Normally, a union must obtain a majority of votes cast by employees in an election to be certified as the employees’ bargaining representative.  However, if the employer has engaged in serious violations of federal labor law during a union organizing drive, the NLRB can order it to immediately recognize and bargain with the union even if the union lost the election.  These orders are commonly referred to as “Gissel” bargaining orders due to a U.S. Supreme Court of that name.

In a recent case, a federal appeals court emphasized that Gissel bargaining orders should only been issued in the rarest of cases where the Board’s traditional remedies – usually ordering a re-run election – are rendered ineffective by the employer’s conduct.  Novelis Corp. v. NLRB, No. 16-3076 (2nd Cir., March 15, 2018).  In Novelis, the Board found that, in the run up to the election, the employer had demoted a union supporter, threatened job loss if employees unionized, and increased certain holiday pay.  When the election was held, the Union lost in a vote of 287 to 273 in favor of the Company.   The Board, in a decision rendered two years after the election, found that these violations were serious enough to issue a Gissel bargaining order against the Company, ordering it to recognize the Union and commence bargaining.

Now, the Second Circuit has refused to enforce the Board’s Gissel Order.  The Court noted that the Board’s decision came two years after the election and the extent of employee turnover (and management turnover) would mean that about 33% of the employees had no connection to the election campaign and employer violations.  In all cases, a Gissel bargaining order must be supported by some showing that the union had the support of a majority of employees in the petitioned-for unit at some point prior to the election.  Thus, the Court found that the balancing act of preserving employee free choice by disregarding the election results could not be maintained where the workforce had undergone such change.

In addition, the Court found that the Board did not consider the effect of its own efforts to remedy the employer violations.  The Board had sought a “10(j)” injunction against the Company in federal district court that resulted in an Order for the Company to remedy the violations, which even included having a plant manager read the Court notice aloud to all employees.  According to the Court, the Board failed to consider the effect of these remedial steps taken by the Company on employee free choice in a potential re-run election.

Novelis serves as a reminder that, when considering a Gissel bargaining order, the Board is supposed to only apply the remedy in rare cases where employee free choice can only be furthered by ordering the employer to bargain irrespective of election results.

Andrew MacDonald is an associate in the firm’s Labor and Employment Department, resident in its Philadelphia office.

Undergraduate resident advisors usually wield a lot of power over university residence halls and those who occupy them. You likely know this already if you were ever a college freshman living in the dorms and received a write-up or warning from your RA. But, for those who do not know, RAs – who are often only slightly older than the college students they oversee – are essentially there to supervise their peers living in dorms and make sure nothing (too) crazy happens. Last week, however, an NLRB Regional Director decided to give RAs at Reed College a right many of them probably did not even consider until recently: the opportunity to unionize.

Pursuant to the Board’s 2016 Columbia University Decision, which entitled university student workers at private campuses – both graduate and undergraduate teaching and research assistants – the right to collectively bargaining, the Regional Director found these RAs were statutory employees under the Act and ordered an election take place. The Regional Director concluded RAs provide a service for compensation, are under Reed College’s control and supervision and, ultimately, that there is no compelling policy reason to exclude them from coverage under the Act.

On the other hand, Reed College argued that Columbia University was wrongly decided and, actually, was not applicable because RAs are not teaching or research assistants. The College also argued that the RAs’ main focus was supporting and mentoring fellow students and that this aspect of their job was inseparable from their role as students, not employees. Notwithstanding these legitimate points, the Regional Director unsurprisingly rejected the College’s arguments. This was unsurprising because Columbia University is still the law of the land and RAs, like teaching and research assistants, are paid for their services, apply and train for the position, and undergo performance reviews. Thus, RAs would have likely garnered a similar finding by the Board who decided Columbia University.

Until the Board finds the proper vehicle to overturn this Obama-era precedent, we can likely expect other subsets of students paid for services at private universities to attempt to unionize as well. Still, the clock is ticking on Columbia University and this fact is not lost on unions attempting to organize students across the country. Indeed, unions at several private universities are now electing to withdraw their representation petitions for fear that a Republican-controlled Board will use their case to overturn Columbia University. Instead, these unions will attempt to pressure these institutions and seek voluntary recognition, a somewhat baffling choice because private universities have long rejected this option and will likely continue to do so (with the exception of only one private institution).

