The Obama NLRB’s Legacy: How Much Will Survive?

Seyfarth Shaw LLP “Seyfarth Shaw” refers to Seyfarth Shaw LLP (an Illinois limited liability partnership). Seyfarth Shaw LLP

The Obama NLRB’s Legacy: How Much Will Survive?

Jack A. Lambremont, Braford L. Livingston,

John L. Telford, and Kyllan B. Kershaw

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AGENDA

• Introduction: How the NLRB Operates

• The Obama NLRB Legacy of Expanding…

– Who the NLRA Covers

– Employee Protections

– Union Organizing

– Union Power versus Employers

• What may Change

• Questions

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How the NLRB Operates

• 5 Board Members

• 1 General Counsel

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“Today’s decision confirms that the NLRB

has become the Rip Van Winkle of

administrative agencies.”

- Then NLRB Member (and former union

lawyer) Wilma Liebman, dissenting in

Register Guard, 351 NLRB 1110 (2007)

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• That was then, this is now

• While Washington Irving may be the

story’s author, it is not Rip Van Winkle, but

the Legend of Sleepy Hollow

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Who the NLRA Covers

• Expanded Definition of “Employees”

• A punt turns into a kick in the pants:

Northwestern University

• Grad students teach their colleges a

lesson: Columbia University

• There’s just no managing adjunct (and

even tenure track) faculty: Pacific Lutheran

University

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Who the NLRA Covers

• Expanded Definition of “Employees”

– You’re not the boss of me: Supervisory

Status

– Playing poker against the house with a

stacked deck: Independent Contractor

Status

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Who the NLRA Covers

• Expanded Definition of “Employers”

– BFI

– Miller & Anderson

– CNN

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Instead of attempting to balance

conflicting interests, the NLRB reacts

like a pinball machine stuck on tilt;

reflexively ensuring employers always

lose a turn.

Hon. Janice Rogers Brown

U.S. Court of Appeals

D.C. Circuit

Workplace Policies and Rules

When Protected Activity Loses Its Protection

When is a Work Rule Unlawful?

• Lutheran Heritage: Would employees

reasonably construe the rule in question to

prohibit protected activities?

• Bush Board rule but current Board

overreaches and stretches limits in

application (i.e., 2015 Report Concerning

Employer Rules)

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What Happens if Rule is Unlawful?

• GC Complaint to force employer to

remove language and post notices

– Can include notice posting via email and on

company intranet

• Unwanted consequences

– Negative publicity

– Ammunition for disgruntled employees and

union organizers

– Undesirable inferences in ULP cases

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Board’s War on Civility: Examples

• Code of Conduct prohibiting “offensive”

conduct towards patients or fellow

employees

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• Code of Conduct prohibiting conduct "that

impedes harmonious interactions and

relationships”

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• Code of Conduct prohibiting "negative or

disparaging comments about the moral

character or professional capabilities of

an[other] employee”

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• Oral statement: "If you are harassed or

threatened on any basis during this

election campaign, regardless of whether

you are for or against the union, we want

to know about it immediately so we can

address the problem.”

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• Employee Handbook prohibiting “insulting,

embarrassing, hurtful, or abusive

comments about other employees”

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Considerations:

You can still prohibit violence, threats, and harassment based on sex, race,

etc.

The law allows “persistent” union solicitation, even to the point of

annoyance and disturbance (a.k.a. “harassment”)

Ask yourself: Do you need a written rule instructing employees to be nice,

respectful, positive, etc.?

What are the upsides and downsides?

So How Do We Make Our Employees

“Fight Nice”?

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T-Mobile USA, Inc., 363 NLRB No. 171 (April 29, 2016)

Struck down the following: “[E]mployees may not tape or

otherwise make sound recordings of work-related or workplace

discussions.”

Important qualifiers:

“broadly prohibiting recording in the workplace on

employees’ own time and in nonwork areas”

rule not limited to states where nonconsensual recording is

unlawful (nor does it reference)

Policies Prohibiting Recording in the

Workplace

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vs. NOT OK

• Broad prohibitions on

recording in the workplace

MAYBE OK?

• Tailored restrictions,

prohibiting recording in

working areas on working

time

• Tailored restrictions where

confidential information

exists

• Restrictions tailored to state

law requirements

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So What’s an Employer to do?

Social Media!

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• New Board with Republican majority

– Less expansive view of protected activity

– Return to Bush Board view of Lutheran Heritage: Would

employees reasonably construe the rule as prohibiting

Section 7 activity?

