HR Management & Compliance

How the NLRB’s Recent Decisions Can Affect All Employers

Decisions by the National Labor Relations Board (NLRB) are often thought of in the context of unions, but the NLRB’s decisions can affect all employers because of the federal law it enforces. Recently, the NLRB issued several decisions that reversed or significantly changed its stance on employer policies and work rules, the makeup of bargaining units, and joint employment relationships.  The decisions occurred during a short window of time in which Republican board members held a 3-2 majority over Democratic members.Employers

The NLRB administers and enforces federal labor law under the National Labor Relations Act (NLRA).  The NLRA applies to most private employers and protects concerted activities undertaken in a group (i.e., more than one employee or one employee acting on behalf of a group) with respect to terms and conditions of employment—regardless of whether those activities are in a formal union context.

This means that the NLRA applies to employers regardless of whether their workers are unionized or not.  Three recent decisions by the NLRB create standards that affect private, nonunionized employers as well as those that have collective bargaining agreements with a union.

Employer Policies

In one recent decision that affects most workplaces, the NLRB established a new test for evaluating an employer’s policy, rule, or handbook provision to determine if it will potentially interfere with the exercise of an employee’s NLRA rights (The Boeing Company, 19-CA-090932 (Dec. 14, 2017)).

Under the new test, the NLRB will look at two factors when deciding if a facially neutral policy would potentially interfere with the exercise of NLRA rights:

(1) The nature and extent of the potential impact on NLRA rights; and

(2) Legitimate justifications associated with the rule.

There are three categories of rules:

  • Category 1 includes a work rule the NLRB designates as lawful because the rule doesn’t prohibit or interfere with the exercise of NLRA rights; or because the legitimate justifications outweigh the potential adverse impact on protected rights.
  • Category 2 covers rules that warrant individualized scrutiny to determine interference with NLRA rights and whether legitimate justifications outweigh any adverse impact.
  • Category 3 includes rules that the NLRB will designate as unlawful because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule. An example is a rule that prohibits employees from discussing wages or benefits with one another.

The Boeing decision overrules an NLRB decision under which an employer’s rule was unlawful if an employee could “reasonably construe” the rule to prohibit NLRA-protected activity.

Bargaining Units

When a union seeks to represent a group of workers, an appropriate bargaining unit of employees consists of those who share a “community of interest” and can be reasonably grouped together for purposes of collective bargaining.  This standard was reinstated by the NLRB in a recent decision (PCC Structurals, Inc., 19-RC-202188 (December 15, 2017)) which overruled a 2011 NLRB decision that required employers to show that employees for a proposed bargaining unit shared “an overwhelming community of interest.”

This more rigorous standard allowed unions to create so-called “microunits,” making it easier for unions to organize small groups of workers who favored union representation. Under PCC Structurals, the NLRB can look at the interests of employees inside and outside the proposed unit and examine factors such as workers’ skills and training, their job functions and work, the terms and conditions of their employment, and whether the workers are supervised separately.

Joint Employers

For labor law purposes, joint employer status means that two separate but distinct businesses share control over the working conditions of a single group of workers. In a December 2017 decision, the NLRB overruled a 2015 decision and reinstated its previous standard for determining whether a joint employment relationship exists (Hy-Brand Industrial Contractors, Ltd., 25-CA-163189, (Dec. 14, 2017)).

Under the Hy-Brand decision, two or more entities are joint employers if there is evidence that one entity actually exercised direct control over another entity’s employees in a manner that is not “limited and routine.”

Under the decision that was overruled (Browning-Ferris Industries of California, Inc.), evidence of indirect control, or evidence of direct control (even if unexercised), was sufficient to establish a joint employer relationship.

When the Majority Rules

Currently, the NLRB is evenly divided into members from the Republican and Democratic parties. Under the current administration, the vacant board seat is likely to be filled by a Republican, giving that party the majority again. Also likely are more decisions by the NLRB that favor employers.  It could be a busy year!

Joan FarrellJoan S. Farrell, JD, is a Legal Editor for BLR’s human resources and employment law publications. Ms. Farrell writes extensively on the topics of workplace discrimination, unlawful harassment, retaliation, and reasonable accommodation. She is the editor of the ADA compliance manual—ADA Compliance: Practical Solutions for HR. Before coming to BLR, Ms. Farrell worked as in-house counsel for a multistate employer where she represented management in administrative matters and provided counseling on employment practices.

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