Fully-Confirmed NLRB Promises New Challenges for Employers

September 20, 2013Articles
For the first time in 10 years, the National Labor Relations Board (“NLRB” or the “Board”) has a full slate of approved members. On August 12, 2013, the Board swore in four Senate-confirmed members. Late last month, the Senate confirmed all five of President Obama’s nominees: Mark Gaston Pearce, the current chairman; Kent Hirozawa, chief counsel to NLRB Chairman Pearce; Harry Johnson III, a labor and employment partner from Arent Fox LLP; Philip Miscimarra, a labor and employment partner at Morgan, Lewis & Bockius; and Nancy Schiffer, associate general counsel at AFL-CIO.1 The two Republican confirmations, both coming from private practice with experience representing employers primarily, are Mr. Johnson and Mr. Miscimarra. The last time the Board had a full slate of approved members was August 21, 2003.

The NLRB is an independent federal agency charged with conducting elections for labor union representation and investigating and remedying unfair labor practices. The Board interprets and enforces the National Labor Relations Act, 29 U.S.C. § 151 et seq., and governs private sector employers and employees.

Last year, President Obama sparked a firestorm when he announced three recess appointments to the NLRB and a constitutional fight ensued. These appointments were criticized as an attempt to undercut the role of the Senate to advise and consent on the executive branch appointments. The D.C. Circuit Court of Appeals ruled these appointments to be constitutionally invalid.2 The Noel Canning opinion issued by the D.C. Circuit Court of Appeals held that since the appointments were constitutionally invalid, the NLRB lacked a quorum to act, which potentially subjected every decision, rule, or regulation implemented by the Board to appeal or attack.3

The U.S. Supreme Court will review the Noel Canning decision either affirming or overturning the D.C. Circuit Court of Appeals on the constitutionality of these recess appointments. Even if the Supreme Court affirms the decision of the lower court, it is a strong possibility, based on the Board’s makeup, that it may simply ratify the decisions made during that period.

With the swearing in of five Senate-confirmed members, the NLRB now has the authority to fully act and its anticipated agenda shows no sign of slowing down. The areas that we anticipate the Board to continue its aggressive agenda include the following:

1. Section 7 Rights

Section 7 of the National Labor Relations Act (the “Act”) protects the right of private sector employees, both non-unionized and unionized, to engage in concerted activity. Protected concerted activity includes speech relating to the terms and conditions of an individual’s employment. In the last few years, employers have seen the NLRB expand its interpretation of Section 7 to encompass a wide range of activities, particularly in social media, employee handbooks, and workplace investigations.

In a series of decisions, the Board invalidated many common sections of employee handbooks relating to conduct, speech, and social media, including any provisions that could potentially be interpreted by employees as infringing on their Section 7 rights. For example, the Board declared that a policy encouraging employees to resolve conflicts by speaking with the particular individual was unlawful. Instead, the Board wants employers to clarify and restrict the scope of their policies and identify clear examples of illegal or unprotected conduct. The Board has also found that a prohibition on inappropriate or unprofessional comments is unlawfully broad. Rather, an employer should craft a policy to prohibit harassing, threatening, intimidating, bullying, or discriminatory comments.

The Board found that seeking confidentiality for workplace investigations could infringe on Section 7 activity, and is unlawful absent an employer’s demonstration of more than a generalized concern with protecting the integrity of its investigations.4 Despite potential conflict with privacy concerns of other employees, the Board found that employees have the right to discuss discipline or disciplinary investigations involving their fellow employees under Section 7. To mandate confidentiality, employers must determine whether any witnesses need protection, any evidence is in danger of being destroyed, any testimony is in danger of being fabricated, or there is a need to prevent a cover up. It is the employer’s burden to show this need for confidentiality in a given situation.

Employers should expect the Board’s aggressive stance in expanding an employee’s Section 7 rights to continue and should monitor their own policies and work rules to ensure compliance. To avoid these predicaments, employers should avoid overbroad and vague language in crafting their employee handbooks and workplace policies. Providing specific examples of prohibited behavior is favored, and in implementing these policies, employers should be cautious of any discipline attendant with the policy. Policies discussing workplace conditions, supervisor treatment, wages, or other similar issues are protected under the Act and any discipline for violation of a neutral workplace policy could result in an unfair labor practice charge.

