December 20, 2017Client Alert

Flurry of Employer-Friendly NLRB Activity Shifts Labor Law

Since the start of December, the Republican-led NLRB has signaled a significant departure from several Obama-era labor policies and decisions.  Over the past few weeks, the Board has overturned several union/employee-friendly labor decisions and policies by returning to long standing  NLRB and Court decisions that are sympathetic to employers’ common sense efforts to regulate their workplaces.

Confusing Lutheran Heritage Standard Overturned

On December 14, in Boeing Co., the Board made it much easier for employers to regulate the workplace through work policies and handbooks. In a 3-2 decision, the Board overturned the Lutheran Heritage standard that made facially neutral work rules unlawful if an employee could reasonably interpret the rule to interfere with his or her right to engage in Section 7 activity, i.e., protected concerted activity. The Lutheran Heritage standard had been criticized for causing inconsistent Board decisions and for evaluating work rules from the employee perspective while disregarding an employer’s legitimate business justifications. Under the new standard, if a work rule, when reasonably interpreted, would potentially interfere with employees’ Section 7 rights, the NLRB will evaluate “(i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the requirement(s).” If no potential interference is seen, the inquiry stops there. With more leeway to regulate the workplace, employers should reevaluate their handbooks and policies.

Joint Employer Standard Returns to Common Sense

In Hy-Brand Industrial Contractors Ltd., also on December 14, the NLRB overturned the Browning-Ferris standard that a company and its contractors are joint employers even if the company has not exerted actual control over terms and conditions of employment, but the mere potential for control exists. Now, a finding of joint-employer status shall once again require proof that two entities have jointly exercised direct and immediate control over employment conditions, rather than merely having reserved the right to exercise control. This decision helps shield businesses from unfair labor practices committed by contractors and franchisees, and eliminates unworkable representation and bargaining issues.

Board Restores Precedent Allowing Changes Consistent with Past Practices

On December 15, in Raytheon Company, the NLRB restored precedent that allows employers to unilaterally change policies if the changes are consistent with past practices.  Raytheon had unilaterally modified employee health care benefits from 2001 through 2012, which established the past practice. Based on the past practice, the Board found that Raytheon did not have to bargain with the union before implementing the change to benefits. This decision reverses the Board’s 2016 decision in DuPont, which overturned longstanding precedent by finding that an employer’s implementation of a discretionary past practice could constitute a “change” requiring notice and an opportunity to bargain.

Specialty Healthcare Decision Allowing “Micro-Units” Overturned

Also on December 15, in PCC Structurals, Inc., the Board discarded the overwhelming-community-of-interest standard and returned to its prior standard for evaluating the appropriateness of a petitioned-for bargaining unit. Now, the NLRB will evaluate whether the employees in the proposed unit share a community of interest “sufficiently distinct” from non-unit employees to support their own unit. This standard effectively limits “micro-units” and makes it much easier for employers to challenge the size and appropriateness of union-proposed bargaining units, and makes organizing more difficult.   

GC Memorandum Signals More Changes to Come

The NLRB’s new General Counsel, Peter Robb, was sworn in on November 17, 2017. By December 1, 2017, Robb had issued Memorandum 18-02, which outlined areas where the General Counsel will be breaking with the policy stances of his predecessor. The Memorandum generally advises Regional Directors of certain significant legal issues where the Division of Advice might wish to weigh in before a new complaint is submitted to the Board. These legal issues subject to further review include precedent from cases over the last eight years that:  (1) expanded the scope of protected concerted activities; (2) prohibited common employer handbook rules; (3) granted employees presumptive rights to use company email to engage in Section 7 activities; (4) expanded protections for work stoppages in various contexts; (5) expanded Weingarten rights and permissible conduct; (6) established a disparate treatment standard for represented employees during contract negotiations; (7) lowered the joint employer standard; and (8)  established that a dues check-off obligation survived the expiration of a contract. 

Robb’s Memorandum also rescinded seven General Counsel Memoranda issued during the past eight years.  The two most notable rescissions were of GC 15-04, which had expanded the types of neutral employer policies that the General Counsel will pursue as Section 7 violations, and GC 17-01, which supported expansion of the circumstances in which faculty, student-assistants, and student-athletes could pursue unfair labor practices against colleges and universities. Finally, the Memorandum announced the cancellation of certain Division of Advice initiatives, including: (1) seeking to extend employee rights to use company e-mail for union organizing to other electronic systems (i.e. extending Purple Communications to other contexts); (2) arguing that employer misclassification of employees as independent contractors, in and of itself, violates Section 8(a)(1); and (3) seeking to apply Weingarten rights in non-union settings.

The Board’s recent decisions reversing precedent from the last eight years, combined with the General Counsel’s Memorandum, signal a forward-looking shift away from some of the more controversial positions of the last administration and toward a more employer-friendly Board. It is important to note that all current precedent remains applicable, and that change is likely to be gradual, so employers must be vigilant in monitoring the shifting landscape at the NLRB.  Michael Best’s team of labor lawyers will be here to advise and update with each new development along the way.

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