Labor Relations Update

Employer’s Policies On Blogging, Solicitation and E-Mail Signature Blocks Lawful, NLRB Rules (For Now, Anyway)

Over the past few years, the National Labor Relations Board has frequently weighed in on employer’s workplace and employee handbook policies, examining whether an employer’s policy impacts employees’ rights under Section 7 of the National Labor Relations Act.  Employers received a needed dose of clarity in Boeing Co., 365 NLRB No. 154 (2017), where the Board set forth rules for interpreting a facially neutral policy, rule or handbook provision.  As noted at the time, employers were sure to see Boeing’s practical impact as more cases were adjudicated under its new framework.  In David Saxe Productions, LLC, 370 NLRB No. 103 (2021) the Board reviewed an employer’s policies with respect to blogging and non-solicitation, applying Boeing’s test.  The Board also examined the employer’s policy with respect to email signature blocks, though did not apply the Boeing framework to that rule.

 Employer’s Blogging Policy

The employer’s blogging policy provided that, while acceptable when done in a professional and responsible manner, employees were not to engage in any blogging that would “harm or tarnish the image, reputation and/or goodwill” of the employer.  The Charging Party union challenged this rule as an unlawful restraint on employees’ Section 7 rights.  While the ALJ found that this policy violated Section 8(a)(1), the Board reversed.  The Board held that under a proper application of the Boeing Category 1(b) balancing analysis, the employer’s rule had a legitimate business justification and therefore was lawful.  Under the balancing test, though the rule against detrimental messages may adversely affection employees’ Section 7 rights, that concern is outweighed by the employer’s legitimate interest in protecting its reputation.

Employer’s Non-Solicitation Policy

The employer also maintained a rule that directed requests from outside people or organizations should be deferred to human resources.  The ALJ found this policy to be an unfair labor practice.  Again, the Board overruled the ALJ, finding that the rule was indeed lawful.  While the ALJ again applied Boeing Category 1(b) balancing test, the Board held that this rule, rather, was properly analyzed as a Category 1(a) rule – meaning it is lawful if, when reasonably interpreted, it does not prohibit or interfere with the exercise of NLRA rights.  Because the rule, on its face, applied to outside persons, and because “under long-settled precedent, such persons or entities have no Section 7 right to access the [employer’s] premises in the first place” except in certain inapplicable situations, the rule was indeed lawful.

Employer’s Signature Block Rule

Finally, the employer had in place an email policy stating in relevant part that employees may not customize their signature blocks.  While the ALJ and Board agreed that this policy was lawful, the ALJ did so based on Purple Communications, Inc., 361 NRLB 1050 (2014), which has been since overruled.  The Board instead applied Caesar’s Entertainment, 368 NLRB No. 143 (2019) and stated that there is “no precedential basis for finding that employees had the right to include Section 7-related messages in their signature blocks.”  Moreover, because the employer’s rule did not permit any alteration of signature blocks whatsoever, it did not discriminate against union activity nor could it possibly have a disparate impact on union activity.

Takeaways

It is highly likely that within a year or so, the Board will return to carefully scrutinizing each fragment of an employer policy to weed out potential problems.  For now, the current Board continues to apply precedent established in the past few years when analyzing workplace rules and policies.  While it remains to be seen whether the Board will soon return to previous era decisions such as Purple Communications or Lutheran Heritage, which Boeing replaced, employers, for now, should take comfort in the legality of their workplace and handbook rules, policies and provisions provided their policies are facially neutral, do not interfere with employees’ NLRA rights, or whether the employer has a legitimate justification that outweighs and adverse impact to employee’s NLRA rights.   The no solicitation ruling is non-controversial and perhaps was based on an error.  However, because it is possible that the blogging and signature block policies found to be lawful in this case could be found unlawful soon, employers should monitor developments at the NLRB closely.

NLRB General Counsel Promises “Vigorous” Enforcement of Employees’ Rights to Engage in Workplace Advocacy Related to Social Issues and Health and Safety Concerns

On March 31, 2021, the NLRB’s Acting General Counsel Peter Ohr issued a Memorandum entitled “Effectuation of the National Labor Relations Act through Vigorous Enforcement of Mutual Aid or Protection and Inherently Concerted Doctrines” to all Regional Directors.  While the Memorandum does not change NLRB precedent in any respect, it is a preview of the Office of the General Counsel’s enforcement and litigation strategy, which could lead to changes in the law over the next several months and years.

