Fall/Winter 2017 Update on Key NLRB Decisions : Torkildson, Katz, Hetherington, Harris & Knorek, Attorneys at Law

Fall 2017 Key Decisions

International Association of Bridge, Structural, Ornamental, and Reinforcing Iron Workers, Local 229, AFL-CIO (Commercial Metals Company d/b/a CMC Rebar), 365 NLRB No. 126 (August 30, 2017).

The Union violated Section 8(b)(4)(i)(B) by: (1) sending a text message to employees of the Charging Party stating “Friends Don’t Let Friends Cross Picket Lines”; (2) phoning those employees and stating they should not perform work for the Charging Party; (3) distributing to those employees a flyer called “Picket Line Etiquette”; and (4) speaking with those employees to induce or encourage them to strike or refuse to perform work.

A Union violates Section 8(b)(4)(i)(B) – the provision addressing secondary boycotts – when it induces or encourages the employees of a secondary employer to stop work, where an object is to compel that employer to cease doing business with the struck or primary employer. In each of the four above instances, the Union induced or encouraged employees of a neutral employer (CMC Rebar, the charging party) to stop working with the objective of forcing that employer to cease doing business with the primary employer.

Gulf Coast Rebar, Inc., 365 NLRB No. 128 (September 18, 2017).

The Board (Members Pearce and McFerran; Chairman Miscimarra, dissenting) reversed the Administrative Law Judge and found that the Respondent violated Section 8(a)(5) and (1) by failing to respond to the Union’s information request. The employer contended that it had effectively repudiated the collective-bargaining agreement (“CBA”) and was under no obligation to respond to the Union’s information request, and, in any event, that the Union’s charge was untimely.

The majority found that the employer’s notice of its contract repudiation to the Union was ineffective because the employer sent a “conflicting signal” to the Union by filing a motion in court after its repudiation of the CBA to compel arbitration under the CBA in a suit the union filed asserting claims for missed dues and fringe benefit payments. The Board found this conflicting signal privileged the Union to send its information request and file its unfair labor practice charge based on the employer’s noncompliance with that request.

Pacific Coast Sightseeing Tours & Charters, Inc., a wholly owned Subsidiary of Coach USA, Inc., and Megabus West, LLC, an indirectly owned Subsidiary of Coach USA, Inc., 365 NLRB No. 131 (September 18, 2017).

The employer violated Section 8(a)(1) by threatening employees with a less lenient work environment if they chose union representation and by telling employees that they could quit if they weren’t happy with their jobs. The Board also sustained the election objection corresponding to those coercive statements made during the critical period and directed a second election.

ImageFIRST Uniform Rental Service, Inc., 365 NLRB No. 132 (September 22, 2017).

The employer violated Section 8(a)(1) by demanding that nonemployee union representatives who were handing out leaflets demanding higher pay and union rights for workers leave the public shoulder where they stood, and by threatening to call and calling the police because they failed to leave. The Board found that it was not reasonable for the employer to believe it had a property interest that allowed it to exclude the nonemployee union representatives from nearby public property.

Southcoast Hospitals Group, Inc., 365 NLRB No. 140 (October 6, 2017).

The employer did not violate Section 8(a)(3) and (1) by maintaining a hiring/transfer policy that gives preference to unrepresented employees over represented employees when filling positions at the employer’s nonunion facilities. The employer established that the policy serves the legitimate and substantial business justification of leveling the playing field between represented and unrepresented employees.

December 2017 Shift in Board Direction and Precedent

GC Memorandum 18-02 (December 1, 2017)

Two weeks after being sworn in as NLRB General Counsel, Peter Robb swiftly issued new direction for the NLRB. His GC Memo explains which types of charges involve “significant legal issues” and which Regional Directors must submit to the Division of Advice, for example:

Concerted activity for mutual aid and protection: cases in which the conduct was found to involve "mutual aid and protection," but only one employee had an immediate stake in the outcome; cases in which employees did not lose protection of the NLRA despite their obscene, vulgar, or other highly inappropriate conduct – so that the Board could revisit its decisions in Fresh & Easy Neighborhood Market and Pier Sixty, LLC.
Common employer handbook rules found unlawful: cases involving allegations of rules prohibiting “disrespectful” conduct or the use of employer trademarks and logos; rules governing "no camera" or "no recording"; rules requiring employees to maintain the confidentiality of workplace investigations; and other rules where the outcome would be different if Chairman Miscimarra’s substitution for the Lutheran Heritage test was applied.

