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L&E Law Alert: NLRB Issues Major Decisions Before Chairman Steps Down

December 22, 2017

Last week, the NLRB held its promise and issued a series of decisions just before Chairman Philip Miscimarra's term ended on Saturday, December 16.  As expected, the Republican-led NLRB overturned four decisions of the Obama-era.  However, the Board issued an employee-friendly decision, holding an employer violated the NLRA by firing two employees for soliciting union support.

Down Goes the Joint-Employer Standard

In a case titled Hy-Brand Contractors Ltd., the Republican-majority NLRB overturned the Obama-era joint employer standard that was enunciated in Browning-Ferris. In Browning-Ferris the NLRB held that companies were joint-employers even when one company only exercised "indirect control" or had the ability to exert such control over the terms and conditions of employment.  Current NLRB Chairman Philip Miscimarra strongly dissented from this decision.

In Hy-Brand, the Republican-majority NLRB, led by Chairman Miscimarra, returned to the previous standard which requires that companies exercise "direct and immediate control" over the terms and conditions of employment.  In its decision, the majority described the new standard as "understandable and rooted in the real world" and as recognizing joint-employer status in "circumstances that make sense and would foster stable bargaining relationships."

NLRB Loosens Employee Handbook Standards

The NLRB also overturned the standard for determining whether employee handbook policies violated the National Labor Relations Act ("NLRA").  The previous standard was that a policy violated the NLRA if employees could "reasonably construe" it to bar them from exercising their rights under the Act.  The Obama-era NLRB used this standard in recent years to invalidate numerous employer policies, including policies prohibiting employees from criticizing employers on social media or recording workplace conversations.

The current NLRB will now consider the nature and extent of a policy's impact on an employee's rights under the NLRA and the employer's legitimate justifications for the policy.  This test balances the employee's rights with the employer's legitimate justifications, rather than relying on the employee's subjective understanding.

The NLRB also announced that it will classify policies in the following categories:

  1. Policies that are legal in all cases because they cannot be reasonably interpreted to interfere with employee's rights or because any interference is outweighed by business interests; and
  2. Policies that are legal in some cases depending on their application; and
  3. Policies that are always illegal because they interfere with employee's rights in a way that cannot be outweighed by business interests.

NLRB Restores the "Sufficiently Distinct" Micro-Unit Standard

In a case titled PCC Structurals, Inc., the NLRB overturned the Obama-era decision which allowed so-called "micro-units", or small bargaining units. The Obama-era NLRB issued the Specialty Healthcare decision which established the "overwhelming community of interest" standard. Under this decision, the NLRB presumed a union's petitioned-for bargaining unit was appropriate as long as it consisted of a clearly identifiable group of employees. Employers that believed additional employees should be included in the unit were required to show there was an "overwhelming community of interest" between the additional employees and those in the bargained-for unit. This allowed unions to seek small units as a strategy to increase their success in organizational campaigns.

The NLRB returned to its traditional approach and will consider whether the employees in the proposed bargaining unit share a community of interest that is "sufficiently distinct" enough from the proposed additional employees to warrant a separate unit.

A Win for Employers Looking to Make Unilateral Changes

The NLRB also overturned the controversial Obama-era E.I. du Pont de Nemours decision.  In the du Pont decision, the Obama-era NLRB held that the changes the employer made to the employee benefit plan after the expiration of the collective bargaining agreement were unlawful unilateral changes.  This decision was a departure from the 50-year-old precedent that allowed employers to make changes to work rules without bargaining after a collective bargaining agreement expired if the employer had a history of making those changes.  The current decision restores this precedent, and employers will have the ability to make changes to work rules as long as they have a consistent practice of doing so.  

NLRB Issues An Employee-Friendly Decision

In a case involving parties from Connecticut, the NLRB issued a decision in favor of employees' rights to organize.  The NLRB held that Waterbury-based Bozzuto's Inc. violated the NLRA by disciplining and terminating two employees who encouraged others to support a union campaign.  In addition, the NLRB determined that an executive level employee unlawfully interrogated an employee by asking what was going on with the union.  The NLRB ordered Bozzuto's to reinstate the employee to his former position and pay back wages.

Takeaways

Based on these decisions, the NLRB seems poised to reverse Obama-era decisions that were seen by many employers as too harsh or impractical.  This certainly is welcome news for employers.  These decisions likely will be challenged in the courts, but should help employers faced with NLRB charges at the local level.  

Please contact any member of our Labor & Employment group if you would like additional information.    

D. Charles Stohler
(203) 575-2626; cstohler@carmodylaw.com 

Giovanna T. Weller
(203) 575-2651; gweller@carmodylaw.com 

Domenico Zaino, Jr.
(203) 578-4270; dzaino@carmodylaw.com 
 
Howard K. Levine
(203) 784-3102; hlevine@carmodylaw.com 

Maureen D. Cox
(203) 575-2642; mcox@carmodylaw.com

Vincent Farisello 
(203) 578-4284; vfarisello@carmodylaw.com 

Sarah S. Healey
(203) 578-4225; shealey@carmodylaw.com 

Susan L. Henebry
(203) 578-4266; shenebry@carmodylaw.com

Pamela K. Elkow
(203) 252-2672; pelkow@carmodylaw.com

Mark F. Williams
(203) 575-2618; mfwilliams@carmodylaw.com 

Alan H. Bowie
(203) 784-3117; abowie@carmodylaw.com