At its core, the Memorandum articulated the Acting General Counsel’s desire to aggressively enforce employees’ Section 7 rights to engage in “mutual aid or protection” and “inherently concerted” activities well-beyond conduct that is a precursor to a union campaign, by extending such conduct to employees’ political and social justice advocacy, which is a trending topic in nearly all workplaces today.

The health and safety concerns underlying the COVID-19 pandemic and the percolating social justice movements over the last year have created a confluence of circumstances resulting in increased employee interest in advocating for “hot button” social issues in the workplace.  This dynamic has been on full display by union leaders seeking to organize new members around more social issues.  This is exemplified by graduate students seeking to organize and form unions, while at the same time, advocating for social justice concerns on campus.

“Mutual Aid or Protection in Today’s Landscape”

Ohr advocated for an expansive view of “mutual aid or protection” in line with speech that is commonplace in the workplace regarding the social issues of today.  Importantly, however, Ohr recognized that such conduct becomes protected by Section 7 of the Act when it “has a direct nexus to employees’ interests as employees.”

Ohr cited examples of when employee conduct gains protection of the Act, which is instructive:  for instance, public commenting, advocating for and engaging in work stoppages in support of an increase of the minimum wage – a legislative issue – would be protected by the Act when voiced by employees who earn around minimum wage.  Similarly, employees who work with or are undocumented immigrants who protest in response to a sudden crackdown on undocumented immigrants, may also be protected.

Ohr promised to “robustly enforc[e] the Act’s provisions” in this area, while commenting on the Board’s recent decisions that applied “mutual aid or protection” narrowly.  While Ohr may disagree with the Board’s 2019 decisions in Alstate Maintenance, 367 NLRB No. 68 (2019) and Quicken Loans, 367 NLRB No. 112 (2019), Ohr did not go so far as to criticize the Majority’s holdings in those cases.  Instead, Ohr noted where those decisions “left avenues for demonstrating mutual aid or protection that should be fully utilized.”  Ohr provides a playbook to employees and unions regarding how to gain protection of the Act:  ensure that workplace objections or protests can be tied to the employees’ interests in the workplace as employees.

For instance, the Board in Alstate Maintenance (which we discussed here) held that the employee’s comment to his supervisor that he did not want to perform a job because the customers did not tip was deemed unprotected activity.  However, the Board noted that the comment would have been protected if it were aimed at changing employer policies or practices.  Similarly, in Quicken Loans, the Board concluded that an employee’s comment about not wanting to handle a customer complaint because it was a “waste of time” was not protected because it was not aimed at changing worker policies.

“Finding Certain Conduct to be Inherently Concerted”

Ohr also discussed his desire to adopt a broad definition of what constitutes “inherently concerted” activity in terms of workplace speech.  Of course, in order to obtain Section 7 protection under the Act, the activity must be “concerted” (in addition to being protected).  To be concerted, the conduct could involve only a speaker and a listener (as opposed to multiple individuals speaking together).  In addition, Ohr noted that contemplation of group action is not a required element.

Ohr indicated that the General Counsel’s Office likely would seek a broad application of what constitutes “inherently concerted” activity.  Specifically, the Acting General Counsel may seek to safeguard employee rights to engage in speech related to workplace health and safety issues and racial discrimination, which have not yet been endorsed by the Board – in addition to the categories of speech that have been traditionally protected, such as wages, job security and hours of employment.

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It certainly bears watching how the Acting General Counsel intends to “vigorously” enforce employees’ Section 7 rights pursuant to this Memorandum, and whether the law will change in any respect.  Stay tuned!

Unsigned and Torn Up: NLRB Weighs In On Issues Arising During Mail-Ballot Elections

Though the National Labor Relations Board has established a pathway for holding in-person union elections, mail-ballot elections continue to be the norm in many Regions across the country.  Of course, the more mail-ballot elections that occur, the more unique issues arise.  In XPO Logistics Freight, Inc., 370 NLRB No. 99 (2021), the Board weighed in on two such issues that arose as employees attempted to return their mail-in ballots to the Region.  First, when a ballot is returned unsigned, the Board discussed how much time is “sufficient time” for the Board to send that employee a new ballot.  Second, the Board discussed conclusions to be drawn from a damaged ballot.  Both issues are not uncommon during mail ballot elections, and the Board’s decision provides clarity to employers faced with these problems.

