NLRB Seeks to Change Joint Employer Test by Rulemaking

By:  Mark Trapp

On September 14, 2018, the National Labor Relations Board (“NLRB” or “Board”) published a Notice of Proposed Rulemaking (“Notice”). In its Notice, the Board states its belief that the “rulemaking will foster predictability and consistency regarding determinations of joint-employer status in a variety of business relationships.” At base, the Notice is an attempt to return the Board to its pre-2015 standard, which the Obama-era NLRB overruled in the controversial Browning-Ferris decision issued that year.

If enacted, the rules would provide a stronger degree of clarity and predictability to business owners and tighten the standard for finding one business to be a joint employer of another employer’s employees. Moreover, by enacting the standard through rulemaking, rather than adjudication, the NLRB decreases the likelihood of the standard being overturned by a later Board. Continue reading

At the NLRB, Big Labor’s Clock Has Not Yet Struck Midnight

By: Mark M. Trapp

shutterstock_424794466As part of an apparent package deal to move through the Senate numerous Trump judicial and other nominees, President Trump on Tuesday re-nominated Democratic member Mark Gaston Pearce for another term on the National Labor Relations Board (“NLRB” or “Board”). Pearce, who has served on the Board since 2010 (when he received a recess appointment from President Obama), saw his latest 5-year term expire at midnight on Monday, only to be renominated within 24 hours.

Pearce served as Chairman of the Agency for nearly six years until President Trump installed his own Chairman in early 2017. His renomination by Trump comes in the face of sharp criticism from the business community and Republicans, upset that in his more than eight years on the NLRB, Pearce was a consistent vote for pro-union outcomes, including the controversial Browning-Ferris joint-employer decision in 2015. An August 17th editorial in the Wall Street Journal summarized the business community’s complaints against Pearce as follows:

Among other labor hits, Democrats allowed graduate students to unionize; required employers to disclose to unions the names, phone numbers and email addresses of workers; and protected workers who vilify their employers on social media. Mr. Pearce also ruled that employees who had resigned their union membership after their labor contract expired could be dunned for back dues. A D.C. Circuit Court of Appeals panel overruled his decision in June. As chairman, Mr. Pearce snubbed Republican colleagues. GOP member Brian Hayes told a member of Congress in 2011 that Mr. Pearce wasn’t sharing information and public comments on the board’s “quickie election” rule that trampled employers’ due process rights. Mr. Pearce then accused Mr. Hayes of threatening to resign to deny the board a quorum, which prompted an investigation by the board’s Inspector General. Mr. Hayes was exonerated, but Mr. Pearce jammed through the election rule anyway without letting him vote. A federal judge appointed by Mr. Obama blocked the rule because the board lacked a quorum.

If confirmed by the Senate, Pearce will not upset the recent 3-2 Republican majority on the NLRB, which is traditionally staffed by three members of the president’s party and two members of the minority party. But many Republicans and business advocates remember the precedent set during the Obama presidency, which repeatedly left open Republican seats when those members’ terms expired, including once for a full two years. This allowed the Obama-era Board to utilize lengthy 3-1 Democrat advantages to reverse over 4,500 years of NLRB precedent, according to one study.

Now with Trump in office, many business owners and Republicans hope to reverse as many as possible of the Pearce-led changes, a task which would become much easier were Pearce’s seat to remain vacant. Many cases are decided by random three-member panels, and if the Board is 3-1 Republican, no such panel will have a Democratic majority, and cases decided without dissent can move more quickly through the NLRB’s internal processing. In addition, the Democrats have been pushing to force the recusal of Republican members John Ring and William Emanuel on the joint-employer issue. A Pearce confirmation combined with the recusal of these two Republicans would give the Democrats a 2-1 majority on perhaps the biggest issue to many business owners.

It will be interesting to see whether Pearce can make it through Senate confirmation as, for now, it does not appear that the nomination is a “done deal” in that Chamber. In the meantime, the Board will operate with four members. Many employers and business owners large and small would like to see this period extended as long as possible, even if Pearce is ultimately confirmed. If and when Pearce is again confirmed, he would serve until August 27, 2023.

