Alerts and Updates

NLRB Delivers Holiday Gifts to Employers

December 23, 2019

The NLRB handed out meaningful holiday gifts to employers in a flurry of employer-friendly rules and decisions.

The National Labor Relations Board (NLRB) is having a busy holiday season. Recently, the NLRB handed out meaningful holiday gifts to employers in a flurry of employer-friendly rules and decisions that undo changes made by the Obama-era NLRB to longstanding rules, procedures and judicial precedent. The end-of-year activity includes relaxing the onerous union election procedure rules; allowing employers to ban work email for union organizing use; permitting employers to cut off union dues collections once a collective bargaining agreement expires; permitting employers to enact certain workplace investigative confidentiality rules; and settling a case with McDonald’s that absolves the company from direct responsibility as a joint employer of a franchisee.

Union Election Procedure Changes

On December 13, 2019, the NLRB announced over a dozen amendments to its union election procedures. These changes roll back the Obama-era “quickie election” rule, which took effect in April 2015. The rule put employers at a disadvantage by shrinking the election campaign timeline and deferring important bargaining unit composition determinations to after elections, among other things. While the NLRB emphasized it was not completely rescinding the quickie election rules, the new election rules essentially have that effect. Unlike the quickie election rules―which were implemented after proposed rulemaking and a lengthy commentary process―the NLRB implemented its new rules without notice and comment. The amendments will go into effect on April 16, 2020.

Noteworthy changes include:

  • Pre-Election Hearings: Pre-election hearings will generally be scheduled 14 business days from notice of the hearing, as opposed to the current eight business days.
  • Notice of Petition for Election: Employers must post and distribute the notice of petition for election within five business days after service of the notice of hearing, as opposed to the current two business days.
  • Nonpetitioning Party’s Position Statement: Nonpetitioning parties (most commonly employers) must file a position statement within eight business days after service of the notice of hearing, as opposed to the current seven business days.
  • Petitioning Party’s Position Statement: Petitioners (typically unions) must file a position statement responding to the issues raised in any nonpetitioning party’s position statement. This responsive position statement is due three business days before the hearing. In most cases, the current rules do not provide for pre-hearing position statements from petitioning parties.
  • Unit Scope and Voter Eligibility Determinations: All disputes concerning unit scope and voter eligibility―including issues of supervisory status―will generally be litigated at the pre-election hearing and resolved by the regional director before an election is directed. The parties may, however, agree to permit disputed employees to vote subject to challenge. Under the current rules, disputes concerning individuals’ eligibility to vote or inclusion in an appropriate unit ordinarily need not be litigated or resolved before an election is conducted.
  • Post-Hearing Briefs: Parties are permitted once again to file post-hearing briefs with the regional director following pre-election hearings. Post-hearing briefs will be permitted for post-election hearings as well. Such briefs are due within five business days of the close of the hearing, and hearing officers may grant an extension of up to 10 business days for good cause. Under existing rules, post-hearing briefs are permitted only upon special permission of the regional director.
  • Notice of Election: The regional director’s discretion to issue a notice of election subsequent to issuing a direction of election is emphasized. The current rules provide that regional directors “ordinarily will” specify election details in the direction of election.
  • Scheduling of Election: Regional directors must continue to schedule the election for the earliest date practicable, but—absent agreement by the parties—normally will not schedule an election before the 20th business day after the date of the direction of election. Under current practice, regional directors must schedule the election date for the “earliest date practicable,” which could be as early as 13 calendar days from filing the petition.
  • Voter Lists: Employers must furnish the required voter list within five business days following the issuance of a direction of election, as opposed to the current two business days.
  • Certification of Election: The regional director will no longer issue certifications following elections if a request for review is pending or if a request for review can still be filed. Under the current rules, regional directors are required to issue certifications following elections despite the pendency or possibility of a request for review.

What This Means for Employers

Employers facing organization efforts should be on high alert over the next four months as unions will likely want to file a petition for election prior to the new rules going into effect on April 16, 2020. Once the new election rules are effective, employers should take solace that they can campaign against unionization with additional time and more balanced rules than are currently in place.

Employers Can Ban Work Email for Union Organizing Purposes

On December 17, 2019, the NLRB ruled 3-1 in Caesars Entertainment Corp. d/b/a Rio All-Suites Hotel and Casino that a popular casino did not run afoul of the National Labor Relations Act (NLRA) when it imposed a policy barring use of its email system for nonbusiness purposes.

The Caesars decision overrules Purple Communications, an infamous 2014 Obama-era case, where the NLRB held employees could use their employers’ email systems to organize or engage in other concerted activities protected by NLRA Section 7 and any contrary policies were presumptively invalid. The NLRB has effectively reverted back to its ruling in Register Guard, in which it held there is no statutory right for employees to use employer-provided email for nonwork purposes. The NLRB reiterated an employer’s communication systems, including its email system, are its property and that employers have a property right to control the use of those systems.

The Caesars decision contains one new exception not previously included under Register Guard―employees may use company email when it is “the only reasonable means for employees to communicate with one another.” However, the NLRB noted that this exception will be rare because in the typical workplace, employees do have adequate avenues to communicate with each other, for example, face to face, via phone, text message, video chat or social media.

What This Means for Employers

Employers that revised their communications and/or nonsolicitation policies to comply with Purple Communications may now again implement a ban on email union solicitations so long as the policy is written and applied in a nondiscriminatory manner. Since Purple Communications, employers have struggled with the confusing NLRB position that employees could use company email systems for union solicitations but not other employer property such as bulletin boards and copiers. Now the NLRB has remedied this seemingly inconsistent position and issued a decision that reflects the modern workplace reality that employees have multiple avenues to connect with each other outside of company email.

