By: Kristofor Hanson<\/p>\n
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.\u00a0 (The Republican majority on the Board was in place until December 16, 2017, when Chairman Philip Miscimarra\u2019s term ended.\u00a0 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.)\u00a0 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.<\/p>\n
Interpreting Neutral Workplace Policies<\/span><\/strong><\/p>\n On December 14, 2017, in The Boeing Company<\/em>, 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 \u201cwould reasonably construe\u201d the policy to prohibit some form of protected Section 7 activity presently or at some point in the future.\u00a0 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.\u00a0 At issue in the case was Boeing\u2019s no-camera rule, which prohibited the use of \u201ccamera-enabled devices\u201d such as cell phones on its property.\u00a0 Boeing stated that it instituted this rule because of its security concerns, as Boeing is a \u201ctarget for espionage by competitors, foreign governments, and supporters of international terrorism, and [it] faces a realistic threat of terrorist attack.\u201d<\/p>\n In finding this rule lawful, the Board sharply criticized the \u201creasonably construed\u201d 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.<\/p>\n 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 \u201c(i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.\u201d<\/p>\n This test provides employers with the ability to defend work rules that may limit employees\u2019 abilities to exercise their Section 7 rights by establishing legitimate business justifications for their rules.\u00a0 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.\u00a0 Those categories are:<\/p>\n Category 1<\/strong><\/span>: 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.\u00a0 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.\u00a0 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 \u201charmonious interactions and relationships\u201d or to maintain basic standards of civility in the workplace.<\/p>\n Category 2<\/strong><\/span>:\u00a0 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.<\/p>\n Category 3<\/strong><\/span>:\u00a0 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.\u00a0 An example would be a rule that prohibits employees from discussing wages or benefits with one another.<\/p>\n The Board stated that going forward, its decisions concerning work rules will place work rules into one of these three categories.\u00a0 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\u2019 rights under the Act.<\/p>\n Return to Previous Joint Employer Standard<\/span><\/strong><\/p>\n In August 2015, in its Browning-Ferris <\/em>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;\u00a0 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.<\/p>\n 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<\/em>.\u00a0 In Hy-Brand Industrial Contractors<\/em>, 365 NLRB No. 156, the Board stated that it was reverting to the \u201cdirect and immediate control\u201d standard, which had been in place for decades prior to the Browning-Ferris <\/em>decision.<\/p>\n Under the direct and immediate control standard employers are considered joint when there is \u201cproof that putative joint employer entities have exercised joint control over essential employment terms (rather than merely having \u2018reserved\u2019 the right to exercise control), the control must be \u2018direct and immediate\u2019 (rather than indirect), and joint-employer status will not result from control that is \u2018limited and routine.\u2019\u201d<\/p>\n 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.\u00a0 It removes from consideration control that is reserved, but not applied, by the employer.<\/p>\n Unilateral Implementation of Work Rule Changes without Bargaining<\/span><\/strong><\/p>\n On December 15, 2017, in Raytheon Network Centric Systems<\/em>, 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.<\/p>\n 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.\u00a0 In Raytheon<\/em>, 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.<\/p>\n The case involved Raytheon\u2019s unilateral adjustment of employees\u2019 healthcare benefits.\u00a0 The lower judge found that the adjustment was unlawful as it needed to be bargained.\u00a0 However, the Board, overturning the decision, held that Raytheon was well within its rights to modify the employees\u2019 healthcare benefits because it had done so annually each of the previous eleven years.<\/p>\n 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.\u00a0 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.<\/p>\n Accordingly, the Board found that Raytheon\u2019s 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.<\/p>\n Micro Bargaining Units are a Thing of the Past<\/span><\/strong><\/p>\n In another December 15, 2017 decision, the Board overturned a 2011 ruling that allowed what were termed \u201cmicro units\u201d to petition for a union election.\u00a0 The case, PCC Structurals, Inc.<\/em>, 365 NLRB No. 160, overturned what is known as the Specialty Healthcare <\/em>standard that required employers to establish that other employees who the employer believed should be included in a bargaining unit had an \u201coverwhelming community of interest\u201d with the petitioning unit.<\/p>\n In this decision, the Board returns to the traditional community of interest standard that it has applied \u201cthroughout nearly all of its history.\u201d\u00a0 This standard allows for the Board to evaluate the interests of all employees \u2013 both those within and those outside the petitioned-for unit \u2013 without having to determine whether their community of interest is \u201coverwhelming.\u201d\u00a0 Rather, the traditional test requires the Board to assess multiple factors to determine the appropriate unit, such as:<\/p>\n 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\u2019s other employees; have frequent contact with other employees; interchange with other employees; have distinct terms and conditions of employment; and are separately supervised.<\/p>\n The Board found that the \u201coverwhelming community of interest\u201d standard was akin to gerrymandering and resulted in arbitrary and fractured units.\u00a0 It stated the traditional community of interest standard takes into consideration those groups of employees who have \u201csubstantial\u201d shared interests to be taken into consideration when determining appropriate unit size.<\/p>\n PCC Structurals<\/em> involved an employer\u2019s challenge of a Regional Director\u2019s decision and direction for election of a petitioned-for unit of 100 welders.\u00a0 The employer contended that the smallest appropriate unit actually consisted of more than 2500 employees.\u00a0 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.<\/p>\n This decision eliminates the burden that had been placed on employers to establish an \u201coverwhelming\u201d community of interest among employees in order to enlarge a bargaining unit.\u00a0 As the Board stated, that burden was nearly impossible for employers to achieve.\u00a0 Employers now will be better able to expand bargaining units, which should allow employers to better combat union organizing efforts.<\/p>\n