Of course, we here at Conn Maciel will be keeping an eye on this issue of importance. For now, for employers it’s “four-speed ahead!”

Free In-Person OSHA and Labor & Employment Client Briefing in Chicago – September 25, 2018

Join Conn Maciel Carey for an In-Person OSHA and Labor & Employment Briefing in Chicago on Tuesday, Sept. 25, 2018, and stay for a reception to celebrate the launch of our Chicago Office.

This complimentary program will feature panel discussions with representatives from EEOC, NLRB, and OSHA addressing key policy trends and regulatory developments.  They will be joined by senior corporate counsel from multinational corporations and Conn Maciel Carey’s own Labor & Employment and OSHA specialist attorneys.  There will also be moderated breakout roundtable sessions covering issues of concern to various industry segments.


Agenda

1:00 PM – Registration and Networking

1:30 PM – OSHA Panel

  • Angie Loftus (OSHA Area Director – Chicago North Area Office)
  • Nick Walters (Former OSHA Regional Administrator – Region 5) Continue reading

With New General Counsel, NLRB Will No Longer “Robb” Employers from Implementing Sensible Work Rules

By: Mark M. Trapp

On December 14, 2017, two days before the term of then-NLRB Chairman Philip A. Miscimarra expired, the existing Republican majority-Board issued its decision in The Boeing Company, 365 NLRB No. 154 (December 14, 2017). As readers of this blog learned not long after, the Boeing case illustrated “the profound difference in the way the Board under new General Counsel Peter B. Robb intends to evaluate employer rules and workplace policies versus the perhaps overzealous and less employer-friendly approach of the Obama-era Board.”

Employee Handbook 2This statement has been borne out in Robb’s recent issuance of Memorandum GC 18-04, Guidance on Handbook Rules Post-Boeing. As Robb notes in the new memorandum, Continue reading

SCOTUS Approves Class Action Waivers in Employment Arbitration Agreements

By:  Kara Maciel and Dan Deacon

The U.S. Supreme Court ruled on Monday that class/collective action waiver clauses in employment agreements that compel employees to settle disputes individually with a third-party arbitrator are enforceable.  In a landmark 5-4 ruling, the Justices in the majority rejected the National Labor Relations Board’s position and held that a class/collective action waiver in an arbitration agreement – which effectively prohibit employees from joining together in a class or collective action lawsuit to settle disputes – do not violate the Federal Arbitration Act (“FAA”) or the National Labor Relations Act (“NLRA”).

Background

Arbitration agreements – requiring employees to submit claims to an arbitrator instead of filing in court – are relatively common in the workplace.  Many employers favor arbitration because it tends to lower the cost of litigation and streamlines a resolution.

The legal issue that percolated through the federal Courts of Appeals over the past several years was whether a class/collective action waiver in an arbitration agreement is enforceable.  An arbitration agreement that includes a class/collective action waiver benefits an employer because it prevents employees from banning together to file costly class or collective actions and it forces employees to utilize the arbitration process rather than filing a lawsuit.  Thus, the only form of redress for an employee is a single action that must be worked out before a neutral, third-party arbitrator.

Over the past five years, the Courts of Appeals issued conflicting opinions on whether class action waivers are enforceable.   Notably, between 2013 and 2014, employers were provided favorable opinions from the U.S. Courts of Appeals for the Fifth, Second, and Eleventh Circuit which concluded that the NLRA does not invalidate class action waivers in arbitration agreements.  In contrast, in 2016, the U.S. Courts of Appeals for the Ninth and Seventh Circuit adopted the NLRB’s position that class and collective action waivers violate Section 7 of the NLRA.

The Supreme Court’s Decision

The Supreme Court’s ruling brings finality to an issue that sparked years of debate and caused significant uncertainty for employers.  Oral arguments took place in October 2017 with the justices appearing split along ideological lines – except for Justices Clarence Thomas and Neil Gorsuch who did not speak at all during the session.  Interestingly, however, it was Justice Gorsuch who wrote the opinion – which was his first major opinion since joining the Court last spring.

