Micro Units, the Next Obama-Era Rule to Die

In PCC Structurals, Inc., the Board reinstated the traditional community of interest standard to be used when determining whether unions have included all necessary employees on a petition for union representation. The Board’s reversal is a welcomed relief to employers who have been forced to bargain with several small units of employees in one workplace, thereby preventing all employees at a worksite from exercising their rights to vote on union representation.

In Specialty Healthcare, the Board did away with over 20 years of established precedent by changing the test used in determining whether a petitioned-for unit of employees to vote for union representation was the most appropriate unit within the employer’s workforce. Unions typically craft the petition to contain the smallest possible group to vote that has already showed their support for representation, while employers typically wish to expand the unit of voting employees to get a more accurate representation of what all employees in the workplace want in terms of union representation.

In PCC Structurals, the Board reinstated the traditional community of interest analysis to determine whether employees in the petitioned-for unit share a community of interest with excluded employees. There, the IAM sought to unionize a micro-unit of approximately 100 welding employees despite belonging to a larger group of over 2,000 production workers. The welding employees worked closely with other production workers and shared several terms and conditions of employment, such as similar schedules, shared supervisors, constant contact, same benefits, same training, and wearing the same protective equipment while working throughout the manufacturing process.

In applying the Specialty Healthcare analysis, the Regional Director determined that the excluded production workers did not share an “overwhelming community of interest” with the micro-unit of welding employees.

Under PCC Structurals, the Board unequivocally reinstated the more simplified and practical analysis used for decades before Specialty Healthcare, examining factors like:

  • Whether the exclude employees and petitioned for unit of employees are organized into a separate department;
  • Have distinct skills and training;
  • Have distinct job functions and perform distinct work, including inquiry into the amount and type of job overlap between job classifications;
  • Are functionally integrated with Employer’s other employees;
  • Have frequent contact and interchange with other employees;
  • Have distinct terms and conditions of employment;
  • And are separately supervised.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.

Browning Ferris: The Short-Lived Tasmanian Devil has Died

The National Labor Relations Board (NLRB) overruled Browning-Ferris Industries and returned to the pre-BFI standard that governed joint employer liability.

The BFI decision set forth a broad definition of “joint employer” imposing liability and requiring bargaining in situations where a business posses only potential and indirect control over the employees in question. The BFI test was unpredictable and fundamentally altered the law applicable to a number of business relationships including: user-supplier, contractor-subcontractor, franchisor-franchisee, parent-subsidiary, predecessor-successor, lessor-lessee, and creditor-debtor.

Under BFI, a company could be deemed a joint employer of another company’s employees even if the company had never exerted overt control over workers’ terms and conditions of employment. This law wreaked havoc on the modern way businesses are run. Much like the Tasmanian devil in Looney Tunes cartoons, BFI spun onto the scene, stirred up trouble, and has now quickly went away.

The Hy-Brand Board wrote: “the BFI standard is a distortion of common law as interpreted by the Board and the courts, it is contrary to the Act, it is ill-advised as a matter of policy, and its application would prevent the Board from discharging one of its primary responsibilities under the Act, which is to foster stability in labor-management relations.”

Hy-Brand announced the Board was returning to the principles governing joint employer status that existed prior to BFI and applying this standard prospectively to all pending and future cases.

Thus, under the new Hy-Brand standard, “a joint-employer finding shall once again require proof that the putative joint employer entities have actually exercised joint control over essential employment terms,” like the right to hire, terminate, discipline, supervise, and direct those employees.

This is welcome news for the business community because gone are the days when “reserved authority” to control will automatically render two entities joint employers of one another’s employees. Rather, an employer may be considered a joint employer in relation to the other employer’s employees only if such employer “directly and immediately” and not in a “limited and routine” manner – exercises significant control over the essential terms and conditions of employment.

With the reversal of BFI, a variety of employers may still be at risk of joint employment finding under the NLRA, including but not limited to some of the relationships described above (e.g. user-supplier, contractor-subcontractor, franchisor-franchisee). Therefore, employers wishing to avoid a joint employer finding should assess these and other corporate/employment relationships under Hy-Brand and the pre-BFI cases and develop a labor policy consistent with these principles.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.

