New NLRB Majority Poised To Reverse Important Obama-Era Decisions
The National Labor Relations Board (“NLRB” or the “Board”) may soon begin undoing a number of important federal labor-law decisions handed down by the Board during the Obama Administration.
As anticipated, President Trump nominated, and the Senate recently confirmed, two Republican appointees, Marvin Kaplan and William Emanuel, to fill vacancies on the five-member Board. Members Kaplan and Emanuel have joined Chairman Philip Miscimarra to create a Republican-majority Board. (The Board’s two current Democrats are Members Mark Gaston Pearce and Lauren McFerran, whose terms expire in August 2018 and December 2019, respectively.)
Under the Obama Administration, the Board consistently applied the National Labor Relations Act (the “Act” or “NLRA”) in a strongly pro-union fashion. The newly composed Board is widely expected to reverse several of these rulings. In anticipation of these potential changes, this article highlights four decisions that seem particularly likely to be revisited and potentially overturned.
In its 2015 Browning-Ferris Industries of California, Inc. (“BFI”) decision, the Board dramatically broadened the circumstances under which an employer may be found to be a “joint employer” of workers employed by another business. In BFI, the Board ruled that if an employer has a right to control essential terms and conditions of employment of workers employed by another business (such as a staffing company), the employer may be considered a joint employer of those employees – meaning, in part, that the employer would be obligated to bargain with the employees regarding terms and conditions of their employment. In rendering its decision, the NLRB reversed decades of precedent holding that an employer must exercise actual control over workers’ terms and conditions of employment in order to be considered a joint employer.
Applying this loosened standard, the Board held that BFI, a California waste-management company, was a joint employer of workers at its plant who were directly employed by an outside staffing agency. Key to the Board’s ruling was the fact that BFI had a contractual right to control certain essential terms and conditions of employment for those workers.
As a result of the BFI decision, employers that secure workers through staffing agencies have faced an increased risk of being obligated to bargain collectively with those workers. However, the decision was appealed to the U.S. Court of Appeals for the D.C. Circuit, which may well remand the case to the Board with a request that the Board explain its departure from its traditional standard on this issue. In that event, rather than providing a justification for the new standard, the newly constituted Board may well return to its prior joint-employer standard.
In a 2011 decision, Specialty Healthcare and Rehabilitation Center of Mobile, the NLRB announced a stricter standard for employers to challenge narrow, or “micro,” bargaining units.
Under Specialty Healthcare, in order to challenge a proposed bargaining unit, an employer must show that workers excluded from the proposed unit share “an overwhelming community of interest” with those falling within it. Previous Board precedents afforded employers significantly greater leeway in objecting to proposed bargaining units.
The stricter Specialty Healthcare standard has therefore made it much more difficult for employers to challenge the composition of unions’ proposed bargaining units. For instance, in a 2014 decision involving a Macy’s department store, the Board found that a proposed unit comprising only cosmetics and fragrance employees was an appropriate unit for a union representation election.
Employers have argued that Specialty Healthcare opens the door to chaos in the work environment by permitting any number of bargaining units to exist within a single work facility. Chairman Miscimarra has agreed, stating in his dissent in a 2017 Board decision, Cristal USA, Inc., that Specialty Healthcare was “wrongly decided” and “promotes instability by creating a fractured or fragmented unit.”
Several federal Courts of Appeals, however, including the Second, Fifth, and Sixth Circuits, have upheld the Specialty Healthcare standard, meaning that any return to the prior standard for employer challenges to proposed bargaining units will likely need to come from the Board itself. But with the new Republican majority on the Board, and in light of Chairman Miscimarra’s already-expressed position, it will not be surprising if such a reversion comes about.
In 2014, the Board ruled in Purple Communications, Inc., that, under Section 7 of the Act, employees generally have a right to use an employer’s email system for purposes of union organizing or other protected concerted activities. The Purple Communications decision overturned the Board’s prior ruling, in the 2007 Register Guard decision, that an employer could ban all non-business email communications, including communications related to protected concerted activities, on the rationale that an employer’s email system is its property.
The impact of Purple Communications has been far-reaching. Because Section 7 of the NLRA applies to unionized and non-unionized employers alike, nearly all private employers have been forced to accommodate employees’ expanded email rights.
As with Specialty Healthcare, Chairman Miscimarra has made clear his disagreement with Purple Communications. In his dissent earlier this year in European Imports Inc., Chairman Miscimarra argued that Purple Communications is “incorrect and unworkable” and that the Board should return to the Register Guard standard, which recognized an employer’s right to prohibit non-business use of its email and other communications systems, so long as the employer did not discriminate against communications related to union or other Section 7 activities.
With the new Republican majority now in place, the Board may well follow Chairman Miscimarra’s lead and cast aside Purple Communications in favor of the prior Register Guard standard.
Finally, in its 2012 decision in Banner Health Systems, the Board held that an employer may instruct employees to keep an ongoing internal investigation confidential only if the employer can demonstrate a legitimate business justification for doing so that outweighs employees’ Section 7 rights to discuss the investigation.
As part of the Banner Health ruling, the Board held that an employer cannot simply assert that all workplace investigations must be kept confidential. Rather, an employer must show the existence of one or more specific circumstances establishing a need for confidentiality in each individual case, such as a need to protect witnesses, avoid fabrication of testimony or destruction of evidence, or prevent a cover-up.
In March 2017, the D.C. Circuit Court of Appeals remanded a portion of Banner Health to the Board, finding that there was insufficient evidence that Banner Health had categorically limited employees’ right to disclose information about ongoing investigations. The newly composed Board will thus have an opportunity to revisit the Banner Health decision.
While each of these recent Board holdings appears ripe for reversal, those changes may take some time to come about, as the new NLRB majority must wait for appropriate cases to be brought before the agency. Further, as Chairman Miscimarra will be exiting the Board when his current term expires on December 16, 2017, there may be a hiatus before a new Chairman is nominated by President Trump and confirmed by the Senate.
Nonetheless, with the next presidential election still three years away, the Board will remain under Republican control for at least that time period, meaning that employers can anticipate changes in these and other important labor-law issues in the foreseeable future.
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If you have any questions about these developments or other anticipated changes under the NLRA, please feel free to contact one of our experienced labor lawyers. We regularly assist employers with all types of union-related issues and would be pleased to help.