Labor Relations Update

D.C. Circuit Court Rules NLRB’s Access to Property Test is Arbitrary

General Counsel of the National Labor Relations Board, Jennifer Abruzzo, is already on her way to accomplishing one of the objectives she laid out in her recent Advice-Memorandum 21-04 (discussed here earlier on this blog). In the GC’s memo, she identified a number of Board decisions to re-evaluate, including Bexar County Performing Arts Ctr. Found., 368 NLRB No. 46 (Aug. 23, 2019).  This Trump-era NLRB decision limited the circumstances in which a contractors’ employees could access private property of another employer to engage in Section 7 activity. On August 31, 2021, the D.C. Circuit Court overturned the 2019 Bexar County access to property standard. Local 23, American Federation of Musicians v. NLRB, No. 20-1010, at *6 (Aug. 31, 2021).

Procedural History: Bexar’s 2019 Standard

The issue in Bexar County arose after the Bexar County Performing Arts Center blocked musicians who work for a symphony that performs at their auditorium from protesting a ballet company inside the arts center. The musicians are represented by an American Federation of Musicians affiliate. The NLRB ruled that a property owner may lawfully prohibit the off-duty employees of its on-site contractors (or licensees) from accessing its property to engage in Section 7 activity unless (1) the off-duty employees regularly and exclusively work on the property, and (2) the owner of the property cannot show the off-duty employees do not have one or more reasonable non-trespassory alternatives to communication their message. Bexar County Performing Arts Ctr. Found. 368 NLRB No. 46 at *3 (Aug. 23, 2019).  The Board noted it would consider contractor employees to have worked “regularly” on the owner’s property only if the contractor regularly conducted business or performed services there. Id. The Board also defined employees to be considered to have worked “exclusively” on the owner’s property if they performed all of their work for that contractor on the property, even if they also worked a second job elsewhere for another employer. Id.

D.C. Circuit Court Holds that Board’s Decision is Arbitrary

The D.C. Circuit Court held that the Board’s decision is arbitrary in the way that it implements its new standard for determining when a property owner may prohibit an onsite contractor’s employees from conducting labor organizing activity on the premises. The Board held that the musicians did not work at the center regularly even though they performed there 22 weeks a year, but said that contract workers who weekly stock vending machines do regularly work there. The D.C. Circuit reasoned that this was arbitrary. Similarly, the D.C. Circuit held that the use of “exclusively” was also arbitrary because it could bar workers with substantial presence at a property if they do a small amount of work for the owner off property while granting it to workers with only a minimal, yet exclusive, presence.

The Court also took issue with how the NLRB applied the second part of the test, which requires property owners to show that workers had other reasonable means to communicate their message. Even though the Board held the burden was on the owner, it did not require Bexar County, the owner of the property, to prove that it had met the threshold.

The Court remanded the case back to the Board with its new-Democratic majority Board, noting that the Board may decide whether to proceed with a version of the test it announced and sought to apply in this case or develop a new test altogether.

Takeaways

The NLRB in Bexar County sent a strong message that private property rights are paramount when it comes to non-employees and Section 7 rights, except in very limited circumstances. At the time of the initial NLRB decision, NLRB Chair Lauren McFerran dissented, cautioning that the ruling effectively eliminated important labor-law rights from employees who work on property owned by an entity other than their employer. With the D.C. Circuit’s ruling, the newly constituted Democratic majority of the NLRB will have a chance to undo the holding of the original Bexar case and will likely imposed a much more lenient standard consistent with Member McFerran’s dissent. As always, we will continue to keep you apprised of all the latest development at the NLRB.

 

House Committee Attempts to Secure “PRO Act” Changes to Labor Law Through Reconciliation Process of Next Federal Budget

As we have discussed in previous posts (see here and here), the Protect the Right to Organize Act (“PRO Act”), which would drastically and fundamentally change the nature and scope of the National Labor Relations Act (“NLRA”) and labor-management relations in the private sector, has languished in the U.S. House of Representatives over the last couple of years, with uncertain (at best) hopes of advancing through the regular rules of the U.S. Senate under the current configuration of that legislative chamber.

In an effort to ensure that certain key aspects of the PRO Act become law, the House Education and Labor Committee, on September 8, 2021, released language that its members hope become part of the federal budget through the process known as “budget reconciliation.”   This process is a legislative measure relating to federal spending that only requires a majority of support in both the House and Senate, and cannot be stopped by a filibuster in the Senate.  If passed, these amendments will take effect on January 1, 2022.

