During a week that brought several notable decisions, the National Labor Relations Board issued a ruling on Friday, December 15, 2017, overturning its controversial 2011 Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011) (“Specialty Healthcare”) decision, which held that in order for employees to be included in a collective bargaining unit, employers had to prove the employees shared an “overwhelming community of interest” with one another. The unions argued that the “overwhelming community of interest” burden was all but impossible to meet and effectively allowed unions to create “micro-units” of any number, group, or sub-group of employees the unions saw fit. This in turn meant that an employer could be faced with negotiating collective bargaining agreements with multiple groups of employees who often shared the same schedule, workplace, and general terms and conditions of employment, but nonetheless were represented by different locals or divisions of the same or multiple unions. In one particularly glaring example, the Board approved a union’s request for separate bargaining units in each of nine different graduate student departments at Yale University despite the fact that the union already represented existing, university-wide bargaining units.
The National Labor Relations Board issued a much-anticipated decision on Thursday, overruling its controversial 2015 Browning-Ferris decision that unions and employees argued drastically expanded the definition and scope of the Board’s joint-employer doctrine. In Browning-Ferris, the Board departed from decades of precedent and held that entities who merely possessed—as opposed to directly and immediately exercised—control over workers would be deemed joint employers for purposes of assessing liability under the National Labor Relations Act. The Board used the Browning-Ferris decision to expand its reach under the joint-employer doctrine to include, for example, companies that relied on staffing agencies and in some cases, parent companies that did not exercise immediate or direct control over a subsidiary’s workers, but had the potential authority to affect certain terms and conditions of employment. The Browning-Ferris decision faced heavy criticism from employers as well as an appeal of the decision itself to the D.C. Circuit Court of Appeals.
On November 15, the EEOC issued its 2017 annual Performance and Accountability Report, providing details and statistics regarding the Commission’s performance and goals during the period of October 1, 2016 to September 30, 2017.
On August 31, 2017, a federal district court judge in Texas struck down the Department of Labor’s Obama-era controversial 2016 rule that raised the minimum salary threshold required to qualify for the Fair Labor Standards Act’s “white collar” exemption. Under the proposed regulations, the minimum salary threshold was raised to just over $47,000 per year, and increased the overtime eligibility threshold for highly compensated workers from $100,000 to about $134,000.
On June 27, President Trump nominated labor attorney William J. Emanuel to fill the last vacancy of the five seats on the National Labor Relations Board. Emanuel is a management-side labor attorney who has practiced many years before the Board. Emanuel has extensive experience arguing in support of employee class and collective action waivers, including involvement in multiple cases that have either been before the Supreme Court or directly led to precedent that the Supreme Court is now set to consider.
As we have said in previous posts, President Trump’s election and now nomination of two NLRB members could signal a tide turn in favor of employers before the Board. Emanuel’s nomination comes a little over a week after Trump nominated attorney Marvin E. Kaplan to the Board on June 19. If confirmed by the Senate, Emanuel and Kaplan would give the NLRB its first Republican majority since 2008. With a likely more employer-friendly majority, the NLRB could be poised to roll back some of the previous administration’s labor initiatives.
In a ceremonial signing on June 22, Philadelphia Mayor Jim Kenney signed a new municipal bill giving the City of Philadelphia authority to temporarily close businesses found to have repeatedly violated the City’s anti-discrimination statutes. The new bill, which amends the City’s Fair Practices Ordinance, states that the Philadelphia Commission on Human Relations may, “upon a finding that [an employer] has engaged in severe or repeated violations without effective efforts to remediate the violations, order that the [employer] cease its business operations in the City for a specified period of time.” The bill, which went into effect immediately, does not state how long a business may be closed. Nor does it define “severe or repeated violations” or clarify what constitutes “effective efforts to remediate.”
With an eye towards “increasingly unaffordable” higher education, President Trump signed an Executive Order on June 15, 2017, seeking to “provide more affordable pathways to secure, high paying jobs by promoting apprenticeships and effective workforce development programs, while easing the regulatory burden on such programs and reducing or eliminating taxpayer support for ineffective workforce development programs.” The Executive Order directs the Department of Labor (“DOL”) to propose regulations that “promote the development of apprenticeship programs by third parties,” including trade and industry groups, companies, non-profit organizations, unions, and joint labor-management organizations. The term “apprenticeship” means “an arrangement that includes a paid-work component and an educational or instructional component, wherein an individual obtains workplace-relevant knowledge and skills.” The Executive Order, in effect, seeks to expand the authority of employers and other third parties to design their own apprenticeship programs and tasks the DOL with implementing or rejecting and assessing such programs on an expedited basis.
President Trump nominated attorney Marvin Kaplan to fill one of two vacancies on the National Labor Relations Board on June 19, 2017. Kaplan currently works on the Occupational Safety and Health Review Commission and previously served as Republican counsel to the House Education and Workforce Committee which, among other things, provides oversight of the NLRB. The five-seat NLRB currently consists of only three members: Chairman Philip Miscimarra (R) and Members Mark Gaston Pearce (D) and Lauren McFerran (D). With members appointed (subject to Senate approval) to 5-year terms, the NLRB is typically composed of three members of the sitting President’s party and two from the other party. If Kaplan’s appointment is approved, it could clear the way for President Trump to appoint a third Republican, giving the NLRB its first Republican majority since 2008.
The Fifth Circuit held recently that the State of Texas had standing to sue the Equal Employment Opportunity Commission (“EEOC”) over the Commission’s “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII” (the “Guidance”) issued in April 2012, which warned employers that blanket policies against hiring felons could disproportionately exclude minorities and thus be deemed discriminatory. Texas originally sued the EEOC in late 2013 seeking an injunction against enforcement of the Guidance and a declaratory judgment that state agencies be allowed to maintain their policies, as instituted under state law, barring categories of convicted felons from state employment. In its complaint, the State also claimed that the EEOC’s Guidance improperly preempted state law. The lower court granted the EEOC’s motion to dismiss on grounds that Texas lacked standing to sue the EEOC because the Commission cannot bring an enforcement action against the state for failing to comply with the Guidance. The lower court also held that the EEOC Guidance did not constitute a “final agency action” under the Administrative Procedure Act (“APA”), and thus the Guidance was not subject to judicial review.
President Obama signed an Executive Order on Monday, September 7, requiring federal contractors to provide paid sick leave to their employees, effective January 1, 2017. The Order requires federal contractors and their subcontractors to let employees earn at least one hour of paid sick leave for every 30 hours worked, up to 56 hours, or 7 days, of leave.