This union action is likely only delaying the inevitable, but, in the end, only time will tell whether Board precedent concerning higher education organizing will flip-flop once again.  Stay tuned.

Carlos A. Torrejon is a former NLRB Attorney and an associate in the firm’s Labor and Employment Department, resident in its Morristown office.

By a brief Order announced on February 26, 2018, the NLRB overturned its precedent on joint employer for the second time in a span of almost two months. Specifically, the Board vacated the decision Hy-Brand Contractors Ltd., 365 NLRB No. 156 (2017), which, in turn, had overruled the joint employer standard announced in Browning Ferris Industries, 362 NLRB No. 186 (2015) (“BFI”). By vacating Hy-Brand, the Board has returned to a joint employer standard based not only on “direct” control over employees, but also “indirect” or “reserved” control.

But, why did the Board overturn its decision so quickly? Ever since the Hy-Brand decision in December 2017, there had been questions regarding the involvement of recent Republican Board appointee, William Emanuel, due to his former firm representing one of the employers in BFI. Democratic Senators had raised alarm bells about Emanuel’s participation in the decision, but the direct impetus for the Board’s vacating order came from an NLRB Inspector General report. The IG report, cited in a footnote of the order, found that Emanuel should not have participated in the decision, and generally questioned the Board’s recusal process. In response, and presumably to try to ensure the decision could stand on appeal, the Board decided to vacate Hy-Brand.

What happens next? The Order does not specifically outline the next steps. It only states that the matter will be addressed in “further proceedings” before the Board. At present there are 2 Democratic appointees and 2 Republican appointees, and a third Republican appointment, John Ring, awaiting hearings and a vote in the Senate on his confirmation to the Board. Thus, with Emanuel’s participation hampered by the IG report, the matter would come before the Board with a Democratic-leaning majority if decided now. Consequently, this could mean that the decision will be vacated permanently and the BFI standard will reign for the foreseeable future.

However, the Board may opt to sit on the decision while it seeks input from interested groups – e.g., unions and employer associations – on the joint employer standard. This is something that the Democratic appointees charged that the Republican-majority failed to do in reaching their decision in Hy-Brand. If the Board issues an opportunity for briefs from interested parties, the case could be delayed with time for Ring to be confirmed. However, the Democratic appointees are sure to resist such a delay, so the procedural next steps are not clear.

Lastly, what does this mean for employers and unions? For now, the joint employer standard has returned to BFI, which means that two employers (or other entities) could be found jointly liable for collective bargaining with a union and/or unfair labor practice charges before the NLRB if they “share or codetermine” wages and working conditions. This is a far more lenient standard than the “direct and immediate control” test that existed for decades prior to BFI and can be sure to ensnare unwitting employers into becoming “joint employers” based on indirect control.

Overall, vacating Hy-Brand introduces yet another element of uncertainty in the debate over joint employer status.

Andrew MacDonald is an associate in the firm’s Labor and Employment Department, resident in its Philadelphia office.

Sometimes, using only one word can make all the difference between a lawful and unlawful statement. Washington University in Saint Louis learned this lesson the hard way when in late October 2017 Associate General Counsel for the NLRB’s Division of Advice Jayme L. Sophir instructed Region 14 to issue complaint, absent settlement, against the University.

The Advice Memorandum, released to the public on February 15, 2018, found the University violated Section 8(a)(1) of the Act by threatening foreign graduate students with deportation if they elected a union and, later on, their union engaged in a strike. Specifically, the statement – “all foreign students will lose their visas and have to leave the country” – was unlawful because a strike would not automatically result with graduate students losing their visas. As labor practitioners know, employer predictions regarding unionization must be based on objective facts and, in general, be measured, reasonable and not overstate adverse consequences as such actions could be seen as restraining and coercing employees’ Section 7 rights.