The following represent the key aspects of the PRO Act that were included in the proposed language from the House Committee:

New liability for employers found to have committed unfair labor practices:

  • Civil penalties up to $50,000 per violation;
  • Civil penalties up to $100,000 per violation within the previous five years that resulted in discharge of or “serious economic harm to an employee”; and
  • Personal liability for directors and officers for unfair labor practices to be determined by the Board based on the particular facts and circumstances presented.

Perhaps, most significant, the budget reconciliation provisions would drastically eliminate a number of economic weapons or tools currently available to employers during labor disputes and/or organizing campaigns.  Specifically, if passed, it would be an unfair labor practice for employers to promise, threaten, or take the following actions:

  • Permanently replace strikers;
  • Discriminate against an employee who is working or has unconditionally offered to return to work because the employee participated in or supported a strike;
  • Lock out employees (prior to a strike);
  • Misrepresent to a worker that they are excluded from the definition of “employee” under the Act, such as misclassifying independent contractor or supervisor);
  • Require employees to attend so-called “captive audience” speeches or meetings during a union-organizing campaign; and
  • Enter into, attempt to enforce, coerce or retaliate against class/collective-action waiver agreements.

Notably, these new prohibitions would be enforced as if they were existing unfair labor practices under the NLRA. The enforcement would result in civil monetary penalties, rather than a requirement for a person or company to cease and desist from the prohibited behavior.

Based on the language proposed by the House Committee, it appears many of the key sweeping changes that advocates of the PRO Act sought in the recent iterations of the legislation have made it through to this proposed bill.

It is far from certain whether all of the amendments in the proposed language are appropriate for this legislative procedure, given many (if not all) of these proposed amendments significantly change substantive policy of federal labor law.  The Senate has a rule (called the Byrd Rule), intended to limit extraneous provisions from inclusion in reconciliation bills, such as legislative items not related to spending or taxes, including those with no budgetary effect.  Any Senator may raise a point of order that a provision of the reconciliation bill is extraneous, and ultimately, the Senate Parliamentarian decides whether a Byrd rule violation has occurred and those provisions can be struck.  (A Byrd rule objection can be waived by 60 votes from the Senate.)

We will of course closely monitor the progress of this bill through the budget reconciliation process, and keep you updated along the way.

NLRB General Counsel Abruzzo Encourages Regions to Utilize More Significant Remedies When Resolving Unfair Labor Practices

In keeping with the momentum of her Office, National Labor Relations Board General Counsel Jennifer Abruzzo issued a memorandum yesterday to all Regional Offices advising them to request that the Board exercise its broad discretion in fashioning remedies for workers impacted by unfair labor practices, indicating the General Counsel’s intent to impose more onerous penalties on employers for violations of federal labor law. Seeking Full Remedies GC Memorandum 21-06, (September 8, 2021).

In her most recent memorandum, General Counsel Abruzzo outlines the types of remedies that Regions should be requesting from the Board based on the type of unfair labor practice involved. Notably, the General Counsel encourages Regions to seek consequential damages to cover the cost of economic losses—such as health care expenses incurred as a result of an unlawful termination of health insurance—in appropriate cases, citing the Board’s stated willingness to explore this new remedy. Additionally, the General Counsel advises Regions to actively seek Gissel bargaining orders in cases involving an ongoing union organizing drive. Lastly, of particular note, the memorandum encourages Regions to seek Board Orders requiring employers to distribute the Notice to Employees through text message and on its social media websites and internal apps that are used by the employer to communicate with its employees—in addition to physical posting and emailing.

Other remedies encouraged in the memorandum, broken down by unfair labor practice, include:

  • Unlawful firings of discriminatees: Regions are advised to seek compensation for consequential damages, front pay, and liquidated backpay. Where the unlawful terminations involve undocumented workers, Regions should seek additional remedies, including compensation for work performed under unlawfully imposed terms and employer sponsorship of work authorization, intended to prevent the employer’s unjust enrichment from its unlawful conduct.
  • Unlawful conduct during organizing drive: While not an exhaustive list, the General Counsel encourages Regions to seek remedies that will (1) facilitate union access by requiring an employer to provide employee contact information or by granting equal access to the employer’s bulletin boards; (2) reimburse unions for organizational costs, including costs incurred during a re-run election; (3) require a public reading of the Notice to Employees; (4) require the employer to provide training to its employees, supervisors, and managers on employee rights under the Act; and (5) impose broad cease-and-desist orders.
  • Unlawful failures to bargain: Regions should seek alternative remedies including bargaining schedules (i.e. mandatory schedules requiring the employer to bargain for a minimum number of sessions of pre-determined length until an agreement or impasse is reached); submission of periodic progress reports to the Agency on the status of bargaining; an insulation period during the compliance process following an unfair labor practice finding during which the union’s status as bargaining representative could not be challenged; and reimbursement of collective bargaining expenses, among other possible remedies.

