EMPLOYEE NOT ENTITLED TO FURTHER WORKER’S COMPENSATION BENEFITS BECAUSE HER DISABILITY-CAUSING SURGERY WAS NOT RELATED TO A COMPENSABLE WORK INJURY

By:      Daniel M. Pedriana and Claudia R. Harke

On August 28, 2018, District I of the Wisconsin Court of Appeals held that the Plaintiff was not entitled to further worker’s compensation benefits because her disability-causing surgery was not related to a compensable work injury.

In Theresa Payton-Myrick v. LIRC, Theresa Payton-Myrick was diagnosed with arthritic changes and degenerative disc disease in her spine. Payton-Myrick was employed as an administrative assistant at the University of Wisconsin-Milwaukee. On July 21, 2009, she fell out of her desk chair and sustained several muscle strains. She subsequently received opinions from several doctors, one of whom recommended a spinal fusion surgery.

Despite conflicting medical opinions, Payton-Myrick underwent surgery, which resulted in multiple procedures and left her “arguably disabled.” Payton-Myrick applied for worker’s compensation benefits. The UW System denied her benefits, which caused Payton-Myrick to file a worker’s compensation claim.

An administrative law judge concluded that Payton-Myrick had “suffered a work-related injury that aggravated Payton-Myrick’s back condition beyond its normal progression” and that “the treatment, including surgery, was necessary and reasonable.”

The Labor and Industry Review Commission (“LIRC”) reversed the ALJ and found that Payton-Myrick’s muscle strains were from a compensable work injury, however, the work injury had healed and did not aggravate her pre-existing condition enough to necessitate surgery. LIRC also made several factual findings including that Payton-Myrick’s disability causing surgeries treated her pre-existing condition, not her compensable work injury.

The Court of Appeals upheld LIRC’s denial of further benefits based on a holding from the Wisconsin Supreme Court in Flug v. LIRC. In Flug, the Supreme Court ruled that Wis. Stat. § 102.42(1m), which states that if an employee who has sustained a compensable injury undertakes treatment in good faith that is medically acceptable, but unnecessary, the employer shall pay for all disability incurred as a result, only applies if the unnecessary, but acceptable surgery is to address the workplace injury.

Since LIRC made a factual finding that Payton-Myrick’s two spinal surgeries were focused on her pre-existing disc problems, not the workplace injury, the Court of Appeals upheld LIRC’s denial of further benefits.

This Decision does not drastically change the law surrounding whether an employee is entitled to further worker’s compensation benefits, however, it reinforces that Wis. Stat. § 102.42(1m) only applies if the unnecessary-but-acceptable surgery was done to address the workplace injury. However, it will be important to have treating and independent doctors specifically note the reason for an employee undergoing an unnecessary-but-acceptable surgery, as that will determine whether they are owed additional benefits.

The time to appeal this decision has passed and the decision remains unpublished.

If you have questions about this decision, please contact Daniel M. Pedriana by email at dpedriana@lindner-marsack.com or Claudia R. Harke by email at charke@lindner-marsack.com or any other attorney with whom you have been working with at Lindner & Marsack, S.C.

THE DEPARTMENT OF LABOR ISSUES TWO NEW ADVISORY OPINION LETTERS ON THE FMLA

By: Oyvind Wistrom

On August 28, 2018, for the first time in almost ten years,  the U.S. Department of Labor’s Wage and Hour Division (DOL) issued two new advisory opinion letters providing employers with guidance on the application of the Family Medical Leave Act (FMLA) to organ donors and a no-fault attendance policy.  While the advisory opinion letters are not binding authority or legal precedent, they signal DOL’s interpretation of the law and provide helpful guidance for employers in handing some interesting nuances of the law.

FMLA Protects Organ Donors

In one of the advisory letters, the DOL concluded that organ-donation surgery can qualify as a “serious health condition” under the FMLA, thus entitling an employee with up to 12 weeks of protected leave.  This is the case even if the employee was in good health before the donation and voluntarily elected to undergo the surgery.  The DOL reasoned that organ-donation surgery may require both “inpatient care” or “continuing treatment” and, therefore, meets the regulatory definitions of a serious health condition.  A serious health condition is defined as an illness or physical condition that requires inpatient care at a hospital.  Since the typical hospital stay after organ donation surgery is four to seven days, organ donation qualifies as a serious health condition.