As alluded to in our prior blog post, President Trump’s ability to fill Justice Scalia’s vacancy was ultimately a deciding factor in what appears to have been a partisan showdown.  Speaking for the conservative wing on the bench, Justice Gorsuch explained that the law is clear that Congress in enacting the FAA instructed federal courts to enforce arbitration as written, including those terms calling for individualized proceedings, and that the “decision does nothing to override” what Congress has done.  In a lengthy dissent, Justice Ginsburg criticized the majority for overturning 80 years of NLRB precedent.  Justice Ginsburg commented that the majority’s decision is “egregiously wrong” and expressed concerns that many employees with small claims, such as minimum wage and overtime violations, will be disinclined to pursue potential claims individually.

The expected fall-out and the future of this ruling now rests with Congress.  Congress certainly has the ability to revise the FAA and the NLRA through legislation.  Given the deep split amongst party lines, however, it is unlikely that Congress will act any time soon.

Take Aways for Employers 

In light of the Court’s decision, employers should immediately review their practices and policies governing employment agreements with arbitration clauses.  For those employers who do not require arbitration of disputes, now may be the time to reconsider whether to implement such an agreement with current employees.  For those employers who have arbitration agreements in place already, now is the time to ensure the agreement contains an enforceable class/collective action waiver, especially for wage and hour disputes.  Employers may want to evaluate whether to restrict class/collection actions for other types of disputes, such as discrimination or harassment cases.  Importantly, any arbitration agreement must be drafted with the company culture in mind.

In short, employers now have the ability to utilize a new forum to resolve legal disputes on an individual basis.  In some circumstances, especially for class/collection claims, an arbitration may be less expensive than lawsuits, take less time, and do not typically result in years of appeals.  Ultimately, the Supreme Court’s decision is welcome news for employers.  Employers can proactively mitigate litigation risk through carefully drafted employment agreements and more effectively manage legal disputes.

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. Continue reading

All Handbooks On Deck

By Mark M. Trapp

shutterstock_policies and procedures (002)A little-noticed decision on Monday from the United States Court of Appeals for the D.C. Circuit illustrates the profound difference in the way the National Labor Relations Board (“Board”) under new General Counsel Peter B. Robb intends to evaluate employer rules and workplace policies versus the perhaps overzealous and less employer-friendly approach of the Obama-era Board.

On January 29, 2018, in Grill Concepts Services, Inc. v. NLRB, Case No. 16-1238, (D.C. Cir. January 29, 2018), the D.C. Circuit remanded back to the Board for reconsideration numerous rules previously found unlawful by the Board. This step was taken at the request of the Board following its decision just over six weeks ago in The Boeing Company, 365 NLRB No. 154 (December 14, 2017).

Continue reading

Conn Maciel Carey Opens Chicago Office with Prominent OSHA and Labor Lawyers Aaron Gelb and Mark Trapp

Washington, D.C.-based OSHA and Labor & Employment law firm Conn Maciel Carey LLP is pleased to announce the launch of a Midwest Office in Chicago, IL and the addition of two prominent Chicago attorneys – Aaron R. Gelb and Mark M. Trapp.

“We are thrilled not only to expand the Firm’s national footprint to the Midwest, but especially to be doing so with such great lawyers as Aaron and Mark,” said Bryan Carey, the firm’s managing partner.  “This move will enable us to better serve our existing national platform of clients, and will strengthen the firm’s specialty focus on Labor & Employment and Workplace Safety Law.  We look forward to bringing Aaron and Mark on board, as they will add depth to all areas of the firm’s practice, including OSHA, litigation and labor counseling on behalf of our management clients.”

Mr. Gelb, former Labor & Employment Shareholder and head of the OSHA Practice at Vedder Price PC, in its Chicago office, represents employers in all aspects of the employer-employee relationship.  Aaron GelbAaron’s practice has a particular emphasis on advising and representing clients in relation to inspections, investigations, and enforcement actions involving federal OSHA and state OSH programs, and managing the full range of litigation against OSHA.

“Aaron and I share the same vision of how we want to practice law and do business, thus entrusting him with the keys to our new Chicago office, and combining our expertise, talent, and resources together made so much sense,” said Eric J. Conn, Chair of the firm’s national OSHA practice“We look forward to partnering with Aaron to build a solid brand for our Midwest practice among our client base and doing what we know best, providing top-notch service and excellent value to clients.”

