Category Archives: NLRB

NLRB ISSUES ADVICE MEMORANDUM REGARDING EMPLOYER SOCIAL MEDIA POLICIES

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By: Jonathan T. Swain & Christopher J. Saugstad

September 27, 2019

The National Labor Relations Board (“NLRB”) recently made public an Advice Memorandum (the “Memorandum”) by its General Counsel on August 15, 2019. The Advice Memorandum detailed the General Counsel’s advice regarding specific social media policies of CVS Health. The Memorandum examined numerous social media policies of CVS Health and found most to be lawful except two specific policies related to the disclosure of personal information.

The Memorandum utilized the new balancing test established in Boeing Co., 365 NLRB No. 154, which evaluates “(i) the nature and extent of the potential impact of Section 7 rights, and (ii) legitimate business justifications associated with the requirements(s).” Additionally, the Memorandum explained how the new balancing test creates three categories in which to classify various types of employer rules. The three categories are broken down into:

  • Category 1: lawful rules that either don’t interfere with NLRA-protected rights or for which the possibly adverse impact on protected rights is outweighed by the employer’s legitimate business justifications;
  • Category 2: rules which warrant individualized scrutiny on a case-by-case basis as to whether they would interfere with NLRA rights, and if so, whether the adverse impact on the protected conduct is outweighed by the legitimate business justifications; and
  • Category 3: unlawful rules which prohibit or limit NLRA-protected conduct and for which the adverse impact on workers’ rights is not outweighed by the employer’s legitimate business justification.

Here, the General Counsel found two CVS Health policies that ran afoul of Section 7 rights under the new balancing test. First, CVS Health adopted a policy in which employees were required to identify themselves by name if they mentioned CVS Health or discussed their work on social media. The Memorandum classified this rule under Category 2, found it unlawful, and explained “[t]he Board has recognized that requiring employees to self-identify in order to participate in collective action would impose a significant burden on Section 7 rights.” The Memorandum explained CVS Health had other policies in place to ensure employee’s social media posts were not being made upon CVS Health’s behalf.

The General Counsel deemed another policy unlawful in relation to personal information. CVS Health’s Handbook and Social Media Policy contained a restriction that prohibited employees from disclosing “employee information” on social media. This policy was also classified by the NLRB as a Category 2 policy and was found by the NLRB as restricting employees’ ability to engage in Section 7 activities. “While the employer has a legitimate business interest in keeping customers’ and employees’ personal and medical information confidential, it has no legitimate interest in preventing employees from sharing contact information or discussing wages, working conditions or employment disputes.”

The Memorandum advised bringing a complaint against CVS regarding the two policies found to be unlawful under the newly established standing in Boeing Co. Due to the decision in Boeing Co., along with the recently published Advice Memorandum, employers will want to review their current handbook and social media policies. Policies requiring employee identification by real name when discussing their employer or their work, or policies prohibiting employees from disclosing “employee information” on social media may be deemed unlawful.

Lindner & Marsack, S.C. represents employers in all areas of labor and employment law. If you have any questions about effective workplace handbook and social media policies, or any other labor or employment issue involving your business, please contact us at any time.

NLRB Adopts a New, Employer-Friendly Standard for Unilateral Changes to Job Terms and Asks for Input on Its Standard Protecting Profane Speech

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David Keating and Kristofor Hanson

Over the course of the past year, the National Labor Relations Board (“Board”) has indicated its willingness to develop more employer-friendly standards that allow employers more flexibility in managing their businesses and their unionized workforces.  Just in the past week, the Board continued its efforts with a ruling allowing for greater ease in implementing unilateral changes to job terms and by seeking input on a troubling standard that had protected outrageous speech by employees.

In M.V. Transportation, 28-CA-173726, decided September 10, 2019, the Board overturned a long-standing, stringent standard that limited an employer’s right to make unilateral changes to job terms such as work rules and attendance policies.  In doing so, it adopted a new “contract coverage” test that allows employers more flexibility in making such changes.

