NLRB Issues a Series of Employer-Friendly Decisions

Q.  I heard there have been some significant National Labor Relations Board decisions recently. What do I need to know about them?

A.  Over the past few months, the Board’s Republican majority has issued a series of employer-friendly decisions. They involve various topics, including expansion of employer property rights, classification of workers as independent contractors, and the scope of a proper petitioned-for unit.  These decisions demonstrate it is likely the Board will continue to overturn union-friendly precedent and issue decisions that allow employers more business flexibility.

Below is a summary of some of these key opinions.

Protection of Employer Property Rights Expanded

The Board has issued a series of decisions that expand an employer’s property rights in connection with non-employee union activity. For example, in Bexar County Performing Arts Center Foundation d/b/a Tobin Center for the Performing Arts (368 NLRB No. 46), the Board analyzed whether a property owner violated Section 8(a)(1) of the National Labor Relations Act (NLRA) by barring the off-duty employees of an on-site contractor from leafleting on its property.

The majority determined that contractor employees generally are not entitled to the same Section 7 access rights as the property owner’s own employees. In reaching this decision, the Board adopted a new standard, holding that a property owner may exclude from its property off-duty employees of an on-site contractor seeking access to the property to engage in Section 7 activity unless (1) those employees work both regularly and exclusively on the property, and (2) the property owner fails to show that they have one or more reasonable alternative means to communicate their message without trespassing on the employer’s property (i.e. use of adjacent public property, newspapers, radio, television, billboards, and social media).

Soon after the Bexar County decision, the Board went a step further in Kroger Limited Partnership I Mid-Atlantic (368 NLRB No. 64), ruling that businesses may lawfully limit the rights of non-employee union supporters to access company property that otherwise is open to the public.  Specifically, it found that Kroger did not violate the NLRA when it removed non-employee union supporters from the parking lot of a Kroger store even though the store permitted civic and charitable organizations to solicit and distribute in the parking area and in front of the store.

In reaching this decision, the Board noted that based on precedent, to establish that a denial of access to non-employee union agents was unlawful, a party must prove that an employer denied access to other non-employee union agents while allowing access to other non-employees for activities similar in nature to those in which the union agents sought to engage. The majority further stated that, consistent with this standard, an employer may deny access to non-employees seeking to engage in protest activities on its property while allowing non-employee access for a wide range of charitable, civic, and commercial activities that are not similar in nature to protest activities.  The Board found that Kroger’s actions were lawful because Kroger had a fundamental property interest in its premises that allowed it to exclude the Union’s solicitor and because the Union’s solicitations were not sufficiently similar in nature to other on-premises charitable, civic or commercial activities that Kroger had previously allowed.

These decisions are demonstrative of the trend toward allowing an employer greater flexibility to regulate non-employee access to the employer’s property under the NLRA. In light of these decisions, employers may distinguish between non-employee activities they will allow and will not allow on their premises.

Worker Misclassification Not a Violation

Proper classification of workers is a fundamental issue under federal labor laws because only statutorily defined “employees” are covered under the NLRA. Under Section 2 of the Act, independent contractors are specifically excluded from the protections afforded to employees.   Employee vs. independent contractor classification issues often arise in the context of determining who is eligible to vote in a union election and in evaluating whether certain workers are protected by Section 8(a)(1) of the NLRA.

In Velox Express, Inc. (368 NLRB No. 61), the Board addressed whether an employer’s misclassification of drivers as independent contractors was a violation of Section (8)(a)(1).  Velox Express operated a courier service and engaged drivers that it classified as independent contractors.  It terminated one of its drivers who, in turn, filed an unfair labor practice charge with the NLRB contesting the lawfulness of her discharge and alleging that her former employer also violated the NLRA by misclassifying her and her coworkers as independent contractors.