No-Fault Attendance Policy under the FMLA

In another letter, the DOL addressed a company’s no-fault attendance policy and found that it did not violate the FMLA.  Under the company’s policy, employees accrued points for tardiness and absences, except for certain absences, including FMLA-protected leave.  The points remained on an employee’s record for 12 months, and the employer would extend that period for any time the employee was not in “active service,” such as during an FMLA leave.

The DOL concluded that “freezing” an employee’s attendance points while on FMLA leave did not violate the Act by denying a benefit to the employee who took FMLA leave.  The DOL reasoned that the FMLA does not entitle an employee to superior benefits because of FMLA leave, and the attendance policy placed the employee in the same position as if he or she had never taken leave.  The DOL cautioned, however, that employers must not treat FMLA leave different from other forms of leave.  Thus, the employer must “freeze” an employee’s attendance points for all similar types of leave.

This opinion letter highlights, first, that absences necessitated by an FMLA leave cannot be counted under a company’s no-fault attendance policy.  Additionally, an employer is not required to remove attendance points from an employee on FMLA leave where the employer has an “active service” component to their policy – as long as the company treats other employees on leave for other reasons the same (i.e., vacation, W.C. leave, etc.).

 

 

SUPREME COURT UPHOLDS USE OF CLASS ACTION WAIVERS

By:  Jenna K. Leslie

Yesterday, the Supreme Court of the United States issued a significant victory for employers when ruling that class and collective action waivers in employment arbitration agreements are fully enforceable under the Federal Arbitration Act (FAA) and do not violate an employee’s rights under the National Labor Relations Act (NLRA).

In Epic Systems Corp. v. Lewis (a companion case to National Labor Relations Board v. Murphy Oil USA and Ernst & Young LLP v. Morris), the high court issued a 5-4 decision upholding the validity of class action waivers in arbitration agreements.  Justice Neil Gorsuch, writing the majority opinion, explained that the FAA unequivocally requires federal courts to enforce arbitration agreements according to their terms, and nothing in the NLRA, which was enacted after the FAA, was intended to negate that requirement.  The opinion specifically found that Section 7 of the NLRA focuses on an employee’s right to organize and bargain collectively, but it does not create a right to pursue class or collective action lawsuits.

Writing for the dissent, Justice Ruth Bader Ginsburg called the majority opinion “egregiously wrong” and argued that the NLRA was intended to equalize the power imbalance in most employment relationships by allowing employees to band together through collective action to improve the terms and conditions of their employment.  The majority opinion rejected this notion, concluding that there is nothing in the NLRA that suggests a clear intention to displace the provisions of the FAA.

In recent years, employees have effectively used class and collective action procedures to bring massive wage and hour claims in both state and federal court.  This decision will curb those lawsuits and allow employers to rely on the enforceability of class and collective action waivers and arbitration provisions within their employment agreements.  Class and collective action waivers are useful tools used to preserve confidentiality, resolve claims more quickly, and limit potential exposure to collective action lawsuits.

This decision is said to affect at least 25 million existing employment agreements.  Employers should review their employment arbitration agreements carefully to determine which agreements are affected by this decision.  Employers should also consider whether it makes sense to implement such agreements prospectively, as the decision paves the way for employers to include class and collective action waivers in future employment agreements.

If you have questions about this material, please contact Jenna K. Leslie or  any other attorney you have been working with at Lindner & Marsack, S.C.

We look forward to seeing many of you tomorrow at our 2018 Annual Compliance/Best Practices seminar held at the Sheraton Hotel in Brookfield, Wisconsin.

LINDNER & MARSACK, S.C. WELCOMES DAVID KEATING TO TEAM

Lindner & Marsack, S.C. is pleased to announce the hire of Attorney David Keating.