2. Non-Employee Access To Employer’s Premises

Last year, the Seventh Circuit Court of Appeals affirmed the Board’s finding that prohibiting non-employee union representatives from handbilling on employer property, while permitting nonunion solicitations and distributions, was discriminatory and a violation of the Act.5

The Roundy’s Inc. case involved Roundy’s, a grocery store employer, who was using non-union contractors. The local union met with Roundy’s to discuss the use of non-union contractors who were not paid the prevailing area standard wages in the construction and remodeling of its stores. Dissatisfied with the Roundy’s response, the union began protesting at its stores, standing outside in the common areas to distribute unflattering handbills, asking customers not to patronize the stores, and informing customers that they could achieve savings at competitors. Roundy’s response was to eject these handbillers from the property. The Board found that since Roundy’s permitted nonunion solicitations and distributions on its property, its ejection of union representatives was discriminatory and a violation of the Act.

The issue remaining before the Board in Roundy’s is whether the employer violated the Act by excluding the union from its own property. The Board invited the public to file briefs concerning the appropriate weight to be given to Register Guard. This Board decision found that an employer may restrict use of its computer systems for union solicitation purposes, even though the employer may allow employees to use computer for other personal, non-business purposes.6

This invitation suggests that the Board will consider whether it will expand the scope of “property” to include the electronic world and apply the principles outlined in Roundy’s to overturn Register Guard. In other words, the Board may decide that if an employer allows an employee to use its computer systems for personal, nonunion solicitations, it must also allow union solicitations via the employer’s e-mail system.

The dissent in Register Guard, written by former Board Members Liebman and Walsh, outlines the predicted route the Board will take on this issue:

  Only a Board that has been asleep for the past 20 years could fail to recognize that e-mail has revolutionized communication both within and outside the workplace. In 2007, one cannot reasonably contend, as the majority does, that an e-mail system is a piece of communications equipment to be treated just as the law treats bulletin boards, telephones, and pieces of scrap paper.7

Given the Board’s stance on Section 7 rights as it relates to social media and employee handbooks, it will likely reverse its precedent and allow employees to use company property, like computers and e-mail, to conduct union solicitations. This means that employers who allow employees to use company computers for personal usage, including access to non-work websites or personal email, may be waiving any right to restrict the use of these computer systems for union solicitations. Likewise, if an employer limits an employee’s computer use to work purposes, forbidding not just union-related business but all non-work-related business, this is permissible as long as the limitations are applied uniformly and not discriminatorily against unions.

3. Micro-Units

On August 15, 2013, the Sixth Circuit Court of Appeals upheld the Board’s decision in Specialty Healthcare,8 holding that the Board has broad discretion when it comes to finding the appropriate bargaining unit.

Specialty Healthcare involved a nursing home and rehabilitation center in Mobile, Alabama. The employer, Kindred Nursing Centers East, LLC (“Kindred”), had a nursing department consisting of 53 Certified Nursing Assistants (“CNAs”), not including the Licensed Practical Nurses (“LPNs”) and Registered Nurses (“RNs”). Kindred sought to include other service and maintenance employees in the same bargaining unit as CNAs, including resident activity assistants, social services assistants, staffing coordinators, maintenance assistants, central-supply clerks, cooks, etc. The union, however, petitioned to represent the full-time and part-time CNAs. Despite Kindred’s argument that the bargaining unit should be expanded to include the additional, non-supervisory, non-professional service and maintenance employees, the Board found the unit of only CNAs to be appropriate. The Board found that the approach outlined in Park Manor Care Center, 305 NLRB 872 (1991), was obsolete for determining whether a proposed bargaining unit in a nursing home is an appropriate unit.

The Board found that it will hold a bargaining-unit to be appropriate when the unit is comprised of an identifiable group of employees who share a community of interest with one another. To determine if a community of interest exists, the Board will look at:

  whether the employees are organized into a separate department; have distinct skills and training; have distinct job functions and perform distinct work, including inquiry into the amount and type of job overlap between classifications; are functionally integrated with the Employers’ other employees; have frequent contact with other employees; interchange with other employees; have distinct terms and conditions of employment; and are separately supervised.9

“Because a proposed unit need only be an appropriate unit and need not be the only or the most appropriate unit,” the Board stated that additional employees will not be added to a proposed unit unless the complaining party (typically the employer) shows that the excluded employees “share an overwhelming community of interest with the included employees.”10 This new standard issued by the NLRB essentially makes it easier for multiple unions to exist in a single place of employment.

The Sixth Circuit affirmed that the Act gives the Board wide discretion in determining the appropriate bargaining-unit and that the Board could reject its precedents as long as the “departure from precedent is explained.”11 The Court’s affirmation of the Board’s actions will likely result in the Board expanding its rulings to further advantage the election of micro-units. In essence, employers need to be cautious of multiple units forming in a single facility.

4. Ambush Elections

Last year, the D.C. District Court struck down the Board’s “ambush election” rule because the Board did not have quorum when the final rule came to a vote.12

The rule limited the evidence that can be presented at a pre-election hearing and eliminated the 25-day grace period to schedule elections. The elimination of this grace period means that the “ambush election” rule reduces the amount of time between when a union files a representation petition and when an election can take place from an average of 40 days to as few as 14 days. In enacting this rule, the Board’s rationale sought to reduce unnecessary litigation, increase efficiency, prevent parties from abusing the process, and eliminate any frivolous delay in the resolution of questions of representation.

