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Labor-Friendly National Labor Relations Board Decisions at Risk Under New Board Configuration

Two recent additions to the National Labor Relations Board - William Emanuel and Marvin Kaplan - join Board Chairman Phil Miscimarra to form a Republican majority for the first time in a decade. The Board’s new configuration under the current administration, and the upcoming appointment of a new General Counsel, jeopardizes recent labor-friendly Board decisions. Those interested in the field of labor law should therefore be on the lookout for decisions reversing Obama-era precedent, particularly with respect to the following topics.

In 2015, the Board decided Browning-Ferris, which refined the standard for finding a joint employer relationship. A joint employer relationship is one where two or more employers share responsibility for unfair labor practices and for bargaining obligations with employees under the National Labor Relations Act (“Act”). Browning-Ferris clarified that an entity with only indirect control over the terms and conditions of employment can nevertheless be considered a joint employer. The Board is currently involved in ongoing litigation seeking to hold the company McDonald’s liable as a joint employer with its franchisees under this joint employer standard. With the new composition of the Board, as well as the upcoming expiration of the General Counsel’s term and the appointment of a new General Counsel, many expect that the Board will seek to reject the joint employer standard set forth in Browning-Ferris and return to a more restrictive interpretation of “joint employer”, thereby making an employer having indirect control over the terms and conditions of employment insufficient to qualify as a joint employer under the Act. Practitioners should also be aware that the D.C. Circuit Court will also be announcing a decision in the appeal of Browning-Ferris in the near future.

Another area of law that may be affected by the change in Board composition is the enforceability of arbitration clauses that prohibit employees from pursuing work-related claims against their employers collectively or as a class in any forum. The Board has taken the position that such arbitration clauses are unenforceable as they limit employees’ rights to take collective action under the Act. The Supreme Court recently heard oral argument on this issue in the consolidated cases of Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and NLRB v. Murphy Oil. The Court’s decision in those cases will determine whether the Board is able to proceed with reversing its previous stance on the issue. More specifically, if the Court’s decision is based upon deference to the Board’s position, the Board will be free to change that position in the future.

The Board’s 2011 decision in Specialty Healthcare may also come under fire by a Republican-controlled Board. In that case, the Board found that an employer challenging the appropriateness of a bargaining unit must demonstrate that those employees excluded from the unit have an overwhelming community of interest with those included with the unit. Given that this decision has been criticized by management as allowing the creation of so-called “micro units,” Specialty Healthcare is a likely target for the new Board.

In addition to Board decisions being in jeopardy, Board rules may also see change by the new Board composition. In 2015, the rules governing elections were amended to streamline the election process. The validity of these amendments has been upheld by the Fifth Circuit. However, management has derided the rules as allowing for “ambush elections,” claiming that they do not allow adequate time for employers to make their anti-union case to their employees. Therefore, you may expect to see the Board put into motion another rulemaking in order to change these rules.

This overview only highlights some of the more recent Obama-era actions that have been criticized by management and are thus likely to be targets of the new Republican-majority Board. As these topics may be prime targets, practitioners, unions, employees, and others affected by changes in Board policy should be on the alert for upcoming changes.

©2017 Zazzali, Fagella, Nowak, Kleinbaum & Friedman. Blog is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between the Zazzali Law Firm and any readers or recipients. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances. Reproduction in whole or in part is prohibited without the express written consent of the Zazzali Law Firm.

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