Highlights of the Spring 2018 Regulatory Agenda – Part 1: Initiatives of the NLRB

Spring 2018 Regulatory AgendaOn Wednesday, the Office of Information and Regulatory Affairs released the Trump Administration’s Unified Regulatory and Deregulatory Actions (Agenda).  This Agenda lays out the short-term and long-term regulatory and, pursuant to the Trump Administration’s focus on rolling back regulation, deregulatory priorities for all the different Federal Government Agencies, including the National Labor Relations Board (“NLRB”), Department of Labor (“DOL”), and Equal Employment Opportunity Commission (“EEOC”).  Specifically, the Agenda identifies and briefly explains the rulemaking activities in which each Agency plans to engage over the remainder of 2018 and into the next year.  Below, we have highlighted the major initiatives the NLRB has taken and intends to undertake as outlined in this Agenda.  We will address highlights from the Agenda for the DOL and EEOC in Part Two of this post.

NLRB’s Intent to Establish Joint-Employer Standard

One of the initiatives that came as a surprise to many when it appeared in the Spring 2018 Agenda is a rulemaking to establish a standard to assess joint-employer status.  This rulemaking has been initiated by the NLRB and is currently on the Long-term Actions list.  Although agencies usually include items on the Long-term Actions list that they do not plan to act on within the next year, the press release issued by the NLRB in conjunction with the Spring 2018 Agenda indicates an intent to move on this rulemaking promptly.  In the press release, Chairman John F. Ring states, “In my view, notice-and-comment rulemaking offers the best vehicle to fully consider all views on what the [joint-employer] standard ought to be.  I am committed to working with my colleagues to issue a proposed rule as soon as possible…” (emphasis added).  The press release also reveals that certain members of the NLRB – Chairman Ring and Members Emanuel and Kaplan – have already begun the internal process required to consider rulemaking on the standard.

The announcement of this rulemaking follows closely on the heels of much activity surrounding NLRB decisions on the joint-employer standard.  Indeed, deciding unfair labor practice or representation cases is most often how the NLRB creates the applicable standards under the National Labor Relations Act.  In 2015, the NLRB greatly expanded the joint-employer standard with its Browning-Ferris decision, in which it determined that an entity could be a joint employer even if it exercises only indirect control over terms and conditions of employment or reserves the authority to do so.  The NLRB then overruled this decision in the Hy-Brand Industrial Contractors, Ltd. case at the end of 2017, holding the pre-Browning-Ferris standard applicable – that two or more entities must exercise direct and immediate control over essential employment terms.

However, in an unprecedented move on February 26, 2018, the NLRB vacated the Hy-Brand decision based on a determination by the NLRB’s Designated Agency Ethics Official that Member Emanuel should have been disqualified from participating in that proceeding due to his prior firm’s involvement in the Browning-Ferris case.  Thus, the joint-employer standard once again reverted to the standard established in Browning-Ferris, at least until another case on this issue comes before the Board, or until a decision is made in Hy-Brand or Browning-Ferris (which is on appeal to the District of Columbia Circuit Court of Appeals).  It is unclear how far the justification of the Ethics Official will extend – i.e., is the mere fact a decision in a completely separate case on the joint-employer issue could result in overruling Browning-Ferris sufficient to disqualify Member Emanuel?  Nevertheless, this rulemaking seems to be one response to that uncertainty.

Based on the current make-up of the Board, it is likely that any joint-employer standard established by this rulemaking would be more akin to the direct and immediate control model, versus the standard established by Browning-Ferris.  There has been no date yet projected for this rulemaking, though the above-referenced press release indicates an intent to move forward “as soon as possible.”

Status of the NLRB’s Initiative to Revise Election Rule

The NLRB has also included its potential rulemaking to revise the representation election regulations in the Spring 2018 Agenda.  In December 2017, the NLRB issued a Request for Information (“RFI”) to the public to initiate this rulemaking effort.  Specifically, it asked for comments regarding how the regulated community has been impacted by the controversial Election Rule promulgated in December 2014 and whether the Rule should be (1) retained without change; (2) modified; or (3) rescinded.  Among other things, the Election Rule substantially cut the time in which a representation election is required to occur, and raised numerous concerns regarding employee privacy and an employer’s ability to adequately address pre-election issues, including voter eligibility, and respond to a petition for election.  After the Election Rule was passed, a majority of both houses of Congress voted to overturn the Rule, but President Obama vetoed the resolution, which kept the Rule in place as promulgated.  The RFI was approved along party lines, with the 3-Member Republican majority moving forward with the Request.

The NLRB accepted comments in response to its RFI until March 19, 2018.  In the Agenda, the NLRB identifies June 2018 as the date by which it will review the comments/responses received.  After that review, the NLRB may issue a Notice of Proposed Rulemaking if it intends to proceed with revising the current regulations, or it may request additional information from the public.

Conclusion

To have a real chance of success, both of these efforts would have to progress relatively quickly through the rulemaking process, while there is a Republican majority.  However, as demonstrated in the case of the Election Rule, progress on this front usually moves slowly, often taking years before a final rule is issued.  That being said, at least as to potential rulemaking on the joint-employer standard, the NLRB will continue to have the opportunity to modify that standard through its adjudicatory function, as cases raising that issue continue to come before it.

As indicated, this is Part One of a two-part post.  Part Two, which will be posted later this week, will review Spring 2018 Agenda highlights of the Department of Labor and the Equal Employment Opportunity Commission.

 

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