The D.C. District Court’s decision suggested that there was nothing to preclude the Board from re-issuing the rule with a properly constituted quorum.13 However, until such a quorum existed, representation elections must continue under the old procedures.14

Since the Board has been fully-confirmed, any procedural defects found in invalidating the ambush election rule will not be problematic should the Board re-issue this rule during this term. While court challenges and potential injunctions regarding the Board’s ability to enact this type of rule are expected, employers can expect the Board to vote on implementing the ambush election rule during the next coming months. Should this rule be enacted, employers can expect expedited elections that will limit the employer’s ability to respond to union organizing and create a campaign of its own to impact the outcome of the election.

5. Revival of MB Sturgis?: Lack of Consent for Multiemployer Units

As with other areas of concern, the direction of the new Board suggests the revival of an issue that many employers thought was buried—M.B. Sturgis.15 M.B. Sturgis was decided by a Clinton-appointed Board. Here, the Board decided that bargaining-units, which combined employees who work solely for an employer and employees who work jointly for the employer and the temporary agency employer, were permissible. However, in 2004, Oakwood Care Center overturned M.B. Sturgis.16 The Bush-appointed Board returned to precedent established in the 1970s and 1990s in Greenhoot, Inc.17 and Lee Hospital, respectively.18

Oakwood Care Center held that temporary employees from a staffing agency could not be included in a bargaining unit with regular employees of the employer without the consent of the staffing agency and the regular employer. It found that multi-employer bargaining units would be impermissible unless both the temporary agency employer and the user employer consented to such a unit.

The Oakwood Care Center decision contains an impassioned dissent, written by former Members Liebman and Walsh, in which the dissenting members contended that the Act authorizes the Board to designate appropriate bargaining units, and only limits the scope of the bargaining unit, but says nothing about the source of its members.19 The language in the Act does not foreclose the possibility of including employees of more than one employer. Focusing on the Board’s broad discretion in unit determination, the dissent finds that temporary employees and regular employees who work side-by-side for an employer who has voluntarily created such an arrangement should be able to join together in the same bargaining unit as they are part of a common enterprise and share a community of interest.

In light of the current views of the Board, employers should note that the dissent in Oakwood Care Center may become the new standard for multiemployer units and the principles outlined in M.B. Sturgis could rise again.

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(1) To learn more about the Board members, visit http://www.nlrb.gov/news-outreach/news-releases/national-labor-relations-board-has-five-senate-confirmed-members.
(2) Noel Canning v. NLRB, 705 F. 3d 490 (D.C. Cir. 2013), cert. granted, 133 S. Ct. 2861 (U.S. June 24, 2013) (No. 12-1281).
(3) For more information on the invalidity of these appointments, please reference: http://www.dinsmore.com/nlrb_appointees_constitutionally_invalid/.
(4) Banner Health System, 358 NLRB No. 93 (2012). See also NLRB Office of General Counsel Advice Memorandum, Verso Paper Case No. 30-CA-089350 (Jan. 29, 2013).
(5) Roundy’s Inc., 356 NLRB No. 27 (2010), aff’d, Roundy’s Inc. v. NLRB, 674 F.3d 638 (7th Cir. 2012).
(6) Register Guard and Eugene Newspaper Guild, CWA Local 37194, 351 NLRB 1110 (2007).
(7) 351 NLRB 1110, 1121 (2007).
(8) 357 NLRB No. 83 (2011), aff’d, 6th Cir. Nos. 12-1027/12-1174, 2013 U.S. App. LEXIS 16919 (Aug. 15, 2013).
(9) 357 NLRB No. 83, at *40-41.
(10) 357 NLRB No. 83, at *2-3, 46, 49-50 (2011).
(11) 2013 U.S. App. LEXIS 16919, at *20-21.
(12) Chamber of Commerce of U.S. v. NLRB, 879 F. Supp. 2d 18 (D.D.C. 2012).
(13) 879 F. Supp. 2d at 30-31.
(14) Id. at 31.
(15) M.B. Sturgis, Inc., 331 NLRB 1298 (2000), overturned by H.S. Care L.L.C. d/b/a Oakwood Care Ctr. and N&W Agency, Inc. (“Oakwood Card Center”), 343 NLRB 659 (2004).
(16) 343 NLRB 659 (2004).
(17) Greenhoot, Inc., 205 NLRB 250 (1973).
(18) Lee Hospital, 300 NLRB 947 (1990).
(19) 343 NLRB 659. 666.