The National Labor Relations Board’s current joint employer standard received a mixed review from a federal circuit court late last month, providing some guidance on how courts may evaluate the Board’s ongoing rulemaking efforts.
It’s now officially public: under the National Labor Relations Board’s (NLRB) General Counsel Peter B. Robb, unions may face greater scrutiny and a higher burden in defending against claims that they violated the duty of fair representation. Under the National Labor Relations Act, unions owe this duty to its members and can be liable under Section 8(b)(1)(A) if they represent them arbitrarily, discriminatorily, or in bad faith. Continue Reading New General Counsel Memorandum Reiterates The NLRB’s Policy of Increased Scrutiny of Unions
The NLRB’s Office of the General Counsel recently issued an internal directive regarding the manner in which NLRB Regions prosecute duty of fair representation charges against unions. Under the National Labor Relations Act, unions have a duty of fair representation to the members of the bargaining unit it represents by engaging in conduct that is not arbitrary, discriminatory or in bad faith, particularly with regard to the processing of worker grievances. Board law has established (and unions typically offer as a defense) that “mere negligence” alone does not amount to arbitrary conduct that would serve to breach the duty of fair representation.
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.