Background

The Region conducted a mail ballot election of the employer’s employees in August 2020, with a deadline to return ballots by August 17.  It ultimately received four unsigned ballots, one ballot with the employee’s name printed rather than signed, and one damaged ballot.  The Region voided all six ballots.  The employer challenged two others on separate grounds.  The ballot count ended up being 54 to 60 against unionization, meaning the voided and challenged ballots could be determinative.  After a series of objections lodged by the union, the Regional Director found that the Regional Office potentially disenfranchised voters by failing to send them duplicate voter kits so they could cure their ballots, and found that the damaged ballot was a “yes” vote despite the fact that the right half of the ballot was torn off.

Ballots Returned Unsigned

The Board analyzed one particular ballot, returned unsigned on August 14.  The Regional Director had held that the Regional Office had “sufficient time” to mail this employee a duplicate voter kit – and by not doing so had disenfranchised the employee.  The Board, however, reversed the Regional Director’s decision, holding that despite the fact the employee lived in the same county as the Regional Office (or in an adjacent county), August 14 to August 17 (the return date) was simply too short a time for the employee to receive and return the kit by mail.  Because there was insufficient time left for the Regional Office to send a duplicate ballot kit, this employee was not disenfranchised.

Ballot Returned Damaged

The Board further analyzed a ballot returned torn in half, but with a “yes” vote clearly marked.  Again reversing the Regional Director, the Board, relying on Midland Steamship Line, Inc., 58 NLRB 1091 (1944), held that a ballot torn in half is void, despite the fact that the “yes” vote was clearly marked.  The Board noted that it “avoids speculation or inference regarding the meaning of physical altercations to a ballot,” and that the Regional Director “necessarily had to resort to speculation as to the possible meaning of the voter’s physical alteration to the ballot at issue here.”  Because speculation about the voter’s intent was involved, the Board reversed and voided the ballot.

Takeaways

Mail ballot procedures are in theory rigid and designed to ensure eligible employees have plenty of time to vote.  The procedures clearly state that the employee must sign the ballot and return it by a particular date. As this case demonstrates, however, there are many opportunities to challenge the balloting.  It is unclear whether the employee printing the name instead of signing it just did not understand – or disregarded – the procedures.  It also is unclear whether delays in the mail delivery contributed to a ballot being received with no time to correct.  While most employers prefer in-person balloting, it is likely mail balloting will continue to be the norm even after the pandemic is over.  So long as mail-in ballots continue to be used for the majority of elections, unique issues will continue to arise.  With the Board’s decision in XPO Logistics, employers can at least have some clarity with respect to some of the more typical issues that may arise.

Tesla and Musk Get a Shock from the NLRB – Tesla CEO Ordered to Delete Union Tweet and Eliminate Overly Broad Confidentiality Policy

In its March 25 decision, the NLRB unanimously held that:  (1) Tesla violated the National Labor Relations Act (“NLRA”) after prohibiting employees from talking to the media; (2) Tesla did not violate the Act by calling employees into a meeting to discuss their potential unionization; and (3) Tesla must order CEO Elon Musk to delete his tweet about the employees’ attempt to unionize, as it was unlawfully coercive in violation of the Act.

Media Contact Provision of Confidentiality Agreement Violated the Act

In 2016, Tesla required its employees to sign a confidentiality agreement in response to leaks of confidential company information.  As part of the agreement, Tesla reminded its employees that it is “never OK to communicate with the media or someone closely related to the media about Tesla, unless [the employee has] been specifically authorized in writing to do so.”

Here, the Administrative Law Judge found that the confidentiality agreement was lawful because considering that it was sent in response to leaks of confidential information, employees would “reasonably interpret” the agreement to apply only to proprietary information.  Further, the Judge found that any potential interference with Section 7 rights was outweighed by Tesla’s interest in protecting such confidential information.