Takeaways

Counting this most recent memo, General Counsel Abruzzo has issued three advice memoranda since being sworn into office on July 22, 2021.  Moreover, she indicated that she plans to issue her fourth memo in short order on the types of remedies Regions should incorporate into settlement agreements. In less than two months in office, General Counsel Abruzzo has taken the NLRB by storm and has kick-started a rapid change in labor law policy. This memo should send a clear signal to employers that the NLRB will be seeking to impose more significant remedies and consequences for employers found by the Board to have committed an unfair labor practice. As always, we will keep you apprised of the latest updates from the NLRB.

New NLRB General Counsel Signals Greater Utilization of 10(j) Injunctions

The recently-sworn in General Counsel of the National Labor Relations Board, Jennifer Abruzzo, has had a busy month, setting the stage for a slate of new enforcement initiatives.  First, the GC issued Advice Memorandum 21-04 (discussed here last week), identifying numerous Board decisions that are all but certain to be reassessed once the full complement of five Board members is seated in the coming weeks.  The GC’s memo also highlighted expected new initiatives in certain areas, including employee status, Weingarten rights, the right to strike, and others.  Just one week later, the GC issued GC Memorandum 21-05, “Utilization of Section 10(j) Proceedings,” re-affirming the NLRB’s emphasis on seeking injunctive relief in federal court for certain urgent matters pursuant to Section 10(j) of the Act.

Reaffirming Agency Initiatives Regarding 10(j) Injunctions

The GC started her memorandum by stating, “Section 10(j) injunctions are one of the most important tools available to effectively enforce the Act”.  The GC illustrated a policy goal that such injunctions should continue to be a priority in appropriate cases.  While this does not necessarily represent a policy overhaul like the GC’s previous memorandum, it is a reminder of the shifting winds at the NLRB.

Section 10(j) of the National Labor Relations Act allows the Board to seek temporary injunctions in federal court while cases are being litigated in order to ensure that any remedy the Board might issue would not be moot or hollow.  Cases where 10(j) injunctions may be appropriate are first identified by the Region processing the underlying charge, then referred to the GC, and the GC must then obtain Board authorization before seeking an injunction in federal court.

In her memorandum, the GC identifies unfair labor practices occurring during organizing campaigns, shortly after certification, and successorship cases as those where Regions should pay particular attention to the question of whether a 10(j) injunction may be appropriate.  However, the GC did not stop there, and instead stated that Regions should continue to consider injunctive relief in all cases where an alleged unfair labor practice could affect employees’ Section 7 rights.  While the GC noted that Regions have historically done well to address potential injunctions at the outset of appropriate cases, she nonetheless stressed the importance of early action when an injunction appears appropriate in order to maintain or restore the status quo.

Takeaways

Though more of a re-emphasis to the Regions rather than a new initiative or precedent shift, GC Memorandum 21-05 nonetheless tips the new GC’s hand with respect to upcoming Board enforcement initiatives.  Particularly in light of last week’s Memorandum 21-04, it is clear that the new GC (predictably) has bold plans for significant changes, and will not hesitate to use tools such as 10(j) injunctions to achieve them and to bring additional pressure on employers.

The proof will be in the pudding as to whether the Regions more frequently seek 10(j) injunctions and under what circumstances.  As always, we will continue to keep you apprised of all the latest developments at the NLRB and the impact of this recent Advice Memorandum issued by the GC.

Second Circuit Adopts “Contract Coverage” Standard as Governing Standard for Unilateral Changes

The NLRB’s “contract coverage” standard for determining whether a collective bargaining agreement privileges an employer to unilaterally change terms and conditions of employment received support last week from a federal court of appeals, further solidifying the legitimacy of the relatively new standard at a time when the Board is undergoing a change in leadership and policy objectives. As announced last Thursday, the new General Counsel wants to revisit the Second Circuit-approved “contract coverage” standard, suggesting that this employer-favorable development may be fleeting when it comes to the NLRB. IBEW Local 43 v. NLRB, Case No. 20-1163 (2d Cir. Aug. 12, 2021).

