Category: NLRB

April 1, 2021

Acting NLRB GC Announces Aggressive Enforcement Policy

In a memorandum dated March 31, 2021, the Acting General Counsel of the National Labor Relations Board, Peter Sung Ohr, proclaimed that the agency would enforce a key federal labor law more ardently than had his predecessor. The subject of the memo itself is telling: “Effectuation of the National Labor Relations Act Through Vigorous Enforcement of the Mutual Aid or Protection and Inherently Concerted Doctrines”. This action signals an aggressive enforcement policy against private-sector employers, whether currently unionized or not.

Legal Foundation

Section 7 of the National Labor Relations Act (NLRA) generally provides that:

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities. . . .

This provision protects private-sector (e.g., non-governmental) employees whether they belong to a union or not. In addition to permitting unionization, Section 7 prohibits discrimination against employees who work together to improve working conditions.

Increasingly, the National Labor Relations Board has disagreed over the extent of these protections. The divide typically follows the political spectrum. Under a Democratic administration, the NLRB reads Section 7 more expansively in favor of workers. Republican administrations find the protections more limited, recognizing the inherent prerogative of business owners to control their enterprises.

Current NLRB Composition

The National Labor Relations Board “board” itself is comprised of five seats based in Washington, D.C. Each seat has a five-year term, with distinct expiration dates. As a result, control of the NLRB does not automatically shift with a change in presidential administrations.

President Biden entered office with only four of the five NLRB board seats filled. Three members are Republicans who President Donald Trump appointed. As the practice has been to have no more than three of the five seats filled by representatives of the president’s party, the fourth member is Democrat Lauren McFerran. Biden immediately named McFerran the new Chair of the NLRB, but has not yet filled the open seat. Republican William Emanuel’s term will expire on August 27, 2021. It is certain that Biden will not reappoint Emanuel at that time. Barring inability to gain Senate confirmation, both the currently vacant seat and Emanuel’s seat will be filled by Democrats. That will shift the Board to a pro-labor majority for the first time since August 2017.

The Board ultimately sets NLRB policy, primarily through adjudicating cases, but increasingly through formal rulemaking as well. However, it does not have absolute control of the NLRB’s activities. The General Counsel of the NLRB oversees the initial intake of cases and controls the prosecution of unfair labor practices. Accordingly, the GC has a pivotal function in guiding NLRB policy.

Breaking with historical practice, President Biden fired Trump’s Senate-confirmed General Counsel, Peter Robb, on his first day in office. Robb’s term wasn’t set to expire until November. Biden appointed Peter Sung Ohr as Acting GC. He has nominated Jennifer Abruzzo to fill the position on a permanent basis.

“Mutual Aid or Protection”

Reflecting a more aggressive enforcement policy, the Acting GC’s memo suggests an expansive view of what constitutes activities for employees’ “mutual aid or protection”. Indeed, he asserts, “employee advocacy can have the goal of ‘mutual aid or protection’ even when the employees have not explicitly connected their activity to workplace concerns”. In support of that conclusion, the memo references several cases decided by the NLRB when there was a Democratic majority.

According to the Acting GC, mutual aid or protection can extend to “employees’ political and social justice advocacy”. Among other examples, the memo points to “protests in response to a sudden crackdown on undocumented immigrants and the possible revival of workplace immigration raids” as conduct he would find protected by the NLRA because “the employees’ conduct . . . concerned issues within their employer’s control, like . . . willingness to hire immigrants.”

On such issues, the Acting GC effectively sets aside the views of the sitting NLRB majority: “I look forward to robustly enforcing the Act’s provisions that protect employees’ Section 7 rights with full knowledge that recent decisions issued by the current Board have restricted those protections”. The memo suggests that the NLRB will pursue cases falling in the gaps of the current majority’s reasoning regarding Section 7 rights, rather than directly rejecting it. However, there is much reason to be suspicious of that supposed distinction.

“Inherently Concerted”

After acknowledging that “[p]rotected, concerted activity . . . begins with a conversation among employees,” the Acting GC’s memo asserts that “contemplation of group action may be indicative of concerted activity, [but] it is not a required element.” He argues that certain issues “are pivotal” to employees’ common interests such that any group discussions about them are “inherently concerted,” again citing a case decided by a Democratic majority. Despite emphasizing “inherently concerted” to be a “settled doctrine,” the Acting GC concedes, “it remains better articulated as an alternative argument in cases where concert may be proven by traditional means.”

The memo further recognizes that the Board has only found discussions to be inherently concerted when they involve “certain vital categories of workplace life”. These categories primarily include wages and compensation. But the Acting GC suggests that discussions of work schedules, job security, workplace health and safety, and racial discrimination (presumably among others) may also qualify. In conclusion, the Acting GC reports that: “In the future, I will be considering these and other appropriate applications of the inherently concerted doctrine in suitable cases.”

Employers Be Warned

It is not surprising that Biden’s NLRB General Counsel will follow a more aggressive enforcement policy. Yet, it is noteworthy that the Acting GC has blatantly announced his intention to begin doing so before his permanent replacement is confirmed. He also does so under a Republican Board majority that will remain in place for several more months.