In 2017, the NLRB set a new standard for determining whether facially neutral work rules or policies would unlawfully interfere with, restrain, or coerce employees in violation of Section 7 of the NLRA.  In Boeing Co., 365 NLRB No. 154 (2017), the Board held that: “[W]hen evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the Board will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.”  In conducting this balancing test, the Board considers the rule or policy from the employees’ perspective.  If the balance favors general employer interests, the rule or policy will be deemed lawful, but if the potential interference with Section 7 rights outweighs any possible employer justification, the rule will be deemed unlawful.

The Board applied the Boeing standard for facially-neutral work rules and reversed the ALJ, and held that the provision in the agreement that prohibited employees from talking to the media without permission was unlawful in violation of Section 8(a)(1).  The Board applied prior precedent and found that the language in the media-contact provision applied to information beyond what the confidentiality agreement defined to be “confidential information,” even if read in conjunction with the introduction explaining that the policy was created in response to leaked information.

The Board held that “[t]hat general statement d[id] not change the meaning of the plain language of the media-contact provision, which employees would reasonably interpret to apply to communications with the media about any matter regarding [Tesla], including working conditions, labor disputes, or other terms and conditions of employment.”

Additionally, because the provision did not include language limiting the restrictions to statements made to the media on behalf of Tesla, and required prior approval for any statements whatsoever, it clearly infringed on the employees’ Section 7 rights.  Tesla’s justification for attempting such restriction did not outweigh the right of its employees to communicate with the media about labor disputes and their terms and conditions of employment—a concept “central to the Act”—and, as such, Tesla violated Section 8(a)(1) by maintaining such a provision.

Tesla Did Not Violate the Act for its Conduct when Its Employees Attempted to Unionize

In 2017, a Tesla employee sent a petition to HR and to CEO Elon Musk, discussing the safety concerns of many employees and noting their intent to form a union in order to protect themselves and ensure their safety.  Shortly after circulating the petition, HR brought the employee to a conference room with Musk, seeking to directly discuss the employee’s safety concerns.  During the meeting, the employee noted that he thought a union would help give the employees a voice.  Musk responded, “[Y]ou don’t really have a voice.  The [Union] is a second—like two-class system where [the Union] is the only one that has a voice and not the workers.”

First, the Board found that the meeting with Musk did not violate Section 8(a)(1), as Tesla did not unlawfully solicit the employee’s safety concerns and impliedly promise to remedy them.  The meeting was a result of the employee’s petition that had been sent directly to HR and Musk, and was an attempt to “understandably” learn more about the serious safety concerns alleged in the petition.  Further, the petition did not detail any specific hazards and there was no explicit or implicit promise to remedy the safety concerns.  As such, the meeting could not be categorized as an unlawful solicitation of grievances.

Second, the Board concluded that Musk’s statement was lawful because “an employer may criticize, disparage, or denigrate a union without running afoul of Section 8(a)(1),” as long as the employer does not threaten an employee’s Section 7 rights.  Musk did not imply that Tesla would use unlawful means to ensure the employees were unable to unionize, and simply explained one effect of unionization—that employees would take up any grievances with Tesla through the Union, who would speak on their behalf.

Elon Musk’s Tweet Violated the Act

Even though the Board found that Tesla did not violate the act by calling an employee into a meeting to discuss unionization, the Board affirmed the ALJ’s finding that Musk’s subsequent tweet on May 20, 2018—to approximately 22 million of his followers—was unlawfully coercive:  “Nothing stopping Tesla team at our car plant from voting union.  Could do so tmrw if they wanted.  But why pay union dues and give up stock options for nothing?  Our safety record is 2X better than when plant was UAW & everybody already gets healthcare.”  The Board agreed that Musk’s commentary lost the protection of the Act because it amounted to a threat that employees would lose their stock options if they unionized; it was not a “prediction carefully phrased based on objective fact[s]” of what may occur as the result of good-faith collective bargaining.  As part of its decision, the Board ordered Tesla to have Musk delete his unlawful tweet and take steps to ensure he complies.

Takeaways

This decision instructively highlights the pitfalls with public communications on social media by the employer and supervisors in response to unionization, reaffirming the principle that while employers have a right to free speech during an organizing campaign, that right must be exercised in a manner that is not overly coercive.  The Board held that Musk’s tweet, to his 22 million followers, was unlawful principally because of the reference to the fact that Tesla employees would “give up stock options for nothing.”  This was construed as a threat—which is unlawful—rather than a potential consequence of good-faith collective bargaining negotiations if a Union were selected by the employees, which could have been lawful.  A fine distinction can be drawn based on the manner in which the statement is phrased and the surrounding context.