Keating comes to Lindner& Marsack with significant experience advising clients in the long-term care industry. He served as Chief Legal Officer and Secretary for Fortis Management Group, LLC, where he provided legal advice and assistance on issues relating to resident care, regulatory compliance, reimbursement, fraud and abuse, human resources, labor relations, transactions and other areas affecting client operations. Prior to that, he held several positions over more than a decade with Extendicare Health Services, Inc., eventually serving as that organization’s Vice President and General Counsel.

“David has proven experience navigating complex legal challenges in an industry that is rapidly evolving and significant among Lindner & Marsack’s client portfolio, which will be a great asset to our clients in healthcare and beyond,” said Thomas Mackenzie, Firm President.

Keating is a member of the State Bar of Wisconsin, the American Bar Association and the Legal Committee of the American Health Care Association. He received his J.D. from the Widener University School of Law in Wilmington, Delaware, in 1995.  He also earned a Master of Labor and Industrial Relations from Michigan State University in 1992 and a Bachelor of Arts in Labor and Industrial Relations and Political Science from Pennsylvania State University in 1991.

“Lindner & Marsack’s long history and excellent reputation as a top-tier, management-side labor and employment law firm, along with the firm’s growth in the healthcare sector, make this a great fit,” says Keating. “As a member of the Lindner & Marsack team, I look forward to serving clients in a way that exceeds expectations and delivers proactive, legally-sound strategies and solutions.”

REGISTER NOW! ANNUAL COMPLIANCE/BEST PRACTICES REVIEW

WHEN: May 23, 2018

8:00 a.m. – 12:00 p.m.

WHERE: Sheraton Milwaukee Brookfield Hotel

375 South Moorland Road

Brookfield, WI

Registration and a continental breakfast will be served beginning at 7:30 a.m.  Click here to register.

This COMPLIMENTARY half-day event will address the latest labor and employment topics impacting employers including:

  • Legal Updates – Labor, Employment and Worker’s Compensation
  • In Search of the Truth for Workplace Investigations: What are the Legal Pitfalls?
  • The Role of Human Resources in Protecting Company Information Before, During and After the Employment Relationship
  • Best and Worst Practices: Common Corporate, HR and Employment Policies that Hinder Employers’ Work Comp Claims and Create FMLA and Disability Law Nightmares
  • Stump the Chumps: Our panel of experts will address all of your burning employment questions

2018 Worker’s Compensation Gamble

Lindner & Marsack’s worker’s compensation defense practice is well recognized as an industry leader in providing work injury defense services to many of Wisconsin’s largest employers and insurance carriers.

Doug Feldman heads the Firm’s highly regarded work injury defense team and is a founding Board Member and current President of Kids’ Chance of Wisconsin.  Kids’ Chance is a non-profit organization that provides college scholarships to children of seriously injured workers in Wisconsin.

Kids’ Chance of Wisconsin is presenting a complimentary half-day worker’s compensation seminar on March 8, 2018 at Potawatomi Hotel and Casino, followed by a networking cocktail hour and raffle.  This year’s conference will focus on the opiate crisis in this country and its impact on workers compensation claims.  Funds raised at the event will directly support the Kids’ Chance mission of providing financial support, in the form of scholarships, to children of parents who have been seriously injured at work.

We encourage you to attend this dynamic and thought provoking conference. If you are interested in attending this event, click Kids’ Chance of WI – Here’s The Deal Seminar – March 8, 2018 for more information.

Lindner & Marsack owes much of its success to its good friends and clients in Wisconsin and is proud to support this worthy endeavor and give back to the community in such a meaningful way. We hope you will consider joining us for this educational opportunity.

 

Employers Who Utilize Temporary Or Loaned Employees Are Now Potentially Liable For Third Party Claims Brought By An Injured Employee

By:  Daniel Pedriana, Joseph Birdsall and Claudia Harke

On January 9, 2018, District III of the Wisconsin Court of Appeals decided that Wis. Stat. § 102.29(6)(b)1 allows an injured temporary employee to choose between filing a worker’s compensation claim and suing the temporary employer for tort damages.

In Rivera v. West Bend Mutual, Carlos Rivera and two other individuals died in a single-vehicle accident. Rivera was survived by five children, two of whom were minors at the time of his death. At the time of the accident, Rivera was a passenger in a vehicle owned by Alpine and insured by West Bend. Rivera was employed by Alex Drywall, which, in turn, had provided him to perform work for Alpine. Alpine paid Alex Drywall for Rivera’s services and Alex Drywall paid Rivera for his work.