Expect the NLRB’s regional offices to pursue more cases against employers now to line them up for a new Board majority toward the end of the year. This approach will expedite the predictable shift in labor policy to favor unions and employees more than was the case under the Trump administration.

Companies should be cautious before disciplining employees for any activities that may run afoul of the aggressive enforcement policy reflected in the Acting GC’s memorandum. Management should work with experienced labor counsel to balance the risks in such scenarios.

Despite current favorable Trump-era precedents, employers might also consider reviewing their policies and procedures that may come under renewed NLRB scrutiny. Examples include social media policies, confidentiality policies, work rules, and investigation procedures. Employers facing or anticipating unionizing campaigns should prioritize such a review. Arguably-minor unfair labor practice allegations can have a significant adverse impact on businesses as fodder for organizing efforts.

Click here to download a copy of this March 31, 2021 Acting GC memorandum.

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February 23, 2021

PRO Act Reintroduced To Expand Federal Labor Rights

The Protecting the Right to Organize Act (PRO Act) was reintroduced in the U.S. House of Representatives on February 4, 2021. The House passed this bill in 2020, but it was dead on arrival in the then-Republican-controlled Senate. As proposed, the PRO Act remains unlikely to win Senate approval this year. However, Democrats will continue to advocate vigorously for its sweeping pro-labor measures.

PRO Act Targets – What Laws Would Change?

The full PRO Act aims to amend several federal labor laws, including the National Labor Relations Act (NLRA) and the Labor-Management Reporting and Disclosure Act (LMRDA).

These laws currently govern the relationship between employers and labor unions in private (non-government) workplaces. They address how employees organize to engage in collective bargaining and things like what public disclosures unions must make about their finances. The NLRA also provides direct protections to employees who are not represented by unions.

Expanding Worker Coverage

The PRO Act includes several measures to expand the NLRA’s rights to more workers. It does this by classifying more workers as “employees.”

Independent Contractors

The NLRA covers “employees,” which is defined to exclude some workers in a workplace. One excluded category includes individuals who are off the employer’s payroll, but still provide services for the company. Often identified by receiving a Form 1099 vs. a W-2 for tax purposes, these workers are considered “independent contractors.”

The PRO Act would expand the universe of employees by further limiting those who qualify as independent contractors.

An individual would only qualify as an independent contractor if all of the following apply:

The individual is free from the employer’s control in connection with the performance of the service.
The service is performed outside the usual course of the business of the employer.
The individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.

Supervisors

Recognizing that a business must have a management team to represent it in dealing with unions, the NLRA excludes “supervisors” from the group covered as employees.

Currently, a supervisor is “any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.”

The PRO Act would fundamentally change the definition in two ways. First, it would remove “assign” and “responsibly to direct” from the list of supervisory duties. Second, it would require that one or more of the remaining functions occupy “a majority of the individual’s worktime.” The result would be fewer “supervisors” and more “employees.”

Joint Employers

The National Labor Relations Board (NLRB), which administers the NLRA, has vacillated on its joint employer standard in recent years. The question is whether two separate business entities both qualify as an employee’s employer. Typical scenarios involve staffing agencies and franchised businesses.

With a current Republican majority, the NLRB has returned to a less expansive interpretation of joint employer status. This approach is generally considered good for business and not as beneficial for employees, or at least unions. The PRO Act would codify a broad joint employer standard. A company would qualify as an individual’s employer even with only indirect control or reserved authority to control the work relationship.

Expanding Workers’ Rights

Some aspects of the PRO Act would diminish employers’ control over their businesses by shifting it to the employees.

Strike Replacements

Unless they have contractually waived the right, employees and their unions may strike to gain bargaining leverage with their employers. Under longstanding law, employers have the right to hire permanent replacements for striking workers in many situations. The PRO Act would strip employers of that right to make it harder for companies to operate without striking workers. It would also enable unions to engage in “secondary” picketing, strikes, or boycotts in support of a third-party company’s workers.

Lockouts

The flip side of going on strike, employers may “lock out” their employees (i.e., keep them from working) during contract negotiations. The PRO Act would prohibit lockouts before the union has initiated a strike.

“Captive Audience Meetings”

The NLRA allows employers to hold meetings where they share their views on a union organizing campaign with employees. Attendance may be mandatory, as the employees are being paid, but employers must stay within legal parameters on what they say.

The PRO Act would make such meetings illegal despite continuing to permit unions to meet with employees they seek to organize.

Additional Issues

The PRO Act is an omnibus pro-labor bill. It contains virtually every legal change unions would universally like to have made to the NLRA. Beyond those described above, provisions include:

Requiring employers to maintain existing terms of employment indefinitely until a first contract is negotiated with a newly recognized union.
Introducing interest arbitration to establish a first contract, with awards based largely on employee prosperity.
Making misclassification of an employee as an independent contractor a direct violation of the NLRA.
Prohibiting class-action litigation waivers.
Establishing expedited union election rules.
Enabling the NLRB to overrule election results and direct union representation upon a finding of employer interference in a fair election.
Permitting employees to use company email for “concerted activity,” including unionizing activity.
Eliminating “right to work” states by entitling unions to receive “fair share” fees from non-member employees notwithstanding contrary state laws.
Compelling employers to notify all employees, including new hires, of their rights under the NLRA.