NLRB GC May Stop Obama Board’s Expansion of Weingarten Rights

Many employers (and this management-side labor lawyer in particular) were surprised by the Obama Board’s inability to overturn IBM Corp., 341 NLRB 1288 (2004), and extend Weingarten rights to non-union employees. The Obama Board, nevertheless, expanded the scope of Weingarten rights in a few areas.

  1. Manhattan Beer: The Obama Board ruled that a beer distributor violated the NLRA by terminating a unionized employee for refusing to take a drug test without first providing him with a reasonable opportunity to consult in person with an authorized union representative, despite the fact that the employee was able to consult with a union representative via telephone.
  2. Howard Industries: This case broadened the range of permissible conduct by union representatives in Weingarten interviews to include allowing union representatives to assist witnesses by providing scripted answers.
  3. Fry’s Food Stores: The Obama Board ruled that Weingarten required an employee to have right to consult with a union representative not only during the investigatory interview, but also before the interview, even without the employee requesting such a meeting.

The Trump NLRB General Counsel issued GC Memo 18-2 which previews that his office will seek to rein in the Obama Board’s overreach by requiring Regions to submit to the Division of Advice any matters involving the range of permissible conduct by union representatives in Weingarten interviews and matters involving the application of Weingarten in the drug-testing context.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.

NLRB Partial Settlements: An Option Once Again

National Labor Relations Board Administrative Law Judges have regained the power to approve partial settlements of Unfair Labor Practice charges (ULPs) even if the NLRB’s General Counsel, and the charging parties themselves, disagree.

This practice, known as the “reasonableness” settlement standard was restored when the NLRB’s five-member Board affirmed an ALJ order that had applied the standard in favor of two ULP respondents and thus overturned a 2016 Board decision that had rescinded the standard.

This decision involved twenty-two (22) separate ULPs, filed by the Service Employees International Union (SEIU) against the University of Pittsburgh Medical Center (UPMC) and subsidiary UPMC Presbyterian Shadyside. The multiple ULPs were consolidated into a single case.

Over the objections of SEIU and the NLRB General Counsel, ALJ Carissimi accepted UPMC’s offer to guarantee the performance of any remedies awarded against UPMC Presbyterian Shadyside in exchange for dropping the single-employer issue.

Judge Carissimi rationalized that UPMC’s agreement to serve as a guarantor in relation to UPMC Prysbyterian Shadyside rendered the single-employer issue – a complex issue that could require years of extensive litigation to resolve – fundamentally moot. The Board agreed, reasoning that the NLRB General Counsel’s objection that UPMC could no longer be held directly liable for the acts of UPMC Presbyterian Shadyside was not enough to vacate Judge Carissimi’s partial settlement of the matter.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.

Ohio Construction Company Cleared of $5M Pension Liability Claim

Stevens Engineers & Constructors, Inc. doesn’t owe withdrawal liability to the Iron Workers Local 17 Pension Fund because the work identified by the union did not fall with the jurisdiction of their previous collective bargaining agreement.

The decision is a blow for the distressed Iron Workers pension fund, which is severely underfunded with a deficit of over $170 million. The Cleveland-based pension plan was the first to receive approval from the Treasury Department to cut participant benefits.

An employer that participates in a multi-employer pension plan and withdraws from the plan is liable for its share of any underfunded benefits, a scheme also known as withdrawal liability. A special rule applies to employers in the construction industry. These employers are not subject to liability if they completely withdraw from work in the jurisdiction of the CBA of the type for which contributions were previously required.

The parties’ dispute started when the union assessed pension liability against Stevens, claiming that certain activities in a construction project that commenced after the company withdrew from the plan, involved work within the jurisdiction of their previous CBA.

The three-judge panel said the power rigging work, which the fund disputed, was not work within the jurisdiction of the CBA because the agreement allowed Stevens to assign this work to another union. The fund could not use the power rigging work as a basis for assessing liability because the job’s assignment to certain workers meant it was within their jurisdiction rather than the iron workers.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.

