Category Archives: National Labor Relations Board

The NLRB Still Has Something To Say About Mandatory Arbitration Agreements

Contributed by Steven Jados, November 5, 2019

In May 2018, the U.S. Supreme Court rejected the argument that the National Labor Relations Act (the “Act”) prohibits mandatory arbitration agreements that contain class and collective action waivers.  But that has not stopped the National Labor Relations Board (NLRB), the federal agency that enforces the Act, from weighing-in and declaring other arbitration agreement provisions unlawful.

As a string of recent NLRB decisions makes clear—the newest of which is Beena Beauty Holding, Inc., 368 NLRB No. 91 (2019)—mandatory arbitration provisions, even in non-union workplaces, that can reasonably be interpreted by employees to limit or interfere with their ability to file unfair labor practice charges with the NLRB are likely unlawful. 

The offending language, from the NLRB’s perspective, is one that generally requires arbitration of all claims relating to an employee’s employment, whether under state or federal law, without exception.  As the NLRB’s decisions show, it does not matter whether the Act or NLRB are specifically mentioned.  Rather, it is a violation of the Act if an arbitration agreement could reasonably be interpreted to prevent employees from filing charges with the NLRB.  In other words, provisions in an arbitration agreement that make arbitration the exclusive forum for violations of the Act are unlawful, whether such provisions are expressly stated or reasonably implied.    

Fortunately, the NLRB has also given insight as to what is acceptable under the Act.  In Briad Wenco, LLC, 368 NLRB No. 72 (2019), the NLRB ruled that the following “savings clause” rendered the employer’s arbitration provision lawful:  “Nothing in this Agreement shall be construed to prohibit any current or former employee from filing any charge or complaint or participating in any investigation or proceeding conducted by an administrative agency, including but not limited to  . . . the National Labor Relations Board . . . .” It is not enough, however, to include language stating that the arbitration provision does not apply to claims “preempted by federal labor laws.” The NLRB has already ruled that such language is insufficient under the Act.  Cedars-Sinai Medical Center, 368 NLRB No. 83 (2019).

Bearing all of this in mind, the bottom line is that even non-union employers should be aware that they—and their mandatory arbitration agreements—continue to be targeted by the NLRB. The addition of a savings clause like the one described in the preceding paragraph may help limit or eliminate the potential for NLRB scrutiny—but we note that arbitration provisions are construed as a whole, so it is best to consult with experienced labor counsel to ensure that arbitration agreements are drafted to limit potential liability and compliance concerns.  

Keep Calm and Be Cautiously Optimistic – Recent NLRB Developments

Contributed by Beverly Alfon, September 25, 2018

Gavel2

Gavel on white background 

The National Labor Relations Board (NLRB) is taking more steps towards positive, significant change for private-sector employers:

Joint Employer Standard

CURRENT LAW:  The Board may find that two or more entities are “joint employers of a single work force if they are both employers within the meaning of the common law, and if they share or codetermine those matters governing the essential terms and conditions of employment.”  Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015). The primary inquiry is whether the purported joint-employer possesses the actual or potential authority to exercise control over the primary employer’s employees.

DEVELOPMENT:  On September 14, the Board issued a proposed rule that would consider an employer a “joint employer” of another employer’s employees “only if the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision and direction.” However, the purported joint employer “must possess and actually exercise substantial direct and immediate control over the employees’ essential terms of employment in a manner that is not limited and routine.” It reflects the current Board majority’s initial view, and is subject to potential revision in response to public comments.  Public comments are due by November 13, 2018.

Construction Industry Collective Bargaining Agreements – Section 9(a)

Most collective bargaining relationships between employers and unions are governed by Section 9(a) of the National Labor Relations Act, which requires a union to have the support of a majority of employees in the bargaining unit. In the construction industry, however, these relationships are presumed to be governed by Section 8(f) of the Act, which allows an employer to enter a collective bargaining agreement with the union without an election or other proof of majority support. Key distinction: An 8(f) relationship can be unilaterally terminated upon expiration of the agreement, but a 9(a) agreement obligates the employer to engage in good faith negotiations with the union for a successor contract.

Current lawA union can convert an 8(f) relationship to a 9(a) relationship based on contract language alone.  Staunton Fuel & Material, 335 NLRB 717 (2001). Typical language in a one-page memorandum of agreement states that the union requested and was granted recognition as the majority or 9(a) representative of the bargaining unit, based on the union having shown, or having offered to show, evidence of its majority support – regardless of whether the union actually presented or offered to present such proof of majority.

