As the composition of the National Labor Relations Board (NLRB) changes from administration to administration, so do labor law standards, policies, and enforcement priorities of the board.
With jurisdiction over virtually every private sector employer – small, mid-size, large, non-profit, etc. – the board’s movements have profound consequences for employers, employees, and organized labor.
And even for public sector employers – which are not covered by the NLRA – the NLRB’s pronouncements are highly influential.
In short, when it comes to labor relations, the NLRB sets the tone and tenor for all employers.
With these considerations in mind, this article attempts to provide an overview of some of the most significant developments at the NLRB year-to-date.
Employee Handbook, Policies, and Other Workplace Rules
During the previous administration,1 the board significantly modified the legal framework (currently commonly known as the Boeing standard) for evaluating the lawfulness of employer workplace rules, overruling the previous standards of Lutheran Heritage Village-Livonia.2
The Lutheran Heritage standard generally required case-by-case analysis of “facially neutral”3 workplace rules to determine whether employees “would reasonably construe the language of a rule” to prohibit union and other protected concerted activity.4
Under Boeing and its progeny, the board instituted a general classification scheme for facially neutral workplace rules alleged to interfere with the exercise of rights protected by Section 7 of the National Labor Relations Act (NLRA).
Under Boeing, many workplace rules were declared presumptively lawful (within certain parameters), including:
disclosure of employer confidential and proprietary information, such as client/vendor lists, accounting records, work product, computer software,5 and other non-public information where disclosure would cause harm to employer or benefit its customers;6
requirement that employees only provide employment references for current or former employees with approval by employer;7
disclosure of company confidential compensation information to certain third parties;8
prohibition of cellphone usage on manufacturing floor;10
social media policy;11
harmonious interactions and civility standards;12
inappropriate or obscene language and conduct in the workplace and bullying;13
nondisparagement of employer’s reputation, business, customers, employees, credibility, or otherwise trying to dissuade any customer or third party from maintaining its relationship with the employer;14
media contact rules;15 and
On Jan. 6, 2022, the board issued an invitation for briefs in Stericycle Inc.17 Specifically, the board invited briefing on whether the board should continue to adhere to the Boeing standard, and, if not, in what respects the board should modify the existing standard to better account for the “economic dependence of employees,” the “potential for a work rule to chill the exercise of Section 7 rights,” the burden of proof, and the balance of employee rights to organization and the employers’ legitimate business interests.
While it is uncertain to what extent the board may modify or overrule Boeing and its progeny, it is widely anticipated that the Stericycle decision, when it does issue, will significantly alter the landscape of Boeing.
It would not be surprising to see a return to the Lutheran Heritage case-by-case basis approach, instead of the classification of rules as presumptively lawful. Moreover, it is likely that the board will revert to greater scrutiny and regulation of employer workplace rules, as it endeavors to strike the balance between the employees’ right to engage in union organizing activity and the employer’s legitimate business interests, in a more employee-protective manner.
Increased 10(j) Injunction Initiative
Section 10(j) of the NLRA authorizes the NLRB to seek preliminary injunctions in U.S. District Court. Considered an extraordinary remedy, injunction litigation has historically been used by the board to combat “nip-in-the-bud” discriminatory action by a company subject to union organizing efforts – for example, a mass discharge of the most vocal employees leading the organizing.
On Feb. 1, 2022, General Counsel Jennifer Abruzzo issued GC Memorandum 22-02, which announces an expansion of injunction litigation to “deter statutory violations” in cases where there is an allegation of “interference with organizing campaigns.”
For example, if an employee alleges that a frontline supervisor made unlawful statements during a union organizing drive, the NLRB will promptly pursue injunctive relief before a trial on the merits, including consideration of many “contextual circumstances,” such as “inherent impact,” “union support,” and the “local labor market” so that “employers will be deterred” and “employees will enjoy more immediate protection” in organizing unions.
Thus far, the NLRB has been quite active in pursuing injunctions. So far in 2022, the NLRB has announced that it has pursued injunctions in at least 15 cases, including four injunctions against Starbucks, and one against Amazon. This would constitute nearly a 40% increase from 2018-21 levels.
Historic Surge in Union Organizing Activity and Unfair Labor Practice Charges
Union representation petitions filed in the NLRB regional offices are commonly considered a barometer for the overall level of union organizing activity.
For fiscal year (FY) 2022, the NLRB has seen an increase of 53% over FY 2021, with 2,510 union representation petitions filed in FY 2022, up from 1,638 petitions filed in FY 2021.
Other activity at the NLRB is also up. Unfair labor practice charges have increased by nearly 20%, and the overall case intake nationwide is up by nearly 25% – the largest increase since FY 1959, an era when nearly one-third of all U.S. workers were unionized.
Overall union membership continues to decline, yet polls reflect a positive growth in perception of labor unions by younger workers.
While the future of the labor movement remains uncertain, recent notable victories with major employers, such as Starbucks, may signal a reversal of the historical trend.18
Rulemaking on Joint-employer Status
On Sept. 6, 2022, the NLRB released a Notice of Proposed Rulemaking to rescind and replace the existing joint-employer rule issued in February 2020. The joint-employer situation occurs where two companies overlap in their control over terms and conditions of employment of the same employees.
Joint-employer status is not just a technical legal doctrine – it has significant practical implications. Not only can an entity held to be a joint employer be held liable for violations committed by the other employing entity, but both employers can be required to recognize and bargain with the union-represented employees “jointly employed.” And both employers may be subject to strikes and labor picketing as “primary” employers involved in the labor dispute.
Under the existing joint-employer rule, joint-employer status was limited to situations of “substantial direct and immediate control” over the essential terms and conditions of another company’s employees.