Purple Communications: cases which involve employees’ presumptive right to use their employer’s email system to engage in Section 7 activities.

Off-duty employee access to property: cases where off-duty employees are allowed access to picket; cases where access must be permitted under Tri-County unless employees are excluded for all purposes, including whether a supervisor expressly authorized access – so the Board could revisit its decisions in Capital Medical Center and Piedmont Gardens.
Conflicts with other statutory requirements: cases in which racist comments by picketers are protected because they were not direct threats; cases where an employee's social media postings are protected even though such conduct could violate EEO principles – so that the Board could revisit its decisions in Cooper Tire & Rubber Co. and Pier Sixty, LLC.
Weingarten rights: cases expanding application of such rights.
Joint employment: cases in which the new Board could revisit its decision in Browning-Ferris, in which it established a new test for finding joint employment based on evidence of indirect or potential control over the working conditions of another employer’s employees.
Unilateral changes consistent with past practice: cases whether unilateral changes were found unlawful after contract expiration where changes were similar to the employer’s earlier practice – so that the Board could revisit its decision in E.I. Dupont de Nemours.
Duty to provide witness statements to union: cases where witness statements must be disclosed if that would be appropriate under the Detroit Edison balancing test.
Dues check-off: cases where the dues check-off obligation survives expiration of the CBA – so that the Board could revisit its decision in Lincoln Lutheran of Racine.
Remedies: cases where search for work and interim employment expenses are recoverable regardless of whether the discriminate had interim earnings – so that the Board could revisit its decision in King Soopers.

The GC Memo also notes that his office is rescinding the following prior memos:

GC 17-01 (General Counsel’s Report on the Statutory Rights of University Faculty and Students in the Unfair Labor Practice Context)
GC 16-03 (Seeking Board Reconsideration of the Levitz Framework, which allows employers to unilaterally withdraw recognition from a union based on objective evidence that the union has lost majority support, such as employee signatures on a petition)
GC 15-04 (General Counsel’s Report Concerning Employer Work Rules, which significantly expanded the types of neutral policies and work rules the GC will consider in deciding whether to issue complaints)
GC 13-02 (Inclusion of Front Pay in Board Settlements)
GC 12-01 (Guideline Memorandum Concerning Collyer Deferral, which instructed NLRB field offices not to defer cases to arbitration where arbitration would not resolve the case within one year)
GC 11-04 (Requiring language in settlement agreement to contain a default procedure against a party that is unable or unwilling to fulfill settlement agreement obligations)
OM 17-02 (Model Brief Regarding Intermittent and Partial Strikes)

In addition, the GC announced several other initiatives no longer in effect, including, efforts to extend Purple Communications (which requires employers to allow employees to use company e-mail for union organizing or employment-related discussion during non-work time) to other electronic systems (internet, phones, instant messaging) if employees use those regularly in the course of their work.

Of course, until the Board overturns existing precedent on these issues, the GC’s office will continue to enforce the Board’s rulings as written, although the GC reserved the right to suggest “alternative analysis” in certain cases.

December 2017 Shift in Board Precedent

During the week before the expiration of Republican Chairman Miscimarra’s term, the Republican majority Board issued a string of decisions overruling key standards that emerged during the Obama-era. The following chart explains these significant changes:

during the Obama-era. The following chart explains these significant changes:

