The NLRB’s Year-End Bonanza

Jan 08, 2018 - 1:15pm

Executive Director, Labor Policy

After ten years of being run by a labor-friendly majority, the balance of power at the National Labor Relations Board (NLRB) finally—if temporarily—switched sides late in 2017.  The 3-2 Republican majority wasted little time in addressing the vast overreach of their activist colleagues by issuing a flurry of important rulings before former-Chairman Philip A. Miscimarra’s term expired on December 16.

Here’s a recap of the NLRB’s year-end restoration of common sense in labor policy:

Joint Employer Test.  Perhaps the most noteworthy of the late December happenings was that the NLRB reversed its deeply-flawed decision in the 2015 Browning-Ferris case, which held that two employers could be joint employers if they have indirect or even potential control of the same employees. That decision upended decades of precedent and stability, and it created massive uncertainty within the business community about previously well-understood legal principals affecting millions of small businesses.

The NLRB handed down its decision in Hy-Brand Industrial Contractors, Ltd. on December 14, and it did not mince words about how seriously misguided Browning-Ferris was, saying that “standard is a distortion of common law as interpreted by the Board and the courts, it is contrary to the Act, it is ill-advised as a matter of policy, and its application would prevent the Board from discharging one of its primary responsibilities under the Act, which is to foster stability in labor-management relations.”

Employee Handbook Provisions. As the Workforce Freedom Initiative (WFI) has written about previously, the Obama-era NLRB went on a crusade to outlaw previously uncontroversial rules found in employee handbooks and employers’ social media policies.  That effort was based on an errant and overly-broad reading of Section 7 of the National Labor Relations Act (NLRA), which protects “concerted activity,” under the NLRB’s 2004 precedent in Lutheran Heritage Village.

On December 14, the NLRB reversed Lutheran Heritage Village in The Boeing Company.  In Boeing¸ the Board majority found “multiple defects are inherent in the Lutheran Heritage [sic] test” and went on to identify the numerous ways that the precedent was deeply flawed, saying “Lutheran Heritage has required perfection that literally is the enemy of the good.”  The NLRB replaced the Lutheran Heritage standard with a new one that will provide more of a balanced approach to determining whether a policy violates the NLRA’s protections. 

Micro-Unions.  As WFI reported at the time, on December 15 the NLRB overturned its controversial 2011 decision in Specialty Healthcare, in which the Board threw out decades of precedent regarding what is an “appropriate” collective bargaining unit.  The recent decision in PCC Structurals, Inc. reversed the “overwhelming” community-of-interest standard that made it extremely difficult for employers to challenge a proposed bargaining unit and reinstated the traditional standard that had governed previously.

“Past Practice” Policy for Unilateral Changes.  This issue involved a case in which an employer “unilaterally modified employee medical benefits and related costs consistent with what it had done in the past” after its union contract had expired. 

In its 2016 decision in E.I. du Pont de Nemours, Louisville Works, the NLRB declared that such “discretionary unilateral changes ostensibly made pursuant to a past practice…are unlawful.”  On December 15, the Board reversed that ruling in Raytheon Network Centric Systems, criticizing the E.I. du Pont decision for requiring bargaining for routine changes “even if an employer continues to do precisely what it had done many times previously—for years or even decades.”  Again, the Board did not mince words, calling E.I. du Pont “fundamentally flawed” and saying it “is inconsistent with Section 8(a)(5) [of the NLRA], it distorts the long-understood, commonsense understanding of what constitutes a ‘change,’ and it contradicts well established Board and court precedent.

Ambush Elections.   On December 14, the NLRB published a Request for Information (RFI) in the Federal Register, asking for public input regarding the Board’s 2014 ambush election rule, which tilted its representation-election procedures in favor of organized labor.  The RFI asks the public whether or not the Board should alter or even rescind the rule, and the publication of such a request is a good indication that the current Board will revisit the ambush election rule, which one hopes will result in some much-needed changes to reverse the Obama Board’s gift to unions.

With a short window of opportunity, the NLRB’s 3-2 Republican majority took on and/or overruled some of the most controversial policies developed under the ten years in which the Board was controlled by Democrats.  Now that former-Chairman Miscimarra has departed, the Board is back to a 2-2 deadlock, so it will be important to install a new member at the NLRB as soon as possible.  Nevertheless, this list of five key actions is was a welcome way to ring in the New Year.

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Executive Director, Labor Policy