The current proposed rule will return to the prior standard, which allowed for a joint-employer finding based on “indirect control” of terms and conditions of employment, including, “indirect, reserved” control, with respect to one or more essential terms and conditions of employment. This includes “wages, benefits, and other compensation, hours of work and scheduling; hiring and discharge; discipline; workplace health and safety; supervision; assignment; and work rules and directions governing the manner, means, or methods of work performance.”
Comments must be filed on or before Dec. 7, 2022. Therefore, it is likely that the final rule will not issue until early 2023 at the earliest.
Right to Wear Union Insignia
On Aug. 29, 2022, the board issued its decision in Tesla, Inc.19 In Tesla, the company maintained a “team-wear” policy, requiring production line employees to wear either red or black “team-wear” shirts with the Tesla logo. Employees successfully sought to wear red or black shirts that contained union logos.
Applying well-established precedent permitting employees to wear union insignia at work, subject to reasonable limits for certain “special circumstances” – i.e., legitimate considerations20 – such as maintenance of a public image, prevention of damage to product, or safety – the board invalidated the “team-wear” policy.
Notably, the board rejected Tesla’s argument that it had legitimate considerations in visual identification based on color because Tesla had previously allowed employees to wear all-black shirts in place of the “team-wear” shirt. Therefore, Tesla was unjustifiably singling out union logos while allowing nonunion logos.
However, the board went further, and overruled recent case law extending the more-lenient Boeing standard to allow for greater restrictions on union insignia based on reasonable “size and/or appearance” based considerations. Overruling Wal-Mart Stores, Inc.,21 the board clarified that restrictions to union insignia would only be justified where the employer could meet the “special circumstances test.”22
In addition to the above, the following are also notable items:
Conclusions and Developments on the Horizon
Many other significant issues are currently pending before the board. These issues include consequential damages and expansion of other available remedies for employer unfair labor practices, mandatory arbitration clauses, coverage of independent contractors and gig workers, and the ability of unions to represent “micro-units.”
The board has also announced that it intends to issue rulemaking on voluntary recognition, blocking charge policy, and standards for union recognition in the construction industry.
In addition, the general counsel announced that changes to the following subjects are considered priorities:
right of employer to communicate opinion about unions during paid working time;
ability of regional directors to mandate usage of videoconference as opposed to in-person hearings for unfair labor practice and representation cases;
right of nonemployee union representatives to enter employer premises;
unionization of religious institutions;
management rights clauses;
past practices involving employer discretionary practices;
union fund ability to unilaterally increase employer contribution levels after expiration of collective bargaining agreement;
employer ability to impose discipline on employees prior to agreement on a first collective bargaining agreement;
extent to which NLRB will allow parties to resolve contractual disputes by usage of negotiated grievance-arbitration procedures of union contracts;
misclassification of employees as independent contractors;
right of employees to union and other representation during disciplinary meetings at nonunion companies;
requirement that employers recognize and bargain with unions without the ability to insist on a secret ballot election; and
extent to which employer conduct during discovery phase of litigation in court proceedings may constitute an unfair labor practice.
This article was originally published on the State Bar of Wisconsin’s Labor & Employment Law Section Blog. Visit the State Bar sections or the Labor & Employment Law Section webpages to learn more about the benefits of section membership.
1 See, e.g., Boeing Co., 365 NLRB No. 154 (2017); Apogee Retail LLC d/b/a Unique Thrift Store, 368 NLRB No. 144 (2019); Motor City Pawn Brokers, 369 NLRB No. 132 (2020); and G&E Real Estate Management Services d/b/a Newmark Grubb Knight Frank, 369 NLRB No. 121 (2020).
2 Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004).
3 A “facially neutral” rule is a rule that doesn’t actually contain any explicitly unlawful or discriminatory prohibitions against union or other protected activity. Nevertheless, the NLRB has long held that certain facially neutral rules can still be unlawful if they would infringe upon the right to engage in union or other protected activity.
4 Lutheran Heritage Village-Livonia, 343 NLRB 646, 647 (2004).
5 LA Specialty Produce Co., 368 NLRB No. 93 at 4-5 (2019).
6 Nat’l Indem. Co., 368 NLRB No. 96 at 2-4 (2019).
7 G&E Real Estate Management Services d/b/a Newmark Grubb Knight Frank, 369 NLRB No. 121 at 3 (2020).
8 Medic Ambulance Service, Inc., 370 NLRB No. 65 at 5 (2021).
9 Boeing Co., 365 NLRB No. 154 at 18-22 (2017).
10 Cott Beverages, Inc., 369 NLRB No. 82 at 3 (2020).
11 Medic Ambulance Service Inc., 370 NLRB at 5.
12 Boeing Co., 365 NLRB at 4
13 Motor City Pawn Brokers, Inc., 369 NLRB No. 132 at 3-5
14 Id. at 3-6.
15 LA Specialty Produce Co., 368 NLRB No. 93 at 5-7.
16 Nicholson Terminal & Dock, 369 NLRB No. 147 at 2-3.
17 Stericycle Inc., 371 NLRB No. 48 (2022).
18 See Andrea Hsu, “Starbucks workers have unionized at record speed; many fear retaliation now,” NPR Morning Edition, Oct. 2, 2022.
19 Tesla, Inc., 370 NLRB No. 88 (2021).
20 Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945).
21 Wal-Mart Stores, Inc., 368 NLRB No. 146 (2019).
22 Tesla, Inc. (2021).
23 Valley Hospital Medical Center Inc., 371 NLRB No. 160 (2022).
24 Starbucks Corporation, 371 NLRB No. 154 (2022).
25 Advice Memoradum, Arcadia Medical Resort of Parkside, Case 19-CA-280613 (April 5, 2022, released Sept. 30, 2022).