4.30.18

News & Analysis

The Good, the Bad and the Ugly

NEWS & ANALYSIS
New NLRB Chairman is John Ring. President Trump’s most recent Republican nominee to the National Labor Relations Board became a Member and was named Chairman on April 20. John Ring fills the fifth and last open seat on the Board, giving Republicans a 3-2 majority, for the first time since December 2017. Chairman Ring’s term ends December 16, 2022.  He is a former management-side labor and employment attorney who was in private practice with the Washington, D.C. Office of Morgan Lewis, the same law firm for which his immediate predecessor as Chairman, Philip Miscimarra, was a partner. Chairman Ring is already facing politically-motivated calls for recusal due to his and his former firm’s representation of employers in the wide array of labor and employment law matters. Practitioners from the management side are hoping that he steers a steady course for a more balanced interpretation of the National Labor Relations Act than was the case under the Obama-era Board, of which Democrat Mark Gaston Pearce was Chairman. Mr. Pearce continues to serve on the NLRB as a Member, and his term will expire August 27 of this year.

NLRB gets “out of joint” over joint employer dispute.

As we last reported, recently seated Republican Member William Emanuel, who joined the Board in 2017, was under attack from Democratic senators, who asserted that he committed an ethical violation by participating in an important joint employment case that we reported on in December. In that case, Hy-Brand, the Board overruled, 3-2, the standard for joint employment in the 2015 Browning-Ferris decision, which was then awaiting review by the U.S. Court of Appeals for the District of Columbia Circuit. After the Hy-Brand standard effectively made Browning-Ferris “dead law,” the D.C. Circuit remanded Browning-Ferris to the Board at the Board’s request.

Browning-Ferris was a controversial decision that expanded the basis for a finding of joint employment. The decision was widely criticized by employers, in part because of the threat that the new standard posed to franchise relationships. Thus, the Hy-Brand decision, which vacated Browning-Ferris, was welcomed by employers.

Since we last reported on the Emanuel recusal controversy, Hy-Brand has fought back. In a motion for reconsideration filed with the Board, Hy-Brand contends that the Board violated Hy-Brand’s due process rights by excluding Member Emanuel from the case and the decision to vacate. Hy-Brand also contends that the decision to vacate was tainted by Member Pearce’s comments at an American Bar Association meeting on February 25 that an important decision was coming the next day. According to Hy-Brand, the Pearce comments were “an egregious breach of confidentiality and the Board’s deliberative process” and justified reconsideration of the decision to vacate. There apparently has been no ruling yet on Hy-Brand’s motion.

Meanwhile, NLRB General Counsel Peter Robb filed a response in the Hy-Brand case that is a scathing indictment of the Board’s action in vacating Hy-Brand and seeks reconsideration of that decision. According to the General Counsel, the decision to vacate violated the due process rights of the General Counsel and Hy-Brand. He also contends that the panel improperly relied on a document from the Board’s Designated Agency Ethics Official that was not part of the formal record in the case, and that the panel’s action violated Board policy by not allowing Emanuel himself to consider and decide the issue of recusal. In a footnote, the General Counsel notes that he disagrees with the NLRB Inspector General’s report that concluded that Member Emanuel violated ethical standards.

And in a March 22 letter to the Board’s Inspector General, counsel for Member Emanuel reportedly maintains, arguably correctly, that Member Emanuel had no conflict of interest and did not violate Board rules when he participated in the Hy-Brand decision. (The actual letter is not available publicly.)

But wait. There’s more. Member Pearce’s comments at the February ABA meeting are now the basis for a complaint that the Competitive Enterprise Institute has lodged with the Inspector General. And the Inspector General himself is the subject of a complaint filed by the National Right to Work Foundation over his ethics report on Member Emanuel. In that complaint, Right to Work argues that the Inspector General improperly disclosed deliberative communications of the Board. The Right to Work complaint is summarized below, quoting from the Washington Examiner:

The OIG issued a report finding that an NLRB official violated the Standards of Ethical Conduct for Employees of the executive branch because he improperly disclosed nonpublic deliberative information. We believe that, by disclosing privileged deliberative, pre-decisional communications in his two reports on Member Emanuel, IG Berry has committed the same violation," Raymond J. LaJeunesse, the foundation's legal director, said in a letter Thursday to the Council of the Inspectors General on Integrity and Efficiency, the independent federal office that oversees the inspectors general.

As for the Browning-Ferris case, on March 1, the NLRB asked the D.C. Circuit to re-consider review of the cross petitions in Browning-Ferris Industries. On April 6, the D.C. Circuit granted the Board’s motion to reopen the review in Browning-Ferris and placed the matter in abeyance until after the NLRB rules again in Hy-Brand.