In February 2016, Rivera’s two minor children and the special administrator of Rivera’s estate commenced a wrongful death lawsuit against Alpine and West Bend. The Estate had not filed a claim for worker’s compensation under the Act. A Milwaukee County Circuit court judge granted summary judgment for Alpine and West Bend, concluding that because Rivera was an employee of a temporary help agency (Alex Drywall), the Estate was prohibited from bringing a tort action against Alpine.

On appeal, the Wisconsin Court of Appeals reversed the circuit court, ruling that the exclusive remedy provision of the Worker’s Compensation Act does not bar a temporary employee from bringing tort claims against a third party.  The Court found that Alex Drywall was Rivera’s employer, and therefore, the exclusive remedy provision prohibited the Estate from bringing a tort claim against Alex Drywall, but it did not prohibit the Estate from pursuing tort claims against Alpine and West Bend, which the Court found to be third parties in this case.

The Court concluded that Wis. Stat. § 102.29(6)(b)1 only bars tort claims from temporary employees who make claims for worker’s compensation. In this case, it was undisputed that the Estate had not made a worker’s compensation claim. As a result, the Estate was not barred from pursuing tort claims against Alpine and West Bend—the temporary employer and its insurer.  The Estate was still barred from suing Rivera’s primary employer, Alex Drywall, which the Court treated as a temporary help agency in this case.

The Rivera decision is significant because it exposes certain Wisconsin employers to tort liability that they were previously sheltered from. Under the Decision, if a temporary employee is injured, the temporary employee may pursue tort claims against the employer that they are placed with or they may file a worker’s compensation claim against their primary employer—the temporary employment agency.

Employers who compensate temporary employment agencies for the services of employees primarily employed by the temporary help agencies should be concerned about tort liability in the event of an injury. Even if other employers do not advertise themselves as temporary help agencies, they may fit the definition of temporary help agency under the statute like Alex Drywall did in the Rivera decision. Furthermore, the Rivera decision indicates that loaned employees under Wis. Stat. §102.29(7) produce the same tort liability as temporary employees who are primarily employed by a temporary help agency.

This decision is currently unpublished, but was recommended for publication by the Third District of the Wisconsin Court of Appeals. The parties have 30 days to file a petition for review to the Wisconsin Supreme Court. This 30 day period will expire on February 8, 2018. As of January 24, 2018, no petition has been filed.

If you have questions about this material, please contact Daniel M. Pedriana (dpedriana@lindner-marsack.com), Claudia R. Harke (charke@lindner-marsack.com), or Joseph D. Birdsall (jbirdsall@lindner-marsack.com) or any other Lindner & Marsack, S.C. attorney.

 

Wisconsin Supreme Court Declares that Non-Solicitation of Employee Provisions are Governed by the Same Wisconsin Statute that Addresses Non-Compete Provisions

By Oyvind Wistrom

The Wisconsin Supreme Court issued a landmark decision on Friday in the case of The Manitowoc Company, Inc. v. John Lanning, 2018 WI 6.  The case represented the Court’s first opportunity to determine whether a Non-Solicitation of Employee (NSE) provision in a contract between an employer and an employee is governed by the same statute, Wis. Stat. § 103.465, that governs the enforceability of non-compete restrictive covenants.  The majority of the Court concluded that NSE provisions are indeed governed by Wis. Stat. § 103.465, and then proceeded to find the NSE at issue overbroad and unenforceable because it restricted Lanning’s ability to engage in ordinary competition attendant to the free market.

The case involved the interpretation of a NSE provision signed by Lanning while he was previously employed by The Manitowoc Company, which prohibited him, for a period of two years following the termination of his employment, from soliciting, inducing or encouraging any employee of The Manitowoc Company to terminate his/her employment with The Manitowoc Company or to accept employment with a competitor, supplier or customer of The Manitowoc Company.  After separating from The Manitowoc Company, Lanning accepted employment with SANY, a competitor of The Manitowoc Company’s crane division.  It was alleged that he subsequently engaged in recruitment efforts in which he encouraged employees of The Manitowoc Company to accept employment with SANY.

