Category: Labor Law

NLRB Jurisdiction

NLRB Jurisdiction: Are We Covered?

The National Labor Relations Board (NLRB) is an independent federal agency that enforces the National Labor Relations Act (NLRA). The purpose of the Act is “to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices, which can harm the general welfare of workers, businesses and the U.S. economy”. The NLRB has broad jurisdiction over private sector employers, employees, and labor organizations. NLRB jurisdiction includes most non-government employers with sufficient activity in interstate commerce.

NLRB Employers and Employees

Employer

The NLRB’s definition of “employer” includes private employers and anyone acting directly or indirectly as an agent of an employer. It does not include the United States, government corporations, federal reserve banks, or those subject to the Railway Labor Act.

Employee

The NLRB’s definition of “employee” includes any employee of a covered employer, including any person whose work has been discontinued in connection with a labor dispute or unfair labor practice. It does not, however, include agricultural laborers, domestic service workers, independent contractors, or supervisors.

Jurisdictional Thresholds Vary by Industry

Despite the broad statutory definitions, the NLRB does not exercise jurisdiction over all private employers and employees. Instead, it considers whether a business performs sufficient volume to warrant coverage by the federal agency. The NLRB applies different coverage standards depending on the nature of the business.

Retailers

Retailers fall under NLRB jurisdiction if their gross annual volume of business is at least $500,000. For shopping centers and office buildings, the threshold is $100,000.

Non-retailers

The NLRB exercises jurisdiction over most non-retailers if their annual inflow or outflow or goods or services is at least $50,000 in gross annual volume. The inflows or outflows can be direct or indirect.

Transportation Industry

Businesses in the transportation industry must produce $50,000 in annual volume to be included in the NLRB’s jurisdiction.

Legal Organizations

Law firms and legal service organizations fall under the jurisdiction of the NLRB if their gross annual volume of business is at least $250,000.

Cultural and Educational Centers

The NLRB exercises jurisdiction over art museums, symphony orchestras, private colleges, private universities, and other private schools if their gross annual volume of business totals at least $1,000,000.

Health Care

Nursing homes and visiting nursing associations fall under the NLRB’s jurisdiction if their gross annual volume of business is at least $50,000.

For hospitals, medical offices, social service organizations, and child care centers gross annual volume of business must be at least $250,000.

Native American Tribes

The NLRB has jurisdiction over commercial enterprises owned by Native American tribes, regardless of whether they are located on a reservation. However, the NLRB does not exercise jurisdiction over enterprises that perform traditional tribal or government functions.

Federal Contractors

Companies with federal government contracts fall under the NLRB’s jurisdiction.

Contentious Gray Areas

NLRB jurisdiction is not always straightforward. There are areas where the Board has wavered on whether it has or should exercise jurisdiction. For example:

  • Graduate students: In an August 2016 decision, the NLRB held that graduate students in private universities are employees and therefore can unionize under the NLRA. However, the NLRB has gone back and forth on whether graduate students are employees.
  • College athletes: On August 17, 2015, the NLRB unanimously agreed not to exercise jurisdiction to determine whether Northwestern football players are university employees under the NLRA. The Board members feared that a ruling these athletes employees would be problematic for the college sports industry.
  • Charter schools: In 2016, the NLRB held it has jurisdiction over New York and Pennsylvania charter schools because the schools are not political subdivisions of their states and therefore not exempt from the NLRA. However, in March of 2018, the NLRB declined to exercise jurisdiction over a Texas charter school because the NLRB found the school’s leadership was “responsible to state officials.”
  • Religious institutions: NLRB jurisdiction depends on whether the nature of the work is religious. For example, a religious school usually would not fall under NLRB jurisdiction, but a religious health care institution typically would.

Why NLRB Jurisdiction Matters

Employers should know whether their organization falls under NLRB jurisdiction. If it does, employers will be subject to certain restrictions and obligations under the NLRA. These include, but go beyond, not interfering with employees’ ability to engage in union activity. For more on how the NLRA can affect non-union workplaces, read New Rules for Employee Handbooks.

Employment Law Checkup

Quick Employment Law Checkup

If you have employees, you’re subject to an array of laws governing the workplace. Going from zero to even just one employee is a huge step. After that, the more employees you have, the more laws apply. And more employees and laws bring along increased risks of noncompliance. To tackle these issues, companies would ideally hire robust human resources departments and employment lawyers. But, that’s not practical for every business in every situation. So, in case you need somewhere to start, you can use this to conduct your own basic employment law checkup.

1. Are you paying workers enough?

I mean legally. Presumably, you’re paying them enough to work for you. And whether you pay enough to retain employees is another subject altogether. But I’m talking about minimum wage and overtime here.