The “contract coverage” standard allows an employer to make unilateral changes to employees’ terms and conditions of employment if the labor contract “contains a provision that broadly grants the employer the right to implement new rules and policies and to revise existing ones.”  An employer would thus have the right to enact changes such as implementing new attendance and safety rules or revise disciplinary or off-duty access policies, according to the Board.

Under the previous “clear and unmistakable waiver” standard, for an employer to make unilateral changes to work rules, attendance policies, or the like, it had to demonstrate that the contract specifically and unequivocally waived the union’s statutory right to bargain over that particular issue.  In overturning this standard, the Board followed the lead of the D.C. Circuit Court of Appeals, which had stated that the “clear and unmistakable waiver” standard was “in practice, impossible to meet.”

According to the Board, the new “contract coverage” test will allow every part of a collective bargaining agreement to be given its bargained-for effect, including those that give an employer the right to act without bargaining first.

Board Will Reconsider Its Loss-of-Protection Standards for Profane and Offensive Outbursts of a Racial and Sexual Nature

In another notable Board development, on September 5, 2019, the Board requested briefing on whether it should reconsider its standards for profane outbursts and offensive statements of a racial or sexual nature.  The Board issued a notice and invitation to file briefs in General Motors LLC, 14-CA-197985 and 14-CA-208242, seeking public input on whether to adhere to, modify, or overrule the standard applied in previous cases in which extremely profane or racially offensive language has been deemed protected by the National Labor Relations Act (“Act”).

Specifically, the notice seeks comments relating to the following cases: Plaza Auto Center, 360 NLRB 972 (2014), Pier Sixty, LLC, 362 NLRB 505 (2015), and Cooper Tire, 363 NLRB No. 194 (2016).  These cases, discussed in General Motors, resulted in considerable protection for outrageously offensive statements.The Board’s treatment of such sexually and racially offensive statements has been criticized as both morally unacceptable and inconsistent with other workplace laws by federal judges as well as within the Board itself.

About the invitation for briefing, Chairman John F. Ring stated: “The Board’s request for briefing on this important topic reflects its long-standing practice of seeking input from interested parties when the Board believes it can benefit from such briefing. We look forward to considering the views of all interested parties.” 

Amicus briefs not to exceed 25 pages in length may be filed with the Board in Washington, D.C. on or before November 4, 2019.

Lindner & Marsack, S.C. represents employers in all areas of labor and employment law.  If you have any questions about the notice and invitation to file briefs or any other labor or employment issue involving your business, please contact us at any time.

NLRB RULES MISCLASSIFICATION OF INDEPENDENT CONTRACTORS DOES NOT VIOLATE THE NLRA

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By: Christopher J. Saugstad

September 6, 2019

On August 29, 2019, the National Labor Relations Board (the “Board”) determined that employers do not violate the National Labor Relations Act (the “NLRA”) merely by misclassifying employees as independent contractors when they should have been classified as employees.

In Velox Express, Inc., 15-CA-184006, 368 NLRB No. 61 (2019), the Board reversed a prior Obama-era decision which ruled Velox had unlawfully interfered with its workers’ rights under the NLRA. Velox Express, Inc. (“Velox”) is a medical courier service in which a number of its drivers were classified by Velox as independent contractors. The Charging Party in Velox raised group complaints of the independent contractor classification and was subsequently discharged.

Initially, an Administrative Law Judge ruled Velox had interfered with workers’ rights by Velox’s misclassification of the Charging Party. Upon review, the Board requested briefing and received thirteen briefs from twenty-eight interested parties. The Board, utilizing their recent decision in SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019), determined the workers were actually employees and therefore protected by the NLRA. The Board held Velox had violated the NLRA when it discharged the Charging Party for bringing to management’s attention group complaints regarding its treatment of employees.

