NLRB Ends 2019 with Flurry of Activity Abandoning Obama-Era Standards
The National Labor Relations Board (the “Board”) ended 2019 with a flurry of activity signaling further departure from several key Obama-era rules and precedents under the National Labor Relations Act (the “Act”). The Board issued numerous decisions which largely return to pre-Obama era standards and specifically relate to the expiration of dues checkoff provisions, restrictions on the use of company email systems, confidentiality of ongoing workplace investigations, arbitration deferral standards, and joint employment status for franchise businesses. In the final weeks of 2019, the Board also adopted new procedural deadlines for union elections.
Board Issues Several Decisions Reversing Obama-Era Labor Standards
In December 2019, the Board issued a number of decisions reversing Obama-era Board decisions:
- The Board has returned to decades-old precedent regarding post-expiration dues deductions by overruling Lincoln Lutheran of Racine, 362 NLRB 1655 (2015) and restoring Bethlehem Steel, 136 NLRB 1500 (1962) by holding that a dues checkoff provision expires with the parties’ collective bargaining agreement ("CBA"). Valley Hospital Medical Center Inc., d/b/a Valley Hospital Medical Center, 368 NLRB No. 139 (Dec. 16, 2019). The Board reasoned that, because dues checkoff provisions fall within the limited category of union rights that exist solely in the CBA, they are “rooted in the contract” and therefore expire with the agreement.
Because employers are no longer required under the Act to check off and remit union dues on behalf of employees once a CBA expires, unions may feel pressured to agree to terms due to the impending expiration of an agreement or to seek extensions of agreements during bargaining.
- The Board has overturned Purple Communications, 361 NLRB 1050 (2014) and found that prohibiting the use of the employer’s email, as well as other information technology resources, for non-business reasons, including for protected concerted activity or union-related communications, does not violate the Act, absent proof that such a restriction would deprive employees of any reasonable means to communicate with one another. Caesars Entertainment Corp., 368 NLRB No. 142 (Dec. 17, 2019).
The Board’s ruling in Caesars Entertainment reaffirms its longstanding precedent that employers may lawfully restrict employee use of employer-owned property (unless email is the only reasonable means of employee communication). However, employers with workplace policies that prohibit the use of email accounts for non-business reasons still must ensure that their policies are not disparately enforced against employees engaging in protected concerted activity.
- The Board has held that a policy barring employees from discussing confidential workplace investigations during the pendency of an investigation does not automatically violate the Act, overturning Banner Estrella Medical Center, 362 NLRB 1108 (2015), which held that, in order to demand confidentiality during a workplace investigation, employers must assess on a case-by-case basis whether an employer has a legitimate and substantial business justification that outweighs its employees’ rights under the Act. Apogee Retail LLC d/b/a Unique Thrift Store, 368 NLRB No. 14 (Dec. 16, 2019). Applying the standard adopted in Boeing Co., 365 NLRB No. 154 (2017), the Board has found that whether a rule limiting the discussion of investigations is lawful will depend on whether employees are barred from discussing confidential investigations indefinitely: if the bar only applies during the investigation, the rule is lawful; if it applies beyond the investigation, the employer will need to show that the indefinite interference with employee rights is outweighed by legitimate justifications.
In the wake of the Board’s holding in Apogee Retail, employers should review their workplace investigation policies and/or procedures to ensure that they limit confidentiality to the period of active investigation.
- The Board has re-adopted a high standard of deference for labor arbitrator awards overturning Babcock & Wilcox Construction Co., Inc., 361 NLRB 1127 (2014), rev. denied sub nom. Beneli v. NLRB, 873 F.3d 1094 (9th Cir. 2017). United Parcel Service, Inc., 369 NLRB No. 1 (Dec. 23, 2019). As a result of the United Parcel Service decision, the Board will defer to an arbitral award if: (1) each party has agreed to be bound by the arbitrator’s decision, (2) the proceedings were regular and fair, (3) the contract issue was factually parallel to the unfair labor practice issue, (4) the arbitrator was presented with the facts relevant to resolving the unfair labor practice issue, and (5) the award is not clearly repugnant to the purposes and policies of the Act.
As a result, it is less likely that the Board will second-guess labor arbitrator decisions.
- Finally, the Board vacated a decision to deny a proposed global settlement resolving multiple cases alleging that McDonald’s was jointly liable for its franchisees’ violations of the Act, and remanded with instructions that the settlement be approved. McDonald's USA, LLC, a joint employer, et al., 368 NLRB No. 134 (Dec. 12, 2019).
With this settlement approval, the Board ends the largest case tried in its 84-year history. The Board has recently attempted to narrow the test for joint-employer status through proposed rulemaking. (Separately, on January 13, 2020, the Department of Labor issued its own final rule narrowing the test for joint-employer status under the Fair Labor Standards Act.) The Board’s settlement approval in McDonald’s suggests that it will continue to support a narrower test for joint-employer liability with respect to franchisors.
In light of the Board’s recent activity, employers should review existing policies that may have restricted employee rights based on prior precedents to determine if those policies can be revised to provide management with more flexibility and control in the workplace.
Final Rule Affecting Procedural Deadlines in Union Elections
In 2014, the Obama Administration enacted via rulemaking a streamlined process, commonly referred to as the “quickie” or “ambush” election rules, for union elections and challenges to the results of such elections. On December 18, 2019, the Board issued a new rule, effective April 2020, absent a challenge, that decelerates the union election process.
The modifications to the union representation case procedures include:
- The pre-election hearing will be scheduled, absent good cause, 14 business days, rather than 8 calendar days, after receipt of the notice of hearing.
- Employers will have 5 business days, rather than 2 business days, after receiving the notice of hearing to post and distribute the Notice of Petition for Election.
- Non-petitioning parties (normally the employer) will have 8 business days, instead of 7 calendar days, after receipt of the notice of hearing to prepare a statement of position.
- Petitioning parties (normally the union) must now file a statement of position by noon 3 business days before the hearing.
- The Board will now normally decide issues regarding the scope of the proposed bargaining unit, voter eligibility, and supervisory status before the election, where it previously had the flexibility to resolve these issues at any time. The parties may still jointly agree to allow disputed employees to vote subject to challenge and resolve such disputes after the election.
- The parties may file a post-hearing brief following a pre-election or post-election hearing, 5 business days after the hearing.
- Elections will be scheduled on “the earliest date practicable,” but generally no earlier than 20 business days following the date of the Board’s direction of election.
- Employers have 5 business days, instead of 2 business days, to file the voter list following the issuance of a direction of election.
In short, the Board’s final rule provides employers with additional time to assess and respond to a petition for representation, as well as greater certainty pre-election regarding issues such as voter eligibility.
The flurry of activity in December demonstrates that the Board is taking aim at prior decisions or standards that limited employers’ rights in favor of employee rights in the workplace. However, given the potential effect these decisions and rules will have on employee and union rights, it is possible that the newly announced rules, decisions, and settlement approval noted above will face legal challenges.
If you have any questions about these or any other of the Board’s latest rulings, please contact your local Quarles & Brady attorney or: