The National Labor Relations Board, which enforces the National Labor Relations Act (NLRA), a federal law that provides collective bargaining rights to most private-sector employees, closed out 2017 with a bang, rolling back a number of significant Obama-era policies and precedents. 

Specifically, in two decisions issued on Dec. 14, 2017, the Board addressed its standards regarding joint employment and employer handbook policies, two areas in which the Obama-era Board had significantly impacted unionized and non-unionized workplaces alike. 

Narrowing the Scope of Joint Employment

In Hy-Brand Industrial Contractors, Ltd., the Board reversed its controversial 2015 decision in Browning-Ferris, which had overruled longstanding precedent regarding the circumstances in which two companies would be found to be joint employers of the same unit of employees.  Industry groups view the Hy-Brand decision as a victory for employers, particularly those in the franchise industry.

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Under Browning-Ferris, joint employment could be found even where one purported employer had only reserved the right to control the employees in question, and in fact, had never actually exercised direct control. As a result of this extremely broad view of joint employment, franchisors and general contractors became concerned they could be held responsible for the unfair labor practices of their franchisees or subcontractors and be required to bargain with employees they did not directly control.  Unsurprisingly, Browning-Ferris resulted in aggressive push-back from franchise and construction industry groups, including an appeal to the U.S. Court of Appeals for the District of Columbia Circuit.

With its decision in Hy-Brand, the Trump Board reversed course, returning to its pre-Browning-Ferris standard, under which joint employment will be found only if the purported joint employer has actually exercised control over the employees in question and the control is both direct and immediate.  Consequently, the D.C. Circuit has remanded the Browning-Ferris appeal to the Board, which has effectively been rendered moot by the Hy-Brand decision. 

A More Flexible Standard for Employer Policies

In Boeing Company, the Board overruled its longstanding Lutheran Heritage test for determining whether the mere maintenance of an employer handbook policy violates the NLRA and announced a new standard affording employers more discretion in setting workplace rules.

Although the Lutheran Heritage test was set in 2004 (during the George W. Bush administration), the Obama-era Board employed it with particular rigor, finding many common employer handbook policies, such as those requiring workplace civility, unlawful on their face. Under the Lutheran Heritage standard, the Board would find an employer policy unlawful if it could be "reasonably construed" by an employee to prohibit the exercise of NLRA rights, regardless of how or whether the policy was enforced.

The Trump Board adopted a more flexible approach in Boeing, balancing the nature and extent of the rule’s potential impact on NLRA rights and the employer’s legitimate justifications associated with the rule. Boeing describes three categories of employer policies, designating some as presumptively lawful and others as presumptively unlawful, with the remainder requiring case-by-case determinations. For example, workplace civility rules are presumptively lawful, unless they are actually applied to restrict protected activity, while a rule prohibiting discussion of wages and benefits would be presumptively unlawful.

In the case at hand, the Board applied its new standard to find Boeing’s rule banning the use of cameras in its facilities (except in very limited circumstances) lawful. Specifically, the Board pointed to the rule’s relatively minimal impact on NLRA rights and Boeing’s legitimate concerns, which included national security. Notably, Obama-era Board policy severely limited the ability of employers to restrict employee use of recording devices, even where substantial justifications were present. 

More to Come, But When?

It is safe to say the Trump Board’s efforts to re-shape Board policy and precedent are far from over. However, it may be some time before any additional significant decisions are issued. With Republican Board Chairman Philip Miscimarra’s term expiring on Dec. 31, 2017, the five-member body is currently comprised of two Republicans and two Democrats. President Trump has yet to nominate a new member to fill the vacancy. Until that vacancy is filled with a third Republican member, the current Board is unlikely to overturn any significant precedents.

For more information, contact Emmanuel Boulukos, Christina Fugate or another member of Ice Miller’s Litigation or Labor and Employment Groups.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.