Now that the Board has a full complement, including three Republican Members who can vote as a majority on the issue, and assuming Member Emanuel or one of the other two other Republicans are not recused, the Board can again consider the appropriate joint employment standard in Hy-Brand and possibly overrule Browning-Ferris. And even if the Hy-Brand case is littered with the residue of incorrect ethical opinions and actions of an Inspector General driven by political pressure, recent press reports indicate that NLRB General Counsel Robb has several other cases in the pipeline that could be the basis for overruling Browning-Ferris and resurrecting a Hy-Brand-like standard for determining joint employment. Stay tuned, please, we know it is a lot!

NLRB’s extended period for comment on so-called “quickie election” rule ended on April 19, and General Counsel weighs in. As previously reported, the NLRB, in a 3-2 vote last year along party lines, appeared to move toward revising or rescinding the Obama-era regulations governing Board representation elections (the so-called “new,” “quickie,” or “ambush” election rule). As a result of that vote, the Board issued a Request for Information seeking public comment as to whether the Board should revise the regulations or rescind them.

Beating the comment deadline by a day, on April 18 NLRB General Counsel Peter Robb announced his views on the subject. He suggested changes to the “blocking” charge policy adopted by the Democratic majority on the Obama-era Board in 2014. Under the “blocking” charge policy, if an unfair labor practice charge is filed in the course of an organizing campaign, the election is delayed pending resolution of the charge unless the charging party agrees to proceed. The General Counsel suggests that this policy unduly delays elections. Instead, he suggests that elections should go forward even if ULP charges are pending, but that the ballots should be impounded until the charges are resolved. He also suggests that pre-election hearings should be scheduled for 12 days after a petition is filed, instead of the current eight days, in order for position statements having preclusive effect to be filed by petitioning parties (typically unions) in response to employer position statements. This would give more balance to the pre-election hearing process. He suggested that voter lists should not be required, as currently, to include cell phone information of employees because this negatively affects employees. Finally, he suggested that in-person voting should be the norm, contending that mail balloting potentially compromises confidentiality and leaves employees subject to potential campaign pressures in their homes and the uncertainties of the U.S. Mail.

The NLRB now has “friend of the court” briefs on whether employee misclassification is an independent labor law violation. Acting on a novel theory advanced by former NLRB General Counsel Richard Griffin, an administrative law judge of the Board in Velox Express found last September that an employer violated Section 8(a)(1) of the NLRA by misclassifying medical laboratory drivers as “independent contractors.” Section 8(a)(1) makes it unlawful to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights. In February, the Board invited the parties in the case and interested amici to file briefs on the issue. The deadline to submit a brief was April 16. Now the parties in the case and other interested observers await a decision from the Board.

NLRB and EEOC get back in sync to support employer efforts to increase civility and stop harassment and bullying in the workplace. On March 6, NLRB General Counsel Peter Robb announced that the Board will try to collaborate with the Equal Employment Opportunity Commission on civility rules in the workplace. The EEOC issued proposed guidance on harassment in the workplace and advocated civility rules and training, although the EEOC acknowledged that this could be problematic under the interpretations of Section 7 that had been issued by the NLRB during the Obama Administration. (The final EEOC guidance has yet to be issued.)

Before General Counsel Robb was confirmed, Acting EEOC Chair Victoria Lipnic was working on joint guidance with then-NLRB Deputy General Counsel Jennifer Abruzzo, but they faced significant obstacles. The outlook is brighter now that General Counsel Robb is confirmed, and in late December the Board suggested in Boeing Co. that it might look more favorably on workplace rules against bullying and in favor of civility.  In short, there is hope that the NLRB and EEOC can align themselves to produce clear, comprehensive, and rational guidelines that will make the workplace better for the vast majority of employees.

NLRB budget busting? The NLRB received $274 million in the Fiscal Year 2018 budget that passed the U.S. Senate and House of Representatives on March 19, matching the funding it received in 2017. But Trump Administration officials have proposed a decrease for 2019. Whether the budget cuts come to fruition or not, the Board is already taking steps to cut costs. We have anecdotal reports of Board regional office personnel curtailing travel and witness interviews in connection with unfair labor practice investigations. Recent press reports indicate that the Office of Management and Budget is withholding some funds from the Board that are due under the budget, which may be authorized by law as long as the withholding does not last for more than 45 days. The Administration continues to push for spending cuts and job freezes at the Board. Not surprisingly, the union representing Board employees opposes staff reductions.

