For employers, the tide is making its long awaited turn in our nation’s capital at the National Labor Relations Board (“NLRB”). Last week, the NLRB reversed precedent on four significant rules that were widely viewed as favorable to unions and a proverbial thorn in the side of employers and the business community. Here is a snapshot of last week’s activity:
- Browning-Ferris Joint-Employer Standard: In a 3-2 decision, the Board overruled Browning-Ferris Industries, 362 NLRB No. 186 (2015), which relaxed the standards for when an entity may be deemed a joint employer under the National Labor Relations Act (“NLRA”). Under the Browning-Ferris standard, one entity could be held jointly liable for another entity’s violations of the NLRA if there was proof the entity had indirect control over the entity’s employees or a contractually reserved right of control even if the entity never actually exercised that control. With its decision last week in Hy-Brand Industrial Contractors,, 365 NLRB No. 156 (December 14, 2017), the Board announced a return to the pre-Browning Ferris standard. Moving forward, an entity may be found jointly liable for another entity’s violations of the NLRA if there is proof the entity actually exercised control over essential employment terms over another entity’s employees and did so directly and immediately in a manner that is not limited and routine.
- Employer Rules, Policies, and Handbook Provisions: In another 3-2 decision, the NLRB overruled its prior decision in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), which held that employers could be found liable under the NLRA by maintaining workplace policies that were facially neutral but could be “reasonably construed” by an employee to prohibit the exercise of NLRA rights. The Board articulated a new test in The Boeing Company, 365 NLRB No. 154 (December 14, 2017). Now, the legality of a facially neutral workplace rule, policy, or handbook provision will be evaluated by the Board through two lenses: (1) the nature and extent of the potential impact on an employee’s NLRA rights; and (2) the employer’s legitimate justification associated with the rule.
- Employers’ Duty to Bargain with Unions: In another 3-2 decision (noticing a trend?), the NLRB restored its 50-year old precedent that limited an employer’s ability to unilaterally make certain changes to terms and conditions in the workplace. In Raytheon Network Centric Systems, 365 NLRB No. 161 (December 15, 2017), the Board reversed its prior ruling that an employer must bargain with the union before implementing changes to employment conditions, even if the change was consistent with the employer’s past practice of making similar changes. Now, an employer may change terms and conditions of employment if its doing so is consistent with a past practice of making similar changes. In Raytheon, the issue involved the employer’s modification to its union employees’ health care benefits, which the Board held could be made without bargaining with the union because the employer had a past practice of making similar unilateral changes every year from 2001 through 2012.
- Micro-Unit Organizing: In another 3-2 decision (Yes. 3-2), the Board reversed its 2011 ruling in Specialty Healthcare, 357 NLRB 934 (2011), which allowed “micro-units” of workers to unionize by placing a burden on employers to show that the workers included in a bargaining unit share an “overwhelming” community of interest with the union’s proposed organizing group. The Board reversed that rule with its decision in PCC Structurals, Inc., 365 NLRB No. 160 (December 15, 2017) and announced a return to its standard pre-Specialty Healthcare: the Board will consider whether the petitioned-for workers belong to an organizing unit with the excluded workers by evaluating whether those workers share a community of interest “sufficiently distinct” from excluded employees to warrant their own unit. The bottom line: this decision will make it easier for employers to expand a union’s proposed organizing unit.
These decisions are part of a significant shift from the union friendly policies of the Obama-era to a Trump-era that many anticipated would bring a more business friendly climate. In each of these decisions, the Board’s members split along party lines (hence, the 3-2).