Here, while a strike could potentially lead to these graduate students losing their visas and being deported, Associate General Counsel Sophir noted the University “overstated the requirements of the applicable regulations and the potential effects of those regulations on the affected graduate student employees.” Conversely, the other statements made by the University concerning immigration laws and potential consequences were found to be lawful because “they either set forth the exact language of the applicable Federal regulations or merely accurately conveyed the possibility that a strike ‘could’ lead to the loss of student visas.” Indeed, all of the statements made by the University would have likely been lawful if the word “will” was simply replaced with the word “could” in the statement at issue. The University, however, did not have to litigate the lawfulness of the statement because the Union chose to withdraw its unfair labor practice charge, resulting in the matter being closed.

Ultimately, this case serves as a helpful reminder that employers must be mindful of its communications with employees during a union organizing campaign and, particularly, seek competent legal counsel prior to taking any action during such times. If not, employers could find themselves in violation of the Act, except likely not have the good fortune of having the complaint against it withdrawn.

Carlos A. Torrejon is a former NLRB Attorney and an associate in the firm’s Labor and Employment Department, resident in its Morristown office.

Graduate students at most private universities have been allowed to unionize since the 2016 decision of the NLRB in Columbia University.  This decision was controversial because the employee status of graduate students has flip-flopped over time, depending on whether members appointed by Democratic or Republican Presidents controlled the Board.  Since 2016, the makeup of the Board has shifted from a Democratic majority to Republican control.  While Democratic appointees generally support the notion that graduate students should be considered employees, Republican appointees do not.  Thus, it is highly likely that graduate students’ status before the eyes of the Board will change, if a University brings a challenge.

However, for Columbia University it is not that simple because the Board has already ruled on the merits of graduate student employee status, and it recently approved the election last December.  Columbia cannot simply ask the Board to reverse itself because the Board’s membership has changed.  Rather, Columbia must first refuse to bargain with the United Auto Workers Union (“UAW”), the representative of its graduate students, and rely on the UAW to file a refusal to bargain charge with the Board.  This Columbia has already done.  In a recent letter, Columbia notified the union that it will not bargain with the UAW regarding a first contract for Columbia’s graduate students.  The Board would then hear the matter, and likely conclude that Columbia did in fact violate the National Labor Relations Act (“the Act”) and order Columbia to bargain.   This in turn will permit Columbia to challenge the Board’s ruling that Columbia’s graduate students are employees under the Act before a United States Circuit Court of Appeals, presumably the D.C. Circuit.

The outcome of this looming appeal will cast a long shadow on graduate student organizing across the country.  If one of the parties to the appeal is unhappy with the result, the matter could reach the U.S. Supreme Court, which would settle this matter for good.

Regardless, how a U.S Court of Appeals decides the matter, expect the Trump Board to reverse course and once again find that graduate students are primarily students rather than employees and conclude that they are guaranteed the right to organize under the Act.

Andrew MacDonald is an associate in the firm’s Labor and Employment Department, resident in its Philadelphia office.

Chip Zuver is an associate in the firm’s Labor and Employment Department, resident in its Los Angeles office.

On February 2, 2018, a split three-member Board panel held that a prior election won by a union must be vacated and, accordingly, ordered a second election as it found merit to the employer’s objection arguing that the tardiness of the Board Agent conducting the election potentially disenfranchised a dispositive number of eligible voters.

In February 2017, employees at Bronx Lobster Place LLC voted in favor of unionization by a narrow margin of 14-12. There were 4 eligible voters that did not vote for unknown reasons but, significantly, the Board Agent running the election opened the second voting session 7 minutes after it was scheduled to begin. Notwithstanding the fact that none of the missing voters actually showed up during the Board Agent’s absence, the employer argued that this alone should be enough to set aside the election results. Indeed, the Regional Director, in adopting the Hearing Officer’s recommendation, relied on this fact – no eligible voters were actually prevented from voting due to the late opening of the polls – in certifying the election results.

But, contrary to the Regional Director and the lone dissenting (Democratic) Board member, the Board majority found that case law “rejects such an actual-disenfranchisement standard, in favor of a potential-disenfranchisement test.” Interestingly, one of the two Democratic Board members left on the panel from the Obama-era ruled in favor of undoing the election results and conducting a second election.

In the end, this Board decision reaffirms precedent dating back almost two decades by clearly articulating the applicable standard, and it is yet another example of a favorable decision for an employer under this new administration. This application is also consistent with frequent management-side requests for bright line rules that make it simpler for parties to operate under. Expect more of the same in the (somewhat) near future once the Board has a fully constituted five-member panel with a Republican majority. Stay tuned.

Carlos A. Torrejon is a former NLRB Attorney and an associate in the firm’s Labor and Employment Department, resident in its Morristown office.

On January 29, 2018, the DC Circuit remanded a 2016 NLRB decision – Grill Concepts Servs., Inc., 364 NLRB No. 36 (2016) – back to the Board for reconsideration of several employee handbook violations found unlawful under the now-replaced Lutheran Heritage standard in light of the Board’s new standard recognized in Boeing Co., 365 NLRB No. 154 (2017).

As explained in a previous Alert, the prior standard considered work rules unlawful if employees would “reasonably construe” them to interfere with union or other protected concerted activity under Section 7 of the Act.  Until this past December, the Obama Board unreasonably interpreted and applied this decision for several years. That, however, changed in Boeing when the Board adopted a balancing approach that considers “the nature and extent of the potential impact” on Section 7 rights and the employer’s “legitimate justifications” for the rule.

Fast forward to this case and the DC Circuit has agreed to remand several work rules the Board previously found unlawful under the now-overruled “reasonably construe” standard.  These rules, contained in the restaurant’s employee handbook, include a “Team Member Relations/Positive Culture” rule requiring employees to interact respectfully with management, an “Online Communications” rule, and a “Team Member Conduct While Representing the Restaurant” rule (just to name a few). And while it is not unusual for a federal court of appeals to remand a matter back to an agency, especially when encountered with a change in policy by said agency, this situation should help instruct employers previously found to have unlawful work rules and currently in the midst of an appeals process.

This decision to remand will also allow the Board to give more guidance to employees and employers alike by actually applying the new standard to different facts and circumstances than those examined in the Boeing case. Yet, the clear guidance we all desire – but at times hardly get – can only happen when John Ring is confirmed by the Senate and gives the Board a 3-2 Republican-majority once again. Until then, any case taken up by a four-member Board evenly divided among party lines will likely end up deadlocked 2-2 and possibly constrain the application of the new Boeing standard.

Carlos A. Torrejon is a former NLRB Attorney and an associate in the firm’s Labor and Employment Department, resident in its Morristown office.

In PCC Structurals, Inc., the NLRB overruled its 2011 Specialty Healthcare decision, which allowed for unions to organize employees in so-called “micro-units.”  Now, the Board has returned to its traditional, multi-factor “community of interest” test.

The term “micro-unit” refers to a segment of employees that have been separated from a larger group of employees who share similar interests (based on compensation, hours, benefits, supervision, training and skills, interchange with other employees, etc.).  These “micro-units” have been criticized for creating unnecessary distinctions between similarly-situated employees.  Permitting employers to create units out of smaller  groups of employees can make it easier for unions to organize.Picketing Image

The Board traditionally reviewed, on a case-by-case basis, the “community of interests” between employees to determine whether a unit of eligible employees was “appropriate” for bargaining, per the language of the NLRA.  Pursuant to this review, the Board might determine that the “appropriate” unit mirrored the unit sought by the union in its petition, or, upon insistence by the employer, it might find that other employees sharing the same “community of interests” must be included in the unit.

In 2011, however, the then-majority of the Board imposed a new framework to determine unit appropriateness.  Under the Specialty Healthcare test, the Board first reviewed whether the union’s proposed unit was “readily identifiable as a group” (using factors of the “community of interests” test).  If the employer asserted that other employees should be included in the unit to make it “appropriate,” it was required to show that there was an “overwhelming community of interests” with other employees.

In overturning Specialty Healthcare, the Board majority in PCC Structurals found that the decision’s framework “detracts” from the statutory framework of the NLRA, which mandates that the Board decide whether a petitioned-for unit is “appropriate” for bargaining “in each case.”  More specifically, the Specialty Healthcare test failed to examine the “community of interests” of all employees, but instead focused just on those identified by the union in the representation petition.  Moreover, the Board found that the Specialty Healthcare framework led to an abdication of the Board’s responsibility to determine unit appropriateness by “giv[ing] all-but-conclusive deference to” the union’s desired bargaining unit.

For these reasons, the Board rejected Specialty Healthcare and re-imposed the case-by-case determination of the overall “community of interests” of employees when determining unit appropriateness.  Accordingly, we can all bid farewell to micro-units.

Andrew MacDonald is an associate in the firm’s Labor and Employment Department, resident in its Philadelphia office.

On January 12, 2018, President Trump nominated Morgan Lewis & Bockius partner John Ring to fill the last vacancy on the five-member Board and, if confirmed by the Senate, this will once again give Republicans a 3-2 majority on the panel after the departure of former Board Chairman Philip A. Miscimarra in December 2017. Mr. Ring, a career management-side attorney, will bring decades of skill and experience to the Board, and will help to restore balance to the NLRB after years of decisions that greatly favored unions and employees under the Obama Board. Indeed, this restoration to a neutral government agency already began during the last week of former Board Chairman Miscimarra’s term when significant labor-friendly decisions – e.g., joint-employer (Browning Ferris Industries), workplace rules (Lutheran Heritage), and micro-unit organizing (Specialty Healthcare) – were overturned.

Moving forward, employers will simply have to wait and see which other Obama-era policies will be invalidated. A few possibilities include employees having a presumptive right to use their employer’s email system to engage in Section 7 activities (Purple Communications), graduate students at private universities being deemed employees under the Act and thus allowed to unionize (Columbia University), and doing away with (or modifying) the ‘ambush’ or ‘quickie’ election rule enacted close to three (3) years ago. At this point, however, this wish list of decisions is just speculation as to what will happen down the road. That said, I am very optimistic further change is coming sooner rather than later.

Carlos A. Torrejon is a former NLRB Attorney and an associate in the firm’s Labor and Employment Department, resident in its Morristown office.

Hy-Brand Industrial Contractors – the recent Board case overturning Browning Ferris Industries and restoring the previous joint employer standard – was perhaps the most important decision among the many decided prior to former Board Chairman Miscimarra stepping down in late 2017; but the decision may not be as significant for all.

As explained in an earlier Alert, the Republican-controlled Board returned to the pre-BFI standard in place for decades and once again found that joint employer status depends on whether entities have “direct and immediate” control over employees’ terms and conditions. And, even though Browning Ferris Industries exposed corporations that franchise to greater legal liability by making it easier to find joint employer status, overturning this incredibly broad standard is less substantial for those employers who do not just sit on the sidelines and observe (reserved control) but who actually have direct and immediate control over the employment terms of another entity.

Primarily, Hy-Brand is a huge victory for business advocacy groups and employers of all sizes as it returns the joint employer standard to its logical place and abandons the nonsensical propositions put forth in Browning Ferris Industries. Additionally, since Hy-Brand applies retroactively to all pending cases regardless of stage in the proceedings, respondents involved in such matters can expect any evidence of indirect and reserved control that the NLRB may have against them to likely be moot and not bear any impact on the outcome.

Hy-Brand will also present the NLRB’s new General Counsel, Peter Robb, with a decision in terms of resources the Agency will allocate when cases purport to show a joint employer finding by relying more on reserved, non-exercised control evidence rather than direct and immediate control. Still, notwithstanding how the General Counsel decides to allocate Agency resources, one thing is certain: businesses – large, small, and in between – can rest a little more easily knowing several Obama-era policies are on their way out.

Carlos A. Torrejon is a former NLRB Attorney and an associate in the firm’s Labor and Employment Department, resident in its Morristown office.