In the weeks surrounding Labor Day 2023, the National Labor Relations Board overturned precedent with decisions and rules significantly impacting both union and non-union employers. The result is labor laws encouraging both unionization and concerted employee actions affecting working conditions. Employers must review and assimilate these decisions before implementing new protocols and strategies in response. Here of some of the most critical so far in 2023.
New Election Rules
The Board announced a Final Rule, 88 Fed. Reg. 58076, amending and returning its representation election procedures to a slightly modified version of the “quickie election” rules establishing tight timelines on hearing dates and elections and drastically reducing the time given to employers for responding to a representation election petition. Barring subsequent agency action or judicial intervention, the Final Rule becomes effective December 26, 2023. The amended rules underscore the importance of a proactive approach to the threat of union organizing.
Mandated Union Recognition
The Board imposed a new framework governing the process through which unions attain the status of collective bargaining representative of a unit of an employer’s employees. 372 NLRB No. 130 (2023). If a union demands recognition based on its claimed support from a majority of employees, an employer that refuses to recognize the union would violate the National Labor Relations Act unless the employer “promptly” files an RM petition with the Board requesting an election to test the union’s claim of majority status or the appropriateness of the unit sought. Further, if the employer commits virtually any unfair labor practices (ULPs), the Board will dismiss the petition without an election and order the employer to recognize and bargain with the union.
Duty to Bargain During Contract Negotiations
In Tecnocap LLC, 372 NLRB No. 136 (2023); and Wendt Corporation, 372 NLRB No. 135 (2023), the Board expanded employers’ duty to bargain during first contract negotiations and following the expiration of collective bargaining agreements. The decisions restrict an employer’s ability to use past practice as a defense to a ULP charge over such unilateral changes, unless they are consistent with a long-standing practice and do not require the exercise of significant discretion. Further, employers can no longer rely on past practice for implementing unilateral changes authorized under an expired management-rights clause. These decisions greatly restrict an employer’s ability to unilaterally implement most changes in terms and conditions of employment during initial bargaining or a contract hiatus.
Protected Concerted Activity
The Board has expanded protections for employee advocacy in the workplace. American Federation for Children, 372 NLRB No. 137 (2023); Miller Plastic Products, Inc., 372 NLRB No. 134 (2023). In Miller, the Board returned to the “totality of the circumstances” test for determining when individual employee action constitutes protected concerted activity. Employee activity will be assessed using a holistic, fact-based approach to determine whether individual complaints or protests have a link to group action. In American Federation, the Board revived prior precedent by holding the Act protects statutory employees advocating on behalf of non-employees, such as interns or contractors. The Board applied an attenuated definition of “mutual aid and protection” to conclude that, by seeking to induce group support for non-employees, the statutory employees were affecting their own terms and conditions of employment, thereby making the activity both “concerted” and protected under the Act.
Work Rules and Handbook Policies
The Board revised its standard for assessing whether an employer’s work rules unlawfully restrict protected employee activity under the Act. Stericycle, Inc.,372 NLRB No. 113 (2023). Work rules will be presumptively unlawful if they have a “reasonable tendency” to chill employees from exercising their organizing rights or otherwise have a coercive meaning. The burden will be on the employer to prove that its “legitimate and substantial business interests cannot be accomplished with a more narrowly tailored rule.” The decision impacts most employers but more so in a union organizing context, because any employer rule deemed unlawful by the Board can result in an order forcing the employer to bargain with the union without an election.
Independent Contractor Standard
The Board returned to an employee-friendly test for determining whether an individual is an independent contractor. The Atlanta Opera, Inc., 372 NLRB No. 95 (2023). The Board’s decision lowers the threshold for finding employee status and, thus, whether workers are afforded protections under the Act, including the right to unionize and collectively bargain. The Board again will assess all aspects of the working relationship, with no single factor being determinative. The entrepreneurial opportunity factor will depend on whether the individual is rendering services as part of an independent business or performing functions that are essential to the employer’s normal business operations. Any weight given to entrepreneurial opportunity also must be actual (not theoretical) and must take employer restrictions into consideration.
The Board reverted to its pre-2020 “setting-specific” standard for determining whether an employer lawfully disciplines an employee for otherwise protected concerted activity that crosses the line into unprotected abusive (“opprobrious”) conduct. Lion Elastomers LLC II, 372 NLRB No. 83 (2023). Rather than focus on the employer’s motivation, the Board will consider the following factors to gauge the lawfulness of the discipline:
1. The locus of the activity;
2. The subject-matter of the otherwise protected conduct;
3. The nature of the employee’s outburst; and
4. Whether the outburst was somehow provoked by the employer’s ULPs.
This decision grants greater latitude to employees who are overzealous or even abusive in exercising what would otherwise be activity protected by the Act.
Remedies for Repeat Violators
The Board outlined expansive remedies for repeat violators of the Act. Noah’s Ark Processors, LLC d/b/a WR Reserve, 372 NLRB No. 80 (Apr. 20, 2023). The Board’s decision posits a listing of potential remedies it will consider if it determines that an employer has engaged in what it concludes are serious ULPs. The list of extraordinary remedies includes forcing an employer to post in its facility a more comprehensive explanation of employees’ rights, requiring a supervisor or other official to read verbatim a notice containing a detailed accounting of employee rights under the Act, mailing the same notice to employees’ homes, and reimbursing the union’s bargaining expenses and bargaining committee employees’ lost wages.
The Board reinstated its standard for restricting employee severance agreements. McLaren Macomb, 372 NLRB No. 58 (2023). The ruling applies to all severance agreements for employees covered by the Act and restricts certain confidentiality and non-disparagement clauses, as well as releases of claims under the Act. The decision emphasized the importance of employees’ rights to make public statements about the workplace and opined that severance agreements restricting such statements would chill employees’ rights to participate in Board investigations or filing ULP charges.
Other Potential Changes
Other anticipated actions by the Board in the coming months:
- Banning mandatory meetings with employees on working time to educate them about the negative aspects of unionization (“captive audience” meetings);
- Expanding employees’ right to use company email and other electronic communication platforms in the workplace for non-business purposes, including union activity;
- Prohibiting overbroad non-compete agreements in employment or severance agreements;
- Expanding union’s right to access employer’s property; and
- Requiring a stricter standard for employing permanent strike replacements.
In addition, the Board is expected to issue a new rule for determining joint-employer status under the Act. The Board’s proposed rule, issued September 2022, provides that entities may again be deemed joint employers if they “share or codetermine those matters governing employees’ essential terms and conditions of employment.” These terms and conditions include wages, benefits and other compensation, work assignments and scheduling, hiring and discharge, discipline, workplace health and safety, supervision, assignment, and work rules. Under the proposal, even reserved control or the power to exert indirect control could be sufficient to establish joint-employer status. The joint-employer standard has been one of the most contentious labor issues in the past decade, and the rule as proposed would have a significant impact on many employers, particularly those who utilize temporary labor services.