Notably, however, the Board reversed the judge’s decision that the misclassification of independent contractors violated the NLRA as a separate and distinct violation. The Board reasoned “erroneously communicating to workers that they are independent contractors does not, in and of itself, contain any ‘threat of reprisal or force or promise of benefit.’” The Board held this type of misclassification would not inherently threaten employees’ adverse actions like discharge if they were to engage in protected activities under the NLRA; nor would the communication of classification solely show it was futile for the workers to engage in such protected activities. The Board explained, “[i]n and of itself, an employer’s communication of its position that its workers are independent contractors simply does not carry either implication.”

Additionally, the Board held that finding that a misclassification created a violation of the NLRA would deter employers from creating independent contractor relationships and would improperly shift the burden of proof to employers.

The Board’s recent ruling in Velox means the Board has removed itself from any future decisions based solely on worker misclassification. Unlike employees, who enjoy protected rights under the NLRA including unionization, independent contractors are not covered by the NLRA and are therefore not protected by it either. While this decision is viewed as a victory for employer, the importance of properly classifying and paying employees remains critical to avoid possible violations of the Fair Labor Standards Act (the “FLSA”).

Lindner & Marsack has represented employers in their dealings with unions for over a century. If you have any questions about this case or any other aspect of classic labor-management law, please feel free to contact us at any time.

NLRB PUTS NEW LIMITS ON UNION ORGANIZING ACTIVITIES ON PRIVATE PROPERTY

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In Bexar County Performing Arts Center Fdn. d/b/a Tobin Center for the Performing Arts, 368 NLRB No. 46 (2019), the National Labor Relations Board has limited prior decisions, which allowed the employees of a tenant to engage in union activities on the private property of their employer’s landlord.  Whether or not the tenant’s employees normally worked at the location or the general public was invited to that location, the landlord’s property rights could exclude the union activities of the tenant’s workers on the premises if they interfered with the property owner’s business.  The only exception would be situations where the union had no “reasonable alternative” communication option to reach its “target [public] audience.”

Since the early 1940’s, employees enjoyed the right to engage in organizational activities on their own employer’s property in non-work areas during their off-duty time.  The original cases involved speaking, distributing leaflets, and sometimes picketing in the employer’s parking lots, lunch rooms, or locker rooms.  However, these rights did not apply to non-employees such as outside organizers paid by the union.  Unless the work location could not be reached without entering private property (for example, an isolated lumber camp), the non-employee was only allowed to deliver the union’s message from the nearest public property, typically, a municipal sidewalk.  Lechmere, Inc. v. NLRB, 502 U.S. 527, 537 (1992), quoting NLRB v. Babcock & Wilcox, 351 U.S. 105, 112-113 (1956). 

With the advent of shopping centers, office parks, and other complexes where the public was invited to enter private property in order to reach the business site of an employer, courts held that non-employees could leaflet and otherwise campaign on that private property.  Shopping centers and similar privately owned gathering places became the new “town square” where all kinds of groups, including unions, could take their message to the public.  This was especially the case when other methods of communication (newspapers, radio, etc.) could not reach the targeted workers.  In 2011, the NLRB held that a union seeking to organize a restaurant which leased a second floor space at a Las Vegas casino could campaign where the aisle used by the general public intersected with the restaurant’s entry.  New York New York Hotel & Casino, 356 NLRB 907 (2011), enf’d. 676 F.3d 193 (D.C. Cir. 2014).  The property was owned by a third-party landlord.  The theory was that people were invited to use this area like a public sidewalk, so the union could not be banned as some kind of trespasser unless the landlord could prove the activity would prevent its use of the property.

In a three to one decision this month, the NLRB held that the right to organize must be balanced with the property owner’s rights to limit the activities of trespassers.  In Bexar County Performing Arts Center, supra,musician-employees of the San Antonio Symphony were prohibited from leafleting the general public on the private walks surrounding the concert hall.  The musicians were “contractor employees” of the tenant symphony, not employees of the owner/landlord.  They only worked on the premises during rehearsals and performances 22 weeks of their 39 week season.  Thus, they did not have the rights of employees of the property owner, but were non-employees who could be barred from the property like the non-employee union-paid organizers in Lechmere and Babcock & Wilcox; supra.  The Board said:

“Off-duty employees of a contractor [tenant] are trespassers and are entitled to access for Section 7 [union activity] purposes only if the property owner cannot show that they have one or more reasonable alternative nontrespassory channels of communicating with their target [public] audience.”

