December Brought Significant Changes in NLRB Positions and Composition, Including AGC-Supported Reversal of Joint Employer Ruling

Republicans’ brief control of the National Labor Relations Board ended with the expiration of Chairman Philip Miscimarra’s term on Dec. 16, 2017.  In anticipation of the change, the Board issued several employer-friendly decisions with significant impact.  The most high-profile among them is a ruling in Hy-Brand Industrial Contractors that overturns the controversial, AGC-opposed joint-employer standard established in Browning-Ferris Industries.

In Browning-Ferris, the Board relaxed the standard for determining when a company could be deemed a “joint employer” of another company’s employees and therefore jointly responsible for unfair labor practices and collective bargaining obligations.  Against urgings by AGC and others, the Board held in the 2015 decision that  “joint employer” status may exist even when a company merely exercises indirect control over, or has simply reserved the right to control, essential employment terms of the other company’s employees.  Browning-Ferris appealed the decision to the U.S. Court of Appeals for the District of Columbia Circuit, and AGC submitted an amicus brief with other associations supporting the appeal.  While the appeal was pending, the Board issued its decision in Hy-Brand.  For reasons consistent with the arguments raised by AGC and allies in the Browning-Ferris case, the Board decided to reinstitute the standard that applied for 30 years prior to Browning-Ferris:  a company may be deemed a joint employer under the National Labor Relations Act (NLRA) only if it has actually exercised control over employment terms and has done so directly and immediately in a manner that is not merely limited and routine.  (In light of the Hy-Brand decision, the DC Circuit has remanded the Browning-Ferris case back to the Board for reconsideration.)

Other noteworthy decisions issued just prior to Miscimarra’s departure include the following:

  • Workplace Policies.  On Dec. 14, 2017, the Board issued a decision in The Boeing Company overruling a 2004 decision in Lutheran Heritage Village-Livonia.  In Lutheran Heritage, the Board held that a facially neutral workplace rule or employment policy could be unlawful under the NLRA if an employee would “reasonably construe” the language to prohibit the exercise of their NLRA rights.  The Board has now replaced the “reasonably construe” standard with a new test for assessing facially neutral rules and policies that takes into consideration (1) the nature and extent of the potential impact on employees’ NLRA rights, and (2) the employer’s legitimate justifications for the rule or policy.
  • Bargaining Units.  In a Dec. 15, 2017, decision in PCC Structurals, Inc., the Board overruled the 2011 decision in Specialty Healthcare & Rehabilitation Center of MobileUnder Specialty Healthcare, an employer seeking to expand the bargaining unit in a union’s petition for a representation election must show that the additional employees shared an “overwhelming” community of interest with the employees in the petitioned-for unit.  The Board has now eliminated the “overwhelming” requirement and returned to the traditional community-of-interest standard.
  • Unilateral Changes.  Also on Dec. 15, 2017, in Raytheon Network Centric Systems, the Board overruled a 2016 decision in E.I. du Pont de Nemours.  Du Pont required employers (at least in a 9(a) relationship) to give a union notice and an opportunity to bargain over changes to employment matters, even when the changes are consistent with past practice, if the past practice was created under a management rights clause in an expired collective bargaining agreement or if the actions involve employer discretion.  The Board now holds that no notice or opportunity to bargain is required (1) when the changes are similar in kind and degree with an established past practice or (2) simply because some degree of employer discretion is involved.

Miscimarra’s departure leaves the Board with an even split of two Republicans and two Democrats.  Media reports indicate that Pres. Trump is preparing to nominate management-side attorney John Ring of the law firm Morgan Lewis to fill the vacancy.  Until Ring, or an alternative, is officially nominated by the President and confirmed by the Senate, the Board is not likely to issues decisions in controversial cases.  Meanwhile, the President has appointed Board member Marvin Kaplan (a Republican) to serve as the Board’s acting chairman.

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