With just one employee in the U.S., virtually all employers become subject to minimum wage and overtime laws. What laws apply to you and your employees? Are employees exempt from overtime? The exemptions are trickier than many understand, so double check this.

2. Are you paying payroll taxes?

For most employers, this is a no-brainer. Taxes are a way of life. But some employers try to avoid these obligations by either paying employees “under the table” or treating them as independent contractors. The first practice is simply illegal. The latter is more complicated.

Genuine independent contractors are responsible for their own taxes (and don’t have to receive minimum wage or overtime). But you can’t just avoid dealing with legal requirements by calling someone an independent contractor. The exact requirements vary, but generally, if a person is working only or primarily for you, they are probably your employee. Especially if they are performing tasks in line with your primary business. For example, a graphic designer “hired” for a one-off project creating a new company logo may be an independent contractor. But a graphic design company hiring the same person to create designs periodically for its customers looks more like an employment relationship.

3. Do you have an anti-harassment policy?

Various state and federal laws prohibit employment discrimination for all but the smallest employers. Even if you’re not subject to these laws, you can’t afford to tolerate workplace harassment. As a starting point, you should have a written anti-harassment policy that advises employees of prohibited behavior and provides a mechanism to report violations. Again, this is a bare minimum. So, after you institute or update your policy, consider providing training to employees. And, of course, take all complaints seriously and investigate promptly.

4. What do your personnel files look like?

If legal issues arise, the employee’s personnel file will come under scrutiny, so don’t be careless. Whether physical or electronic, you should have separate files for each employee. These should contain the “new hire” paperwork such as offer letters, I-9s, and tax withholding forms. They also include employee benefit documents, such as for insurance and retirement plans, if applicable. They would also include any formal disciplinary records. And if you receive medical information about an employee, that must go in a separate file.

5. How do you handle employee medical issues?

If you do have medical information, you’ve probably had to deal with employee medical issues. These can touch on a surprising number of employment laws. I regularly advise clients about single employee medical situations that potentially implicate 6-7 laws. For example, you may have to make reasonable accommodations to an employee with a disability. This might include time off, even if you don’t have a sick leave policy.

6. Will your employees go union?

Most employees have the right to join unions. As an employer, it’s not your choice. But that doesn’t mean your fate is sealed. Getting the above issues right, treating employees well, and listening to them will often keep unions out. But if your employees do unionize, then you’ll be playing by a new set of rules. You’ll have to negotiate with the union over many issues. You will enter the world of potential grievances and arbitrations. And employees will likely receive “just cause” job protection. Make sure you understand how this world works before you find yourself in it. (There are geographic and industry-based factors affecting the likelihood that your workforce will unionize, but it’s at least a possibility in nearly every company.)

Beyond this Employment Law Checkup

I’m only providing this quick employment law checkup as a starting point. I want employers to get these issues right. But that’s not always an easy task. Plus, there are many more employment laws beyond the subjects addressed here. The laws are complex. Often there are extensive regulations. Minor nuances can entirely change an employer’s responsibilities.

 

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Employee Handbooks NLRB Guidance Rules

New Rules for Employee Handbooks

On June 6, 2018, the General Counsel of the National Labor Relations Board issued a guidance memorandum regarding employee handbooks and other work rules. The memo applies a December 2017 NLRB case decision that permitted employers greater flexibility in drafting meaningful workplace policies.

If challenged under the National Labor Relations Act, rules will now fall into one of three categories: lawful rules, unlawful rules, and rules requiring further scrutiny. Many more rules will be deemed lawful than under the previous analysis.

1. Rules that are Generally Lawful to Maintain

The guidance memorandum identifies nine subcategories of rules that will usually not violate the National Labor Relations Act (NLRA). These rules are acceptable “either because the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of rights guaranteed by the Act, or because the potential adverse impact on protected rights is outweighed by the business justifications associated with the rule.”

Civility Rules

Under the Obama Administration, the NLRB routinely found that this type of rule was unlawful. Now they will usually be acceptable because they “are consistent with basic standards of harmony and civility.”

Examples of generally lawful civility rules include:

  • “Behavior that is rude, condescending or otherwise socially unacceptable is prohibited.”
  • “Disparaging the company’s employees is prohibited.”
  • “Employees may not post any statements, photographs, video or audio that reasonably could be viewed as disparaging to employees.”

No-Photography Rules and No-Recording Rules

The NLRB recently allowed a rule prohibiting the use of camera-enabled devices to take images or video at work. The guidance memo suggests that similar rules regarding audio recording should likewise be lawful.

However, the memo cautions that “a ban on mere possession of cell phones at work may be unlawful where the employees’ main method of communication during the work day is by cell phone.”