The new balance requires consideration of the third-party landlord’s right to limit access (and disruption) by a union or its members if they can use alternative media to present their otherwise lawful message.  They are not the landlord’s employees; as non-employees they can be treated as trespassers and excluded from the private property to which the general public has access.

Lindner & Marsack has represented employers in their dealings with unions for over a century.  If you have any questions about this case or any other aspect of classic labor-management law, please feel free to contact us at any time.

SUPREME COURT UPHOLDS USE OF CLASS ACTION WAIVERS

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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.

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

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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.

 

Three Lindner & Marsack Attorneys to Present at the State Bar of Wisconsin Health, Labor & Employment Law Institute

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Lindner & Marsack’s Tom Mackenzie, Laurie Petersen and Daniel Finerty will share expertise on a variety of employment law matters at the State Bar of Wisconsin’s 2016 Health, Labor, and Employment Law Institute, an event is designed to share comprehensive information to help attorneys stay current on new developments that impact health, labor and employment law practice.

The conference will be held at the Wilderness Hotel and Golf Resort in Wisconsin Dells on August 18-19 and the agenda includes:

  • Tom Mackenzie will co-present NLRB Update: The Changing Landscape of Labor with Jennifer Abruzzo, Deputy General Counsel to the National Labor Relations Board. The focus will be on ever-changing issues faced by today’s employers including topics critical to health care employers such as the use of cameras and videotaping in the workplace, “English only” policies, civility and confidentiality rules and other updates regarding recent changes to the election rules (Breakout Session 1: Thursday, August 18th at 10:05 a.m.).
  • Daniel Finerty will present Advanced Issues in Health Care Employee Background Checks to further review the applicable federal and state law regarding background checks and review recent examples of missteps in the hiring process and claims filed by applicants (Breakout Session 3: Thursday, August 18th at 1:25 p.m.).
  • How to Fire Someone the Right Way will be presented by Laurie Petersen along with Richard Rice of Fox & Fox, S.C. The session will explain that it is best to provide a legitimate, clearly-articulated business reason for termination in order to prevent costly litigation and obtain the best result (Breakout Session 3: Thursday, August 18th at 2:35 p.m.).
  • Lindner & Marsack will co-host a complimentary Thursday Evening Social Hour and Cocktail Reception for conference attendees (Thursday, August 18th at 4:50 p.m.).

The Conference also features an optional paid lunch with Tammy H. Scheidegger, Ph.D. According to Dr. Sheidegger, while “having it all” seems to go hand-in-hand with being “successful,” research on happiness, and the emerging science of neuro-counseling, is shifting the happiness paradigm and providing a clear roadmap for how “having enough” is actually the way to balance all aspects of one’s life.

Watch for live updates on Twitter at the #2016HLE conference from Daniel Finerty (@DanielFinerty). A full schedule and registration information is available at http://hle.wisbar.org/schedule.html.

Lindner & Marsack, S.C. has represented management exclusively in all facets of labor, employment, employee benefits and workplace injury defense law since 1908.  Call Tom, Laurie or Daniel at (414) 273-3910 regarding any of their #2016HLE topics, or visit http://www.lindner-marsack.com/ to learn more about the firm and how our experienced and innovative attorneys can help your business.

NLRB Expands Appropriate Bargaining Unit to Include Temporary Workers

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In a 3-1 decision issued this week, the National Labor Relations Board (“Board”) reversed current precedent that prohibited the inclusion of temporary employees along with permanent, or “solely employed,” employees in a bargaining unit absent employer consent, as it returned to the previous standard under M.B. Sturgis, Inc., 331 NLRB 1298 (2000), where no such consent was required.

