenditures of each affiliate or other entity and the percentages of each category those affiliates and other entities consider chargeable and nonchargeable, and a detailed explanation of how the affiliates and other entities calculated their expenditure allocation.

 What This Means Going Forward

This holding essentially means that unions will have to disclose much more detailed financial information when employees exercise their Beck rights—information that unions will likely be far more resistant and hesitant to provide.  With affiliates’ expenditures coming under greater scrutiny, it also makes it more likely that Beck dues objectors will seek to have less of their money going to the unions (and their affiliates) activities.  With more Americans than ever choosing to be union-free and/or choosing not to be union members, this decision places much more power with individual employees, and emboldens their protected right to refrain from union activity, a right already afforded under the Act but often glossed over by unions.

Featured on Employment Law This Week – Philip Miscimarra, Acting Chairman of the National Labor Relations Board (NLRB), has given a strong indication of the changes likely to come once President Trump fills vacant seats on the NLRB.

In a sharply worded dissent, Miscimarra doubled down on his disagreement with the NLRB’s controversial 2014 rule on union representation elections. Miscimarra argues that the rule’s heavy emphasis on election speed interferes with an employee’s right to make informed decisions on union representation and is inconsistent with the requirements of the statute. In another dissent, he argues that the NLRB’s current standard for reviewing employee handbook provisions “defies common sense” and should be replaced with a test balancing competing interests.

Watch the segment below and see our recent post.

NLRB Acting Chair Philip Miscimarra has given the clearest indication to date of what steps a new Republican majority is likely to take to reverse key elements of the Labor Board’s hallmark actions of the Obama administration once President Trump nominates candidates for the Board’s two open seats and the Senate confirms. In each of these cases, Miscimarra highlighted his earlier opposition to the majority’s changes in long standing precedents and practices.

The Acting Chair’s Position On the Board’s 2014 Amended Election Rules – The Emphasis On “Speed Above All Else” is Inconsistent With the Law

In a strongly worded dissent in European Imports, Inc., 365 NLRB No. 41 (February 23, 2017), the Acting Chair took issue the majority’s decision to deny an Employer’s Emergency Request for Review, that sought to postpone and reschedule a representation election scheduled to take place only three days after a significant number of the employees who would be eligible to vote approximately 25%, learned that they were included in the bargaining unit, and would be affected by the outcome of the vote.

In its Emergency Request, the employer urged the Board to postpone the election by a week, to endure that the employees would know whether they would be eligible to vote and if they were, to allow them to get the facts and make an informed decision when they voted. It also argued that holding the election so soon after the issuance of the Direction of Election “would deprive many employees of sufficient notice that they would be voting in election that would dictate whether they would have union representation.”

Disagreeing with the decision of Members Mark Pearce and Lauren McFerran to deny the employer’s Emergency Request without comment, Miscimarra took issue not only with the denial of this Request, but more broadly, with the Board’s 2014 Amended Election Rule (the “Rule”) and its “preoccupation with speed between petition-filing and the election,” the Rule’s “single-minded standard” calling for “every election (to be) scheduled for ‘the earliest date practicable . . .”

Miscimarra reiterated his position, as expressed in his dissent to the Board’s adoption of the amended Election Rule in 2014, that such an emphasis on speed above all else is inconsistent with the Board’s duty under the National Labor Relations Act “to assure to employees the fullest freedom in exercising the rights guaranteed” by the Act.

The Acting Chair again called for the Board to establish “concrete parameters” for the scheduling of elections that would ensure “reasonable minimum and maximum times between the filing of a representation petition and the holding of an election.”

In addition to addressing issues of timing, Miscimarra also took issue with the fact that during the representation hearing preceding the Direction of Election. The Board’s Regional Director had refused to permit the employer to present evidence and develop a record as to why it was being prejudiced in this case by the 2014 Amended Election Rule. The Regional Director ruled that because earlier judicial challenges to the facial validity of the Election Rule had been dismissed, the employer could not litigate the actual prejudice the Rule caused in this case.

Miscimarra made clear that in his view, the fact that earlier facial challenges to the Amended Election Rule had been dismissed, questions as to the validity of the Rule, when applied to specific facts remains open and that it is a “clear error and an abuse of discretion” to deny an employer the opportunity to litigate such issues when they arise.

The Acting Chair’s Position On the Obama Board’s Handbook and E-Mail Decisions

In another dissent in Verizon Wireless Inc., 365 NLRB No. 38 (February 24, 2017)  Miscimarra reiterated his strong dispute with the way in which the Obama Board has analyzed and decided cases challenging employee handbooks and policies, writing that Board’s current standard for deciding such cases “defies common sense.”

