Tag: John Ring

Joint Employer NLRB Rulemaking

NLRB Suggests Joint Employer Rules

On May 9, 2018, the National Labor Relations Board announced that is considering rulemaking on the subject of joint employer status. The joint employer standard has received much attention in recent year. The Board’s Republican majority tried to change the standard for this important analysis through a December 2017 case decision. However, the NLRB later withdrew that decision upon allegations that one of the Republican members had a conflict of interest. Shifting to rulemaking to change the joint employer standard may overcome the conflict issue.

Current Joint Employer Analysis

In 2015, a 3-2 Democratic majority Board decided a case involving whether Browning-Ferris Industries of California (BFI) was a joint employer with a company that supplied workers onsite at BFI. The NLRB departed from precedent and applied an “indirect control” standard that considerably expanded the situations where two entities would be joint employers under the National Labor Relations Act. The broad test only requires that the entities “share or codetermine those matters governing the essential terms and conditions of employment.” This is evaluated by asking whether each entity “possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful collective bargaining.”

Before this case, the NLRB applied a “direct” and “substantial” control standard.

The primary difference was the shift from requiring actual exercise of control over workers to mere potential of control.

Initial Attempt to Return to Previous Standard

When President Trump took office, he named Philip Miscimarra the Chairman of the NLRB. Miscimarra was on the Board when the NLRB decided the Browning-Ferris case. He and the other Republican member at the time issued a vigorous dissent to the Democratic majority’s decision. Just before Miscimarra’s term expired in December 2017, he and a new Republican majority issued several prominent decisions reversing Obama-era NLRB precedent. This included an attempted reversal of the joint employer standard.

In a December 14, 2017, 3-2 Board decision, the NLRB announced it was returning to the earlier test. The restored test focused on which business(es) have “direct and immediate” control over terms and conditions of employment. It dismissed analysis of “indirect” factors that the Democrat majority introduced in 2015.

However, on February 26, 2018, the NLRB vacated the December 14, 2017 decision, reverting to the “indirect control” standard. Marvin Kaplan, whom Trump had appointed Chair upon Miscimarra’s departure, joined the two Democratic members in that decision. The other Republican member, Bill Emanuel, was not allowed to participate in the decision. The NLRB Inspector General’s Office had opined that Emanuel had a conflict of interest. His previous law firm had represented a party in the Browning-Ferris case, which the December 14, 2017 decision effectively overturned.

The alleged conflict may prevent Emanuel from deciding any case involving a change in the joint employer standard.

Shift to Rulemaking

The NLRB recently regained full strength with the Senate confirmation of Republican attorney John Ring as the fifth member. President Trump promptly replaced Kaplan with Ring in the Chairman seat. Ring, like Emanuel, may also face conflict challenges given the extensive client-base of his former firm.

Likely because the Republican majority would face repeated conflict claims in attempting to overturn Browning-Ferris through adjudication of an actual case, Chairman Ring has shifted to administrative rulemaking as the vehicle to change the joint employer standard. The NLRB has seldom relied on rulemaking to establish policy. So, this attempt to do so will itself likely face legal challenges.

Nonetheless, Chairman Ring offers a compelling argument for the rulemaking approach:

“Whether one business is the joint employer of another business’s employees is one of the most critical issues in labor law today,” says NLRB Chairman John F. Ring. “The current uncertainty over the standard to be applied in determining joint-employer status under the Act undermines employers’ willingness to create jobs and expand business opportunities. In my view, notice-and-comment rulemaking offers the best vehicle to fully consider all views on what the standard ought to be.”

His Democratic colleagues unsurprisingly disagree. The NLRB’s press release on the matter specifically noted that “The inclusion of the proposal in the regulatory agenda does not reflect the participation of Board Members Pearce and McFerran.”

The press release explained that the next step would be the issuance of a Notice of Proposed Rulemaking. Although it added that “[a]ny proposed rule would require approval by a majority of the five-member Board,” that statement notably recognizes that the opposition of Members Pearce and McFerran will not be enough to overcome the expected consensus of the three Republican members.

Expected Outcome of Joint Employer Rulemaking

Chairman Ring even took to Twitter to make his views known: “The joint-employer standard is one of the most critical issues in labor law today—affecting millions of Americans in nearly every sector of the economy. Uncertainty over the standard undermines job creation & economic expansion. The new majority intends to get the job done.”

There’s no mystery of what that job is. It’s finding joint employers status only where multiple entities have “direct and immediate” control over workers.

And, although administrative rulemaking takes some time, Ring wants to do this quickly: “The Board majority will work to issue a proposed rule ASAP, and we will consider the views of all interested parties.”

Member Pearce, who was the NLRB Chair when it decided Browning-Ferris, also tweeted on this subject. Among his pointed comments: “Board majority “considering rulemaking” but @NLRBChairman says “Board majority…work[ing] to issue proposed rule ASAP” — certainly sounds like another objective is already set. .”

 

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John Ring NLRB Chair

John Ring Joins the NLRB

On April 11, 2018, the U.S. Senate narrowly confirmed management-side labor attorney John Ring as the fifth member of the National Labor Relations Board. Ring fills the seat vacated in December 2017 by former Board Chairman Philip Miscimarra. The Senate voted 50-48 along party lines. Ring, a Republican, was a partner with Morgan, Lewis & Bockius LLP before his confirmation.

