On March 21, 2017, we published an article addressing possible changes in direction under a National Labor Relations Board controlled by President Trump’s appointees. This article will report on changes made in 2017 and address other changes that could be coming in the future.
The President appointed two Republicans to the five-member Board, with the second nominee taking office on Sept. 27, 2017. As a result, Republicans had a 3-2 majority on the Board that lasted until Dec. 16, 2017, when the Republican Chairman’s term expired. The Board is currently split 2-2, with one vacancy for the President to fill.
The President also appointed a Republican General Counsel, who took office on Nov. 17, 2017. The new General Counsel has already indicated that he intends to revisit a number of legal positions taken by his Democratic predecessor.
Although the Republican majority lasted less than three months, the Board took quick action to reverse a number of controversial Obama Board decisions.
I. Joint Employer Standard
In Browning-Ferris Indus. of Cal., 362 NLRB No. 186 (2015), the Obama Board adopted a new and controversial standard for determining joint employer status. Under this standard, an employer would be a joint employer even if it does not exercise any actual control over the employees of the other employer.
In Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (Dec. 14, 2017), the Trump Board overruled Browning-Ferris and returned to the prior joint employer standard requiring exercise of actual control instead of potential control in order to find joint employer status.
II. Union Organizing
The Obama Board in Specialty Healthcare, 357 NLRB 934 (2011), created a new standard to establish bargaining units for a union election. The new standard gave unions more latitude to select their voters by requiring an employer to establish an overwhelming community of interest in order to add employees to a bargaining unit sought by a union. This decision also created the possibility of micro-units.
In PCC Structurals, Inc., 365 NLRB No. 156 (Dec. 15, 2017), the Trump Board overruled Specialty Healthcare and rejected the overwhelming community of interest standard. The appropriateness of a bargaining unit and any competing unit proposed by an employer will now be determined by traditional community of interest principles, making it more difficult for a union to control who votes in an election.
B. Quickie Elections
On April 14, 2015, the Obama Board implemented new “Quickie Election Rules,” which significantly altered how union elections are processed. The new rules provided for union elections as soon as 11 days after a petition is filed and were disadvantageous for employers.
On Dec. 12, 2017, the Trump Board issued a Request for Information asking for public comment about whether to retain, change, or rescind the “Quickie Election Rules.” The public’s responses are due Feb. 12, 2018. The two Democratic Board members dissented from this action.
It seems unlikely that the Trump Board would seek this information and then decide to do nothing.
In Raytheon Co., 365 NLRB No. 161 (Dec. 15, 2017), the Trump Board overruled a 2016 Obama Board decision that prevented employers from making changes to terms and conditions of employment without bargaining to impasse in the absence of a contract explicitly authorizing the changes even if the changes were consistent with an established past practice. Under Raytheon, employers will have more flexibility to manage their business during union negotiations.
III. Employee Handbooks
Employers whose handbooks contain anti-harassment or courtesy/civility policies (and many other routine policies) had been repeatedly subjected to scrutiny under the Obama Board, which found that such rules “chill” protected activity.
In Boeing Co., 365 NLRB No. 154 (Dec. 14, 2017), the Trump Board overruled prior decisions and established a new standard governing the lawfulness of employer work rules. Under this standard, the Board will consider: (1) the nature and extent of the potential impact of the rule on NLRA rights; and (2) legitimate justifications for the rule. The Board identified three categories of rules: (1) always lawful; (2) sometimes lawful; and (3) never lawful. The Board specifically noted that rules establishing “basic standards of civility” fall in the always lawful category.
Under Boeing, an employer can still violate the law by: (1) creating an otherwise lawful rule in response to union activity (which would mean the rule was unlawfully created); or (2) applying the rule unlawfully (i.e., only enforcing the rule against union activity while permitting other violations of the rule).
As discussed above, it appears the Trump Board is going to revisit and perhaps rescind the “Quickie Election Rules.” This process could take years, as it would require rulemaking.
The Republican Board members have also indicated a willingness to change the longstanding “blocking charge” rule which lets unions block elections by filing an unfair labor practice charge before the vote occurs. The current “blocking charge” rule makes it relatively easy for an incumbent union to delay a decertification election.
As discussed in our March 21, 2017 article, we expect the Trump Board to overrule other Obama Board decisions, such as: (1) Total Sec. Mgmt. Ill. 1, LLC, 364 NLRB No. 106 (2016) (usually preventing employers from disciplining employees in the absence of a union contract without bargaining to impasse); (2) American Baptist Home of the West, d/b/a/ Piedmont Gardens, 369 NLRB No. 13 (2016) (making it risky for employers to use permanent replacements during economic strikes by finding that an intent to discourage future strikes is sufficient to violate the law); (3) Babcock & Wilcox Construction Co., 361 NLRB No. 132 (2014) (making it much harder to obtain deferral to arbitration); and (4) Murphy Oil USA, Inc., 361 NLRB No. 72 (2014) (finding class action waivers in arbitration agreements unlawful – this issue is pending before the Supreme Court).
President Trump’s nominees hit the ground running and ended 2017 with a bang. We expect 2018 to be a similarly consequential year (once President Trump fills the current vacancy). We will alert you to future developments.