Procedural History

The union filed an unfair labor practice charge against the employer, claiming the employer violated the Act by implementing a 6-day workweek without first giving it notice and an opportunity to bargain. While the administrative law judge (ALJ) concluded the employer did violate the Act, the Board reversed the ALJ’s decision and dismissed the complaint. Shortly before deciding this case, the Board abandoned its long-standing “clear and unmistakable waiver” standard for evaluating the lawfulness of employer’s unilateral changes to terms and conditions of employment and adopted the “contract coverage” test.

Applying the new “contract coverage” standard, the Board determined that the parties’ collective bargaining agreement permitted the employer to change employee schedules without first bargaining with the union. Reading the management rights provision, which granted the employer the exclusive right to “determine the reasonable amount and quality of work needed”, together with a provision providing for the payment of overtime wages for work performed “weekly in excess of forty (40) hours, or on scheduled days off,” the Board held that the CBA authorized the employer to determine the amount of work it needed employees to perform and to require employees to work in excess of 40 hours a week.

Legal Analysis

On review, the Court considered both the Board’s adoption of the new “contract coverage” standard and its application of this standard to the facts. In considering which interpretive method should be applied to determine whether a CBA grants an employer the right to act unilaterally, the Court found the Board’s reasoning for breaking with its precedent to be “thorough and carefully reasoned” and adopted the “contract coverage” test.

Agreeing with the Board’s assessment, the Court explained that the previous “clear and unmistakable waiver” standard tended to undermine contractual stability by denying the effect of contract provisions that failed to meet this “exacting” standard. Under the “clear and unmistakable waiver” analysis, the CBA had to “unequivocally and specifically” permit the employer’s action in order for the Board to find that the union waived its right to bargain over the action at issue. With respect to the “contract coverage” standard, which considers whether the employer’s action falls within the “compass or scope” of the CBA, the Court reasoned that the Board’s new test comports with ordinary principles of contract interpretation “while preserving meaningful limits on unilateral employer action”. As such, the Court adopted the Board’s “contract coverage” standard as the governing standard for unilateral changes.

Applying the “contract coverage” standard to the facts before it, however, the Court disagreed with the Board’s interpretation of the parties’ collective bargaining agreement. The Court found that the plain language of the CBA placed restrictions on employees’ hours and work schedules, providing that “[t]he workweek shall be forty (40) hours during any one workweek or eight (8) hours during any workday” and specifying that employees’ normal schedule will consist of either a 5-day workweek of 8-hour shifts or a 4-day workweek of 10-hour shifts. While the CBA stated that certain specified deviations from this normal work schedule were permissible, it required the employer to follow a two-step process before making the limited changes permitted by the CBA. Contrary to the Board, the Court did not interpret the contractual right to determine the “amount” of work needed and the requirement to pay overtime wages for work in access of 40 hours in a week as giving the employer the right to mandate overtime work. Therefore, the Court held that the CBA did not privilege the employer to unilaterally impose a 6-day workweek and vacated the Board’s dismissal of the complaint.

Takeaways

The Second Circuit’s approval of the Board’s “contract coverage” test may take on greater significance as the composition of the NLRB changes under the Biden Administration. As we discussed here, the newly sworn-in General Counsel of the NLRB, Jennifer Abruzzo, recently issued a memo outlining the Board’s enforcement priorities. Among other directives, the memo requires NLRB Regions to submit cases involving application of the “contract coverage” standard to the Office of the General Counsel for advice prior to any decision. The memo signals a likely change to the Board’s standard for employer unilateral changes, meaning the Board may return to its prior standard requiring a “clear and unmistakable” waiver of a union’s right to bargain before an employer may act unilaterally. However, favorable decisions from federal courts of appeal like this offer a glimmer of hope for employers where decisions by the Board can be appealed, and potentially vacated, by a federal appellate court on review. As always, we will continue to monitor and report on developments at the NLRB.

The NLRB’S Recently Seated General Counsel Plots Entirely New Direction for the Board

Less than a month after being sworn in as the new General Counsel of the NLRB, Jennifer Abruzzo defined a bold new direction for the Board’s enforcement priorities in a memo issued on August 12, 2021.  The memo, Mandatory Submissions to Advice GC Memorandum 21-04 (August 12, 2021), lays out subject matters that NLRB Regions must submit to the Office of the General Counsel for Advice prior to any decision.  Abruzzo’s memo makes clear she seeks to depart sharply from the priorities outlined by her predecessor, Peter Robb, and specifically targets for review areas where the Trump Board overruled past legal precedent.