Under the Board’s 2004 Lutheran Heritage standard, the Board will find a handbook provision or policy to violate the Act and unlawfully interfere with employees’ rights to engage in concerted, protected activity if which in part rendered work rules and handbook provisions unlawful if employees “would reasonably construe” them to prohibit protected activities under Section 7 of the Act.

The Acting Chair reiterated his view, as explained in his lengthy 2016, dissent in William Beaumont Hospital, 363 NLRB No. 162, that the Board’s current test is unworkable, and fails to adequately recognize employer’s legitimate needs of employers. Calling on the Board and the Courts to overturn and reject the Lutheran Heritage standard, Miscimarra urged the adoption in its place of a new balancing test that would not only focus on employees’ rights under the Act, but that would also take into account employers’ legitimate justifications for a particular policy or rule, such as attempting to avoid potentially fatal accidents, reduce the risk of workplace violence or prevent unlawful harassment.

Miscimarra also took direct aim in his dissent at the He also wrote that he believes the Board should overturn its Purple Communication decision allowing employee virtually unfettered use of employer email systems and return to the former standard in Register Guard, which recognized that such systems are employer property and should be recognized as such. The dissent described the standard under Purple Communications as “incorrect and unworkable,” and called for a standard that would once again recognize “the right of employers to control the uses of their own property, including their email systems, provided they do not discriminate against NLRA-protected communications by distinguishing between permitted and prohibited uses along Section 7 lines.”

What This Means for Employers

As we noted when the President appointed then Member Miscimarra to serve as Acting Chair of the Board, meaningful change in how the Board interprets and applies the Act will not come until the two vacant seats are filled and a new majority is able to act. Additionally, current General Counsel Richard F. Griffin, Jr.’s term runs through August 4, 2017.

We expect change to come as ULP issues get before the Board. It is to be expected that any new Members appointed by the President will almost certainly share Acting Chair Miscimarra’s views on such issues as use of employer email systems and the review and enforcement of workplace rules, handbooks and the like.  A new balancing test such as that proposed in the Beaumont Hospital dissent is quite foreseeable.

Concerning the Amended Election Rule, things are a bit trickier. The Rule itself was the result of formal rule making, with public comment and input after the Board published its proposed Rule in the Federal Register.  Major changes in the Rule itself would require a new Board to follow the same processes, which are quite lengthy. However, there is certainly room, as Miscimarra’s dissent in European Imports demonstrates, for the Board to make changes in how it administers and processes cases even under this Rule, before any change to the Rule itself becomes effective.  The Acting Chair’s comments concerning the right of employers and other parties to due process, including the right to develop a complete factual record on disputed, material issues is something that can be changed through the administration and application of the Rule even without formal change.  So to, it would not be surprising for a new General Counsel to give guidance to the Board’s Regional Offices calling for them to apply their discretion to avoid circumstances like those that triggered the Emergency Request in European Imports to make sure that there are no more “three day elections.”

Periods such as this, where there is transition in interpretation and enforcement, are challenging but in reality they have been a part of the history of the enforcement and application of the Act for more than 80 years.  Students of the Board often speak of a pendulum and the need for those with business before the Board to try to anticipate its swings.  Careful consideration of not just what the “law” is now, but also what it is likely to be going forward will now once again be the watchword.

 

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

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

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

Why the Board says it is amending its Rules

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

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

A Summary of Principal Changes in the These Amendments

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

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

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

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

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

I Global Changes

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

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

II Changes Concerning Definitions, Filing and Service

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

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

III Unfair Labor Practice Cases

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

IV FOIA

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

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

V Other Sections

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

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

The Board’s Required Findings Concerning the Amended Rules

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

What Employers Should Do Now

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

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

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

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

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

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

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

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

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

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.

As we previously reported, the ambush election rules implemented by the National Labor Relations Board (“Board”) last year tilted the scales of union elections in labor’s favor by expediting the election process and eliminating many of the steps employers have relied upon to protect their rights and those of employees who may not want a union. We warned that in addition to rapidly expediting election timeframe, the regulations were full of technical and burdensome procedural mandates on employers.  The Board further emphasized the pro-union impact of these requirements in a Decision last week when it overturned the results of an election that a union overwhelming lost based on a hyper-technicality.  Even though there was no prejudice to the union, the Board gave the union another bite at the apple despite the employees’ resounding rejection of union representation; effectively denying the employees their voice and imposing even more burdens on the employer.

