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Embattled Trump NLRB Strikes Back

Agenda tackles ethics rules, joint employer standard and employee handbooks.

The new Republican majority of the National Labor Relations Board (NLRB) is striking back at attacks from both inside and outside the agency by those who want to block its efforts reversing the Obama-era board’s pro-union decisions.

In March the new board was forced to reverse its own December 2017 ruling overturning an Obama-era board’s joint employer decision, which itself had reversed 30 years of precedents. The Democrat-dominated board had found joint employer status existed between companies and their staff leasing providers and franchisees. The 2015 decision decreed that secondary employers would be considered joint employers if one employer retains indirect control or rights of control—even when those rights are never exercised.

The goal was to bolster unions by allowing independent contractors, leased and temp employees to vote alongside the regular workforce on whether to unionize. Joint employer status is very important for unions trying to organize large-scale franchisors like McDonald’s. A court suit to allow union organizing at the burger chain was pending last December when the new joint employer decision was issued.

Then, earlier this year, NLRB Inspector General David Berry, who is an Obama-era Democrat holdover, announced that Republican board member William Emanuel should have recused himself from the vote to reverse the joint employer status because his former law firm had represented one of the companies involved in the 2015 case.

Following the IG’s assertion that this meant Emmanuel had a conflict of interest when he voted in the later joint employer case in which his firm had no involvement, the full board then had to vacate its December decision. The new board then asked a federal court that earlier had been reviewing challenges to the legality of the board’s 2015 action to revive that proceeding.

The conflict of interest issue had been raised by members of Congress who were alerted to it by their union allies, and who then condemned it publicly in the most heated terms. These included Sen. Patty Murray (D-Wash.) and Sen. Elizabeth Warren (D-Mass.), who solemnly declared, “A big ethics cloud hangs over the NLRB.”

However, those same legislators had been quiet when conflict of interest complaints were made about Obama-era NLRB member Craig Becker, who had stubbornly refused to recuse himself from cases directly involving his previous employer, the Service Employees International Union (SEIU), where he had been associate general counsel.

New Rulemaking & Ethics Review

Following Emmanuel’s recusal and reversal of the new NLRB’s joint employer decision, new Republican Chairman John Ring announced the board’s intention to open a proposed rulemaking on joint employer status, requiring public input, and that he and others believe also would allay some of the uncertainty among employers about future board actions.

Responding to Ring on May 29, Sens. Warren, Bernie Sanders (I-VT) and Kirsten Gillibrand (D-NY) sent a letter to the chairman accusing him of planning to open the rulemaking as a way to sneak around the conflict of interest concerns that were raised earlier.

“While it is hard to see how such an action could reduce uncertainty, it is very easy to understand how it appeases corporate interests desperately seeking to escape liability under [the 2015 decision] and suppress their workers’ efforts to organize,” the senators wrote, adding that the planned ethics rulemaking “would sweep significant conflict-of-interest concerns raised by multiple independent, non-partisan officials under the rug and further damage the board’s reputation.”

Ring was having none of it. In a June 5 reply he politely but firmly rebutted their assertions and denied the proceeding would be unethical, citing judicial decisions and precedents by chapter and verse (or more accurately, by quotation and footnote) to prove his point.

He also informed the Democrat senators that the board would engage in a comprehensive internal ethics and recusal review to make sure that the NLRB “has appropriate policies and procedures in place to ensure full compliance with all ethical obligations and recusal requirements.”

Attorney Keith Brodie of the law firm of Barnes & Thornburg observes, “This would surely be a welcomed sight to avoid fallout in future cases akin to what happened” in the joint employer case. “It may also help address what some have perceived is an attempt to leverage the issue to hijack the current Republican majority.”

The Boeing Micro Union

Just how important the stakes are can be seen in the Obama-era board’s “micro union” organizing decision, which allows unions to organize small subgroups within a single workplace. Although some of that board’s pro-union decisions haven’t quite helped the unions as much as originally anticipated, this one is different. Since 2011, organized labor has had some success in organizing micro unions throughout the country in a wide variety of business settings, ranging from factories to department store perfume counters.

One example that made headlines took place recently when 178 technicians at the Boeing plant in Charleston, S.C., voted in favor of having the International Association of Machinists become their collective bargaining representative. Workers among the plant’s total workforce of about 6,800 either declined to vote or chose to vote overwhelmingly against the union last year.

Employers thought the micro union issue had been put to rest when the new Republican majority on the NLRB voted last December to reverse the previous board’s decision opening the door for micro unions. That decision, however, merely tightened the criteria for allowing such units and did not eliminate micro unions completely. The Boeing micro union organizing drive confined to the Charleston technicians was given the go-ahead by an NLRB regional director, one of many lower-level officials assigned to adjudicate such cases, who had applied the new micro union standards. In May the full board upheld the regional director’s decision and allowed the vote to proceed.

