The Biden Administration’s efforts at adjusting the balance of labor relations toward the interests of organized labor, at least for now, must largely fall back on non-legislative means, given the Republican capture of the U.S. House of Representatives in the 2022 elections. Ongoing legislative efforts, such as the Protecting the Right to Organize Act of 2019 – also known as the PRO Act – are likely to stall. Facing this reality, the Administration and its allies in organized labor have other ways to make gains at the National Labor Relations Board and the U.S. Department of Labor. A few key policy and legal initiatives are summarized below.
AT THE NATIONAL LABOR RELATIONS BOARD
Changes to Trump-era regulations
Proposed regulation on joint employer standard. On September 7, the NLRB published in the Federal Register a Proposed Rule addressing the standard for determining joint employer status under the National Labor Relations Act. If it takes effect, the proposal would rescind and replace the Trump Board’s joint employer rule, which took effect on April 27, 2020. The NLRB now has a Democratic majority, and its proposed joint employer rule is based on established common-law agency principles, consistent with Board precedent and guidance from the U.S. Court of Appeals for the District of Columbia Circuit.
Under the proposed rule, two or more employers would be considered joint employers if they “share or codetermine those matters governing employees’ essential terms and conditions of employment,” such as wages, benefits and other compensation, work, and scheduling, hiring and discharge, discipline, workplace health and safety, supervision, assignment, and work rules. The proposed standard would include consideration of direct evidence of control as well as consideration of evidence of unexercised or indirect control when analyzing joint-employer status.
According to NLRB Chair Lauren McFerran,
In an economy where employment relationships are increasingly complex, the Board must ensure that its legal rules for deciding which employers should engage in collective bargaining serve the goals of the National Labor Relations Act. . . . Part of that task is providing a clear standard for defining joint employment that is consistent with controlling law. Unfortunately, the Board’s joint employer standard has been subject to a great deal of uncertainty and litigation in recent years. Rulemaking on this issue allows for valuable input from members of the public that will help the Board in its effort to bring clarity and certainty to these significant questions.
The original deadline for comments on the proposed regulations was November 7, but the current deadline is December 7, with replies to comments due by December 21.
The clear intent of the new Board proposal is to broaden the range of businesses subject to representation and unfair labor practice proceedings.
Blocking charges, voluntary recognition, and construction industry bargaining relationships. On November 4, the Board published in the Federal Register a proposed rule that would rescind a final rule adopted by a majority of the Trump Board on April 1, 2020. Under the rule currently in effect,
- Representation elections may proceed despite pending unfair labor practice charges alleging coercive conduct that interferes with employee free choice and thus possibly requires a re-run election.
- Employees may file election petitions to challenge the representative status of a union that has been voluntarily recognized, based on a showing of majority support among employees at any time before a collective bargaining agreement is entered into, even before there has been a reasonable period for collective bargaining.
- Employees in the construction industry may submit election petitions to challenge the representative status of unions where there has not been certification by election, even if the union and the employer agreed to the union representation in a collective bargaining agreement based on an alleged showing of majority support.
The proposed rule, if it or some close version of it becomes effective, will affect the above provisions of the current rule as follows:
- The proposed rule will return to the Board’s longstanding “blocking charge” policy first adopted by the Board in 1937 – meaning that the unfair labor practice charges alleging coercive conduct generally will result in a pause of the election, absent a party’s request to proceed. In the Board’s view, the proposed rule promotes employee free choice, and it also conserves the resources of the Board and the parties, by ensuring that elections that may have to be re-run will not take place. The counter view is that blocking charges prevent employees from having a timely vote, despite the fact that unlawful interference may ultimately not be found.
- The proposed rule will return to the Board’s “voluntary recognition” bar doctrine established in 1966 and refined in 2011. That doctrine allows employees and unions to agree on recognition and prevents challenges to the status of a newly recognized union until after a reasonable period after collective bargaining has elapsed. In the view of the current Board, return to the older standard better serves the policies of the NLRA by vindicating employee free choice, encouraging collective bargaining, and preserving labor relations stability.
- The proposed rule as it relates to construction industry employees would restore the approach reflected in past decisions of Boards with Democratic majorities. This would include a six-month period during which employees could not file election petitions to challenge a construction employer’s voluntary recognition of a union, even when the employees have never voted for representation or otherwise shown union support. The proposed rule would adopt the principle that detailed language in a collective bargaining agreement will suffice to show that voluntary recognition was based on Section 9(a) of the NLRA and thus may serve to continue the union’s representation of the employees covered by the agreement even after the agreement expires. This would be a significant change from the existing regulation as it relates to the construction industry, as will be discussed in more detail below.
For the construction industry, Section 8(f) of the NLRA permits employers and unions to use “pre-hire” agreements authorizing union representation of employees even when the union has not established majority support in a bargaining unit. For example, the pre-hire agreements may be valid even when no employees have yet been hired for the project. This is in contrast to application of Section 9(a) of the NLRA, which typically requires employer recognition of a union to have some basis in a finding that the majority of employees in a bargaining unit support the union (for example, an NLRB election result, union authorization cards, or a document with employee signatures).
