The National Labor Relations Board issued a flurry of decisions last week making drastic changes in labor law from the previous administration’s Board. These decisions all reflect a new era at the Board and likely foreshadow more management-friendly decisions to come. Outlined below are the highlights of these three key decisions and the key takeaways for employers.
A joint-employer relationship will only be found where a second entity has actually exercised direct control over another entity’s employees. Employers now have more discretion to run their businesses without fear of jointemployer liability under the National Labor Relations Act
In The Boeing Co., 365 NLRB No. 154 (Dec. 14, 2017), the Board established a new standard for weighing the legality of employee handbook policies. Previously, the Board held that a policy is illegal if employees could “reasonably construe” it to bar them from exercising their rights to band together under the National Labor Relations Act. The Obama Board had used that standard in an expansive way to strike down a wide array of employer policies, including rules blocking workers from criticizing their employers on social media or making recordings in the workplace. Under the new standard, the Board will consider the “nature and extent” of a challenged rule’s “potential impact on NLRA rights” and the “legitimate justifications associated with the rule.” The decision also sets forth three categories into which the Board will classify rules — lawful, unlawful, or subject to individual scrutiny on a case-by-case basis.
Category 1 Rules
These are rules the Board considers lawful in all cases because they cannot be reasonably interpreted to interfere with workers’ rights or because any interference is outweighed by business interests. The Board noted that examples of Category 1 rules are “no camera rules,” rules promoting “harmonious interactions and relationships in the workplace,” and rules requiring employees to conduct themselves in a civil way. These are types of rules that had been found unlawful by the previous Board.
Category 2 Rules
These rules are legal in some cases depending on whether they interfere with employee rights and, if so, whether the impact is outweighed by other legitimate considerations.
Category 3 Rules
These rules are always unlawful because they interfere with workers’ rights in a way not outweighed by business interests. The Board noted an example of a Category 3 rule would be one that prohibits employees from communicating with each other about their wages and benefits.
Joint Employer Status
A joint-employer relationship will only be found where a second entity has actually exercised direct control over another entity’s employees. Employers now have more discretion to run their businesses without fear of joint-employer liability under the National Labor Relations Act.
In Browning-Ferris Industries, 362 NLRB No. 186 (2015), the Board had established a new standard for evaluating joint employer relationships by finding that two entities are joint employers where the second company exercises control over the first employer’s employees, or where the second employer might be able to exercise control, even if it had not done so.
In Hy-Brand Industrial Contractors, 365 NLRB No. 156 (Dec. 14, 2017), the Board reversed Browning-Ferris and returned to a standard of finding joint-employer status where the second entity has actually exercised control over another entity’s employees in a direct and immediate way. This new test provides more certainty as to when a joint-employer relationship exists. Employers who have avoided business relationships due to joint-employer concerns can now re-evaluate such joint ventures in light of this decision.
The Board has returned to a “community of interest” analysis to determine what is an appropriate bargaining unit. Employers should consider analyzing their groupings of employees to determine if there are ways to develop facts that would support more favorable bargaining-unit configurations.
Under Specialty Healthcare, 357 NLRB 934 (2011), if a union petitioned for an election among a particular group of employees, and those employees shared a community of interest among themselves, the Board would not find the petitioned-for unit inappropriate unless the employer proved that the excluded employees shared an “overwhelming” community of interest with the petitioned-for group.
In PCC Structurals, 365 NLRB No. 160 (Dec. 15, 2017), the Board abandoned the “overwhelming” community-of-interest standard, stating that “there are sound policy reasons for returning to the traditional community-of-interest standard that the Board has applied throughout most of its history, which permits the Board to evaluate the interests of all employees — both those within and those outside the petitioned-for unit — without regard to whether these groups share an ‘overwhelming’ community of interests.” This revised standard will make it more difficult for unions to seek small groups of employees within larger organizations, which often disenfranchise employees who do not support union representation.