Current NLRB

Following Ring’s confirmation, the White House announced that he would replace Marvin Kaplan as Chair of the NLRB. President Trump had just named Kaplan the Chair in December. Despite the unusual demotion, Kaplan confirmed he would remain on the Board.

In addition to Kaplan, Ring joins members William Emanuel, Mark Pearce, and Lauren McFerran on the Board.

Other than formally making Ring the Chair, no further changes to the Board’s composition are expected until Member Pearce’s term expires on August 27, 2018. Traditionally, no more than three members of the Board have represented the same political party. However, that is not dictated by law. Thus, it will be interesting to see what the White House does regarding Pearce’s seat.

Republican Majority

Republicans now hold 3-2 majority control of the Board. This foretells a continued shift away from pro-labor decisions by the Obama-era NLRB. The Republicans recently held the majority for just a short time before Miscimarra’s term expired. They issued several significant reversals in the last days of his term. (Read more in 2017 NLRB Buzzer Beaters.)

However, the Republican majority still faces a hurdle that may slow the anticipated shift in federal labor law. Member Emanuel’s vote in one of the December 2017 reversals (regarding the joint employer standard) created controversy based on an alleged conflict of interest. Emanuel’s former firm had represented a party in the case that was overruled. The Board subsequently excluded Emanuel and vacated the decision in which he had participated, reverting to the Obama-era precedent.

Emanuel, who had been a partner at national labor law firm Littler Mendelson, may face similar conflicts in many other cases. Ring could also struggle with conflict issues given Morgan Lewis’ substantial client list.

More About John Ring

Before his confirmation, John Ring was a co-leader of Morgan Lewis’ labor/management relations practice.

He received his Bachelor’s Degree from Catholic University and his law degree from Catholic University’s Columbus School of Law. He is a Fellow of the College of Labor and Employment Lawyers.

NLRB General Counsel

General Counsel Reports on the NLRB

On March 14, 2018, NLRB General Counsel Peter Robb issued a memorandum in response to questions and concerns raised at the Midwinter Meeting of the American Bar Association’s Practice and Procedure Under the National Labor Relations Act Committee of the Labor and Employment Law Section. This is an annual tradition for the General Counsel of the National Labor Relations Board.

As the newly confirmed General Counsel, this is Robb’s first time issuing such a report. For those who don’t have the time to read all 27 pages, here are some highlights.

Reorganization of Field Operations

In his first months as General Counsel, Robb has raised many eyebrows and ruffled a fair number of feathers. This has primarily occurred through his designs on reorganizing how the NLRB’s field offices operate.

On this subject, the GC’s memorandum offers:

The General Counsel is currently soliciting input from Agency HQ and Field staff for the purpose of formulating recommended changes to existing case processing procedures. At an appropriate future point, the General Counsel, again in deliberation with Agency staff, will examine and may propose, as appropriate, recommended changes to the structure of the Field offices. No decisions have been made at this time.

The report further indicates that the changes are under consideration for budgetary purposes, adding:

The results of such changes may be to generate benefits in several potential areas, including perhaps: improvement in the efficiency, timeliness, quality of services and organizational decision making, elimination of unnecessary levels of management and administrative support, maximization of employee performance, reduction in travel and other case processing expenses.

The General Counsel also suggests that any changes to the structure of the field offices “will be open for public comment prior to implementation.” He identifies a target effective date of October 1, 2018.

Unfair Labor Practices

In the memorandum the General Counsel reports case-handling statistics for Fiscal Year 2017.

The NLRB received 19,280 charges last year. It settled 95% of them. The agency issued 1,263 formal complaints based on charges. Overall, the NLRB found merit in only 38.6% of the charges filed.

The report includes much more data on topics including:

  • Motions for Summary Judgment
  • Deferrals
  • Subpoenas
  • Section 10(j) Injunctions
  • Submissions to the Division of Advice
  • Charges on Particular Subjects

Representation Cases

Union representation petitions resulted in 1,205 elections in FY 2017. Unions won 71% of these elections. Across these elections 80.5% of the 81,646 eligible employees voted. Overall, 46.7% of the eligible employees voted “yes” and 33.7% voted “no.”

The NLRB also conducted 173 decertification elections. Unions won 32% of these elections, yielding a 68% decertification rate.

The GC’s memorandum also includes a chart of days to election from FY08 to FY17. From 2008 to 2014, there was a median each year of 37 or 38 days from filing of an election petition to the date of the election. In 2015 the number dropped to 33. Over the past two years it has been much lower at 23 days.

The average size of bargaining units has ranged from 24 to 28 between FY07 and FY17. The 2017 average of 24 employees matches that of 2007, 2009, and 2017.

More to Come from the General Counsel and the NLRB

This will not be the last we hear about the NLRB this year. There is still one vacancy on the 5-member Board. Management-side labor attorney John Ring awaits Senate confirmation. When he, or someone else, joins the Board, the new member will join Chairman Marvin Kaplan and Member Bill Emanuel giving the NLRB a Republican majority. They are likely to get back to work changing Obama-era precedents favorable to labor.

One issue still on the table is the fate of the Obama Board’s so-called “quickie” election rules. Late last year a temporary Republican majority issued a request for information suggesting an interest in changing the representation procedures. The Board has now twice extended the time to respond to the RFI. The current deadline is April 18, 2018.

Labor attorneys representing both sides will also be interested to see whether and how the General Counsel proposes to reorganize the NLRB’s field offices. This could significantly affect how the agency operates.