The GC identifies three broad categories of topics that must be submitted for advice: (1) subject matter areas where, in the last several years, the Board overruled legal precedent; (2) new initiatives that the General Counsel would like to carefully examine, and; (3) matters traditionally submitted to Advice.

The lists of topics are telling and indicate to employers quite clearly that the Board is going to plot a new course from the Trump Board.

Topics Overturned by the Trump Board

The General Counsel all but promised change in these subject matters, criticizing the Trump Board for “overruling many legal precedents which struck an appropriate balance between the rights of workers and the obligations of unions and employers.”  The memo identified the following topics for reassessment:

  • Employer handbook rules: in particular the new, more lenient, test for the legality of an employer’s handbook and policies articulated The Boeing Co., 365 NLRB No. 154 (2017).
  • Confidentiality provisions: a slate of decisions which found confidentiality provisions in settlement agreements, workplace investigation procedures and arbitration agreements lawful.
  • Protected concerted activity: a variety of decisions which narrowed what constitutes limitations on protected concerted activity (i.e., activity protected by the National Labor Relations Act), highlighting in particular a reassessment of decisions finding that limiting the use of email to only workplace communications lawful.
  • Test for Unlawful Union Animus: in particular, Tschiggfrie Properties, Ltd., 368 NLRB No. 120 (2019) and other cases heightening the animus requirement for showing unlawful union discrimination.
  • Remedies Available: decisions which lowered the likelihood that an employer must offer reinstatement and lowered the standard for Regions to accept settlement agreements;
  • Union Access: cases which limited certain employees and union representatives from the employer’s property;
  • Union Dues: cases which permitted employers to unilaterally cease remitting union dues after a collective bargaining agreement expires and imposed more duties on unions in relation to collecting dues;
  • Employee Status: cases involving a 2019 decision which made it more likely that an employee with entrepreneurial opportunity would be deemed an independent contractor;
  • Religious institutions: Bethany College, 369 NLRB No. 98 (2020), which articulated a new standard for assessing whether the Board has jurisdiction over a religious education institution;
  • Employer duty to recognize and bargain with a union: the GC identifies multiple key doctrines developed over the last four years regarding a union’s waiver of the right to bargain which provided employers with the right to promulgate policies without bargaining with a union, and decisions permitting employers to implement changes after a collective bargaining agreement expired;
  • Deferral: cases involving deferral of discharge and discipline cases to arbitration and the more permissive standard reinstated by the Trump Board.

Other New Initiatives

The memo identifies initiatives to review seven other subject matters as well:

  • Employee Status: cases involving misclassification of employees as independent contractors and the coverage of the Act to individuals with disabilities and applicants;
  • Weingarten: involving the applicability of a right to information in the pre-disciplinary interview context and whether the right to representation applies in non-unionized settings as well;
  • Jurisdiction of NLRB: assessing the jurisdictional contours between the NLRB and the National Mediation Board (jurisdiction over rail and airline industries);
  • Employer duty to recognize and bargain with a union: in addition to identifying issues related to surface bargaining and a refusal to furnish information related to a plant relocation, the GC particularly identified that the Board will consider overturning Shaw’s Supermarkets, Inc., 350 NLRB 585 (2007), which permits mid-term withdrawals of recognition after the third-year of a contract;
  • Employees’ rights to strike and/or picket: cases involving replacement of strikers, the broad definition of an intermittent strike, and strikes with an unlawful secondary object;
  • Remedies and compliance: issues involving make-whole remedies and a discriminatee’s duty to conduct an adequate search for interim employment;
  • Interference with employee’s rights: cases regarding statements that imply employees access to management will be limited if a union is voted in, involving an employer’s threat to close a plant where the threat was not disseminated, and the promulgation of mandatory arbitration agreement in response to employee protected activity.

The memo concludes with a recitation of other casehandling matters that traditionally have been submitted to Advice.

More to Come and Takeaways

The memo, a dense ten pages, is a signal that the Board will be plotting a new course for at least the next four years.  This combined with the recent confirmation of two new Board members (one already seated, and the other who will be seated later this month) makes clear that the ideology and leaning of the NLRB is rapidly changing.  The GC’s memo should be a clear signal to all that significant changes to labor law precedent are on the horizon. As always, we will keep you informed of any new developments.