Rules Against Insubordination, Non-cooperation, or On-the-job Conduct that Adversely Affects Operations

The guidance memorandum acknowledges that nearly all employee handbooks contain these rules. It provides these specific examples:

  • “Being uncooperative with supervisors or otherwise engaging in conduct that does not support the Employer’s goals and objectives is prohibited.”
  • “Insubordination to a manager or lack of cooperation with fellow employees or guests is prohibited.”

Rules of this nature will generally be acceptable.

Disruptive Behavior Rules

The guidance memorandum references rules prohibiting:

  • “Boisterous and other disruptive conduct.”
  • “Creating a disturbance on Company premises or creating discord with clients or fellow employees.”

In 2016, the NLRB found the first rule above unlawful because employees could read it to prohibit lawful activity such as protests and picketing. However, the current Board will likely allow these rules. The guidance memo offers that “even if employees would read such rules as applying to strikes and walkouts (as opposed to only unprotected conduct), employees would not generally refrain from such activity merely because a rule bans disruptive conduct.”

Rules Protecting Confidential, Proprietary, and Customer Information or Documents

Confidentiality rules in employee handbooks can be problematic if they limit discussion of wage information or working conditions. But the guidance memorandum clarifies that other rules “banning the discussion of confidential, proprietary, or customer information” are now generally acceptable. “Employees do not have a right under the Act to disclose employee information obtained from unauthorized access/use of confidential records, or to remove records from the employer’s premises.”

Rules against Defamation or Misrepresentation

As recently as 2017, the NLRB held that a rule prohibiting employees from “misrepresenting the company’s products or services or its employees” was unlawful. The new guidance memorandum suggests that rule is now acceptable, recognizing that “[t]he vast majority of conduct covered by these rules is unprotected.”

Rules against Using Employer Logos or Intellectual Property

In the past, the NLRB objected to these rules:

  • “Employees are forbidden from using the Company’s logos for any reason.”
  • “Do not use any Company logo, trademark, or graphic without prior written approval.”

Now, employers may include similar rules in their employee handbooks. The current NLRB General Counsel accepts that these rules are unlikely to deter employees from “fair use of a logo on a picket sign,” which would likely be allowed under federal copyright and labor laws.

Rules Requiring Authorization to Speak for Company

As long as the rule only addresses who may speak on behalf of the company, it will generally be lawful.

Rules Banning Disloyalty, Nepotism, or Self-Enrichment

The NLRB has historically allowed rules of this nature. Examples include:

  • “Employees may not engage in conduct that is disloyal, competitive, or damaging to the company such as illegal acts in restraining of trade or employment with another employer.”
  • “Employees are banned from activities or investments that compete with the Company, interferes with one’s judgment concerning the Company’s best interests, or exploits one’s position with the Company for personal gain.”

2. Rules Warranting Individualized Scrutiny

The NLRB recognizes a gray area for rules that are not obviously lawful or unlawful on their face. Whether an employer may maintain such rules in their employee handbooks or policies manuals will depend on context.

The guidance memo advises that:

[S]uch rules should be viewed as they would by employees who interpret work rules as they apply to the everydayness of their job. Other contextual factors include the placement of the rules among other rules, the kinds of examples provided, and the type and character of the workplace.

These rules will also draw greater scrutiny if employees have actually refrained from lawful activity because of them.

Here are some rules that may fall into this category:

  • Broad conflict-of-interest rules
  • Confidentiality rules encompassing “employer business” or “employee information”
  • Rules regarding disparagement or criticism of the employer
  • Restrictions on use of the employer’s name
  • Rules restricting speaking to the media or third parties
  • Bans on off-duty conduct that might harm the employer
  • Rules against making false or inaccurate statements

3. Rules that are Unlawful to Maintain

Finally, some rules will still readily violate the NLRA. The following will most likely get employers in trouble.

Confidentiality Rules Specifically Regarding Wages, Benefits, or Working Conditions

The ability to interact with other employees over core terms of employment is a fundamental right under federal labor law. The guidance memorandum offers that “[t]here are no legitimate interests in banning employees from discussing wages or working conditions that are sufficient to overcome Section 7 [of the NLRA] rights.”

Rules Against Joining Outside Organizations or Voting on Matters Concerning Employer

Similarly, the NLRA plainly gives employees the right to join unions. So, employers cannot directly purport to curtail that right through a workplace rule.

Revising Employee Handbooks

This NLRB guidance and the recent case decision give employers greater leeway in drafting their workplace policies. Accordingly, businesses may take this opportunity to review their employee handbooks and consider revisions. But, employers who previously revised policies to comply with earlier, more-stringent NLRB rulings could choose to retain the less-restrictive policies.