DEVELOPMENTOn September 11, the Board invited the public to file briefs regarding whether or not it should revisit this standard. Construction industry employers should be pushing hard for this reevaluation. Briefs from interested parties must be submitted on or before October 26, 2018.

Employee Use of Company Email for Union Organizing

Current law: Employees may use company computer systems for the purpose of union organizing.  Purple Communications, Inc., 361 NLRB 1050 (2014).  This applies to both union and non-union employers.

DEVELOPMENT: Last month, the Board invited briefs on whether they should uphold, modify or overrule Purple Communications. The public comment period has been extended to October 5, 2018. On September 14, the NLRB General Counsel filed an amicus brief in a pending case and took the position that employers should be allowed to restrict non-work use of its email systems in a non-discriminatory manner, as it does with other company-owned resources.

Be cautiously optimistic, but remain cognizant of the current law.  Stay tuned.

 

 

The NLRB’s Recent Decision Lowers the Trigger for Employee Weingarten Rights

Contributed by Beverly Alfon, August 2, 2018

Employers have had reason to exhale a bit in the Trump era of the National Labor Relations Board (NLRB). However, as demonstrated in a recent case involving employee Weingarten rights, long-standing federal labor principles and facts can nonetheless tilt a decision against the employer.

A Quick Refresher:  The term “Weingarten rights” refers to the rights of union-represented employees to demand union representation during an employer’s investigatory interview that may result in discipline (as opposed to a meeting where discipline is simply being issued to the employee). The U.S. Supreme Court upheld these employee rights in NLRB v. J. Weingarten Inc., 420 U.S. 251 (1975), but made clear that the right to union representation is not automatic, but arises “only in a situation where the employee requests representation.” Consistently, for the past 40 years, the NLRB and federal courts have held that the right to representation at an investigatory interview only attaches once the employee has requested representation.

Union Block WordsIn June, the Board issued a decision addressing what constitutes a “request” for representation. In Circus Circus Casinos, Inc., 366 NLRB 110 (2018), a union-represented employee stated prior to an interview that he had “called the Union three times [and] nobody showed up, I’m here without representation.” The Board majority (2 of 3-member panel) found that this was enough to constitute a request for representation under Weingarten.

The majority pointed out that statements or inquiries such as – “I would like someone there that could explain to me what was happening” or “Should I have someone here with me, someone from the unions,” have been found sufficient to trigger Weingarten rights before. However, in Circus Circus Casinos, Inc., the employee did not ask the employer for union representation, tell the employer that he wanted a union representative, or ask the employer whether or not he needed a union representative present. The employee did not attempt to stop the interview. At most, he indicated that he did not have union representation. Nonetheless, the Board ordered the employer to reinstate the employee (who was discharged as a result of the interview) with full back pay from his termination in 2013, and reimburse him for job-search and interim-employment expenses.

Now, it is clear that Weingarten rights are triggered even if an employee does not directly address the request for representation to the employer. The inquiry has shifted from the question of whether the employee communicated a request for union representation to the employer – to whether or not the employer is somehow “on notice” of the employee’s preference for union representation.

Best Practice: Review and update your policy and procedure related to investigations involving union-represented employees. Review the Weingarten standards with your investigators. If the employee makes any comment or suggestion regarding union representation before or during an interview, ask the employee to clarify whether s/he is requesting union representation before proceeding with the interview, or if s/he would like to proceed without representation. If the employee confirms that s/he prefers union representation, either (a) immediately suspend the interview until a union representative is identified and present or (b) immediately end the interview altogether. Remember that a union-represented employee should not be disciplined for requesting union representation at an investigatory interview.

Being knowledgeable about the do’s and don’ts during an investigatory interview where a union representative is present is equally important. It is important to consult with experienced labor counsel in order to avoid drawing any unfair labor practice charges.

Supreme Court Rules Class Action Waivers Enforceable Ending Uncertainty for Employers

Contributed by Suzanne Newcomb, May 21, 2018

36419114 - hand about to bang gavel on sounding block in the court room

The U.S. Supreme Court ruled this morning that employers can enforce class action waivers included in employment-related arbitration agreements. An arbitration agreement is a contract through which an employee and an employer agree in advance to resolve any disputes that may arise through binding arbitration rather than in court. The issue before the Supreme Court was whether an employer could enforce an arbitration agreement provision requiring each employee to arbitrate his or her disputes individually rather than collectively or as part of a class action. The Court ruled that so called “class action waivers” are enforceable.

