- The National Labor Relations Board experienced an extreme uptick in activity throughout 2023, processing a notable increase in unfair labor practice charges and election petitions.
- Part of the Board’s busy and controversial year includes the many union-friendly changes to the law instituted in the form of Board decisions and rulemaking.
- The most major developments (summarized below) impact both non-union and union employers and reverse prior decisions or rules that were in place. Thus, we recommend familiarity with the changes to ensure that your organization is in compliance heading into the new year.
As we reflect on the many decisions that the National Labor Relations Board (NLRB or the Board) has handed down this year (many of which are unfavorable to employers), now is the perfect time to ensure that your organization is up to date on the most impactful cases of the year and the NLRB’s controversial position on certain issues.
Read on to be sure that your business will head out of the holiday season and into 2024 on the “nice list” – and not on the Board’s “naughty list.”
Increase in Board activity
As expected, 2023 has been an extremely active year at the Board, with the processing of a 10 percent increase in unfair labor practice charges from the previous fiscal year, which, notably, is the highest number of cases filed since 2016. In addition, the Board saw a noticeable increase in election petitions, representing the highest number filed since fiscal year 2015.
Led by General Counsel (GC) Jennifer Abruzzo, this significant uptick in activity was anticipated, as her controversial policy choices throughout 2023 continue to aggressively favor a union-friendly agenda.
Prohibition on broad confidentiality and non-disparagement provisions
The McLaren Macomb decision reversed several Trump-era rulings that had allowed employers to proffer severance agreements to employees containing broad confidentiality and non-disparagement provisions. As we previously reported, the Board now holds that the “mere proffer” of a severance agreement containing a confidentiality and/or non-disparagement provision is unlawful where the clause is drafted too broadly and would “chill” an employee’s ability to exercise his or her right to engage in concerted activity pursuant to Section 7 of the National Labor Relations Act (NLRA or the Act). Our team also published an insightful Q&A on this decision, available here.
General Counsel memorandum limiting noncompete provisions
GC Abruzzo issued a May 2023 memorandum arguing that “the proffer, maintenance, and enforcement” of noncompete provisions in employment contracts and severance agreements violates the NLRA, except in limited circumstances. According to GC Abruzzo, denying employees the “ability to quit or change jobs by cutting off access to other employment opportunities” violates Section 7 of the NLRA. Our team published a comprehensive review and analysis of the GC’s memorandum, which can be viewed in full here. The Board has not actually adopted GC Abruzzo’s view on noncompetes – yet – but it is highly likely that this current Board will do so. In fact, in September 2023, the Board’s Regional Office in Cincinnati issued a complaint against Harper Holdings LLC d/b/a Juvly Aesthetics, alleging that the medical clinic and spa violated the Act when it required its employees to execute agreements containing a noncompete provision as well as customer and employee non-solicitation provisions.
Curtailment of an employer’s ability to issue discipline in response to a worker’s profane speech
The Lion Elastomers decision addresses an employer’s ability to issue discipline in response to a worker’s profane speech or conduct purportedly taking place in the context of workplace activism and union-related activity. In another departure from commonsense precedent, this decision makes it significantly more difficult to terminate employees who engage in abusive conduct or use derogatory language when claiming to speak out against workplace conditions. This decision restored a series of tests that use context- or setting-specific factors and account for labor disputes being “heated affairs.” These tests give workers more leeway for behaviors (including racially charged or misogynistic slurs) in certain contexts. You can read our full summary of these tests in our previous blog post.
Expansion of what behavior qualifies as ‘protected concerted activity’
The Miller Plastics case articulated the test for determining whether an employee who intends to induce group action by fellow employees engages in protected concerted activity under the Act. In what is likely now a familiar pattern, Miller Plastics overturned the Board’s previous decision in Alstate Maintenance, LLC, which held that solo protests are only protected when accompanied by “evidence of ‘group activities,’” on the basis that Alstate allegedly took too narrow a view regarding workers’ right to organize. Now, the Board holds that solo protests should be considered protected by the Act if they could be viewed as intending to induce mass actions based on elements from a wide range of possible evidence. This decision builds on the Board’s U.S. Court of Appeals for the District of Columbia Circuit’s ruling in Constellium Rolled Products Ravenswood, LLC v. NLRB, which upheld the Board’s decision that the employer committed an unfair labor practice when it terminated an employee who wrote “whore board” on an overtime sign-up sheet – finding the employee was engaged in protected concerted activity. See our review of that decision here.
Irrational scrutiny of employer work rules
The Stericycle decision describes the latest test to evaluate facially neutral work rules. Once again, the Board overruled its previous decision in favor of a more employee-friendly standard. The test articulated in Stericycle is thoroughly described in our previous post, but in sum, this decision provides that a work rule is unlawful if an employee “could reasonably interpret the rule to have a coercive meaning … even if a contrary, noncoercive interpretation of the rule is also reasonable.” The Board cautioned employers that an employer’s intent is irrelevant – instead, if a “reasonable” employee could interpret the rule to restrict protected activity, the rule is presumptively unlawful.
Upending the decades-old organizing process
The Board’s controversial Cemex decision places increased pressure on employers who are faced with union organizing. Essentially, the decision lowers the threshold for when the Board will issue a bargaining order without it holding an election. As a result, if an employer is presented with a demand for recognition by a union based on a majority of support, the employer must either recognize and bargain with the union or file a petition seeking an election. Moreover, the decision lowers the bar for the Board to issue bargaining orders in connection with alleged employer unfair labor practices during (or even before) organizing activity.
Final rule on joint employers
On Oct. 26, 2023, the Board announced a new final rule that changes the test for determining who is a joint employer. The rule is a drastic expansion of joint employment. Now, a business is a joint employer if it has the right to exercise control over any of seven enumerated terms or conditions of employment, even if it never exercises such control and even if the only way it could exercise such control would be through an intermediary. We prepared a thorough review and analysis of the new joint employer test, available here. The rule is subject to ongoing judicial review. While litigation plays out, your organization should evaluate relationships with subcontractors, vendors, staffing agencies and other third parties that might fit the new definition of joint employment under this rule. But in a bit of good news for employers, the Board recently announced that it has extended the effective date of the rule to Feb. 26, 2024, in order to “facilitate resolution of legal challenges with respect to the rule.”
Broadening the Board’s remedies
Finally, we leave you with Thryv, Inc., a late 2022 decision that is still worthy of inclusion in our 2023 roundup. In Thryv, the Board broadened the scope of remedies available to include all direct or foreseeable pecuniary harms suffered as a result of an unfair labor practice. In the context of layoffs, the Board suggested that an employee may be forced to incur out-of-pocket expenses for medical bills and credit card debt and that such expenses are foreseeable harms. With respect to the employees who unlawfully were laid off by Thryv, the Board ordered payment of loss of earnings and other benefits, costs related to search for work and interim employment expenses, and compensation for adverse tax consequences of the lump sum back pay award. This expansion of remedies is significant because historically speaking, a “make whole” remedy for an unfair labor practice included back pay, reinstatement and compensation for other direct harms. Our team published a comprehensive review of this decision, available here.
The NLRB is almost certainly gearing up for another busy – and controversial – year ahead. BakerHostetler will continue to actively monitor the Board’s activity and will alert our clients to the Board’s most impactful decisions. Until then, should you have any questions about the Board’s decisions throughout 2023, and the associated effects on your organization, the BakerHostetler Labor and Employment Practice Group is available to assist.