In addition, this decision reinforces that employers may lawfully restrict employees from talking to the media about proprietary information, but such provisions must be carefully crafted to ensure that they do not infringe on employees’ Section 7 rights.  Employers should take care in ensuring that they do not categorically restrict employees from talking to the media without prior authorization.

 

NLRB Suffers Significant Turnover in Agency Staffing

In a report released on March 29, 2021, the Governmental Accountability Office (“GAO”) announced that between fiscal years 2010 and 2019, the National Labor Relations Board (“NLRB”) experienced a 26% decrease in total staff. The most significant reductions taking place in Regional offices which saw a 33% reduction compared to only an 8% reduction at the Board’s headquarters.

A Federal Employee Viewpoint Survey revealed that NLRB employees were increasingly dissatisfied with the sufficiency of resources and the overall organization in recent years. The report mentioned that staff have expressed concern about workloads and warned the Board of overburdening staff and compromising the quality of work.

Although the Board’s total number of cases (representation cases and unfair labor practice cases) dropped by 22% since 2010; the significant decline in regional staffing outpaces the decline in cases. The report noted that this reduction could exacerbate the burden on current staff.

The reduction in staff is also coupled with a growth in unobligated funds. In the NLRB’s 2019 fiscal year, more than $5 million of the year’s appropriations were not obligated. The GAO reported that total appropriations fell from $283 million in 2010 to $274 million in 2019; a decrease of 17% when allowing for inflation. The Board, according to the report, therefore, experienced a $46 million decline in purchasing power.

To combat these issues, the GAO made the following recommendations for the NLRB:

  1. Develop objective and quantifiable performance measures, with associated target levels of performance, for timeliness and quality for unfair labor practices and representation cases; organizational excellence; and resource management;
  2. Develop mechanisms to ensure that the quality review of case files is conducted in a manner consistent with agency guidance;
  3. Evaluate performance pressure on personnel and make resource adjustments as necessary; and
  4. Develop mechanisms to improve communication with the key internal stakeholders to increase transparency and collaboration in implementing agency policies.

The NLRB has agreed to these recommendations. We anticipate as a result of the adoption of these recommendations that there will be an increased focus on hiring in the NLRB regional offices, and in turn, the NLRB will increase their caseload.

 

Requiring Employees to Maintain the Confidentiality of Arbitration Proceedings Held to be Lawful Under the NLRA…For Now

In a recent decision by the NLRB, the Board upheld the lawfulness, in part, of an arbitration agreement that required employees to maintain the confidentiality of the arbitration proceedings, including the discovery process and the hearing. Dish Network, LLC, 370 NLRB No. 97 (March 18, 2021). However, Chairman McFerran’s considerable dissent likely signals that the Board’s position on arbitration-confidentiality agreements will be short-lived.

Majority Opinion

Broad Arbitration-Exclusivity Provision was Unlawful Because it Restricted Access to the NLRB.  The Board reviewed a policy maintained by the employer that was a broad, all-encompassing arbitration clause, requiring all claims, controversies or disputes between the employer and employees “arising out of and/or in any way related to Employee’s application for employment, employment and/or termination of employment…shall be resolved by arbitration.”  The Board reviewed the facially-neutral policy under Boeing, and found that the policy was overbroad, because it made arbitration the exclusive forum for resolving all employment-related disputes between the employer and its employees, including claims arising under the National Labor Relations Act. As such, the Board held that the agreement, often referred to as an arbitration-exclusivity agreement, restricted employees’ access to the Board and, therefore, rendered the agreement unlawful.

Confidentiality of Arbitration Proceedings was Lawful, but Settlement Terms Need Not Be Confidential.  The Board next reviewed the portion of the arbitration agreement that required confidentiality of “all arbitration proceedings, including but not limited to hearings, discovery, settlements, and awards.”  The NLRB General Counsel asserted that the agreement unlawfully prohibited employees from discussing their terms and conditions of employment. The Board majority, consisting of Members Ring and Kaplan, held that the arbitration-confidentiality requirement did not violate the Act to the extent that it required confidentiality of arbitration proceedings, including hearings, discovery, and awards, explaining that the confidentiality provision “sets forth rules under which arbitration will be conducted.” Relying on Supreme Court precedent interpreting the Federal Arbitration Act (“FAA”), the Board reiterated that the “FAA requires that courts rigorously enforce arbitration agreements according to their terms, including terms that specify…the rules under which…arbitration will be conducted.”