Boeing announced that it intends to appeal the NLRB’s ruling in favor of the union. “Boeing continues to believe that this type of micro-unit is prohibited by federal law,” it said in a statement. “While we are deeply disappointed with the result and are appealing, we will come together as we continue to deliver on our customer commitments.”

At this point it’s difficult to see how Boeing’s appeal could meet with much success. Over the years the board has proven reluctant to overturn such elections once they have been held.

David Pryzbylski, an attorney with the law firm of Barnes & Thornburg, stressed that, “This case will be important to watch as it continues to unfold, and it serves as a reminder that employers must continue to evaluate how to stave off potential micro-unit determinations at any sites where they may be vulnerable to union organizing attempts.”

It’s been reported that Boeing is concerned that the vote could set a precedent at the plant, eroding some of the cost advantages the company sought when it located its 787 Dreamliner assembly line in South Carolina, a right-to-work state where few unions have been able to achieve a foothold.

Handbook Standards Loosened

On June 7, NLRB General Counsel Peter Robb significantly loosened Obama-era decisions restricting employee handbook policies by approving employer policies regarding discipline and productivity that had been quite common previously.

The Obama-era board had broadened its control of handbook policies as a way to extend its mission beyond policing union and management relationships to reach further into nonunion workplaces, and by doing so actively promoting unionization.

Robb’s guidance memo establishes new standards for interpreting handbook rules for the NLRB staff charged with their enforcement. Board employees were told that their focus should be on balancing the rules’ negative impact on employees’ protected rights against the employer’s right to maintain discipline and productivity in the workplace.

While this obviously is good news, the memo doesn’t mean employers can do anything they want in this area, labor attorneys warn. “While the new standards by which handbook rules will be judged are more balanced and ‘employer friendly,’ they are heavily nuanced, and employers are warned against creating rules without determining, in each case, what legitimate business purpose is being served,” stresses the law firm of Duane Morris LLP.

Robb described several kinds of rules he says are generally lawful either because, when reasonably interpreted, they do not prohibit or interfere with the exercise of workers’ rights, or because any potential adverse impact on protected rights is outweighed by business justifications.

The general counsel said these include employer rules:

• Promoting civility in the workplace, such as prohibiting disparaging or offensive language.

• Banning photography and audio recording on premises.

• Against insubordination, non-cooperation, or on-the-job conduct that adversely affects operations.

• Restricting disruptive behavior, such as creating a disturbance on company premises or creating discord with clients or fellow employees.

• Protecting confidential, proprietary, and customer information or documents.

• Banning defamation or misrepresentation.

• Prohibiting the use of employer logos or intellectual property without permission.

• Requiring authorization to speak for the company.

• Banning disloyalty, nepotism or self-enrichment.

What Is Questionable

Robb also took the opportunity to list rules he says are not obviously lawful or unlawful, but which must be evaluated on a case-by-case basis to determine whether the rule would interfere with employee rights under federal law to address wages and working conditions. Examples include rules that:

• Pertain to conflict-of-interest that do not specifically target fraud and self-enrichment and do not restrict membership in, or voting for, a union.

• Confidentiality restrictions that broadly encompass “employer business” or “employee information.” He said these are different from confidentiality rules regarding customer or proprietary information, or confidentiality rules more specifically directed at employee wages, terms of employment or working conditions.

• Ban disparagement or criticism of the employer, as opposed to civility rules regarding disparagement of employees.

• Restrict the use of the employer’s name, as opposed to rules regulating use of the employer’s logo or trademark.

• Generally require employees not to speak to the media or third parties, which is different from restricting speaking to the media on the employer’s behalf.

• Ban off-duty conduct that might harm the employer, as opposed to rules banning insubordinate or disruptive conduct at work.

• Prohibit making false or inaccurate statements, seen as being different from a rule against making defamatory statements.

In addition, Robb described the types of workplace rules that are generally considered to be unlawful because, beyond any possible justification, they would prohibit or limit actions by employees that are explicitly protected by federal law.

He said these include confidentiality rules specifically targeting wages, benefits or working conditions, as well as prohibitions against joining outside organizations or voting on matters concerning the employer.

Attorneys with the law firm of Proskauer Rose LLP note that Robb’s guidance memo “provides helpful clarity, with a detailed analysis and specific examples.” It is particularly helpful because it foreshadows how an NLRB regional office would prosecute a potential unfair labor practice charge brought by an employee or union, they add.

The attorneys also point out that Robb expressly states that regional offices should not interpret ambiguities in rules against the drafter. “This certainly benefits employers in any proceeding,” they explain. “We expect this guidance to lead to fewer charges brought against employers in this arena, but only if employers heed the general counsel’s advice when drafting their employee handbooks.”

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