The Circuit Court initially ruled in favor of The Manitowoc Company and awarded damages related to the alleged breach.  The Wisconsin Court of Appeals reversed and ruled in favor of Lanning, finding the NSE provision unenforceable under Wis. Stat. § 103.465 because it was broader than reasonably necessary to protect a legitimate business interest of The Manitowoc Company.  Specifically, the NSE was overbroad because it restricted Lanning from encouraging as many as 13,000 employees of The Manitowoc Company, many of whom worked in a different division of the company and with whom Lanning had no contact, to terminate their employment with The Manitowoc Company.

The majority of the Justices on the Wisconsin Supreme Court agreed and affirmed the decision of the Court of Appeals.  In so doing, the Court first concluded that Wis. Stat. § 103.465 governed the enforceability of NSE provisions.  The Court thus clarified that in order for a NSE provision to be enforceable under Wisconsin law, it must be (1) reasonably necessary for the protection of the employer; (2) provide a reasonable time period; (3) provide a reasonable territorial limit; (4) not be harsh or oppressive as to the employee; and (5) not be contrary to public policy.  The lead opinion of the Court concluded that the NSE at issue was not reasonably necessary to protect a legitimate interest of The Manitowoc Company.  In particular, as the restriction was worded, it prevented Lanning from encouraging any Manitowoc Company employee, no matter the employee’s job or location, to terminate his or her employment with Manitowoc for any reason, or soliciting any Manitowoc Company employee to take any position with any competitor, supplier or customer of The Manitowoc Company.  Without a specified territory or class of employees, the provision restricted Lanning’s conduct with respect to all employees of The Manitowoc Company everywhere.  The restriction was simply too broad for the Court to enforce.

The primary lesson to be learned from this case is that in order for a Non-Solicitation of Employee provision to be enforceable under Wisconsin law, the provision must be narrowly tailored to protect a legitimate business interest.  An employer does not have a protectable interest in restricting competition of the type that an ordinary stranger can provide.  For instance, while The Manitowoc Company’s NSE was extremely broad, a NSE that, for example, only prevents the recruitment or poaching of key employees with whom a former employee had contact for a specified period of time, may still be enforceable under Wisconsin law.  Even such a restriction must still be drafted in such a way as to ensure it satisfies all five statutory requirements outlined above.  Employers who utilize NSE provisions should review these provisions carefully with legal counsel to ensure they are compliant and enforceable under Wisconsin law.

For further information, or assistance in drafting or reviewing your restrictive covenants, please contact Attorney Oyvind Wistrom at (414) 273-3910 or via email at owistrom@lindner-marsack.com.  Mr. Wistrom was lead counsel in The Manitowoc Company case and successfully argued the case before the Wisconsin Supreme Court.

LINDNER & MARSACK, S.C. NAMES SALLY PIEFER AS EQUITY PARTNER

Lindner & Marsack, S.C., one of the region’s most respected and long-standing management-side labor and employment law firms, announced today the advancement of Sally Piefer to Equity Partner.

Piefer, who joined Lindner & Marsack in 2016, specializes broadly in all areas of employment law matters with special emphasis in employment litigation, employment counseling and compliance issues, and employee/supervisor training. Sally’s litigation practice has involved representing and defending employers in employment discrimination, wage & hour, FMLA, ADA, OSHA and unemployment compensation claims. In addition, she frequently drafts, advises clients and litigates claims involving non-competition, non-solicitation, confidentiality and duty of loyalty issues.

“In the short time Sally has been with Lindner & Marsack, she has become both a leader among our dedicated team of attorneys as well as an invaluable asset to our clients in providing counsel to help them address their toughest legal challenges,” said Thomas Mackenzie, Firm President.

Piefer received her JD from Marquette Law School in 1994. Before joining Lindner & Marsack, she led the employment law team at a small Waukesha area law firm for more than 17 years. Piefer has an AV rating from Martindale Hubbell, the highest possible. She has also received “Women in the Law” accolades from the Wisconsin Law Journal and special recognition from the Waukesha County Community Foundation’s Women of Distinction.