However, the Board majority came to the opposite conclusion concerning the arbitration-confidentiality requirement to the extent it pertained to settlements, which the Board found to be outside of the protection of the FAA where settlements are generally an alternative to arbitration and not part of it. According to the Board, requiring settlements be kept confidential unlawfully restricts employee conversations about terms and conditions that give rise to claims and disputes covered by the arbitration-confidentiality agreement and requires employees to prospectively waive their Section 7 right to discuss terms and conditions with fellow employees.

Chairman McFerran Dissents

In dissenting from the majority’s holding that the arbitration-confidentiality agreement was lawful to the extent that it requires employees to maintain the confidentiality of arbitration proceedings, Chairman McFerran strongly disagreed with the majority’s interpretation of Supreme Court jurisprudence and with the majority’s conclusions about the interplay between the FAA and the NLRA. In fact, Chairman McFerran accused the majority of “unnecessarily sacrifice[ing] the statute that Congress has charged us with administering” in finding that the protections under the NLRA must give way under the FAA, despite the Board’s charge under the NLRA to vigorously protect access to the Board and uphold workers’ core Section 7 rights.

Chairman McFerran argued that broad arbitration-confidentiality provisions, like the one involved in this case, unlawfully restrained employees from exercising their Section 7 right to communicate with co-workers about information relevant to terms and conditions of their employment acquired during the course of arbitration proceedings, thereby interfering with a right that “lies at the heart of protected Section 7 activity.”

Contrary to the majority’s holding, Chairman McFerran argued that such arbitration-confidentiality provisions are not “shielded” by the FAA simply because they are included within a mandatory arbitration agreement. Rather, Chairman McFerran asserted that “invalidating arbitration-confidentiality provisions, because of their demonstrable impact on Section 7 rights, is the proper accommodation between the NLRA and the FAA” that serves to preserve core rights under the NLRA without diminishing any “fundamental attribute” of arbitration. In Chairman McFerran’s view, Congress’ purpose in enacting the FAA was to make arbitration agreements as enforceable as other contracts—but not more so.

Takeaway

The Board’s decision is instructive in reinforcing the principle that employers cannot reinforce the confidentiality of arbitration settlements, to the extent such confidentiality agreements prohibit employees from discussing the terms of the settlements with their co-workers.  The decision also is noteworthy to the extent an exceedingly broad mandatory arbitration procedure may be interpreted by the Board as unlawful, where the agreement would theoretically require private arbitration of alleged violations of the NLRA, rather than through the Board.

While employers hoping to maintain the confidentiality and integrity of arbitration proceedings may find some comfort in the Board’s holding, this comfort may be fleeting. As we reported here, Lauren McFerran was recently appointed NLRB Chairman by President Biden. While she may represent a minority voice on the Board today, we anticipate a change in the Board’s composition and labor policy agenda after Member Emanuel’s term expires this August. Chairman McFerran’s dissent, which stated that the Board’s “decision is part of an alarming trend reflected in the Board’s recent decisions”, suggests that Chairman McFerran is likely to reverse what she views as a “string of recent Board decisions [that] have made it easier for employers to maintain and enforce confidentiality rules against employees, even when the rules deter activity protected by Section 7 of the Act” as soon as she becomes part of the Board’s majority.

As always, we will continue to monitor further developments from the Board.

BREAKING: NLRB Withdraws Proposed Rule Concerning Employee-Status of Student Teachers and Research Assistants

After publishing the Notice of Proposed Rulemaking over a year ago, followed by tens of thousands of public comments and many months of anticipating the final rule, the NLRB announced today that it will publish a Notice of Withdrawal of the proposed student assistant rule. Under the proposed rule, students at private colleges and universities who perform services, including teaching and research, in connection with their studies for compensation would have been exempted from the NLRB’s jurisdiction and definitively not “employees” as defined by Section 2(3) of the NLRA. As we previously reported here and here, the rule would have helped to bring certainty to an area of labor law that has seen regular oscillation since the 1970s, with the NLRB changing its position on the employee-status of student workers three times over the years.