For several years the general counsel for the National Labor Relations Board (NLRB) has argued that class action waivers violate Section 7 of the National Labor Relations Act which protects employees’ right to engage in “concerted activity.” The Federal Court of Appeals for the Fifth Circuit rejected this argument, but the Seventh and Ninth Circuits agreed with the NLRB prompting the Supreme Court to look at the issue.

The Supreme Court sided with the Fifth Circuit ruling that employees and employers can agree that future disputes arising between them will be resolved only through binding one-on-one arbitration. The decision provides welcome clarity to employers and their counsel and unequivocally returns a useful tool to the employers’ risk-management toolbox.

Still, the larger question of whether an arbitration agreement is right for your particular business remains. The fact that you can require employees to sign arbitration agreements does not always mean that you should. Employers who are considering asking their employees to sign arbitration agreements should seek the advice of experienced legal counsel and carefully evaluate the pros and cons of submitting various types of employment-related disputes to binding arbitration.

Arbitration agreements – like all contracts – can be challenged on other grounds. If an employer decides, after careful consideration, that an arbitration agreement best fits its needs, care must be taken in drafting and implementing the agreement to guard against allegations that the agreement is unfair or unconscionable, or that the employee’s acceptance of the agreement was the result of fraud or duress.

Dust off Those Handbooks: NLRB Restores Sanity to Employment Policies

Contributed by JT Charron, December 27, 2017

Thirteen years ago the National Labor Relations Board issued its decision in Lutheran Heritage Village-Livonia, 343 NLRB 646, which held that facially neutral work rules violated the National Labor Relations Act if employees would “reasonably construe” the rule to restrict the employees’ rights to engage in protected concerted activity under Section 7 of the Act. Following that decision, the Board used the “reasonably construe” standard to invalidate even the most well intentioned work rules. See e.g., T-Mobile USA Inc., April 29, 2016 (finding that employer’s policy requiring employees to maintain a positive work environment violated the NLRA).

On December 14, in The Boeing Company, 365 NLRB 154, the Board overturned Lutheran Heritage and articulated a new test for evaluating the validity of facially neutral work rules. In place of the unworkable “reasonably construe” standard, the Board introduced a balancing test for analyzing facially neutral work rules. Under the new standard, the Board will “evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.” (emphasis in original).

Workplace investigation

Examining Documents

Utilizing this standard, the Board reversed the administrative law judge’s decision that Boeing’s no-camera rule violated the NLRA. Instead, it found that the employer’s legitimate business reasons for the policy — protecting proprietary information and national security interests — outweighed any potential Section 7 violation. The Board also articulated three broad categories of work rules that would result from the new balancing test:

  • “Category 1 will include rules that the Board designates as lawful to maintain, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule.”
  • “Category 2 will include rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.”
  • “Category 3 will include rules that the Board will designate as unlawful to maintain because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.”

Boeing is a big win for employers and represents a clear change in the Board’s attitude towards work rules. While only time — and additional Board decisions — will tell, the new standard should provide “far greater clarity and certainty” to employers in drafting workplace policies. Additionally, employers may want to consider taking a second look at policies previously removed and/or revised in the wake of Lutheran Heritage and its progeny. Finally, as we head into 2018, employers should evaluate all workplace policies in light of the Board’s new balancing test and be prepared with strong justifications for any policies that have the potential to infringe on an employee’s rights under the Act.

2017 Ending With A Bang: Obama Era NLRB “Micro Unit” Ruling Reversed

Contributed by Jeffrey Risch, December 22, 2017

2017 is coming to an end, and with somewhat of a Bang! for labor relations moving forward under Trump’s NLRB.  In a matter involving PCC Structurals, Inc. and the Intern’l Assoc. of Machinists & Aerospace Workers (19-RC-202188), the NLRB this month overruled its 2011 decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934, and reinstated the traditional community-of-interest standard for determining an appropriate bargaining unit in union representation cases.  The essence of the 2017 decision is that the National Labor Relations Act mandates that the NLRB must evaluate, in each and every case, whether the group of employees a union seeks to represent constitutes a unit that is “appropriate” for collective bargaining.

As a reminder… in Specialty Healthcare, the NLRB held that if a union petitioned for an election among a particular group of employees, those employees PRESUMABLY shared a community of interest among themselves.  And so, if the employer took the position that the smallest appropriate unit had to include employees excluded from the proposed unit, the NLRB could not find the petitioned unit inappropriate unless the employer proved that the excluded employees shared an “overwhelming” community of interest with the petitioned-for group.  The practical effect of this ruling made it “next to impossible” for an employer to successfully challenge the union’s petitioned for “micro-unit”.

