New Employer-Friendly NLRB Decisions Overturn Past Rulings
In the span of two days last December, the National Labor Relations Board handed down four decisions—all by a 3–2 majority—overturning previous board rulings, three of which came during the Obama administration.
“This series of decisions affects a wide range of day-to-day business and employee relations practices, as well as the extent to which unions may interject their presence in such matters,” says CBIA HR Counsel Mark Soycher.
“It’s critical that employers understand these changes and how their businesses could be affected.”
The recent rulings, says Soycher, impact such union-related issues as:
- The permissible grouping of workers that unions may approach when attempting to organize a workplace
- Unions seeking to organize—under one collective bargaining agreement—distinct businesses engaged in joint venture or other business relationships
- Requiring employers to bargain over changes to an employee benefit plan after the expiration of a union contract
- Restricting employers’ rights to hold workers accountable under reasonable workplace rules on important behavioral matters such as social media activity, respectful conduct, and recording workplace conversations or production activity
Workplace Rules & Policies
In a Dec. 14 decision involving aerospace giant Boeing’s no-camera rule, the board overruled the 2004 Lutheran Heritage Village-Livonia decision. (Boeing maintains a policy restricting the use of camera-enabled devices, including cellphones, on its property.)
In the Lutheran Heritage ruling, the board found that employers violated the National Labor Relations Act by maintaining workplace rules that could be “reasonably construed” by an employee to prohibit the exercise of NLRA rights—even if the rules do not explicitly prohibit protected activities, were not adopted in response to such activities, and were not applied to restrict such activities.
In place of the Lutheran Heritage “reasonably construe” standard, the board established a new test in the Boeing decision: When evaluating a facially neutral (not discriminatory on its face) policy, rule, or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the board will evaluate two things—the nature and extent of the potential impact on NLRA rights, and legitimate justifications associated with the rule.
The board concluded that Boeing lawfully maintained a no-camera rule.
The board majority reasoned that the rule potentially affected the exercise of NLRA rights, but that the impact was comparatively slight and outweighed by important justifications, including national security concerns.
Joint Employer Standard
A second NLRB decision on Dec. 14 overturned the board’s 2015 ruling in Browning-Ferris Industries and returned to the pre-Browning Ferris standard that governed joint-employer liability.
In all future and pending cases, two or more entities will be deemed joint employers under the NLRA if there is proof that one entity has exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control) and has done so directly and immediately (rather than indirectly) in a manner that is not limited and routine.
Accordingly, under the pre–Browning Ferris standard restored on Dec. 14, proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will not be sufficient to establish a joint-employer relationship.
The board majority concluded that the reinstated standard adheres to the common law and is supported by the NLRA’s policy of promoting stability and predictability in bargaining relationships.
Applying the reinstated pre–Browning Ferris standard in the Dec. 14 decision, the board agreed with an administrative law judge’s determination—but disagreed with the legal standard the judge applied to reach that finding—that Iowa-based firms Hy-Brand Industrial Contractors Ltd. and Brandt Construction Co. were joint employers and therefore jointly and severally liable for the unlawful discharges of seven striking workers.
To Bargain or Not to Bargain
On Dec. 15, in a decision involving Texas-based Raytheon Network Centric Systems, the board issued a ruling affecting bargaining obligations that are required before implementing a unilateral “change” in employment matters. (Following expiration of its collective-bargaining agreement, the employer unilaterally modified employee medical benefits and related costs, consistent with what it had done in the past.)
Adhering to other board cases dating back to 1964, the NLRB held that actions do not constitute a change if they are similar in kind and degree with an established past practice consisting of comparable unilateral actions.
The board also held that this principle applies regardless of whether a collective bargaining agreement was in effect when the past practice was created, and no CBA existed when the disputed actions were taken.
The board ruled such actions consistent with an established practice do not constitute a change requiring bargaining merely because they may involve some degree of discretion.
The Dec. 15 decision overturned the ruling in last year’s E.I. du Pont de Nemours case, where a divided NLRB held that actions consistent with an established past practice constitute a change, and therefore require the employer to provide the union with notice and an opportunity to bargain prior to implementation, if the past practice was created under a management-rights clause in a CBA that has expired, or if the disputed actions involved employer discretion.
In the Dec. 15 decision, the board concluded that Raytheon’s changes to employee health benefits in 2013 were a continuation of the company’s past practice involving similar unilateral changes made at the same time every year from 2001 to 2012.
Therefore, the NLRB found the company did not violate the NLRA by failing to give its union advance notice and the opportunity for bargaining before making the 2013 changes.
Determining an Appropriate Bargaining Unit
The final decision in this flurry of NLRB rulings came on Dec. 15 in a case involving Oregon-based manufacturer PCC Structurals Inc., in which the board overruled the 2011 decision in Specialty Healthcare & Rehabilitation Center of Mobile and reinstated the traditional community-of-interest standard for determining an appropriate bargaining unit in union representation cases. (The NLRA provides that the board must decide in each case whether the group of employees a union seeks to represent constitutes a unit that is "appropriate" for collective bargaining.)
Under Specialty Healthcare, if a union petitioned for an election among a group of employees, those employees shared a community of interest among themselves, and the employer took the position that the smallest appropriate unit had to include employees excluded from the proposed unit, the Board would not find the petitioned-for unit inappropriate unless the employer proved that the excluded employees shared an "overwhelming" community of interest with the petitioned-for group.
Abandoning the “overwhelming” community-of-interest standard, the Board in PCC Structurals Inc. stated that "there are sound policy reasons for returning to the traditional community-of-interest standard that the board has applied throughout most of its history, which permits the board to evaluate the interests of all employees—both those within and those outside the petitioned-for unit—without regard to whether these groups share an ‘overwhelming’ community of interests."
In PCC Structurals Inc., an NLRB regional director found that a petitioned-for unit of approximately 100 welders was appropriate for collective bargaining.
Applying Specialty Healthcare’s "overwhelming community of interest" standard, he rejected the employer’s contention that the smallest appropriate unit was a wall-to-wall unit of 2,565 employees.
Expressing no opinion as to whether the petitioned-for unit was appropriate, the board remanded the case to the regional director for further appropriate action consistent with its order in PCC Structurals Inc.
"As the National Labor Relations Board composition shifts to the right, Republicans’ influence appears to be resetting the management-labor balance, preserving traditional protections of worker rights, but allowing employers the necessary latitude to run their businesses and manage their workforce," says Soycher.
"Stay in touch with CBIA’s employment law experts to learn more about these developments and adjust management practices as this trend continues."
Employment law questions? Contact CBIA's Mark Soycher (860.244.1138) or Eric Gjede (860.244.1931).
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