Aaron also has extensive experience litigating equal employment opportunity matters in federal and state courts having tried a number of cases to verdict and defending employers before the EEOC as well as fair employment agencies across the country.  In the past 5 years alone, Aaron has successfully handled more than 250 discrimination charges.

Mr. Gelb said “I am incredibly excited to join what I believe to be the country’s leading OSHA practice as the experience and expertise of the Conn Maciel team will enable me to enhance the workplace safety legal support I currently provide to my clients in the Midwest and beyond.  I’ve known Eric for years and have great respect for what he and his colleagues have accomplished in the OSH field.  At the same time, Kara’s employment defense group fits perfectly with my practice as we share a common client-focused philosophy and deep experience in many of the same industries.  While leaving Vedder Price after nearly 20 years was not an easy decision, I simply could not pass up the opportunity to partner with two dynamic attorneys that so perfectly complement the dual aspects of my practice.”

Mr. Trapp joins the firm with seventeen years of experience, during which he has represented employers in all types of labor disputes, from union campaigns and collective bargaining to grievances and arbitrations. Mark M. Trapp (3)Mr. Trapp has defended employers before administrative agencies and in litigation brought under the ADA, ADEA, Title VII and other federal anti-discrimination laws.

Mr. Trapp said “I am thrilled to again have the opportunity to work with the top-notch legal professionals at Conn Maciel Carey.” According to Mr. Trapp, the expertise of a boutique firm focused on OSHA and other labor and employment matters “complements my experience handling labor and employment issues. I look forward to helping strengthen the team’s ability to provide exceptional knowledge and insights to labor and employment clients, and expanding the firm’s presence in the Midwest.”

Mr. Trapp is perhaps best known as a leading authority on multi-employer pension withdrawal liability.  His articles on withdrawal liability and other labor and employment issues have been published in respected legal publications.

“I have worked with Mark for over a decade at various law firms, so I am excited that he has joined our boutique practice that focuses on positive client solutions and effective client service.  His unique knowledge of traditional labor issues and multi-employer pension disputes is unparalleled and he has proven to be a creative and out-of-the-box adviser when counseling clients,” Kara M. Maciel, Chair of the Labor & Employment Practice reported.

In Flurry of Activity, National Labor Relations Board Restores Pre-Obama Precedent

By:  Mark M. Trapp

Capitol Building

One of the most visible manifestations of the maxim that elections have consequences is illustrated by the regular oscillations in labor policy at the National Labor Relations Board (“Board”) that follow elections in which an opposing party takes control of the White House. After securing the first Republican-majority Board in a decade at the end of September, the Trump administration last week saw that majority quickly act to restore several pre-Obama precedents, setting a much more employer-friendly tone at the NLRB.

In four different cases issued on December 14 and 15, a 3-2 Republican majority reversed decisions issued by the Obama-era Board, each of which upset long-established policies that had survived prior Republican and Democrat administrations. The flurry of activity came on the last two working days of NLRB Chairman Philip A. Miscimarra’s term (which expired on Saturday), for the moment leaving the Board with a 2-2 deadlock between Republican and Democrat appointees. President Trump’s next nominee will again establish a 3-2 Republican majority, so these cases are presumably a preview of things to come.

On Friday, in PCC Structurals, Inc., 365 NLRB No. 160 (December 15, 2017), the majority reinstated the traditional community of interest standard that had prevailed for many decades before the Obama-era Board changed it in 2011. The 2011 decision in Specialty Healthcare gave much more leeway to unions to select the appropriate bargaining unit when attempting to organize an employer’s employees, as the employer challenging that selection had to prove that the excluded workers shared an overwhelming community of interest with the unit selected by the union.

Overruling the Specialty Healthcare decision, the majority returned to the prior rule, under which an employer bore no such burden. Instead, the Board will determine in each case whether the employees in a petitioned-for group share a community of interest sufficiently distinct from the interests of employees excluded from the petitioned-for group to warrant a finding that the proposed group constitutes a separate appropriate unit. While employers will certainly welcome this decision, as it will likely curtail the proliferation of so-called “micro units,” the decision merely restores a standard that prevailed for most of the Board’s history.