In its July 11, 2016 decision, Miller & Anderson, Inc. and Tradesmen International and Sheet Metal Workers International Association, Local Union No. 19, AFL-CIO, the Board expressly overruled the 2004 decision of Oakwood Care Center, 343 NLRB 659 (2004), which had held that the National Labor Relations Act (“NLRA”) did not authorize the Board to direct elections in units encompassing employees of more than one employer, i.e. a company’s employees and other employees placed at the company via a staffing agency.  The Oakwood Board further held that combining such employees would lead to significant conflicts among the various employers and among groups of employees.

With the Miller & Anderson decision, the Board reversed course again, holding that the terms “employer” and “employer unit,” as used within Section 9(b) of the NLRA, were sufficiently broad to encompass temporary employees performing work for another employer.  The Board also reasoned that the Sturgis standard better effectuated the purposes of the NLRA.

Going forward, the Board will apply the traditional “community of interest” factors when determining if a bargaining unit is appropriate.  The Board will determine whether the temporary employees and solely employed employees have the same or substantially similar interests as to wages, hours or other working conditions.

While the Board described its decision as a return to Sturgis, the landscape has changed since 2004, when Sturgis was last the standard.  Last year, the Board issued the highly contentious Browning-Ferris decision, which overruled two other long-standing joint-employer decisions.

Under Browning-Ferris, the Board greatly expanded the joint-employment standard by abandoning the requirement that an employer exercise “direct and immediate” control over an employee’s terms and conditions of employment and instead including relationships where an employer merely exercised “indirect” control or even where an employer has simply reserved the authority to exercise control.   Thus, between 2000 and 2004, when Sturgis was the standard, the law was much clearer as to when a joint-employer relationship existed.  Now those waters are far murkier, and employers will have to navigate them to make best judgments as to whether a joint-employer relationship exists and, if so, whether a group of temporary employees and solely employed employees have sufficient interests in common in order to create an appropriate bargaining unit.

Employers and other amici cautioned that a return to Sturgis would create confusion and hinder meaningful bargaining.  We will see whether those concerns bear out.

SAVE THE DATE FOR OUR ANNUAL COMPLIANCE/BEST PRACTICES SEMINAR!

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Please mark your calendar for Lindner & Marsack, S.C.’s Annual Compliance/Best Practices Seminar!

WHEN:         April 14, 2016

8:00 a.m. – 12:00 p.m.

WHERE:       Sheraton Milwaukee Brookfield Hotel

375 South Moorland Road

Brookfield, WI

This FREE half-day event will address current topics in labor, employment, benefits & worker’s compensation law and provide employers across industries with practical and creative solutions for addressing their toughest workplace legal challenges.

SESSION TOPICS INCLUDE: 

  • Labor Law Update: Including Recent NLRB Decisions, Right to Work and Collective Bargaining Trends
  • 2016 Employment Law Update
  • FMLA Update – A Best Practices Review
  • The Use of Temporary Workers in 2016 – A Panel Discussion
  • Update on Proposed Wisconsin Worker Compensation Act Reform
  • Winning Strategies in Defending Worker Compensation Cases – How to Avoid Early Mistakes in Investigating Claims

Watch your inbox as well as our Facebook, LinkedIn and Twitter pages for more detailed information about session topics and a link to register for this free seminar.

NLRB EXPANDS JOINT EMPLOYER STANDARD, EXPOSING MORE EMPLOYERS TO UNIONIZATION

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By: Kristofor L. Hanson and John E. Murray

The National Labor Relations Board (“Board”) has expanded its joint employer test providing easier access to unions seeking to represent staffing agency temporary workers. The Board’s decision in Browning-Ferris Industries of California, 362 NLRB No. 186 (Aug. 27, 2015), will likely have far-reaching implications for businesses who have relationships with workers provided by staffing agencies whom they did not previously consider as their own employee.