More focus on whether rule addresses legitimate business

interests

Rule at issue in Lutheran Heritage would have been found unlawful

by this Board—likely OK again

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What Happens Now?

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But money does not explain the Board’s bad faith;

‘the pleasure of being above the rest’ does. See C.S.

Lewis, MERE CHRISTIANITY 122 (Harper Collins 2001).

Let the word go forth: for however much the judiciary

has emboldened the administrative state, we ‘say

what the law is.’ Marbury, 5 U.S. (1 Cranch) at 177.

In other words, administrative hubris does not get the

last word under our Constitution. And citizens can

count on it.

Hon. Janice Rogers Brown

U.S. Court of Appeals

D.C. Circuit

Take Heart, Employers

Organizing and Elections: Fragmented,

Expedited, and Stacked Against

Employers

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• Specialty Healthcare, 357 NLRB No. 83 (2011)

– A union can seek to organize any group that is “readily

identifiable” as long as employees share a community of

interest.

– A party challenging the petitioned-for unit must show that the

employees it seeks to include share an “overwhelming

community of interest” with the petitioned-for unit.

• Result: Proliferation of “micro-units”

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Specialty Healthcare and “Micro-Units”

• Board decisions since 2011 demonstrate that establishing an

“overwhelming community of interest” is a substantial burden

• DPI Secuprint, Inc., 362 NLRB No. 172 (2015)

– a petitioned-for micro-unit may exclude a functionally

integrated group of employees and still be found appropriate

– “readily identifiable” simply means that the description of the

unit is sufficient to specify the group of employees the union

seeks to include

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Specialty Healthcare and “Micro-Units”

• The New Rule went into effect on April 14, 2015

• Biggest change in the NLRB’s approach to union elections in

over 50 years

• It provides Unions a much quicker path to an election

• Streamlined election rules exacerbate problems created by

Specialty Healthcare

• What Has Changed??

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The New World Order

• Electronic filing of petitions, with union setting forth proposed

date, time, place and manner of election

• Same day service of Notice of Hearing on employer is

common.

• Employers must post the revised “Initial Notice to Employees

of Election” within two business days of service of Notice of

Hearing.

– Must also distribute electronically if employer customarily

communicates that way

– Failure to post/distribute grounds for setting aside election

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NLRB Rule on “Streamlined” Elections

• Statement of Position to identify disputed issues.

– Due seven days from notice of hearing (noon day prior to

hearing)

– Must state position on all issues and basis for its position,

such as: (i) unit appropriateness; (ii) classifications, locations

and groupings or who is in or out; (iii) challenges to voter

eligibility; and (iv) election details

– Issues not raised are waived

• Preliminary list of voters required as part of required

Statement of Position.

– Includes work locations, shifts, classifications

– Separate list for employees to be added or excluded

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• Pre-election hearings to open 8 days from the date of service

of the notice.

• The Representation Hearing:

– Limited to appropriateness and scope of bargaining unit. An

individual’s eligibility to vote or inclusion in unit ordinarily not

litigated (saved for after the election)

– Regional Director has ability to decide which issues may be

litigated and to limit evidence.

– Regional Director will have the authority to determine

whether post-hearing briefs may be filed.

• Practical Consequences: Employer dilemma regarding

putative supervisors (e.g., leads).

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• Decision and Direction of Election issued shortly after the hearing.

• Voter (Excelsior) Lists:

– Due within two business days from Decision and Direction of Election or approval of election agreement.

– Electronic format, including full names, home addresses, “available” non-business e-mail addresses, “available” non-business home and cell numbers, work locations, shifts and job classifications.

• Notice of Election: Must be posted for 3 full working days and distributed electronically if employer customarily communicates that way

• Failure to properly submit the Excelsior List and post the notice is grounds for setting aside election

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• The Election:

– Election must be set at “the earliest date practicable.”

– Not set time frames, but most elections likely will end up

being held within two or three weeks.

– Will substantially reduce an employer’s pre-vote opportunity

to litigate.

• Post-Election Procedures:

– Right to have the NLRB review decisions by a Regional

Director or an Administrative Law Judge has been

eliminated. Review is discretionary.

– Regional Director will set a post-election hearing 14 days

after the tally of ballots (or as soon thereafter as practicable).

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• The so-called “Quickie Election” rules are here to stay (unless a

different Board changes its mind).

– Legitimacy of rules affirmed by 5th Circuit in June; Judge in

D.C. Circuit likewise rejected similar challenge

• Given 5th Circuit’s reputation as a relatively conservative court,

future challenges to the rules are unlikely to succeed.