New Regulations require service of Excelsior List on union

Section 102.62(d) of the Board’s New Rules and Regulations provides that an employer “shall provide to the regional director and the parties…a list of the full names [and other information] of all eligible voters… within 2 business days after the approval” of the Stipulated Election Agreement. This list of eligible voters is commonly referred to as an “Excelsior list.”   Section 102.62(d) further provides that the Employer’s failure to follow these procedural mandates “shall be grounds for setting aside the election whenever proper and timely objections are filed.”

The Petition and Election at issue

On Thursday, March 3, 2016, URS Federal Services, Inc. (“Employer”) and the International Association of Machinists and Aerospace Works, District Lodge 725 (“Union”) entered into a Stipulated Election Agreement. The Employer filed the list of eligible voters, commonly referred to as an “Excelsior list,” with the Region on Saturday, March 5, but failed to serve the list on the Union.  While the Board’s Decision noted the Employer never offered any explanation for its oversight, the fact is that under the prior regulations an employer need only file the list with the Region; the requirement to serve the union is new.  While the Employer did not directly send it, the Region forwarded the list to the Union on Monday, March 7, thus the Union timely received the list within two business days of the approval of the Stipulated Election Agreement.

The Union lost the election 91 to 54. After its crushing defeat, the Union filed objections, seeking to overturn the election because of the Employer’s deficient service, even though it had timely received the list and never complained of service issue before.

Regional Director finds no harm, no foul

The Acting Regional Director for Region 20 acknowledged that the Employer failed to serve the Union, but declined to set the election aside because the Union had suffered no prejudice since it received the list within two business days of the approval of the Stipulated Election Agreement as required by the Election Rules. The Regional Director explained that “[t]o hold otherwise would exalt form over substance.”  Relying on well-established Board precedent, the Regional Director also concluded that the employer’s technical violation did not frustrate the purpose of the Excelsior rule, which was to ensure that employees are provided a “full opportunity to be informed of the arguments concerning representation.” Bon Appetit Management Co., 334 NLRB 1042, 1043 (2001).

Board puts form over substance to favor Union

The Board rejected the Regional Director’s decision, reasoning that “[t]o allow parties to ignore the service requirements set forth in Section 102.62(d) without any explanation or excuse would undermine the purpose of those provisions.” The Board never articulated what purpose it was referring to, other than to insinuate that strict enforcement was necessary to ensure “all parties take their obligations seriously under the amended Rules.”  (italics in original).  Notably, the primary purpose of the service requirements – to ensure employees are fully apprised of the arguments concerning representation – had not been undermined since the Union timely received the list from the Region.

Dissent detail Board’s pro-union hypocrisy

As dissenting Board Member Philip A. Miscimarra (“Miscimarra”) explained, the Board’s decision is troubling for several reasons. Not only does the holding elevate form over substance, but it contravenes longstanding precedent that the Board should not overturn election results lightly “unless presented with clear evidence that the results may not reflect the will of the voters.”  In furtherance of this principle, the Board has previously declined to overturn elections despite allegations of death threats or widespread voter fraud.  In stark contrast, the Board here accepted the Union’s contention that a “purely technical violation of a service requirement, timely cured by the Region, warrants overturning election results that overwhelmingly disfavored” the Union.

Equally, and perhaps more, concerning is that the Board has effectively created a double standard for unions and employers. In Brunswick Bowling Products, LLC, 364 NLRB No. 96 (2016), a decision issued a mere three months earlier, the Board unanimously upheld the Regional Director’s decision to excuse the union’s untimely service of its Statement of Position.  As Miscimarra aptly pointed out, although the Board has long tolerated minor deviations from the Excelsior list requirements, no such “history of leniency” exists with respect to the service requirements for Statements of Position.   Yet, when a union violated the historically inflexible service requirements for Statements of Position, the Board excused the union’s noncompliance, but refused to do the same for an employer who failed to comply with rules that have traditionally permitted slight deviations, “even though the service error could not have affected the election results because the Union received the voter list on the same day it would have received the list had no service error been committed.”

Employers are advised to continue to adhere to Obama Board’s Regulations and Decisions

During the last eight years, the Obama Board has overturned longstanding Board precedent and expanded the rights of unions far and wide. Many employers may anticipate some relief from the onerous burdens imposed by the Board during the last eight years as a new administration comes to DC.  However, this case is a sober reminder that the Board intends to enforce the rules it has promulgated during the last eight years, and employers cannot afford to become lax in their obligations under these rules and must remember the Decisions rendered remain the standards to which they will be held.