The Browning-Ferris decision arose after the Teamsters sought to represent various temporary workers at a BFI recycling facility. At this facility, BFI had 60 employees who performed work outside the facility. Most of these employees were represented by the Teamsters. Approximately 240 individuals worked inside the facility. Most of these workers were temporary employees supplied by Leadpoint, a staffing agency. The Teamsters conducted a campaign to represent these temporary workers as employees of BFI. BFI claimed these workers were not their employees.

The Underlying Facts

BFI and Leadpoint had an agreement which designated Leadpoint as the sole employer of the temporary workers it supplied to BFI. Leadpoint and BFI shared responsibility for the temporary workers in a manner which is fairly common among employers who use temps. Leadpoint was responsible for hiring and supplying qualified workers, but BFI set the qualification standards and required a pre-employment drug screen. Both BFI and Leadpoint provided some training to the temporary workers. Leadpoint had the responsibility to discipline, evaluate and discharge these workers. However, BFI could discontinue the placement of a worker, and could recommend or request discipline. Leadpoint was responsible for paying employees and setting wage rates, so long as those rates did not exceed the rate BFI paid full-time employees for similar tasks. BFI set shift schedules, staffing levels, productivity standards and controlled the pace of work. Leadpoint assigned workers to particular shifts and jobs. BFI supervisors conducted pre-shift meetings for all employees. However, Leadpoint had three on-site mangers and three leads who supervised these workers. It also had an HR manager on-site. Despite their agreement, BFI actually exercised fairly little control over the Leadpoint workers.

The Board’s Ruling

The Board determined BFI’s “right to control the work of [these] employees and their terms of employment” was more important than BFI’s actual exercise of that control. The Board stated that it does not “require that this right be exercised, or that it be exercised in any particular manner” in order for BFI to be considered a joint employer. In other words, BFI was a joint employer of these workers because of the control it could exercise over them.

The Board’s decision departed from more than 30 years of Board decisions and federal case law which had held that the actual control exercised was more significant in determining joint employer status. Now an employer who exercises “indirect control,” “reserves authority” to exercise control, or “co-determines” terms and conditions of employment may well be a joint employer under the National Labor Relations Act. 

The Impact of the Board’s Decision

This decision will likely have a far-reaching impact for any employer who engages a staffing agency for temporary workers.

Increased Organizing. Particularly where it already represents an employer’s full-time workforce, unions presumably will begin to target temporary workers for representation campaigns. It will be challenging for employers to recognize and respond to these campaigns. However, the impact of this decision probably will not be limited to efforts to organize temporary workers. It will potentially reach into other areas, such as:

Franchisor-Franchisee relationships. Franchisees and franchisors historically have not been joint employers of the franchisee’s employees. However, the NLRB’s General Counsel currently is trying to hold McDonald’s liable as a joint employer for the unfair labor practices of its franchisees. Based on the Browning-Ferris decision, the degree of control McDonald’s could directly or indirectly exercise over these workers may determine its joint employer status. The Board, or unions, also may assert pressure on franchisors in an effort to organize the employees of their franchisees.

Secondary boycotts. The new joint employer standard may expand the number of employers union workers can lawfully picket.

Multi-party bargaining. If the Teamsters represent BFI’s temporary workers, situations could arise in which BFI and Leadpoint both need to be involved in collective bargaining. In addition, many employers use temporary workers supplied by more than one staffing agency. Each staffing agency may require a seat at the bargaining table. This decision also could cause employers to limit the number of staffing agencies they use.

At the present time, the full scope of this decision is difficult to assess. There will likely be further litigation related to the Browning-Ferris decision. The ensuing litigation may lead the current Board, or a future Board, to modify its application. Lindner & Marsack will be preparing a more detailed memorandum on these and other issues as they are addressed by the Board and by federal courts. If you have any immediate concerns about how this decision could affect your business, feel free to call or email Kris Hanson, John Murray, Jon Swain, Tom Mackenzie, or any other Lindner & Marsack attorney.