Republican Majority at NLRB Brings Important Pro-Employer Decisions

The recent, temporary Republican majority at the NLRB brought several important changes to Board decisions issued during the Obama Administration. In early December Republican appointees of President Trump briefly held a majority of the seats on the Board. This status continued until December 16 when Board Chairman Miscimarra’s resignation took effect. However, in the weeks leading up to Miscimarra’s resignation, the three Republican Board members penned pro-employer decisions that for the most part return to Board precedent in effect prior to 2009. On December 22, 2017, President Trump appointed Board Member Marvin E. Kaplan as Acting Board Chairman. The President is expected to nominate management labor attorney John Ring to fill the vacancy created by Miscimarra’s resignation. But before Miscimarra exited, the Republican-majority issued several decisions that rolled back prior Board precedent and set the stage for more pro-employer decisions. A few examples are as follows.

On December 14, the Board issued two decisions, Boeing Co. and Hy-Brand Industrial Contractors, that address facially neutral workplace rules and the joint employer standard.  In Boeing, the Board revisited the 13-year old Lutheran Heritage standard which held that an employer that maintains a facially neutral workplace rule commits an unfair labor practice if an employee would reasonably construe the rule as prohibiting Section 7 activity. In Boeing, the company issued a workplace rule that prohibited cameras at work. The Board held that the Lutheran Heritage standard, under which the anti-camera rule was unlawful, failed to consider legitimate justifications for the polices, rules, and handbook provisions challenged. The Board found it particularly problematic that prior decisions applying the Lutheran Heritage standard found unlawful employer directives that employees “work harmoniously” and conduct themselves in a “positive and professional manner.”  In Boeing the Board announced it will now apply a two-pronged test that considers (i) the nature and extent of the rule’s potential impact on employee Section 7 rights and (ii) the employer’s legitimate justifications for the rule.

Also on December 14 the Board overruled the joint employer standard announced in its 2015 Browning-Ferris decision, which decreed that “even when two entities have never exercised joint control over essential terms and conditions of employment, and even when any joint control is not ‘direct and immediate,’ the two entities will still be joint employers based on the mere existence of ‘reserved’ joint control, or based on indirect control or control that is ‘limited and routine.’” In Hy-Brand Industrial Contractors, the Board held that a finding of joint employer status now requires proof that putative joint employers have actually exercised control over essential employment terms, and that the control is direct and immediate, not limited or routine.

On December 15, Miscimarra’s last day on the job, the NLRB issued two more pro-employer decisions -- Raytheon Network Centric Systems and PCC Structurals, Inc.  In Raytheon, the Board revisited the Supreme Court’s 1962 decision in NLRB v. Katz and the case law applying Katz. The Court in Katz held that Section 8(a)(5) of the Act prohibits employers from making a change in mandatory bargaining subjects unless the employer gives the union advance notice and an opportunity to bargain over the proposed change. Later NLRB case law held that an employer may lawfully take unilateral action so long as it “does not alter the status quo.”  Raytheon provided an opportunity for the Board to clarify what constitutes a “change” from the “status quo” and to revisit the Board’s 2016 holding in E.I. du Pont de Nemours which re-defined what constitutes a “change” requiring notice to the union and bargaining prior to implementation. In DuPont the Board ruled that even if an employer continued to do precisely what it did for decades pursuant to a CBA, and even if the CBA permitted the employer’s past actions, once the CBA expires, taking the same action constitutes a “change.” Furthermore, if the employer’s action involved discretion and the employer took discretionary action, under DuPont this exercise of discretion was a “change.” In Raytheon the Board overruled DuPont as fundamentally flawed. The Board concluded that “an employer’s past practice constitutes a term and condition of employment that permits the employer to take actions unilaterally that do not materially vary in kind or degree from what has been customary in the past.” In Raytheon the Board held that since the employer routinely changed its employees’ benefits, premiums, deductibles, and copayments for health insurance in the past, Raytheon did not violate the Act when it made similar changes after the CBA expired. The Board held that its decision applied retroactively, but also cautioned this its holding had no effect on a union’s right to demand bargaining over mandatory bargaining issues.

On December 15 the Board returned to the prior standard for determining when a proposed unit is appropriate for collective bargaining. PCC Structurals Inc. The Board overruled its 2011 decision in Specialty Healthcare & Rehabilitation Center of Mobile and returned to its prior “community of interests” standard. The Board criticized the Specialty Healthcare standard for transferring too much responsibility from the Board to the organizing parties and deferring to the petitioned-for unit in all but a few narrow, highly unusual circumstances. In reverting to the community of interests standard, the Board stated, “It is the Board’s responsibility to determine unit appropriateness based on a careful examination of the community of interests of employees both within and outside the proposed unit.” Accordingly, employers will have greater participation in the determination of an appropriate unit for a union election. Conversely, union organizers are expected to have less success in gerrymandering the unit to conform to the employee groups they are targeting.

More pro-management changes are expected once the fifth Board member is confirmed. For example, the Board may revisit its blocking charge policy, which delays a union decertification election when a union files an unfair labor practice charge and essentially keeps the employees in the union until the election occurs, regardless of the charge’s merits.

For more information about how the changes at the NLRB affect unionization efforts at your company or your company’s implementation of work rules, policies or procedures, please contact one of the partners in the firm’s Labor Law Practice Group -- James J. McGovern III, Esq., at jmcgovern@genovaburns.com, Patrick W. McGovern, Esq., at pmcgovern@genovaburns.com, Douglas E. Solomon, Esq. at dsolomon@genovaburns.com, or John R. Vreeland, Esq., at jvreeland@genovaburns.com  -- or call us at 973-533-0777.