The National Labor Relations Board issued a decision that serves as a reminder to employers of their bargaining obligations upon implementing changes to their business. Rigid Pak Corp., 366 NLRB No. 137 (2018) involves a unionized company (“Rigid”) that manufactured and sold plastic products. Rigid maintained an injection-molding division and a blow-molding division housed on different sides of its facility. The injection-molding division manufactured open-head containers, lids, and crates while the blow-molding division manufactured plastic bottles. In 2014, Rigid encountered various financial difficulties, and to address them, the company entered into a supply agreement to outsource its work to a third-party manufacturer.
On July 18, the Department of Labor’s (DOL) Office of Labor-Management Standards issued a final rule rescinding the so-called “persuader rule,” a controversial Obama-era regulation requiring employers to disclose advice received regarding opposition to union efforts.
Many in the labor community are familiar with the Machinists Union’s long running effort to unionize Boeing’s South Carolina-based 787 Dreamliner manufacturing facility. After failing in two previous attempts to organize the entire facility, the Union recently won a bid to organize a “micro-unit” limited to a group of flight line technicians and inspectors. The Regional Director’s decision to approve the Union’s proposed bargaining unit took most labor practitioners by surprise, given the NLRB’s recent decision in PCC Structurals overturning the controversial Specialty Healthcare standard that facilitated the formation of micro-units. In PCC Structurals, the Board rejected the Specialty Healthcare test and reaffirmed that in reviewing representation petitions, the Board cannot limit its analysis to the interests of employees in the proposed bargaining group and instead must make a “meaningful” evaluation of the interests of those excluded from the group.
Under this standard, the micro-unit proposed by the Union should have been rejected. Inexplicably, the Regional Director reviewing the petition approved the unit, paying little heed to the guidance announced in PCC Structurals. Boeing has petitioned the full NLRB to review and overturn the Regional Director’s decision.
Hunton Andrews Kurth filed an amicus brief supporting Boeing’s appeal on behalf of a group including the Coalition for a Democratic Workplace, Independent Electrical Contractors, National Association of Wholesaler-Distributors, National Federation of Independent Business, National Retail Federation, Restaurant Law Center and Retail Industry Leaders Association. In the brief, the amici urge the Board to accept Boeing’s petition for review in order to provide guidance to the regulated community and the NLRB Regions charged with processing representation petitions on how to properly apply the standard announced in PCC Structurals. A copy of the brief can be found here.
In a highly anticipated decision, the U.S. Supreme Court ruled that public employee unions may not collect involuntary fees from the public employees they represent. Janus v. AFSCME, U.S., No. 16-1466, 6/27/18. Here are the key points of the court’s decision:
Janus involved state employees represented in a bargaining unit by an Illinois public employee union. The union was the exclusive collective bargaining representative of all the employees in a bargaining unit. The union bargained with the State of Illinois for a collective bargaining agreement covering the employees in bargaining unit. The union also engaged in other activities not directly related to the bargaining and administration of the collective bargaining agreement. Continue Reading Supreme Court Strikes Down Involuntary Public Employee Union Fees
The saga continues with regards to the status of a December 2017 NLRB decision that loosened restrictions on employer workplace rules. As we reported, on December 14, 2017, the NLRB overruled the “reasonably construe” standard for evaluating the validity of employer work rules and replaced it with an evaluation that balances 1) the nature and extent of a rule’s impact on NLRA rights and 2) an employer’s legitimate justifications for the rule. The new standard is widely-perceived as a victory for employers and indicated the newly-composed NLRB’s intent to revise the law in situations where the previous administration had stretched key legal principles too far, turning the “reasonably construe” standard into a “possibly construe” standard.
Recently, the NLRB created significant uncertainty as to the joint employer test under the NLRA when it vacated a December 2017 decision that resurrected the standard that existed prior to 2015. Such a standard determines the existence of a joint employer relationship by assessing whether one entity has “actually exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise control)” and the control is “’direct and immediate’ (rather than indirect)” and exercised in a manner that is not “limited and routine.”
On April 16, newly confirmed member John Ring was sworn in as the fifth member and Chairman of the National Labor Relations Board, establishing a Republican-controlled Board. While all has been relatively quiet with regard to rulings from the Board, we will likely see a rise in activity now that the NLRB (with a newly-minted majority) is poised to roll back some of the Obama-era rulings.
Recently the National Labor Relations Board invited interested parties and amici to submit briefs in Velox Express, Inc. (15-CA-184006) to address under what circumstances, if any, the Board should deem an employer’s misclassifying statutory employees as independent contractors constitutes a violation of Section 8(a)(1) of the National Labor Relations Act (“the Act”). Briefs from parties and interested amici must be submitted on or before April 16, 2018.
The National Labor Relations Board continues to undo its actions overruling the joint employer test of Browning-Ferris Industries, 362 NLRB No. 186 (2015). Earlier this week the Board vacated its decision in Hy-Brand Industries, the case which had overruled Browning-Ferris.
Shortly after the original Hy-Brand decision, the Board had asked the U.S. Court of Appeals for the District of Columbia Circuit to remand the Browning-Ferris case to the Board. At the time, the Browning-Ferris case was pending before the court of appeals on the Board’s petition for enforcement and Browning-Ferris’s petition for review, and had been fully briefed and argued.
We previously informed you of the National Labor Relations Board’s decision in Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co., 365 NLRB No. 156 (2017), in which the Board overruled the controversial joint employer test which it had announced in Browning-Ferris Industries, 362 NLRB No. 186 (2015).
On February 26, 2018, the Board entered an order vacating the Hy-Brand decision, 366 NLRB No. 26 (2018). It did so in light of a determination by the Board’s Designated Agency Ethics Official, that Board Member William Emanuel “is, and should have been, disqualified from participating in the [Hy-Brand] proceeding.” Accordingly, Browning-Ferris is again the controlling Board law on joint employer status.
It remains to be seen when the Board might re-visit Browning-Ferris through another decision. In the meantime, employers who face joint employer concerns should evaluate their current practices in light of this development.