At the 11th hour of former Chairman Philip Miscimarra’s term, the National Labor Relations Board (“NLRB” or “the Board”) issued a wave of decisions overturning significant precedent. This deluge of contentious opinions is seen by labor advocates as an aggressive act in a campaign to curb the enforcement of workers’ rights under the National Labor Relations Act (“the Act”) and to undue the Obama Board’s efforts to adapt the Act to the changing economic realities of the modern day workplace.
The Board departed from regular practice by issuing these decisions without providing any opportunity for public comment. Typically, when considering a new approach to a significant legal issue or a departure from standing precedent, the Board provides public notice and extends a public invitation for interested parties to submit briefs. These hastily-issued decisions focused on complex questions that take considerable time to review given the substantial consequences of any change in approach. The Board overturned more than 5 significant lines of precedent with a 3-2 republican majority – two of whom were new to the Board.
Hy-Brand Industrial Contractors, Ltd. (overturning Browning-Ferris Industries)
In Hy-Brand, the Board abandoned its recently updated joint-employer standard to return to the narrower analysis in effect before the Board’s 2015 Browning-Ferris decision. In Browning-Ferris the Board underscored the significance of a putative joint-employer’s right to control the terms and conditions of employment, regardless of whether an employer ever actually exercised that right. In an attempt to base the Board’s standard in the common-law and apply the Act to the realities of today’s workplace, the Browning-Ferris standard did not require a putative employer to actually exercise its authority in order to find a joint-employer relationship.
The Board’s decision in Hy-Brand reversed that approach, returning to a standard under which a joint-employer relationship only exists where the entities have actually exercised control over the essential employment terms in a direct and immediate manner. Notably, neither party in this case requested that the Board reconsider the standard set forth in Browning-Ferris, which was under review before the D.C. Circuit when the Board issued its decision. The D.C. Circuit remanded the Browning-Ferris case to the Board for review in light of its decision in Hy-Brand.
PCC Structurals, Inc. (overturning Specialty Healthcare)
In PCC, the Board altered its analysis for deciding which employees are appropriate to be included in a petitioned-for bargaining unit. When facing a union election, employers often argue that the list of eligible voters should include a larger number of employees in order to dilute the pool of union-supporting voters. Under Specialty Healthcare, the Board found a proposed unit to be inappropriate where the excluded employees shared an overwhelming community of interest with the petitioned-for unit. This approach was approved by the Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, and D.C. Circuits.
In overturning Specialty Healthcare, the Board abandoned the “overwhelming” community-of-interest standard. Under the PCC analysis, the Board will evaluate whether the employees not included in the petitioned-for unit share a community of interest with those who were. In performing this analysis, the Board will consider the interests of those excluded employees, which in effect will amount to granting far less deference to the workers who wish to unionize. This decision makes it easier for employers to challenge the scope of a union’s petitioned-for unit, and like Hy-Brand, will make it more difficult for workers to band together to bargain over the terms and conditions of employment.
Raytheon Network Centric Systems (overturning E.I. du Pont de Nemours)
In Raytheon, the NLRB overturned precedent regarding when an employer can make unilateral changes without providing the union with notice and an opportunity to bargain over those changes.
In this case, the parties’ expired collective bargaining agreement (“CBA”) allowed Raytheon to change employee benefits as long as the changes it made for union employees were the same as those made for non-union employees. When the CBA expired, and negotiations were underway for a new CBA, Raytheon unilaterally altered employee healthcare benefits – a change that the parties agreed involved extensive employer discretion. The Board concluded that the change was lawful because it was consistent with the company’s practice of exercising discretion to make such changes.
This decision makes it easier for employers to pressure unions during collective bargaining by unilaterally changing terms and conditions of employment as long as the changes are similar to those made in the past. Under E.I. du Pont, the Board required employers to show that their unilateral changes were not based on “considerable discretion,” or that the unilateral change was consistent in terms of timing and content.
The dissent in Raytheon expressed concern that the majority misunderstood Supreme Court precedent on this issue. The Supreme Court has held that “an employer’s unilateral change violates the duty to bargain under the National Labor Relations Act, even where the change is consistent with a past practice of changes made, if the changes involve significant employer discretion.”
The Boeing Company (overturning Lutheran Heritage Village-Livonia)
In Boeing, the Board overruled a 13-year old case called Lutheran Heritage, announcing a new test for the validity of seemingly impartial workplace rules.” Under Lutheran Heritage, the Board applied a three-prong test to assess the validity of workplace rules. In applying this test, the Board considered whether employees could “reasonably construe” the rule in question to prohibit concerted activity.
The Republican majority in Boeing held that it will balance the “the nature and extent of [a rule’s] potential impact on NLRA rights” against the “legitimate justifications associated with [a] rule.” The decision created a multi-factor test to determine whether business concerns outweigh the chilling effect a rule has on employee rights. The majority also pronounced that the Board will always deem civility rules, which require employees to foster “harmonious interactions and relationships” or to maintain basic standards of civility in the workplace, lawful. In his dissent, Member Pearce stated that the majority opinion amounts to a “how-to manual for employers intent on stifling protected concerted activity before it begins. This decision will make it easier for employers to maintain strict workplace rules that deter employees from coordinating to improve their working conditions.
UPMC (overruling United States Postal Service)
In UPMC, the Board overruled a 2016 case called United States Postal Service regarding when an administrative law judge (“ALJ”) may accept a proposed settlement even though the Board’s General Counsel and the charging party object to the terms. In Postal Service, the Board held that an ALJ could only accept a settlement over the objections of the charging party and the General Counsel where the respondent’s offer included a full remedy for the alleged violations.
Here, the Board expanded ALJs’ ability to settle cases even where the General Counsel and the charging party have determined that their best interests are served by other means. This decision allows ALJs to accept settlements over the objection of the General Counsel and charging parties as long are the settlements are “reasonable” under Independent Stave (which sets forth a multi-factor test to determine reasonableness). This decision expands the possibility of cases settling against the wishes of the workers alleging unfair labor practices. Such settlements may also greatly diminish workers’ ability to enforce their rights, as employers can simply negotiate with the ALJ, ignoring the General Counsel’s position, to find an alternative resolution.