By Kara M. Maciel and Mark M. Trapp
Last week, National Labor Relations Board (“NLRB”) Member William Emanuel’s term expired. His Democrat replacement, David Prouty, who was confirmed by the Senate on July 28 (along with another Democrat nominee, Gwynne Wilcox), ensures a 3-2 Democrat majority at the agency for the first time in almost four years. As usually occurs when there is a change in the composition and control of the Board, this shift portends a shift in policy.
A recent labor and employment conference held in Big Sky, Montana and attended by many current and former government officials provided a glimpse into several issues that will undoubtedly be subject to reexamination as the new Democrat majority takes control. One interesting panel featured current (Republican) Member John Ring and former (Democrat) Chair Wilma Liebman, moderated by former (Republican) Chair Philip Miscimarra.
During her remarks, former Chair Liebman noted three cases/issues she declared “need to be reversed” by the new Democrat majority. Liebman first noted PCC Structurals, Inc., a 2017 Board decision that overruled a prior 2011 ruling by the former Democrat majority (Specialty Healthcare) and reinstated the traditional community of interest standard for determining an appropriate bargaining unit in union representation cases.
A return to the Specialty Healthcare standard would make it easier for unions to narrow the scope of proposed bargaining units, which can make a significant difference in union organizing efforts. In general, according to one recent review by Bloomberg Law, “[t]he union win rate since mid-2014 has been definitively higher in elections covering fewer than 50 workers than in all other size categories.” Because smaller units – sometimes called “micro units” – are generally easier to organize than larger units, the reversal of PCC Structurals would facilitate increased union organizing efforts. For this reason, former Chair Liebman is surely correct that the case is a likely target for reversal.
Liebman next pointed to Super Shuttle DFW, Inc., 367 NLRB No. 75 (2019), in which the Republican-majority Board returned to the long-standing common law agency test used to determine whether a worker is an employee or an independent contractor. In a 2014 decision (FedEx), the Obama-era Board had significantly diminished one important factor of that test, entrepreneurial opportunity. A return to the FedEx standard would once again place many employers, especially those operating in the so-called “gig economy,” at greater risk over workers which traditionally may have been deemed to be independent contractors.
Finally, former Chair Liebman noted the “election protection rule” implemented by the Republican-majority Board in the summer of 2020. Like the other issues, this one represents another switch from a prior Democrat policy – the Obama-era Board had significantly changed the prior long-standing rules governing union elections. Of course, a return to those rules would open employers to greater risks of union organizing.
For his part, Member Ring noted three “significant” decisions issued during the short-lived Republican majority. Ring first noted a 2020 decision, General Motors, LLC, 369 NLRB No. 127 (2020). In that decision, the Board modified the standard for determining whether employees have been lawfully disciplined or discharged after making abusive or offensive statements during activity that might otherwise be protected under the NLRA. Under General Motors, cases involving abusive or offensive conduct – including profane, racist, or sexually unacceptable remarks – will be decided under the familiar so-called Wright Line standard, a standard long used by the Board in evaluating mixed-motive cases. It remains to be seen whether this case will be targeted for reversal by the new majority.
Ring next cited The Boeing Company, 365 NLRB No. 154 (2017). Boeing had established a new test for determining whether a facially neutral policy, rule or handbook provision would potentially interfere with the exercise of rights protected by the NLRA. Under that test, the Board would first examine the nature and extent of the rule’s potential impact on protected rights, and second, any legitimate justifications associated with the rule. This policy was much more deferential to employer-promulgated policies, such as handbooks, which had come under fire even for non-union employers during the Obama era. A reversal would again place employers, union and non-union alike, at much greater risk of scrutiny.
Finally, Member Ring mentioned MV Transportation, Inc., 368 NLRB No. 66 (2019), in which the Board abandoned the “clear and unmistakable waiver” standard and instead adopted the so-called “contract coverage” standard long endorsed (and applied) by the D.C. Circuit. Any reversal of the Board’s adoption of the contract coverage standard may still be challenged at the D.C. Circuit, which has long admonished the Board to apply just that standard, and in 2016 even forced the Board to pay an employer’s attorneys fees for its obstinate application of the “clear and unmistakable waiver” standard applied prior to its abandonment in MV Transportation.
The discussion of these issues by Member Ring and former Chairwoman Liebman indicates the potential impact of any shift by the new Democrat-majority Board. Going forward, in making employment-related decisions, employers should of course consider and weigh the likelihood of the new Board’s views on and likely approach towards the issues discussed herein. Hint – that view will surely show more deference to unions than during the Trump administration.