For employers with a union workforce — or a workforce that could unionize — complying with the National Labor Relations Act is an ongoing headache. That headache will only intensify thanks to the National Labor Relations Board (NLRB), the federal agency responsible for regulating labor law. The NLRB recently took several steps to create a more favorable atmosphere for unionization by making it harder for unions to decertify, and making it easier for temporary workers to join collective bargaining units.
In order to stay competitive and in compliance with federal regulators, employers need to understand the current atmosphere, what the new actions mean, and the steps they need to take to avoid trouble with the NLRB.
The NLRB General Counsel Memo
On May 9, NLRB General Counsel Richard Griffin Jr. issued a memo that made it more challenging to eliminate unions, even when most employees no longer want to belong to one.
Under current law, unionized employees may circulate a petition to determine whether there’s continued support for a union. If employees get enough signatures, they may petition the NLRB to hold a decertification election. Alternatively, if the signatures make clear that the union has lost majority support among the workforce, in some circumstances the employees can directly ask the employer to stop recognizing the union. The NLRB’s recent memo proposes to do away with the right of employers to withdraw recognition.
According to the memo, the current system for decertifying unions is causing problems. The framework in place was developed after the NLRB’s 2001 ruling in Levitz Furniture of the Pacific. Griffin is proposing to do away with employees’ option of directly approaching their employer when they can prove that the majority of the bargaining unit no longer supports the union.
“It has created peril for employers in determining whether there has been an actual loss of majority support for the incumbent union,” he wrote in the memo. Griffin further noted that the Levitz ruling caused litigation and hampered employees’ ability to choose union representation. Instead, Griffin would require a formal election by the NLRB before an employer could stop treating the union as the employees’ representative.
In July, the NLRB overturned a 10-year-old precedent, making it easier for temporary workers to take part in collective bargaining units. The ruling also requires contracting companies to bargain with these employees, even though they often don’t actually employ them. In the 3-1 decision in Miller & Anderson Inc., the NLRB ruled that petitioners seeking to represent employees in bargaining units that combine both solely- and jointly-employed employees of a single user employer are no longer required to obtain employer consent. The ruling overturns a 2004 decision in Oakwood Care Center, which found that this type of unit required consent from both employers.
The case began when the Sheet Metal Workers International Association asked to form a union bargaining unit that included Miller & Anderson workers, along with temporary workers jointly employed by Miller & Anderson and the staffing service Tradesmen International.
In overturning Oakwood Care Center, the NLRB eliminated the consent requirement and called for a “community of interest” test to decide the propriety of a unit. “The majority held that petitioned-for units combining solely and jointly employed workers of a single user employer must share a community of interest in order for a single unit combining the two to be appropriate,” the NLRB noted in a press release about the ruling. “The board will apply the traditional community of interest factors for determining unit appropriateness.”
The NLRB sent the case back to the Region 5 Office in Baltimore for further action. Board Chairman Mark Gaston Pearce was joined by members Kent Y. Hirozawa and Lauren McFerran in the majority opinion. Member Philip A. Miscimarra dissented. In his dissent, Miscimarra raised concerns about requiring an entity to engage in multi-employer bargaining without consent, in the absence of any employment relationship between the entity and the employees that it must bargain with.
The Miller & Anderson ruling is particularly important for employers because it involves joint-employer relationships, which the NLRB significantly expanded in its August 2015 decision in Browning-Ferris Industries of California. Before the Browning-Ferris ruling, companies were only considered joint-employers if they had “direct and immediate” control over employment matters. Browning-Ferris redefined joint-employment to include employers that may only have indirect or unexercised control over franchisees and contractors’ employment conditions. Browning-Ferris has appealed the NLRB decision.
What You Need to Know Now
The NLRB’s recent actions put employers in a difficult situation. With the Miller & Anderson ruling, employers must now bargain over employees they “jointly employ” not only directly employ.
Employers should take immediate steps to understand the implications these new NLRB decisions might have on their workforces:
• Review Contracts with Contractors and Staffing Companies.
With the help of both inside and outside counsel experienced in labor law issues, employers should review and analyze their contracts with all outside companies that provide labor. After a review, the company will be better able to understand what any potential risks or liabilities are.
• Understand the Politics.
Many of the actions involved with recent NLRB activity revolve around unions trying to increase their numbers after years of declining membership. In many cases, unions are being met with sympathetic responses from elected officials and appointed boards. In order to ensure the best interests of organizations and their employees, companies need to be realistic about the political, legal, and economic environment that’s driving many NLRB rulings and decisions.
• Stay on Top of New Developments.
Employers should keep an eye on whether the NLRB’s expansive rationale is adopted by any other enforcement agency. For example, the Department of Labor recently issued a memorandum explaining its position that many employees have been misclassified as independent contractors, and the Equal Employment Opportunity Commission has filed an amicus brief in the Browning-Ferris appeal in support of the NLRB’s expansive joint-employer test. All similar decisions warrant monitoring.
• Consider Action through Trade Groups.
Many trade groups are working to educate those inside and outside their industries about the potential effects that these recent NLRB decisions might have. Companies should consider working with relevant trade groups and others to make sure their voices are heard and their concerns are addressed before it’s too late.
In order to navigate the new terrain, employers need to work closely with experts, including in-house and outside counsel. Attorneys with a background in labor law can help companies understand the risks they face, and how their workforce could be dramatically impacted. Failing to do so may mean that employers could find themselves in the crosshairs of regulators.