The same is true of the other decision issued on Friday, Raytheon Network Centric Systems, 365 NLRB No. 161 (December 15, 2017). In that case, the Board majority restored 50-year old precedent upset just last year by a decision from the Obama-era Board. In Raytheon Network, consistent with other Board cases dating back to 1964, the majority held that unilateral actions of an employer do not constitute an unlawful change in terms and conditions of employment if they are similar in kind and degree with an established past practice consisting of comparable actions. Accordingly, an employer has no obligation to bargain over such changes before implementation, even if they involve some degree of employer discretion. This most often arises in employer-provided healthcare benefits, which change year over year.

These two decisions followed a pair of decisions on Thursday of last week. In the first, The Boeing Company, 365 NLRB No. 154 (December 14, 2017), the Republican majority overruled a standard placing limits on employer policies which could be “reasonably construed” to limit workers’ rights protected by the National Labor Relations Act. In its place, the Board set forth a new standard. Now, when evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, might potentially interfere with the exercise of employees’ NLRA rights, the Board will evaluate two things: first, the nature and extent of the potential impact on those rights, and second, the employer’s legitimate justifications for the rule. Balancing these two factors should impact many employer policies, particularly those involving confidentiality, social media and non-disparagement provisions.

The second decision issued Thursday may have received the most attention, as it overturned an Obama-Board decision significantly broadening the standard under which a company can be held responsible as a so-called “joint employer,” an issue that often arises with the use of staffing firms. In Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (December 14, 2017), the majority overruled a 2015 Obama-era decision, and reinstated the prior standard in place over several decades. Under that restored standard, two or more entities will be deemed joint employers only upon proof that one entity has directly and immediately exercised control over the terms of employment of the other entity’s employees. The Board also clarified that proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will not be sufficient to establish a joint-employer relationship.

The now overturned 2015 decision generated much controversy among employers, and prompted the Save Local Business Act, which passed the House in November. It is unclear whether this Act will make it through the Senate

Given that Chairman Miscimarra’s term has now ended, leaving the Board with a 2-2 deadlock, these four decisions may be the only fireworks from the Board for a little while. However, because President Trump will soon get another nominee of his choosing, and the recently-confirmed General Counsel for the Board has telegraphed his intention to overturn a wide range of Obama-era precedent, these decisions are likely a sign of further pro-employer decisions to come.

Conn Maciel Carey Welcomes Chicago Partner, Mark Trapp!

Mark M. Trapp (3)

Conn Maciel Carey LLP is pleased to announce that Mark M. Trapp, an attorney with extensive experience defending employers in a broad range of litigation before federal and state courts, the NLRB and other agencies, has joined the firm as a partner in its Labor & Employment Practice Group, in Chicago, Illinois.

 

Mr. Trapp joins the firm with seventeen years of experience, during which he has represented employers in all types of labor disputes, from union campaigns and collective bargaining to grievances and arbitrations. Mr. Trapp has defended employers before administrative agencies and in litigation brought under the ADA, ADEA, Title VII and other federal anti-discrimination laws. 

In addition, Mr. Trapp’s experience with multiemployer pension withdrawal liability has been recognized across the country and his articles on withdrawal liability and other labor and employment issues have been published in respected legal publications.

“I have worked with Mark for over a decade at various law firms, so I am excited that he has joined our boutique practice that focuses on positive client solutions and effective client service.  His unique knowledge of traditional labor issues and multi-employer pension disputes is unparalleled and he has proven to be a creative and out-of-the-box adviser when counseling clients,” Kara M. Maciel, Chair of the Labor & Employment Practice reported.  

Mr. Trapp said “I am thrilled to again have the opportunity to work with the top-notch legal professionals at Conn Maciel Carey.” According to Mr. Trapp, the expertise of a boutique firm focused on OSHA and other labor and employment matters “complements my experience handling labor and employment issues and provides a solid platform for my withdrawal liability practice. I look forward to helping strengthen the team’s ability to provide exceptional knowledge and insights to labor and employment clients, and expanding the firm’s presence in the Midwest.” 

Welcome to the firm, Mark!