A return to 'common sense'? A recap of the NLRB's sweeping changes so far

On Saturday, National Labor Relations Board (NLRB) Chairman Philip Miscimarra’s term officially came to an end — as did a week marked by a flurry of case decisions and regulation changes by the agency.

Observers saw the writing on the wall at the beginning of the month thanks to a memo written by the newly installed general counsel asking regional offices to escalate any cases in which the Board could potentially overturn precedent set during the last eight years. Not hard to find, Michael Lotito, co-chair of Littler’s Workplace Policy Institute, told HR Dive; in the past eight years, a collective 4,559 years of precedent was overturned.

Some of the shifts in position are “inevitable” due to the nature of the board, he said, but in the past eight years, the swings were “extreme.” To many of the lawyers HR Dive spoke with, the recent moves are a shift back to “common sense” — but that doesn’t necessarily guarantee things will remain that way during future administrations.

Either way, many original rulings with a Miscimarra dissent were re-examined this past week, Steven Swirsky, employment, labor and workforce management attorney at Epstein Becker Green, said. Here’s how it went down.

Joint employer clarity

One of the biggest bombshells was the reversal of the Browning-Ferris joint employment standard. A decision in the Hy-Brand case brought the NLRB stance on joint employment back to a place where only employers with “direct and immediate” control over workers can be jointly liable for National Labor Relations Act violations. Browning-Ferris, which said employers with “indirect control” could be responsible, created a number of legal quandaries, particularly for the franchise model.

Luckily for employers, that’s changed. “I think there’s clarity as a result of the decision there, particularly in the franchise community,” Lotito said. Those that outsource food services or security or use temp staffing agencies also will have more certainty in how to structure those relationships.

The timing was interesting, especially because Browning-Ferris still sits at the D.C. circuit court. “The attorneys representing the Board in that matter will have a duty to tell the circuit that there has been a change in the Board’s stance,” Swirsky said. Those attorneys can then ask the court to either hold the case as the Board re-evaluates or ask that the case be returned to the Board for consideration under the new (old) test.

The court could rule on the now-reversed standard, Lotito said, but it’s unlikely. It’s more likely that no real decision comes of the case at all — an interesting twist, considering watchers have been waiting on a ruling for months.

Workplace rules and the 'reasonableness standard'

The expansion of protected speech, and the increased scrutiny on handbooks, has plagued employers with uncertainty for some time. Last week, the NLRB gave first hints that it would be returning to interpretations that favored employers.

In the Boeing case, the NLRB reversed a standard set in Lutheran Heritage Village that cast doubt on whether confidentiality policies or “harmonious workplace” policies could be construed to prohibit concerted activity, Zachary Fasman, a partner in the Labor & Employment Law Department at Proskauer Rose LLP, told HR Dive in an email.

“Rules that on their face looked remarkably similar were ruled either lawful or unlawful in decisions that seemed to have no rhyme or reason,” Fasman said. “A rule prohibiting ‘abusive or threatening language to anyone on Company premises’ was lawful, while a rule restricting ‘loud, abusive or foul language’ was not.”

Boeing essentially begins the reversal of that, and creates three categories of rules to outline how the NLRB will approach handbooks in order to provide clarity to employers:

Category 1 includes rules that the Board will “designate as lawful” because they can either be reasonably interpreted not to infringe on labor rights or the rule justifications outweigh those protections;
Category 2 includes rules that “warrant individual scrutiny”; and
Category 3 includes rules that are unlawful.

Lotito called the decision an “opportunity to return to common sense rules.” The Board had become “the handbook police,” he said, and even a cursory review of the majority opinion in Boeing “shows just how totally out of control we were,” he added.

Quite a bit remains to be clarified regarding protected speech, especially vulgar speech on social media. Boeing doesn’t go into how those lines will be drawn, Swirsky said. But from early interpretations, the reasoning “would lead one to the logical conclusion that they would find that behavior unprotected,” Lotito said.

Microunions and the 'quickie election' rule

Some changes to how the Board will approach unionization also took place. The NLRB first announced its intention to review the “quickie election” rule, which essentially sped up the unionization process overall, by publishing a Request for Information on the issue last week.

The rule enabled electronic filing of a union petition, made pre-election posting and “Statement of Position” from employers (or risk losing the chance to identify issues entirely) mandatory, limited pre-election hearings, expedited post-election objections and more — most all of it markedly employee- and union-friendly.

NLRB has asked the public to weigh in on whether the rule should be retained, modified or rescinded. Stakeholders have until Feb. 12 to comment.

“There’s nothing that will paralyze businesses as much as uncertainty. Not knowing what the rules are is the most critical problem.”

Michael Lotito

Co-chair, Workplace Policy Institute, Littler Mendelson P.C.

The NLRB also reversed the “microunion” rule established in Specialty Healthcare. Interpretation of that case enabled employees to create bargaining units that “shared a community of interest,” Fasman said. Even if other employees shared those interests, an employer had to prove that all employees in question shared an “overwhelming community of interest,” a standard that was rarely met, he added.

Under that rule, a shoe department in a department store could organize alone — a bit of a problem for an employer who likely dealt with employees in that department the same as it would approach employment throughout the store.

In PCC Structurals Inc., the NLRB returned to the standards that had been in place for decades prior to Specialty Healthcare.

A pendulum-swinging Board? It's time to get a labor lawyer

With the Board making such abrupt changes, employers should be sure to run their handbooks by a labor lawyer — not just an employment lawyer, Lotito said. Boeing, in particular, re-introduces nuances that employers need to be aware of.

In such a partisan environment, major shifts will remain possible with each election. Will Congress decide to step in and codify these issues into law to protect against such stark changes in the future?

“It always seems very hard to get Congress to act on these matters,” Swirsky said. Even when President Obama had a Democratic majority at the start of his term in 2009, little progress was made in the legislative arena. “Now that joint employer has been addressed, Congress may not view it as much of a priority now." Instead, it may allow the Board to clean up on its own, first, he added.

But the bipartisan approach to the Save Local Business Act — legislation that sought to overturn Browning-Ferris — heartened Lotito, who noted that businesses feeling secure in their policies is one of the key ways to ensure expansion and growth.

“Businesses don’t function on the political cycle. They have the long view,” Lotito said. “There’s nothing that will paralyze businesses as much as uncertainty. Not knowing what the rules are is the most critical problem.”