An employer-union relationship based on a Section 8(f) pre-hire agreement generally ends with the expiration of the agreement. In contrast, a Section 9(a) employer-union relationship generally continues until there is some basis for establishing that the union no longer maintains majority support in the applicable bargaining unit.
The proposed regulation, if it becomes final, will permit an employer and a union to convert a Section 8(f) agreement for union representation to Section 9(a) representation by stating in the collective bargaining agreement that the agreement is pursuant to Section 9(a) or that the union has the support of a majority of the bargaining unit. In other words, the union would be recognized even though the affected employees themselves had no right to vote on the union or otherwise were asked whether they supported the union. And under the proposed regulation, an NLRB election petition challenging the conversion will be subject to the Board’s “contract bar” rule if the petition is not filed within six months of the conversion.
According to the current Board majority, the 2020 regulation – which allowed employees to challenge union representation when there was no election – had injected uncertainty and unpredictability (i.e., for the union representation) into construction-industry labor relations.
Chair McFerran has said, “The Board believes, subject to comments, that these proposed changes will better protect workers’ ability to make a free choice regarding union representation, promote stability in labor relations, and more effectively encourage collective bargaining.”
Chair McFerran’s preceding quote and the view of the current Board majority arguably reflect a one-sided view of the NLRA as “encouraging collective bargaining,” while disregarding the fact that the NLRA also gives employees the right to “refrain” from union and concerted activity. But at least for now, the majority of the Board agrees with her interpretation of the law.
Comments on the proposed rule were originally due by January 3, but the deadline has now been extended through February 2. Replies must be received by the Board by February 16.
Aggressive use of existing law
In addition to the rulemaking and power of the current Board to overrule existing law, the NLRB majority will be deciding cases influenced by the prosecutorial discretion of NLRB General Counsel Jennifer Abruzzo, a former Special Counsel of the Communications Workers of America union and previously a long-term Board official. In at least one General Counsel Memorandum, she has emphasized that she will vigorously enforce “extant” (existing) law and seek to persuade the Board to apply current law in new ways to deal with” employer actions that she believes interfere with employees’ Section 7 rights under the NLRA.
Areas where GC Abruzzo wants to make changes include, but are not limited to, the following:
- Allowing “card check” of union majority support based on union authorization cards instead of Board-supervised elections with secret votes.
- Making employer-mandated meetings of employees about unions unlawful on a theory that employees have a right to refrain from listening to employer speech about unions.
- Expanding union access to employer and third-party private property for union activity.
- Expanding the scope of what constitutes “protected concerted activity.”
- Restricting employers’ electronic monitoring of employees and employer use of computer software algorithms to monitor employee conduct and productivity.
- Shifting burdens proof further onto employers defending unfair labor practice charges.
- Making unlawful employee handbook rules and policies if employees might “reasonably construe” the rules and policies to limit protected concerted activity.
AT THE U.S. DEPARTMENT OF LABOR
Not to be outdone, the U.S. Department of Labor, in April 2021 and again in January 2022, indicated that it would consider revisiting the Obama-era regulation that attempted to expand the scope of “Persuader Rule” reporting requirements under the Labor Management Reporting and Disclosure Act of 1959. The regulation would have narrowed the scope of the “Advice Exception” from the Persuader Rule’s financial reporting requirements. The effect would have been to require employers (and their labor consultants) to report funds spent even to obtain legal advice relating to many labor and employee relations matters, possibly infringing on attorney-client privilege. However, a federal court in Texas enjoined the regulation nationwide in 2016. Then, with the election of President Trump, control of the DOL shifted into Republican hands, and the regulation was rescinded.
But earlier this year, the Biden White House Task Force on Worker Organizing and Empowerment recommended restoring the Obama-era interpretation of the Persuader Rule reporting requirement. On November 14, Bloomberg Law reported that a second Task Force report is at the White House for consideration. A proposal to issue new Persuader Rule regulations may be near the top of the list of Task Force priorities.
If new regulations are issued, a heated political and legal battle is likely to ensue. Where and how it might end is anyone’s guess. According to a column in the “HR Daily Newsletter” of the Society for Human Resources Management, the Director of the DOL’s Office of Labor-Management Standards believes employers and their consultants are underreporting and that there is “chronic non-compliance.” As a result, the OLMS has reestablished a program to remind employers and their consultants of the reporting requirements and has even instituted a “Tip Line,” encouraging unions and employees to contact the OLMS about persuader activity.
THE BOTTOM LINE
Employers should not become complacent in their efforts to maintain positive employee relations and remain legally compliant in the area of labor relations, especially in the face of one-sided interpretation of laws and regulations by the NLRB and the DOL. Although the legislative options for organized labor may be all but gone until the 2024 elections, labor has plenty of options from the administrative enforcement, regulatory, and interpretive side.