New Board Law	Old Board Law
Settlement Terms
UPMC Shadyside Hospital, 365 NLRB No. 153 (Dec. 11, 2017). In its first five-member decision since Trump’s two Board appointees, the 3-2 majority held that administrative law judges are permitted to accept a respondent’s proposed settlement terms, over objection of the General Counsel and charging party, if the proposed terms are reasonable based on the 1987 Independent Stave factors.	United States Postal Service, 364 NLRB No. 116 (2016). Administrative law judges were not permitted to accept a respondent’s proposed settlement, over the objection of the General Counsel and charging party, unless the offer was a “full remedy” for all of the violations alleged in the complaint.
Work Rules
The Boeing Co., 365 NLRB No. 154 (Dec. 14, 2017). The 3-2 majority struck created a new test for evaluating employer work rules. The Board will classify work rules into three categories. A rule will be in Category 1 (always lawful) if either the rule standing alone, reasonably and objectively interpreted, could not potentially interfere with NLRA rights or if the rule’s potential interference with NLRA rights is outweighed by the employer’s legitimate business justifications. A rule will be in Category 2 (sometimes lawful) if it potentially interferes with NLRA rights. The Board will determine whether the potential interference is outweighed by legitimate business justifications. A rule will be in Category 3 (always unlawful) if it infringes upon NLRA rights regardless of the employer’s business justifications. The Board held that Boeing’s no-camera rule that restricted the use of camera-enabled devices such as cell phones as falling into Category 1 because Boeing’s justification, including the protection of information implicating national security, trade secrets, and employees’ personal information outweighed any potential impact on protected concerted activity. Notably, the Board also explicitly overruled all cases in which the Board held that employers violated the NLRA by maintaining rules requiring employees to foster “harmonious interactions and relationships” or to maintain “basic standards of civility” in the workplace.	Lutheran Heritage, 343 NLRB 646 (2004). Employers could violate the NLRA by simply maintaining work rules that might “reasonably be construed” by an employee to interfere with the right to engage in protected concerted activity. This rule has plagued employers and led to much confusion and bewilderment in its application.
Joint Employer Status
Hy-Brand Industrial Contractors, Ltd. 365 NLRB No. 156 (Dec. 14, 2017). Two or more entities are joint employers if there is proof that one entity actually exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control), and has directly and immediately (rather than indirectly) exercised that control in a manner that is not limited and routine. The Board’s decision is based on the 28-page Browning-Ferris dissent, and even made the same observation that under the Browning-Ferris standard, “a homeowner hiring a plumbing company for bathroom renovations could well be deemed a joint employer of the plumbing company’s employees!”	Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015). Two companies could be deemed joint employers even when they had never exercised joint control over essential terms and conditions of employment, and even when any joint control was not “direct and immediate.” The two entities would still be joint employers based on the mere existence of “reserved” joint control, or based on indirect or “limited and routine” control. The employer community extensively criticized this standard, and Congress initiated legislation to nullify it.
Changing Terms and Conditions Consistent with Past Practice
Raytheon Network Centric System, 365 NLRB No. 161 (Dec. 15, 2017). Employers may unilaterally change terms and conditions of employment if the changes are similar “in kind and degree” with an established past practice consisting of comparable unilateral action (subject to later union requests). This principle applies regardless of whether a CBA was in effect when the past practice was created or whether no CBA existed when the employer took the disputed unilateral action. The Board found that Raytheon did not violate the NLRA by failing to give the Union advance notice and an opportunity to bargain before making changes to employees’ healthcare benefits because Raytheon made similar unilateral changes at the same time every year for the past twelve years.	E.I. Du Pont de Nemours, 364 NLRB No. 116 (2016). An employer was not permitted to change terms and conditions of employment consistent with past practice before giving the Union notice and an opportunity to bargain over changes if the past practice was created under a management rights clause in a CBA that expired or if the disputed actions involved employer discretion.
Excluding Employees from Unit for Representation Election
PCC Structurals, Inc., 365 NLRB No. 160 (Dec. 15, 2017). In a representation election, employees in an appropriate bargaining unit must share a community of interest sufficiently separate and distinct from excluded employees. In determining whether the excluded employees are sufficiently separate and distinct, the Board will assess whether they are in separate departments; have distinct job functions and perform distinct work; have certain amounts and types of job overlap with the included employees; are functionally integrated with included employees; have frequent contact or interchange with them; have distinct terms and conditions of employment; and are separately supervised. The Board’s return to the traditional community of interest test is positive for employers who wish to prevent employees from organizing into “micro-units.” However, it remains uncertain how circuit courts will respond.	Specialty Healthcare, 357 NLRB 934 (2011). In a representation election where the employer took the position that the smallest appropriate unit had to include additional employees excluded from the proposed unit, the Board would find the petitioned-for unit appropriate unless the excluded employees shared an “overwhelming” community of interest with the included employees.

New Board Law

Old Board Law

Settlement Terms

UPMC Shadyside Hospital, 365 NLRB No. 153 (Dec. 11, 2017).
In its first five-member decision since Trump’s two Board appointees, the 3-2 majority held that administrative law judges are permitted to accept a respondent’s proposed settlement terms, over objection of the General Counsel and charging party, if the proposed terms are reasonable based on the 1987 Independent Stave factors.