Expanding Penalties

The NLRA has never relied on extensive monetary damages to compel compliance. Instead, it emphasizes legally enforceable “make whole” orders that require employers to take action consistent with the law (or refrain from inconsistent action). The law does, however, require employers to compensate employees for lost earnings and benefits connected to unlawful conduct.

The PRO Act introduces a broader array of financial consequences for unfair labor practices. Borrowing from other employment laws, it would make front pay and consequential damages, as well as liquidated and punitive damages and attorneys’ fees, recoverable. But it goes further than other federal employment laws by authorizing double liquidated damages (additional damages equal to twice the lost wages award) and eliminating the common mitigation requirement (allowing employees to recover wages even that they have already earned through alternative employment).

In addition to damages payable to workers, the PRO Act introduces various civil penalties payable to the government. Penalties could reach $50,000, or $100,000 for a repeat offense or one that involves employee discharge or serious economic harm.

The PRO Act would also enable employees to bypass the NLRB and take their claims of NLRA violation to the courts in many situations.

Persuader Activity Disclosure

By amending the LMRDA, the PRO Act would require employers to engage in broader public disclosure of arrangements with consultants related to labor-relations activities. This expansion aims to include representation by attorneys, potentially curtailing the attorney-client privilege.

Study of Foreign Labor Laws

The PRO Act requires the Comptroller General to complete a study of “the laws, policies, and procedures in countries outside the United States governing collective bargaining at the level of an industry sector, including the laws, policies, and procedures involved in” issues related to collective bargaining. Congress would receive this report in support of considering additional changes to U.S. labor laws. Recognizing that many countries have a structural history of more extensive union involvement in business operations, this reporting requirement aims to yield even more pro-labor amendments.

Employers Beware

Simply put, the PRO Act would radically alter the landscape of American workplaces, as is the intent. The balance of power would undeniably shift toward employees and unions in particular.

The current 50-50 split in the U.S. Senate may keep the PRO Act from becoming law in its entirety. Republicans would almost certainly filibuster the legislation to prevent it from coming up for a vote. However, Democrats will not stop trying to legislate for as many of the PRO Act’s components as possible. They may be able to achieve some through the filibuster-proof reconciliation process and perhaps some even through old-fashion political dealmaking with Republican Senators.

So, while the PRO Act’s enactment is not an imminent certainty, the prospect should keep the business community on alert. If the filibuster falls by the wayside and/or Democrats gain a larger majority in Congress, these dramatic labor changes could become a stark reality.

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August 21, 2020

NLRB Proposes Reduced Disclosure of Employee Contact Information in Union Elections

On July 28, 2020, the National Labor Relations Board (NLRB) proposed additional amendments to its current rules and regulations governing election procedures. One of the proposals would modify what employee contact information employers must provide to unions before the election. Specifically, employers would no longer be required to disclose employees’ personal email addresses and home and cellular telephone numbers.

History of Employee Voter Lists

In a 1966 case involving Excelsior Underwear, Inc., the NLRB established a requirement that employers provide unions petitioning to represent employers with a list of eligible voters before the election. Employers originally had to include only the employees’ home addresses:

“[The access of all employees to such communications can be insured only if all parties have the names and addresses of all the voters. In other words, by providing all parties with employees’ names and addresses, we maximize the likelihood that all the voters will be exposed to the arguments for, as well as against, union representation.”

In 2014, an Obama-era NLRB majority revised its election rules and regulations. These amendments included new employee contact information requirements for the voter lists. Employers had to disclose all “available” personal email addresses and home and personal cellular telephone numbers of all eligible voters. According to the NLRB in 2014, this addition addressed the dramatic change in electronic communications. Reasons provided in support of this greater disclosure included:

The prevalence of telephones as compared to 1966;
The ability to leave voicemails if someone doesn’t answer the original phone call;
The emergence of cellular and smartphones as a universal point of contact combining telephone, email, and text messaging;
The need to reach persons who rely on their phone, rather than email for communication; and
The fact that some employers may not bother to update physical addresses and may contact their employees exclusively via phone.

Proposed Change Regarding Employee Contact Information

The 2014 rule imposed new administrative burdens on employers and raised privacy concerns from employees.

Now the NLRB seeks to undo much of the 2014 expansion of the voter lists. The proposed rule would eliminate the additional employee contact information, specifically the personal email addresses and home and cellular telephone numbers.

A press release announced, “The Board believes, subject to comments, that elimination of this requirement will advance important employee privacy interests that the current rules do not sufficiently protect.”

Public Comment Period

The public has until September 28, 2020, to submit initial comments. There is then another opportunity to submit replying comments (to comments submitted by others) by October 12, 2020.

Assuming the proposed rule takes effect, it will only affect employers involved in an NLRB election. These most often consist of situations where a union is seeking to represent a group of employees in a company.

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