Employers Can Cut Off Union Dues Collection

On December 16, 2019, the NLRB ruled 3-1 in Valley Hospital Medical Center that employers can unilaterally stop deducting union dues from employees’ paychecks once a collective bargaining agreement (CBA) expires.

While typically terms and conditions that must be bargained for continue until impasse when a CBA expires, the NLRB overturned the Obama board’s 2015 decision in Lincoln Lutheran, which held that an employer cannot stop deducting union dues once a CBA expires. The NLRB reasoned that automatic dues collections belong to the limited category of mandatory bargaining subjects that are exclusively created by the contract and thus enforceable only for the duration of the contractual obligation created by the parties. In overturning Lincoln Lutheran, the NLRB returned to prior precedent established under Bethlehem Steel, which was the settled rule in this area since 1962. Restoring this rule will require unions to be timely in the negotiation of successor agreements to ensure their continuous receipt of union dues and will give employers leverage during union contract negotiations, since if they refuse to continue to check off dues, unions would have to collect dues directly from members instead of relying on automatic dues deductions.

What This Means for Employers

With the reversal of another Obama board decision, employers with CBAs expiring soon now have more leverage during union contract negotiations. Employers should consult with counsel for advice on what terms must be continued and what terms may be changed upon contract expiration.

Employers Can Forbid Discussing Workplace Investigations

On December 17, 2019, the NLRB ruled 3-1 in Apogee Retail LLC dba Unique Thrift Store and Kathy Johnson that employers do not necessarily violate the NLRA when they implement rules banning employees from discussing pending workplace investigations “where by their terms the rules apply for the duration of any investigation.”

The decision overrules a 2015 Obama board decision, Banner Health System, which held that confidentiality requirements in connection with workplace investigations generally infringe on employee rights. In the 2017 Boeing decision, the NLRB created three categories of rules for determining the legality of workplace investigations with respect to the NLRA. Category 1 rules are presumptively legal, as those rules do not affect employee rights or because employer interest in maintaining them outweigh any effect on rights. Category 2 rules affect workers’ rights more than Category 1, but may be legal if an employer can justify the rules on a case-by-case basis. Category 3 rules are always illegal because employers cannot justify the infringement on worker rights.

The NLRB in Apogee Retail characterized investigative confidentiality rules that by their terms only apply to “open investigations” as Category 1 and thus are presumptively legal. Such rules include requiring participants in an investigation to maintain the confidentiality of the investigation and/or prohibiting participants from discussing the investigation or interviews conducted in the course of the investigation while the investigation is in progress.  The NLRB noted that while such rules have a “comparatively slight” effect on NLRA rights, they protect workers’ privacy and assist in investigations. However, investigative confidentiality rules not limited on their face to open investigations―i.e. rules that continue the confidentiality requirement after an investigation concludes―are Category 2 and require individualized scrutiny in order to determine their lawfulness.

The NLRB determined the employer’s investigative confidentiality rules in Apogee Retail were not limited to open investigations, as the rules were silent on the duration of the confidentiality requirement, and thus fell into Category 2, requiring further scrutiny. The NLRB remanded the case to the region for further proceedings to assess whether the employer had legitimate justifications for requiring confidentiality after an investigation is complete, and if so, whether those justifications outweighed any infringement on employee rights.

What This Means for Employers

After Banner Health System, employers faced tough decisions as to whether to compromise investigations by not requiring confidentiality or to violate the NLRA. Additionally, the NLRB’s prior position was inconsistent with the Equal Employment Opportunity Commission’s (EEOC) position that employers should keep harassment complaints confidential to the extent possible. The EEOC’s position is based on its reasoning that employees are more likely to file complaints, especially sexual harassment complaints, when complaints are investigated in a confidential manner. Now, employers may freely require confidentiality during investigations without violating the NLRA, so long as confidentiality is limited to open investigations. Employers should consider revising their confidentiality and investigation policies to take advantage of the NLRB’s now more relaxed standard.

McDonald’s Settlement

On December 12, 2019, the NLRB instructed Administrative Law Judge Lauren Esposito to approve a settlement between McDonald’s Corp. franchisees and their employees. The workers alleged McDonald’s Corp., as a joint employer, should be responsible for labor violations by franchisees.

Previously, Judge Esposito rejected the proposed global settlement among the parties as inadequate. She expressed a variety of concerns about the form of the settlement, its enforceability, the level of resources already expended in the case, and the likelihood of future litigation. Judge Esposito concluded that McDonald’s obligations under the settlement agreements did not “in any way approximate the remedial effect” of a joint-employer finding.

In a 3-1 ruling, the NLRB reversed, finding the series of agreements, totaling at least $170,000, to be reasonable as it seeks to redress all alleged violations. The NLRB explained that its longstanding policy is to encourage settlements. The NLRB noted the settlement agreements remedied every violation alleged in the complaints and that further litigation would impose a substantial burden on the parties, without a significant probability of prevailing on the complainant’s joint-employer allegation.

What This Means for Employers

Since overruling Browning-Ferris in the now-overturned Hy-Brand Industrial Contractors decision, the Trump board has sought to roll back efforts by the Obama board to make it easier for two employers to be found to be joint employers. In September 2018, the NLRB proposed rules seeking to change its joint employer standard, largely in the same manner as Hy-Brand, and the NLRB has since allowed an exceedingly long comment process regarding these rules. The NLRB’s resolution of the McDonald’s case signals that a final rule regarding the board’s joint-employer standard may be imminent.

For More Information

If you have any questions about this Alert, please contact Eve I. Klein, Eric W. Ruden, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

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