United States Postal Service, 364 NLRB No. 116 (2016).
Administrative law judges were not permitted to accept a respondent’s proposed settlement, over the objection of the General Counsel and charging party, unless the offer was a “full remedy” for all of the violations alleged in the complaint.

Work Rules

The Boeing Co., 365 NLRB No. 154 (Dec. 14, 2017).
The 3-2 majority struck created a new test for evaluating employer work rules. The Board will classify work rules into three categories. A rule will be in Category 1 (always lawful) if either the rule standing alone, reasonably and objectively interpreted, could not potentially interfere with NLRA rights or if the rule’s potential interference with NLRA rights is outweighed by the employer’s legitimate business justifications. A rule will be in Category 2 (sometimes lawful) if it potentially interferes with NLRA rights. The Board will determine whether the potential interference is outweighed by legitimate business justifications. A rule will be in Category 3 (always unlawful) if it infringes upon NLRA rights regardless of the employer’s business justifications.
The Board held that Boeing’s no-camera rule that restricted the use of camera-enabled devices such as cell phones as falling into Category 1 because Boeing’s justification, including the protection of information implicating national security, trade secrets, and employees’ personal information outweighed any potential impact on protected concerted activity.

Notably, the Board also explicitly overruled all cases in which the Board held that employers violated the NLRA by maintaining rules requiring employees to foster “harmonious interactions and relationships” or to maintain “basic standards of civility” in the workplace.

Lutheran Heritage, 343 NLRB 646 (2004). Employers could violate the NLRA by simply maintaining work rules that might “reasonably be construed” by an employee to interfere with the right to engage in protected concerted activity. This rule has plagued employers and led to much confusion and bewilderment in its application.

Joint Employer Status

Hy-Brand Industrial Contractors, Ltd. 365 NLRB No. 156 (Dec. 14, 2017).
Two or more entities are joint employers if there is proof that one entity actually exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control), and has directly and immediately (rather than indirectly) exercised that control in a manner that is not limited and routine.

The Board’s decision is based on the 28-page Browning-Ferris dissent, and even made the same observation that under the Browning-Ferris standard, “a homeowner hiring a plumbing company for bathroom renovations could well be deemed a joint employer of the plumbing company’s employees!”

Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015).
Two companies could be deemed joint employers even when they had never exercised joint control over essential terms and conditions of employment, and even when any joint control was not “direct and immediate.” The two entities would still be joint employers based on the mere existence of “reserved” joint control, or based on indirect or “limited and routine” control.

The employer community extensively criticized this standard, and Congress initiated legislation to nullify it.

Changing Terms and Conditions Consistent with Past Practice

Raytheon Network Centric System, 365 NLRB No. 161 (Dec. 15, 2017).
Employers may unilaterally change terms and conditions of employment if the changes are similar “in kind and degree” with an established past practice consisting of comparable unilateral action (subject to later union requests). This principle applies regardless of whether a CBA was in effect when the past practice was created or whether no CBA existed when the employer took the disputed unilateral action.

The Board found that Raytheon did not violate the NLRA by failing to give the Union advance notice and an opportunity to bargain before making changes to employees’ healthcare benefits because Raytheon made similar unilateral changes at the same time every year for the past twelve years.

E.I. Du Pont de Nemours, 364 NLRB No. 116 (2016).
An employer was not permitted to change terms and conditions of employment consistent with past practice before giving the Union notice and an opportunity to bargain over changes if the past practice was created under a management rights clause in a CBA that expired or if the disputed actions involved employer discretion.

Excluding Employees from Unit for Representation Election

PCC Structurals, Inc., 365 NLRB No. 160 (Dec. 15, 2017).
In a representation election, employees in an appropriate bargaining unit must share a community of interest sufficiently separate and distinct from excluded employees. In determining whether the excluded employees are sufficiently separate and distinct, the Board will assess whether they are in separate departments; have distinct job functions and perform distinct work; have certain amounts and types of job overlap with the included employees; are functionally integrated with included employees; have frequent contact or interchange with them; have distinct terms and conditions of employment; and are separately supervised.

The Board’s return to the traditional community of interest test is positive for employers who wish to prevent employees from organizing into “micro-units.” However, it remains uncertain how circuit courts will respond.

Specialty Healthcare, 357 NLRB 934 (2011).
In a representation election where the employer took the position that the smallest appropriate unit had to include additional employees excluded from the proposed unit, the Board would find the petitioned-for unit appropriate unless the excluded employees shared an “overwhelming” community of interest with the included employees.