In recent years, the end of a National Labor Relations Board member’s term occasioned an odd death watch for controversial precedent. Last week, Board Chair Phil Miscimarra finished his term with a flurry of big decisions, including five cases that overturned very significant precedent.
In every one of the precedent-reversing cases, the Board split along political lines with the Republican majority having its way. The breadth of the carnage was unexpected in light of the fact that this majority has been together only since the end of September. Moreover, several of these cases were amenable to decision without reversing Board precedent. Instead of observing the venerable principle that adjudicators should resolve cases without addressing precedent if possible, the soon-to-vanish majority reached out to manufacture opportunities for their disruptive decision making.
Most significantly, breaking with the Board’s long precedent, in none of these cases did the Board accept input from the public through a hearing or solicitation of amicus briefs. Three of the cases that the Board overturned last week had been decided only one or two years ago and thus the impact of those decisions had yet to be analyzed through cases applying them. In fact, in several of the cases, the Board didn’t even have the parties’ view on whether to reverse precedent — the parties themselves didn’t ask the Board to reverse precedent and the Board didn’t even bother to slow down long enough to get additional briefing. Instead, the Board delivered surprise gifts to those respondents.
Taking all of these attributes together, the point of the Board majority’s exercise during the past week seemed to be to rush to set the clock back on workers’ rights as much as possible before they temporarily lost their majority while waiting for Miscimarra’s replacement, no matter the quality of the available vehicles or consistency with long-standing process designed to support reasoned decision making. Below is a summary of the precedent-reversing decisions:
Restricting Joint Employer Liability: In Hyland Industrial Contractors, Ltd. and Brandt Construction, Inc., the Board overruled its 2015 decision in Browning-Ferris Industries (BFI) regarding joint-employer status. Under Hyland, the Board will require the General Counsel to establish that one entity actually exercised control over the second entity and that it had done so directly and immediately in order to prove joint-employer liability. Under BFI, the Board had examined the impact of one employer reserving the right to control the other. Again, the dissent criticized the majority for reaching out to reverse precedent not at issue in the case. Specifically, the dissent argues that the question before the Board was whether Hybrand and Brandt were a single employer, not whether they were joint employers. In addition, the dissent raises the question of whether the majority’s decision making process was so deficient that it raises questions of whether it complied the Administrative Procedures Act. Bottom line: It will be much harder for the General Counsel to prove joint employer status at a time when contingent work relationships are proliferating.
Constraining Union Discretion in Defining Bargaining Units: In PCC Structurals, Inc., the Board re-established the standard for defining what is an appropriate bargaining unit when the employer argues that the definition of the petitioned-for unit is too narrow. The Board overruled the change in the standard established in Specialty Healthcare, which had shifted the analysis from the traditional inquiry into whether a community of interest exists among employees in a petitioned-for unit and the excluded employees that an employer seeks to include to an inquiry into whether excluded employees share an overwhelming community of interest with employees in a petitioned-for unit. The effect of the Board’s decision will be to greatly narrow the deference accorded a union’s preferred unit definition. The dissent criticized the majority both for the substance of the decision, alleging that it adopts a standard that “is inferior to Specialty Healthcare in every important respect, including consistency with the statute” and for the process, which failed to allow any opportunity for public input. Bottom line: Employers will have more power to influence the definition of a bargaining unit and can use that influence to get a bargaining unit in which they think that the union is less likely to win.
Permitting Civility Rules: In The Boeing Company, the Board established a new test for determining whether maintenance of a facially neutral workplace rule unlawfully interferes with the exercise of NLRA rights. In doing so, the Board overruled the its 2004 decision in Lutheran Heritage Villiage-Livonia, pursuant to which the Board’s examined whether facially neutral rules could be “reasonably construed” by employees to inhibit their Section 7 activities. Instead, the Board will categorically find “civility rules” to be lawful and for other rules, will balance any potential adverse impact on protected rights against the employer’s justification for the rule. Member Pearce described the new standard as less of a balancing test and more of “how-to manual for employers intent on stifling protected concerted activity before it begins.” Noting that the majority took a case about a single narrow work rule regarding use of cameras and turned it into unprecedented permission for employers to broadly constrain concerted activity, Member McFerran called the process in Boeing “arbitrary and capricious” and the result “alarmingly flawed.” Bottom line: Employers have broader latitude to impose workplace rules that chill concerted activity.
Narrowing Unilateral Change Doctrine: In Raytheon Network Centric Systems, the Board narrowed the definition of what constitutes an unlawful unilateral change, expanding the discretion of employers to alter terms and conditions of employment during the sensitive period while the parties are negotiating for a new collective bargaining agreement. Specifically, the Board overturned the 2016 decision in E.I. DuPont Nemours, in which the Board had held that employers could not rely on a past practice of making discretionary changes pursuant to a management rights clause to justify a failure to bargain over additional discretionary changes after contract expiration. The dissent described the majority’s decision as “manifestly inconsistent” with the Supreme Court’s decision in NLRB v. Katz. The Board did not request amicus briefs in this case. Bottom line: Employers will be able to put additional pressure on unions at the bargaining table by making unilateral changes during negotiations.
Broadening ALJ Settlement Discretion: In UPMC, the Board addressed again the question of whether an administrative law judge can accept a respondent’s proposed settlement terms over the objection of the charging party and the General Counsel. It held that as long as the ALJ found that the settlement was reasonable under the factors laid out in Independent Stave, the ALJ could ignore others’ objections, reversing the Board’s 2016 decision in USPS. Member Pearce’s dissent argues that the case could have been resolved based on the finding that the ALJ had mischaracterized the nature of the proposed settlement. Member McFerran, in addition to joining Member Pearce’s dissent, raised several additional concerns, including the incentive created by the Board’s decision for parties to try to do an end-run around the General Counsel and enmesh the Board – a supposedly neutral adjudicator – in litigation. Bottom line: The majority creates the possibility that a case will be settled without anyone advocating on behalf of the workers whose rights will be extinguished as a result of the settlement.