The Board’s short Notice of Withdrawal did not provide a detailed explanation for its decision, stating only that, “[i]n light of competing agency priorities, the Board has determined to focus its time and resources on the adjudication of cases currently in progress.” The Notice stated that the Board is withdrawing the proposed rule in an attempt to effectively allocate the Board’s limited resources. The Notice of Withdrawal will be published in the Federal Register on March 15, 2021.

With this withdrawal of the proposed student assistant rule, the Board’s standard on student-employee status as articulated in its 2016 Columbia University decision, finding that student teachers and research assistants are “employees” under the Act, will remain the controlling standard.  We anticipate that this will lead to another wave of union organizing in higher education.  As always, we will be closely monitoring the Board as it continues to shake up national labor policy from the last four years.

Once Again, the House Passes “Protect the Right to Organize Act,” Sending Bill to Senate

As we recently foreshadowed, given the slim Democratic margins in the House and Senate, and a Democratic President, there is the potential for the most significant amendments to the National Labor Relations Act (“NLRA” or “Act”) in its eighty-six (86) year history.  On Tuesday night, March 9, 2021, the U.S. House of Representatives took the first step, by voting 225-206 to pass the Protect the Right to Organize Act (“PRO Act”).

This is not the first time the House as passed a version of the PRO Act; just last year around this time, the House did the same.  The key difference is that Democrats now have slim control of the U.S. Senate, although the bill faces steep odds of passage given that it is unlikely to garner 60 votes to avoid a filibuster.  The PRO Act likely has the support of President Biden, but it is uncertain whether the bill will ever reach the President’s desk.

Substantively, the PRO Act would amend the National Labor Relations Act and constitute the most significant overhaul of federal labor law in decades, strengthening workers’ rights, including their ability to unionize.

For instance, the PRO Act would give the NLRB power to fine companies that retaliate against organizing workers and require arbitration when unionized workers and employers cannot reach agreement on contracts. Other changes include: strengthening workers’ right to strike, overriding state “right to work” laws which allow employees to forgo paying dues in unionized workplaces, and permitting employees to hold union elections off of company premises and use mail or electronic ballots.

Additionally, the PRO Act addresses the so-called “gig” economy by lowering the bar for independent contractors to prove they are “employees” under the Act.  The legislation adopts California’s “ABC test” for independent contractor test, which is generally considered a more rigid test for employers to satisfy in order to classify workers as independent contractors rather than employees.

We will, of course, continue to monitor developments and keep you posted.

Board Invites Briefing on Potentially Overturning “Johnnie’s Poultry” Standard for Questioning of Employees About Putative Protected Activity

On Monday, the Board voted 3-1 to solicit a public briefing on whether it should overrule the Johnnie’s Poultry Co., 146 NLRB 770 (1964) safeguards employees must receive if they are questioned by employers about their own or another employees’ potentially protected concerted activity. Those safeguards include requiring the following:

  • The employer must communicate to the employee the purpose of the questioning, assure the employee that no reprisal will take place, and obtain the employee’s participation voluntarily;
  • The questioning must occur in a context free from employer hostility to union organization and must not be itself coercive in nature; and
  • The questions must not exceed the necessities of the legitimate purpose by prying into other union matters, elicit information concerning an employees’ subjective state of mind, or otherwise interfere with the statutory rights of employees.

In Sunbelt Rentals, Inc. and Int’l Union of Operating Engineers Local 139, AFL-CIO, No. 18-CA-236643 (May 13, 2020), the ALJ found the employer, a construction equipment retailer accused of several Section 8(a) violations, including failing and refusing to bargain collectively and in good faith, violated Section 8(a)(1) of the Act when its attorney interrogated employees in connection with their testimony in the case.  Specifically, the ALJ found the attorney failed to 1) inform one employee that his testimony would not affect his employment and 2) inform the other employee that his participation was voluntary.  The employer asked the Board to not apply Johnnie’s Poultry, but instead apply a “totality of the circumstances” standard, considering the purpose of the interview, the entire statement made to the employee, and scope of questioning.