The Trump NLRB (in a 3-2 party split decision) has now 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…”

This PCC Structurals case involved a Regional Office’s finding that a petitioned for unit (a “micro-unit”) of approximately 100 welders was appropriate for collective bargaining.  A “micro-unit” is a small and discrete subset of employees at a particular worksite or worksites, which a union seeks to represent.  It is the opposite of a “wall-to-wall unit” that would encompass the majority of an employer’s non-supervisory employees.  Applying Specialty Healthcare’s “overwhelming community of interest” standard, the Regional Director rejected the employer’s contention that the smallest appropriate unit was a wall-to-wall unit of 2,565 employees.

Of course, the more limited that a union defines a petitioned for unit, the less number of employees belong to the unit and the easier it is for the union to “cherry pick” the necessary votes to win an election and get a “foot in the door” of an employer.  We saw this work to the union’s benefit in many cases since Specialty Healthcare (see here).

The Quick Take Away:  Despite this favorable ruling for employers who prefer to remain union-free, it may be temporary due to what political party occupies the White House; and it does not prevent unions from successfully petitioning for smaller units at a place of business that would otherwise meet the “community of interest” standard.  Indeed, smaller units have always been successfully petitioned for by labor unions under this standard.  But, for the time being, big labor may not be able to “cherry pick” a few employees at a time.

You CAN Ask Your Employees To Be Happy! Federal Appeals Court Reins In National Labor Relations Board (NLRB)

Contributed by Beverly Alfon, August 17­, 2017

Labor LawMuch has been written and discussed about the National Labor Relations Board’s (NLRB) attack on handbook policies over the past several years. The NLRB has found what many consider to be run-of-the-mill, standard policies that have, for many years, raised no issues or controversy, to be violative of the National Labor Relations Act (NLRA).

Last year, the NLRB struck down various policies in a handbook issued by T-Mobile, including one that encouraged employees to be professional and maintain a “positive work environment” in T-Mobile USA, Inc. v. NLRB, No. 16-60284 (5th Cir. 2017). In its decision, the Board reasoned: “[w]e find that employees would reasonably construe the rule to restrict potentially controversial or contentious communications and discussions, including those protected by Section 7 of the [NLRA], out of fear that the [employer] would deem them to be inconsistent with a ‘positive work environment.’” T-Mobile appealed the NLRB’s decision to the U.S. Court of Appeals for the Fifth Circuit.

Specifically, T-Mobile challenged the Board’s determination that the following provisions from its employee handbook violated the NLRA because they discouraged unionizing or other concerted activity protected by the Act. Provision (1) encouraged employees to “maintain a positive work environment”; (2) prohibited “[a]rguing or fighting,” “failing to treat others with respect,” and “failing to demonstrate appropriate teamwork”; (3) prohibited all photography and audio or video recording in the workplace; and (4) prohibited access to electronic information by non-approved individuals.

On July 25, the Fifth Circuit held that the Board erred in finding that a reasonable employee would construe policies (1), (2), and (4) to prohibit protected activity. The Court reasoned:

In this case, where the record does not suggest that the rules have been applied in the context of union or collective activity, the ‘reasonable employee’ is a T-Mobile employee aware of his legal rights but who also interprets work rules as they apply to the everydayness of his job. The reasonable employee does not view every employer policy through the prism of the NLRA. Indeed, ‘[the Board] must not presume improper interference with employee rights.’

The Court did agree with the Board’s finding that a reasonable employee would construe policy (3) to prohibit protected activity. It reasoned that unlike the other policies such as the “workplace conduct” policy and “commitment –to-integrity” policy, the recording policy blanketedly forbids certain forms of clearly protected activity. For instance, it would prohibit an off-duty employee from taking a picture of a wage schedule. Notably, last month, the U.S. Court of Appeals for the Second Circuit upheld a similar NLRB decision on workplace recordings.

Bottom line: This federal appeals court decision in T-Mobile USA Inc. v. NLRB gives employers and their counsel additional basis for defending legitimate personnel policies in the face of numerous NLRB decisions issued over the past several years that have been viewed as an attempt to diminish management’s right to set basic employee standards in the workplace. However, it seems that blanket policies prohibiting workplace recordings continue to require careful wording and business justification.