“No matter the issue or challenge facing a client, my main goal is to help employers operate in the most efficient, productive and cost-effective environment possible, says Piefer. “I take immense pride in working with clients to mitigate and manage risk, and helping them implement solutions that are proactive, practical and legally sound. Doing this work with the support of my colleagues at Lindner & Marsack just makes it that much more rewarding.”

 

THE NLRB BRIGHTENS THE SEASON WITH MULTIPLE EMPLOYER-FRIENDLY DECISIONS BEFORE THE NEW YEAR

By: Kristofor Hanson

As has been anticipated since the change in presidential administrations earlier this year, the National Labor Relations Board, with a Republican majority, issued a slew of impactful and employer-friendly decisions in recent days.  (The Republican majority on the Board was in place until December 16, 2017, when Chairman Philip Miscimarra’s term ended.  The Board now has two Republican appointees and two Democrat appointees until President Trump appoints a new member who must receive the approval of the United States Senate.)  These decisions, altering standards for workplace policies, joint employers, the duty to bargain, and bargaining unit makeup will come as a pleasant Christmas present to employers this year.

Interpreting Neutral Workplace Policies

On December 14, 2017, in The Boeing Company, 365 NLRB No. 154, the Board discarded its test for determining whether an otherwise facially neutral workplace policy violates the National Labor Relations Act because an employee “would reasonably construe” the policy to prohibit some form of protected Section 7 activity presently or at some point in the future.  Section 7 rights give employees protection for engaging in concerted activity, such as joining a union and discussing or complaining about the terms and conditions of their employment, among others.  At issue in the case was Boeing’s no-camera rule, which prohibited the use of “camera-enabled devices” such as cell phones on its property.  Boeing stated that it instituted this rule because of its security concerns, as Boeing is a “target for espionage by competitors, foreign governments, and supporters of international terrorism, and [it] faces a realistic threat of terrorist attack.”

In finding this rule lawful, the Board sharply criticized the “reasonably construed” test stating that it has been difficult to apply, failed to consider any legitimate reasons for the work rule, failed to allow for considerations of the type of industry and work settings involved, and provided no clear guidance for employers to determine what rules and policies were lawful.

Therefore, the Board decided a new test was appropriate and held that to determine whether a facially neutral work rule interferes or potentially interferes with Section 7 rights the Board will look at “(i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.”

This test provides employers with the ability to defend work rules that may limit employees’ abilities to exercise their Section 7 rights by establishing legitimate business justifications for their rules.  In addition to enunciating the new standard, the Board also created three categories of rules designed to aid in the evaluation of the legality of the policies.  Those categories are:

Category 1: Rules that are lawful either because (a) when reasonably interpreted, they do not prohibit or interfere with the exercise of NLRA rights; or (b) the potential adverse impact on protected rights is outweighed by justifications associated with the rules.  The Board found the Boeing no-camera rule to be such a justified rule and also determined that rules requiring employees to abide by basic standards of civility are similarly justified.  In doing this, the Board overruled past decisions in which employers were found to have violated the Act by maintaining rules requiring employees to foster “harmonious interactions and relationships” or to maintain basic standards of civility in the workplace.

Category 2:  Rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.

Category 3:  Rules that the Board will designate as unlawful to maintain because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.  An example would be a rule that prohibits employees from discussing wages or benefits with one another.

The Board stated that going forward, its decisions concerning work rules will place work rules into one of these three categories.  Doing this will offer employers a fair amount of guidance, but employers must continue to carefully assess each proposed rule and policy to determine whether the business justifications for the rule are legitimate and outweigh any limitations the rule might place on employees’ rights under the Act.

Return to Previous Joint Employer Standard

In August 2015, in its Browning-Ferris decision, the Board altered long-standing precedent concerning joint employer status, holding that employers are joint employers if: (1) they are both employers within the meaning of the common law;  and (2) they share or codetermine matters governing the essential terms and conditions of employment. The central question under this standard was whether an employer exercised control over terms and conditions of employment directly or indirectly, or had reserved the right to do so.