Scabby the Rat Has Been Legitimized by the NLRB

A split Board concluded this week that a union did not engage in unlawful secondary activity under the NLRA when it stationed a 12-foot-tall inflatable rat—known all too well by employers as “Scabby the Rat”—and two 8-foot banners on the worksite of a neutral employer for the purpose of forcing the neutral employer to cease doing business with the primary employer with whom the union had a labor dispute. International Union of Operating Engineers, Local Union No. 150 (Lippert Components, Inc.), 371 NLRB No. 8 (July 21, 2021).

The Board’s decision lays to rest former General Counsel Peter Robb’s attempt to bring renewed scrutiny to the use of the inflatable rat and other forms of “bannering” against neutral employers as a form of secondary activity that Congress intended to prohibit under Section 8(b)(4) of the Act.

ALJ’s Finding of No Unlawful Secondary Activity

As we previously reported here, the underlying unfair labor practice charge was heard by an Administrative Law Judge (ALJ) in 2019. At issue in the unfair labor practice complaint was whether the union violated the Act when it set up an inflatable rat and two 8-foot banners, manned by two union representatives, at the entrance of a trade show that targeted a neutral employer that did business with the primary employer with whom the union had an ongoing labor dispute.

The ALJ applied Board precedent, developed just a decade earlier, in Eliason & Knuth of Arizona and Brandon Regional Medical Center, which found, respectively, that the use of stationary banners or an inflatable rat at the site of a neutral employer without more did not “threaten, coerce, or restrain” the neutral employer in violation of Section 8(b)(4) of the Act. Constrained by this precedent, the ALJ dismissed the complaint, finding that the union’s stationary display did not amount to unlawful picketing or coercive non-picketing conduct under the NLRA.

Request for Board Review and Legal Analysis

Following the ALJ’s decision, the Office of the General Counsel of the NLRB requested, in October 2020, that the Board overrule its prior decisions on such conduct, arguing that Board precedent unnecessarily narrowed the definition of picketing and coercive conduct falling within the scope of Section 8(b)(4)’s prohibition. The Board subsequently invited the parties and interested amici to submit briefs on the question of whether the Board should overrule Eliason & Knuth and Brandon Regional Medical Center and, thereby, reverse its position on the use of inflatable rats and stationary banners.

After reviewing the ALJ’s decision and the 30 briefs submitted in the case by the parties and by amici, a majority of the Board affirmed the ALJ’s decision and dismissed the Section 8(b)(4) complaint. The majority opinions agreed that the doctrine of constitutional avoidance required dismissal of the complaint. Thus, even where the Act could be interpreted such that banners and inflatable rats constitute the type of coercive secondary conduct prohibited by the Act, the question is whether the Act must be read in this way when it raises serious First Amendment issues.

The majority concluded that where the conduct at issue was clearly expressive activity intended to persuade the neutral employer’s customers, the possible infringement on the union’s First Amendment rights precluded the Board from finding that the banners and inflatable rat violated the Act. Moreover, the Board held that neither the union’s display nor the large, imposing presence of Scabby the Rat mandated a finding of intimidation or coercion within the meaning of Section 8(b)(4).

Takeaways

For the foreseeable future, the Board’s decision has blessed unions’ use of Scabby and banners as a lawful application of secondary pressure on neutral employers. In his dissent, Member Emanuel warned that unions would exploit the “gaping secondary hole” left by the majority’s failure to recognize the wide range of coercive union secondary conduct. Whether this ominous warning will bear out remains to be seen. With the upcoming changes to the composition of the NLRB—President Biden’s two Board appointees are well into the confirmation process and could give Democrats control of the Board by the end of August—it is likely that unions will resort to using Scabby more often.

BREAKING: Jennifer Abruzzo is Sworn In as General Counsel of the NLRB

After being nominated by President Biden on February 17, 2021, Jennifer Abruzzo was sworn in as General Counsel of the NLRB yesterday by Chairman Lauren McFerran. Abruzzo will serve a four-year term as General Counsel, spearheading the agency’s investigation and prosecution of unfair labor practice cases and supervising the NLRB field offices in the processing of cases. As the NLRB noted in its official press release, this is the first time in the NLRB’s history that women have occupied both the Chairman and General Counsel positions.

Peter Sung Ohr, who has served as Acting General Counsel since President Biden terminated former General Counsel Robb in January 2021, will remain in the Office of the General Counsel, serving as a Deputy General Counsel.