New NLRB Guidance on Handbook Policies

In the 2004 Lutheran Heritage decision, neutrally worded handbook rules that could be “reasonably construed” by employees to prohibit the exercise of National Labor Relations Act rights became unlawful. Since then, the Board repeatedly ignored context and completely disregarded employer explanations unrelated to union activity, to cite this decision as support to outlaw historically common work rules such as rules:

  • Prohibiting profanity or abusive behavior toward co-workers (workplace civility rules);
  • Against disclosure of confidential information;
  • Prohibiting photography, and surreptitious audio or video recording in the workplace;
  • Prohibiting employees from conducting “personal business” while on the employer’s premises;
  • Prohibiting employees from making “false, disparaging, or misleading” statements about the employer online;
  • Requiring employees to behave in a “positive and professional” manner; and
  • Forbidding unauthorized employee use of the employer’s logos, insignia, and other trademarks.

Now, in place of the Lutheran Heritage “reasonably construe” standard, the National Labor Relations Board established a new test that focuses on two factors: 1) the nature and extent of the potential impact on NLRA rights, and 2) legitimate justifications associated with the rule.”

In cases in which one or more facially neutral policies, rules, or handbook provisions are at issue that, when reasonably interpreted, would potentially interferes with Section 7 rights, the Board will evaluate two things: 1) the nature and extent of the potential impact on NLRA rights, and 2) legitimate justifications associated with the requirements. Again, we emphasize that the Board will conduct this evaluation, consistent with the Board’s “duty to strike the proper balance between…asserted business justifications and the invasion of employee rights in light of the Act and its policy.

In Category 1 are rules that are lawful to maintain because they cannot be reasonably interpreted to impinge on NLRA rights, or the employer’s interests are sufficiently justified.  The Board included so-called “civility” rules in that category. The term refers to common employer rules intended to maintain basic standards of good behavior.

Category 2 includes rules that “warrant individualized scrutiny” to determine whether they could be interpreted to impinge on NLRA rights.

Of course, there is an spoken third category – rules that the Board will designate as unlawful to even have on the books, like a rule prohibits discussion of pay or benefits among worker.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.

Union Members Allowed to Protest on Property Not Belonging to their Employer

Musicians should have been allowed to stand on private property while they protested a ballet company’ use of recorded music inside a performing arts center. This decision shows that the right of employees to engage in peaceful and non-disruptive labor activities may trump the interest of an employer to control access to its private property.

The company said the musicians could not hand out leaflets on sidewalks outside the building where they normally play music.

The Tobin Center leases performance space to the San Antonio Symphony, San Antonio Ballet, San Antonio Opera. AFM Local 23 has a collective bargaining agreement with the symphony. Union musicians perform live music for some, but not all, of the ballet company’s performances.

The ballet group was scheduled to perform Tchaikovsky’s “Sleeping Beauty” with recorded music. Union members stood on a sidewalk near the auditorium entrance and handed out leaflets before the performance urging the public to demand live music. “You’ve paid full price for half of the product,” Local 23 argued in the leaflets.

Tobin Center staff told the union members they had to leave the center’s private property. The Local 23 members moved across a handed out several hundred leaflets to arriving spectators. The union filed an unfair labor practice charge alleging the center violated the National Labor Relations Act by expelling them from the front of the auditorium.

The musicians were not employees of the Tobin Center, the ALJ said, but they regularly worked in the performance arts center and barring their leafleting violated the NLRA.

There was no evidence of overcrowding or disruption at the Tobin Center, and no support for the center’s argument that if it is a “soft target” for terrorists, the ALJ said. The musicians were not carrying backpacks that might conceal explosives, and sending the union members across the street from the Tobin Center would not likely reduce any danger from terrorism, he said.

Terrorists? Really? I’ve heard some lawyers make outlandish arguments – especially when the law is not on their said, but comparing violinists to terrorists for passing out paper…..

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.