The full Board unanimously adopted the Administrative Law Judge’s conclusion that Velox Express failed to establish that its drivers are independent contractors. However, the Board reversed the judge and dismissed the allegation that Velox Express independently violated Section 8(a)(1) by misclassifying its drivers as independent contractors.  It held that an employer’s misclassification of its employees as independent contractors, standing alone, does not violate the NLRA.  The Board explained that an employer’s communication to its workers of its legal opinion that they are independent contractors does not, in and of itself, inherently threaten that those employees are subject to termination or other adverse action if they exercise their Section 7 rights or that it would be futile for them to engage in union or other protected activities.  The communication of that legal opinion is therefore privileged by Section 8(c) even if the employer is ultimately mistaken.

This case is one of a few recent case developments by the Board which positively affects employers faced with independent contractor issues. It demonstrates that this current Republican majority does not disfavor independent contractor relationships.  As a result of this decision, employers who genuinely believe their workers to be independent contractors may share that belief with their workers, even if it ultimately turns out to be wrong, without fear of being prosecuted by the Board’s General Counsel, provided the statements are not expressly or implicitly linked to the workers’ engaging in NLRB protected activities.

Limits to “Micro-Unit” Strategy

In The Boeing Company (368 NLRB No. 67), the Board clarified the traditional community-of-interest test for determining whether “micro-units” of employees within a larger workforce can organize on their own.   In that case, the union attempted to utilize a “micro-unit” strategy to target a petitioned-for unit made up of only two job classifications from a significantly larger workforce.  The Board concluded that the petitioned-for unit was not an appropriate unit for purposes of conducting a union election.

The Board set forth a clarifying, three-step analysis for determining whether a petitioned-for unit is appropriate. Under that analysis, the Board will consider:

  • Whether the members of the petitioned-for unit share a community of interest with each other;
  • Whether the employees excluded from the unit have meaningfully distinct interests in the context of collective bargaining that outweigh similarities with unit members; and
  • Guidelines the Board has established for appropriate unit configurations in specific industries.In reaching its decision, the Board found that the mechanics in the petitioned-for unit did not share an internal community of interest and did not have sufficiently distinct interests from those employees excluded from the petitioned-for unit. The Board also concluded that there were no appropriate-unit guidelines specific to the employer’s industry.This decision is an indication that smaller units will face increased scrutiny and may be easier for employers to challenge.

Leigh McMonigle

NLRB to Issue New Rules on Whether Student Workers Can Unionize

Q.  Are students who work in connection with their studies considered to be “employees” and therefore able to unionize?

A.  In a significant development for private colleges and universities, the National Labor Relations Board (NLRB) announced that it intends to propose rules that would establish a “standard for determining whether students who perform services at private colleges or universities in connection with their studies are ‘employees’” under the National Labor Relations Act (NLRA). The NLRB currently projects that the proposed rules will be issued in September 2019. It is widely expected that the rules, which will be proposed by the Republican-controlled Board, will make it more difficult for students to be classified as “employees” for the purpose of forming unions.

For more information, click here.

Christopher J. Moran & Lee E. Tankle

NLRB Flip Flops on Browning Ferris Standard for Joint Employment (Again)

Q.  What is the standard for determining whether two companies are joint employers?

A.  On February 26, the National Labor Relations Board (NLRB) decided unanimously to vacate its decision in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (2017) (vacated at 366 NLRB No. 26).  As we reported previously, in December 2017, the NLRB issued a 3-2 decision in Hy-Brand, in which it overruled the controversial joint-employer standard articulated in Browning-Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (2015). The Browning-Ferris decision had significantly relaxed the standard for proving that two entities are joint employers, ruling that entities could be joint employers even if one had only indirect control or the unexercised right to control employees’ terms and conditions of employment. The Hy-Brand decision returned to the pre-Browning-Ferris standard for finding joint-employer status, under which entities are joint employers only if each has exercised direct and immediate control over employees.

With this latest development, at least for now, the Browning-Ferris standard is in effect again, making it much easier for employees and unions to establish that two companies are joint employers.

For more information about this topic, please click here.

Susan K. Lessack