Jennifer Abruzzo most recently served as Special Counsel for Strategic Initiatives for the Communications Workers of America (CWA). Prior to this role, Abruzzo spent over two decades working for the NLRB in various capacities, with her most recent position being Deputy General Counsel and then Acting General Counsel before former General Counsel Peter Robb was confirmed by the Senate. After her swearing in, Abruzzo said she was “thrilled to rejoin the Agency” and looks forward to working with her colleagues to “promote better enforcement of labor and employment laws.” General Counsel Abruzzo also took the opportunity to express her belief that “vigorous enforcement of the Act will help level the playing field for workers and their freely chosen representatives”.

General Counsel Abruzzo’s opening remarks likely signal what lies ahead for employers.  Viewing this development in conjunction with the pending nominations of two union side attorneys to fill vacant seats on the NLRB, one can certainly see that the winds of change at the NLRB are certainly blowing.  Stay tuned.

District Court Approves of President Biden’s Firing of Former NLRB General Counsel, But is This the Final Word?

As we reported here and here, there are several challenges to the authority of the Acting General Counsel of the National Labor Relations Board, Peter Sung Ohr, given President Biden’s unprecedented move of terminating the sitting General Counsel, Peter Robb, in January 2021.

One recent challenge to the Acting General Counsel’s authority was brought before the District Court of New Jersey in response to the Board’s petition for an injunction under Section 10(j) of the National Labor Relations Act in a pending unfair labor practice proceeding. Goonan v. Amerinox Processing, Inc., 21-CV-11773 (D.N.J. July 14, 2021).

While the court ruled that the President had the authority to terminate the General Counsel without cause and designate an Acting General Counsel in the interim, the decision is unlikely to be the proper vehicle for a final determination of the issue.

Background

The employer in Goonan was charged with a number of ULPs surrounding the union’s claim that the employer unlawfully terminated several employees because of their support for the union during an ongoing organizing campaign. The General Counsel issued a complaint alleging that the terminations violated the Act. The case went before an ALJ, and the ALJ found that the employer committed a number of unfair labor practices in violation of the Act.

While the complaint was pending before the ALJ, the Board, through its Regional Director, filed the instant petition for an injunction under Section 10(j) of the Act, seeking an order from the district court enjoining the employer from committing unfair labor practices. In its opposition to the 10(j) petition, the employer challenged the Board’s authority to seek an injunction, arguing the Acting General Counsel, who filed the petition on behalf of the Regional Director, did not have any legal authority to prosecute the underlying unfair labor practice charge. According to the employer, the President’s termination of former General Counsel Robb was not in accord with the NLRA and, further, the President’s designation of Peter Sung Ohr did not comply with the Appointments Clause of the U.S. Constitution and was therefore invalid.

Legal Analysis

The court only briefly addressed the employer’s argument that the petition was invalid because the Acting General Counsel lacked legal authority, finding overall that the validity of the Acting General Counsel did not impact whether the Board could petition the court for an injunction.

On the issue of the President’s ability to terminate the General Counsel without cause, the court concluded that the text of the Act as drafted by Congress provided the President with this power. Section 3 of the Act provides that persons appointed to the Board “may be removed by the President, upon notice and hearing, for neglect of duty or malfeasance in office, but for no other cause.” However, Congress did not include a similar restriction on the President’s ability to terminate the General Counsel. Therefore, the court determined that the plain language of the Act allows the President to “relieve the General Counsel of his or her duties without the process required for Board members.” The Act also explicitly permits the President to designate an Acting General Counsel when a vacancy occurs, without any limitation with respect to how that vacancy came into existence. As such, the court rejected the employer’s argument that the President’s failure to comply with the Appointments Clause invalidated the authority of the Acting General Counsel.

After briefly discussing the President’s authority to terminate a sitting General Counsel, the court concluded that it ultimately had jurisdiction to hear and adjudicate the matter because a petition for an injunction under Section 10(j) is brought by the Board and not the General Counsel. The question before the court, therefore, was whether to grant the Board temporary relief.

Takeaways

The district court’s decision is the first of its kind to assess and rule on the legality of President Biden’s unprecedented decision to terminate the sitting General Counsel upon taking office. However, since the issue of the legitimacy of the Acting General Counsel was not squarely before the court, this decision is unlikely to become the vehicle for further review of Peter Robb’s removal and the subsequent appointment of Peter Sung Ohr as interim General Counsel. However, the court’s analysis may offer a preview of how other federal courts could come out on the issue. As always, we will keep you informed on any new developments.