On December 14, 2017, the Board reversed course on this standard and returned to the standard that had been in place prior to Browning-Ferris.  In Hy-Brand Industrial Contractors, 365 NLRB No. 156, the Board stated that it was reverting to the “direct and immediate control” standard, which had been in place for decades prior to the Browning-Ferris decision.

Under the direct and immediate control standard employers are considered joint when there is “proof that putative joint employer entities have exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise control), the control must be ‘direct and immediate’ (rather than indirect), and joint-employer status will not result from control that is ‘limited and routine.’”

This standard limits joint employer status to only those employers who have significant and direct control over the terms and conditions of employment and actually exercise that control.  It removes from consideration control that is reserved, but not applied, by the employer.

Unilateral Implementation of Work Rule Changes without Bargaining

On December 15, 2017, in Raytheon Network Centric Systems, 365 NLRB No. 161, the Board restored 50-year old precedent that allows an employer to implement changes to work rules without bargaining with a union if the employer has a past practice of taking similar actions.

This decision overturns a 2016 Board ruling that required employers to bargain with unions over changes workplace rules, even where employers had made similar changes in the past.  In Raytheon, the Board criticized the previous ruling as distorting common sense understanding of what constitutes and change in employment conditions and ignoring long-standing precedent concerning the impact of past practice on the labor-management relationship.

The case involved Raytheon’s unilateral adjustment of employees’ healthcare benefits.  The lower judge found that the adjustment was unlawful as it needed to be bargained.  However, the Board, overturning the decision, held that Raytheon was well within its rights to modify the employees’ healthcare benefits because it had done so annually each of the previous eleven years.

The Board stated that employer actions do not constitute a change if they are similar in kind and degree with an established past practice consisting of comparable unilateral actions.  The Board held this applies regardless of whether (1) a collective bargaining agreement was in effect when the past practice was created, or (2) no CBA existed when the disputed actions were taken.

Accordingly, the Board found that Raytheon’s change to the healthcare benefits of its employees was consistent with its past practice and did not require Raytheon to notify the employees of the proposed change and provide them with an opportunity to bargain before making the change.

Micro Bargaining Units are a Thing of the Past

In another December 15, 2017 decision, the Board overturned a 2011 ruling that allowed what were termed “micro units” to petition for a union election.  The case, PCC Structurals, Inc., 365 NLRB No. 160, overturned what is known as the Specialty Healthcare standard that required employers to establish that other employees who the employer believed should be included in a bargaining unit had an “overwhelming community of interest” with the petitioning unit.

In this decision, the Board returns to the traditional community of interest standard that it has applied “throughout nearly all of its history.”  This standard allows for the Board to evaluate the interests of all employees – both those within and those outside the petitioned-for unit – without having to determine whether their community of interest is “overwhelming.”  Rather, the traditional test requires the Board to assess multiple factors to determine the appropriate unit, such as:

whether the employees are organized into a separate department,; have distinct skills and training; have distinct job functions and perform distinct work, including inquiry into the amount and type of job overlap between classifications; are functionally integrated with the Employer’s other employees; have frequent contact with other employees; interchange with other employees; have distinct terms and conditions of employment; and are separately supervised.

The Board found that the “overwhelming community of interest” standard was akin to gerrymandering and resulted in arbitrary and fractured units.  It stated the traditional community of interest standard takes into consideration those groups of employees who have “substantial” shared interests to be taken into consideration when determining appropriate unit size.

PCC Structurals involved an employer’s challenge of a Regional Director’s decision and direction for election of a petitioned-for unit of 100 welders.  The employer contended that the smallest appropriate unit actually consisted of more than 2500 employees.  The Board did not decide whether the unit sought by the employer was appropriate, but directed the Regional Director to reevaluate the unit based upon the standard enunciated in the case.

This decision eliminates the burden that had been placed on employers to establish an “overwhelming” community of interest among employees in order to enlarge a bargaining unit.  As the Board stated, that burden was nearly impossible for employers to achieve.  Employers now will be better able to expand bargaining units, which should allow employers to better combat union organizing efforts.

The decisions cited here can be found at https://www.nlrb.gov/cases-decisions/board-decisions

Should you have any questions about the cases and issues discussed above, please contact our offices.