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The NLRB’s Election Rules: Where Things Stand

• Changing the Rules would presumably require another Formal

Rulemaking process.

– Drafting NPRM

– Notice

– Comment

– Preparation of Final Rule

– Effective Date

• Rulemaking resulting in 2015 changes took 14 months from

NPRM to effective date of new rules

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• While a Trump Board could adopt a more flexible approach on

election timelines, other elements of the new rules would remain

in effect:

– Posting of Notices

– Preliminary voter lists

– Statements of Position

– Excelsior Lists

– Etc.

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• Number of elections: NLRB held 1,628 representation elections in

2015-a five-year high and a 10% increase from 2014.

• Union win rate: 69.3 percent

– Slightly down from 69.5 percent in 2014

• Full story:

– 6% increase in petitions proceeding to election in 2015

– Increased number of union wins in right-to-work states

– Unions winning more decertification elections

– Median days from petition to election has dropped from 27 to 25

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Impact of the New Rules for Employers

• Beware challenging the Union’s designated observer, even if:

– Observer is a non-employee union official (Longwood

Security)

– Observer is an employee terminated for serious misconduct

and workplace violence issues (Equinox Holdings, Inc.)

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Wacky NLRB Rulings on Election Observers

• Brunswick Bowling: Beware of Preclusion

– No showing of prejudice required

– Speak now or forever hold your piece: employers must raise

ALL issues in the Statement of Position in a timely fashion

• Premier Utility Services: Another reason for employers to avoid

a mail-ballot election

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Other Takeaways for Employers Facing Elections Under New Rules

Labor Negotiations – the Board’s Effort

to Tilt the Scales in Favor of Union

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• Degradation of Management Rights

• Expanding the Union’s Right to Company Information During

Bargaining

• Shifting the Post-Expiration Power Dynamic

• Redefining Successorship

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During CBA

• Management Rights Clause is ALIVE

• But see Graymont PA

After CBA

• Management Rights Clause is DEAD

• See Du Pont

• Extra note: “Stone Container” flexibility also non-existent

Both?

• What if you plan and announce the change before the CBA expires, but the change does not occur until after the CBA expires?

• See American Nat’l Red Cross

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What Management’s Rights Clause?

NLRB’S New Approach to Work

Stoppages

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• Piedmont Gardens: NLRB “clarifies” law around employer’s

motive for hiring permanent replacements

• Reply Brief in United Site Services of CA v. IBT Local 315

– Asks Board to require employers to establish a legitimate and

substantial business reason for hiring permanent

replacements

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Bye, Bye, Bye…to Permanent Replacements

• Wal-Mart Stores, Inc.:

Peaceful strikes may be protected by the NLRA even when they

occur on an employer’s premises in full view of customers

– Miscimarra dissent: retail employees should lose the Act’s

protection if conduct causes disruption or interferes with the

business

• GC Model Brief on Intermittent Strikes

– If proposed framework is adopted by NLRB,

expect to see increase in union-led, short-duration strikes

– Impossible for employers to plan for or find replacement

workers

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Get Ready for “Flash Mob” Strikes

– The NLRB has determined that employers normally will be

obligated to continue deducting union dues even after a

collective bargaining agreement expires. Lincoln Lutheran of

Racine

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Meanwhile…the Board Supports Union Funding Past Contract Expiration

Redefining Successorship

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• The Board held that a purchaser employer becomes a Burns

successor with an obligation to recognize and bargain with the Union

when, as required by a local worker retention law, it has to hire the

predecessor employer’s employees for a “trial period.” GVS Properties,

LLC

• The Board reaffirmed doctrine requiring employers to bargain over

discretionary discipline issued to successor and newly organized

employees pre-first contract and mandated prospective make-whole

relief including reinstatement and back pay for future violations. Total

Security Management Illinois

• New successorship bar essentially requires a year of negotiations

before the purchaser can withdraw recognition based on the union’s

loss of majority status.

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Redefining Successorship

• Increased focus on the language included in an APA –

need to avoid guaranteeing similar pay and benefits.

• Purchaser may be held liable for the statements made by

the seller prior to close.

• Increases the difficulty of balancing the fiscal changes

necessary for a successful deal against the desire for

employee continuity and positive morale.

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New “Perfectly Clear” Successorship Test Restricts Purchasers’ Ability to Set Initial Terms

QUESTIONS?

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The Obama NLRB’s Legacy: How Much Will Survive?

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