The Board majority observed that the Respondent is not alone in believing Johnnie’s Poultry has outlived its utility, stating “several courts of appeal have disagreed with it,” citing as one example Tschiggfrie Properties, Ltd. v. NLRB, 896 F.3d 880, 888 (8th Cir. 2018) (we previously reported on the Board’s decision here).  Given various appellate courts declining to apply the Johnnie’s Poultry standard, the Board invited the parties and the public to file briefs addressing 1) whether the Board should adhere to or overrule Johnnie’s Poultry and 2) if overruling Johnnie’s Poultry, what standard the Board should adopt (e.g., totality of the circumstances, maintain some of the safeguards outlined under the existing standard).

Board Chair Lauren McFerran, promoted by President Biden on his first day in office, was the sole dissenter.  Chair McFerran felt there was no “compelling reason” to consider alternatives to this 56-year old bright-line rule, stating the importance of protecting vulnerable employees’ statutory rights as well as the Board’s ability to enforce the Act.

Click here to read the notice and invitation to file briefs.  Public briefs are due by April 5, 2021.

As always, we will continue to monitor developments in the composition of the Board. Subscribe to Proskauer’s Law and the Workplace blog to stay current on the latest Biden administration developments impacting your business.

Recent Labor Victories for Adjunct Professors Signal Likely Uptick in Contingent Faculty Organizing

Recently, adjunct professors at Elon University and Ithaca College won victories before the NLRB and an American Arbitration Association arbitrator, respectively, that further bolster the position that adjunct, or contingent, faculty members are “employees” as defined by the NLRA.  Moreover, it also suggests that there will likely be a surge of new organizing activity amongst adjuncts in the future.

Non-Tenure Track Faculty at Elon University

In Elon University, 370 NLRB No. 91 (2021), the NLRB, still with a Republican majority, unanimously affirmed the decision of a Regional Director that the petitioned-for non-tenure-track faculty members constituted an appropriate bargaining unit. Contrary to the University’s assertion, the Board held that the non-tenure-track faculty members, consisting principally of adjunct professors, are not managerial employees devoid of collective bargaining rights under the Act. The Board determined that the University failed to meet its burden of establishing that the petitioned-for non-tenured faculty members serve on any of the University’s shared governance committees that oversee academic programs, enrollment management policies, personnel policies, or financial considerations. The Board found that, for a number of these committees, adjunct faculty members were explicitly restricted from participating. In those limited circumstances where adjunct faculty members could theoretically serve on a collegial faculty body, the University failed to show that adjunct faculty in fact served on these committees. Additionally, the Board found that the petitioned-for faculty members were not structurally included in the University’s managerial bodies where the short-term nature of their employment makes service on the shared governance committees difficult. As such, the Board held that the non-tenured faculty members were not managerial employees and were an appropriate bargaining unit under the Act.

Contingent Faculty at Ithaca College

A unionized group of adjunct professors at Ithaca College had their right to engage in concerted action reaffirmed by a AAA arbitrator. In response to pandemic-related cuts by the University, an adjunct professor, on behalf of the Union, penned a memo to his tenured faculty colleagues titled “Solidarity in a Time of Crisis: A Plea from Your Contingent Colleagues”. The memo was posted to a virtual message board for the Ithaca College community and requested community support for contingent faculty members facing the prospect of continued layoffs. The memo suggested that tenured or tenure-track faculty members could assist their contingent colleagues by refusing certain courses over the summer term and pressuring department chairs to prioritize contingent faculty for these courses.

The University contended that the professor’s memo violated the no-strike provision of the collective bargaining agreement and threatened the professor with discipline “up to and including termination”. The University also demanded that the Union retract the memo.

The union filed a grievance which resulted in a hearing before an arbitrator. The arbitrator sided with the Union, finding that the professor’s actions did not violate the CBA and, therefore, the discipline was without just cause.

Takeaways

These recent decisions illustrate the difficulty universities and colleges will likely face when attempting to argue that adjunct faculty are not “employees” as defined by the Act. Higher education institutions that permit adjunct faculty to participate in shared governance committees and other managerial bodies, may have better luck arguing such contingent faculty are managers under the Act and therefore not entitled to rights under the Act. We expect that these cases will only intensify the amount of new organizing of adjunct faculty around the country.

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