Advice Memorandum concludes Section 7 activity includes political issues outside the workplace and outside of employer influence and control – but for how long? In an Advice Memorandum released to the public in March 2018 (which had been issued internally in August 2017 before the current General Counsel took the reins for management of that office), the NLRB Office of the General Counsel, Division of Advice, opined that an employer violated Section 8(a)(1) of the NLRA by discharging employees who willfully chose to be absent from work without permission to participate in “Day Without Immigrants” demonstrations. The employees had chosen to miss scheduled work and “strike” to protest President Trump’s positions on immigration. The Division of Advice, then still operating on the principles espoused by General Counsel Richard Griffin, came to an unsurprising opinion that the strike was protected concerted activity and therefore that the discharges violated the NLRA. Underpinning the opinion was the somewhat shaky determination that the strike had a direct relationship to terms and conditions of work. The Division determined that the strike, in part, was in response to sudden increased immigration raids in workplaces, and thus a workplace issue. But the Division of Advice apparently missed what many would consider to be the determinative fact -- that the employer had no direct power to influence the immigration raiding policies of the federal government and thus the activity was not directed at terms and conditions of employment within the bargaining obligations of the NLRA, but instead was directed at national immigration law policy. The opinion was consistent with the views of former General Counsel Griffin, who, in a well-publicized guidance regarding employer workplace rules and policies, essentially asserted that concerted political activities are inherently related to working conditions and therefore protected concerted activities. It is not at all clear that current General Counsel Robb will agree.

THE GOOD, THE BAD AND THE UGLY
A debate we can live with! A Bloomberg BNA report on April 20 (paid subscription required for access) covered a debate we’re happy to have: whether the economy is at “full employment” or only “almost-full employment” after the tax and regulatory reform and more employer-friendly administrators have had time to work. According to the Federal Reserve, the current unemployment rate of approximately 4.5 percent means the economy is now finally at full employment. The Chair of the President’s Council of Economic Advisors is not entirely convinced. That naysayer is apparently asserting that “full employment” requires unemployment levels of 4 percent or less. In any event, the good news keeps on coming. According to the Federal Reserve, the unemployment rate is likely to fall even further, to 3.8 percent by the end of 2018 and 3.6 by the end of 2019, as businesses consider hiring more workers and doing more business in the still-improving economy.

Meanwhile, Marketplace, heard on National Public Radio, cites a report from the National Association for Business Economics indicating that more than one-third of U.S. companies have increased pay in the past quarter to try to attract workers, and that other employers have increased internal training or lowered qualification requirements to get workers.

Union-represented employees are reportedly benefitting from the stronger economy, too. According to Bloomberg BNA, pay raises in recently signed collective bargaining agreements are rising in 2018 compared with the corresponding period in 2017. First-year wage increases in labor agreements through January 28 averaged 2.9 percent, up from 2.8 percent in 2017.

Recuse, recuse, recuse, recuse! The “Committee to Preserve the Religious Right to Organize” filed a motion with the NLRB to request the recusal of all three Republican Board Members. The Committee argues that all have conflicts preventing them from fairly hearing and deciding any case because they represented employers in labor and employment their past careers. The Committee probably is aware that historically many Board members have come from careers at law firms representing employers, unions, or employees, or some of each, in labor and employment legal matters. And if only the two Democratic members were left at the Board, it could decide no cases because it would lack a quorum. That may be exactly what the Committee seeks.

The same Committee has also filed separate unfair labor practice charges against the Trump presidential campaign, alleging that the campaign’s employee guidelines, as well as confidentiality agreements with employees (including former employee Steve Bannon) contained unlawful confidentiality provisions. The Office of the NLRB General Counsel recommended in October that the charges be dismissed because (1) the “non-public information” which the confidentiality agreements covered did not restrict employees from disclosure of terms and conditions of employment, and (2) the charges were moot because the Campaign no longer had any employees. The Committee has appealed, and it also alleges that NLRB General Counsel Robb, who would ordinarily decide such an appeal as a matter of discretion, should be – guess what – recused! because he was nominated by President Trump. The Committee has also alleged that the Trump Vineyard in Virginia violated the NLRA by maintaining a curfew for certain vineyard workers living in company housing. That charge has also been dismissed.

We were unable to find a website for the Committee, but according to the Washington Free Beacon, the Committee is “a coalition of California unions and labor activists that sees union activities as a religious freedom issue.” What religion(s) that would be is not clear.

Will the Fiat Chrysler-UAW corruption investigation ever end? We have reported on ongoing events in the corruption investigation involving former officials of the UAW and the labor relations staff at Fiat Chrysler and a UAW training center in Michigan. At last report, we expected more indictments. Now “in the docks” is former senior UAW official Keith Mickens, the fifth person to be indicted. According to the Detroit News, Mr. Mickens is accused of buying luggage, electronics, designer clothes, and golf equipment with training center funds in excess of $7,500, and also with facilitating unlawful payments for the personal expenses of others who were involved in the corrupt scheme. Mr. Mickens was the president of a charity set up by a now-deceased UAW vice-president, which allegedly funneled payments from Fiat-Chrysler to the vice president. Mr. Mickens is expected to plead guilty. The UAW, for its part, has continued to assert that the corruption scheme was confined to a few bad actors and that no collective bargaining agreements were compromised as a result of the corruption. There is surely more to come on this.

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