Access Denied: Supreme Court Finds California Regulation Permitting Union Access to Employer Property Constitutes An Unconstitutional Taking

In a 6–3 decision, the U.S. Supreme Court held on June 23, 2021 that a California regulation granting labor organizers the “right to take access” to agricultural employers’ private property to solicit union support violated the Takings Clause of the U.S. Constitution. See Cedar Point Nursery et al. v. Hassid et al., USSC Case No. 20–107 (June 23, 2021).

Background

Decades ago, California’s Agricultural Labor Relations Board (“ALRB”) promulgated a regulation that requires agricultural employers to give labor organizers access to their private property for as much as three hours per day, 120 days per year for purposes of organizing. In 2016, two agricultural employers sued the ALRB in federal court in California, seeking to prohibit the agency from enforcing the regulation because the regulation constituted a physical appropriation of private property in violation of the Constitution’s Taking Clause, which precludes the government from taking private property “without just compensation.”

The district court, however, rejected this argument, holding that because the regulation did not “allow the public to access [the Employers’] property in a permanent and continuous manner for whatever reason,” it did not amount to an unconstitutional physical taking. On appeal, a split Ninth Circuit panel affirmed the district court’s decision, noting that the regulation neither allowed the public to “unpredictably traverse” the employers’ private property “24 hours a day, 365 days a year,” nor “completely deprive[d]” the employers of all economically beneficial use of their property. After the Ninth Circuit denied their petition for re-hearing en banc, the employers appealed to the Supreme Court, which granted certiorari.

Holding

The Supreme Court reversed the Ninth Circuit, reasoning that because the right to exclude third parties from private property “is ‘one of the most treasured’ rights of property ownership,” the California regulation requiring agricultural employers to allow union organizers private-property access constituted a clear physical appropriation. In such cases, because the physical appropriation of private property is so clear, the Court “use[s] a simple, per se rule: The government must pay for what it takes.” The Court then distinguished PruneYard Shopping Center v. Robins—a 1980 case in which the Court rejected the argument that state protection of leafletting in a privately owned shopping center represented an unconstitutional taking—explaining that, unlike the agricultural employers’ private property, the shopping center in Pruneyard “was open to the public, welcoming some 25,000 patrons a day.” See 447 U.S. 74. Notably, the Court also implied that the narrow exception enjoyed by unions under current federal labor law—which allows non-employee organizers a right of access to employers’ private property when employees are otherwise “beyond the reach of reasonable union efforts to communicate with them”—could similarly prove to be an unconstitutional taking, if challenged.

Potential Impact of the Decision

For the parties, the main question left open by the Supreme Court’s decision is, what is the appropriate remedy for the unconstitutional taking here?  In other words, should the property owners be granted injunctive relief, as they requested, and/or should the property owners be compensated for the access granted to organizers? And if so, how much?  The Court remanded the case to the federal district court to handle this question.

This case is interesting for management- and union-side labor lawyers alike because the regulation at issue provided for a union’s right to access employer property, directly impacting the traditional labor-management relationship. What is particularly unique about this case is that state and local labor laws are usually challenged on preemption grounds (i.e., the aggrieved party argues the state or local regulation is preempted because such conduct is arguably protected or prohibited by federal labor law). Here, however, the law did not face a preemption challenge—likely because agricultural employers fall outside the NLRA’s scope. Depending on the facts, the potential avenue for redress under the Takings Clause could encourage parties to challenge similar state or local regulations that grant third parties access to private property.

Only time will tell, but on balance, this decision’s potential effect on labor-management relations seems limited for at least four reasons:

  • First, while California agricultural employers are no longer required to grant labor organizers access to their private property (unless the state provides “just compensation”), this change applies only to employers in just one industry in just one state—nothing more.
  • Second, according to the Wall Street Journal, even though California has about 16,000 agricultural employers, union organizers have recently invoked their right to access in just a few dozen instances each year.
  • Third, if the State of California opts to keep mandating private-property access for union organizers by providing agricultural employers with “just compensation,” there is no guarantee a windfall will result for agricultural employers, particularly if “just compensation” is determined to be nominal.
  • Finally, even the Court’s suggestion that the “highly contingent” right-of-access current federal labor law affords non-employee union organizers (when employees are beyond “reasonable” communication efforts) could similarly represent an unconstitutional taking seems unlikely to prove consequential. Indeed, because this right of access is limited to extreme situations when employees live or work on highly remote, employer-owned properties (such as logging camps or fish canneries), fact patterns that could enable such a challenge, as a practical matter, would seem few and far between. And even if such a fact pattern did arise—ultimately enabling a successful challenge to the exception—because the exception is so limited, it would naturally impact very few workplaces.
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