Previously, I wrote about the “preemption” problem with the Seattle Ordinance regulating ride-sharing services like Uber and Lyft.  After Seattle passed the Ordinance, the federal Ninth Circuit Court of Appeals quickly stayed the Ordinance pending an appeal.  The Ninth Circuit recently issued its opinion on the case.  Although the law remains stayed due to antitrust law issues (that topic is for another blog…), the court’s decision provided a potentially game-changing decision on the preemptive force of national labor law as it relates to independent contractors.

As explained in my previous post, the National Labor Relations Act, which governs the formation of unions for most employees in the private sector, only covers “employees” and explicitly excludes independent contractors.  Since the ride-sharing drivers are independent contractors, Seattle passed the Ordinance based on the reasoning that, if the NLRA does not cover these workers, then it should be permissible for local government to step in and provide its own collective bargaining regime.  The counterargument, brought by the Chamber of Commerce on behalf of the ride-sharing companies and other interested employers, was that the exclusion of independent contractors from the NLRA’s coverage was purposefully intended to exclude them from any type of collective bargaining regime.

The Ninth Circuit agreed with Seattle on the preemption issue and found that the NLRA does not prohibit local governments from creating their own collective bargaining law covering independent contractors.  The Court found that, in passing the statute, Congress did not intend to prohibit independent contractors from bargaining collectively.  The NLRA only excluded them from coverage of its own provisions.  Moreover, the Court noted that the Ordinance itself provided that any drivers who were found to be employees of a business would be excluded from coverage of the Ordinance and, instead, subject to coverage of the NLRA.

Thus, the Ninth Circuit’s decision gives the “green light” to local governments (or even states) to create collective bargaining laws for independent contractors.  However, as in the Seattle case, local governments and independent contractors must beware of the potential antitrust implications of such arrangements.  It is expected that, regardless of the NLRA preemption holding, interested municipalities will wait for the remainder of the case to run its course on the antitrust issues before creating their own collective bargaining laws.

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

This past Monday, April 30, marked the conclusion of a weeklong strike conducted by Columbia graduate students at the University’s campus. Timing, as people say, is sometimes everything – especially in an ongoing labor dispute – and here these graduate students scheduled a strike for the last – and busiest – week of the semester.

As such, the strike was expected to be problematic for both professors who rely on graduate students to teach classes, perform research, and grade papers and exams, and for undergraduate students who attend these classes and anticipate receiving grades in a timely fashion. Indeed, there is no denying that the strike was at least somewhat disruptive as reports indicated that several hundred students and professors either moved classes off campus or cancelled them altogether. This, coupled with the fact that the turnout for the strike was greater than expected, is something the union likely considers a victory (in addition to the outside support received from the likes of President of Ireland Michael Higgins, U.S. Congressman Jerry Nadler, and Sex and the City alumna turned NY gubernatorial candidate Cynthia Nixon). In fact, according to an article by the Columbia Daily Spectator (the weekly student newspaper of the University), union organizers and graduate student leaders have already pledged to strike again at some point in the next academic year and have even discussed possible public demonstrations during graduation ceremonies.

Still, the University did not blink and it proceeded with business as usual over the course of the strike. However, as explained in a prior blog post by my colleagues, the University is still currently waiting – and likely hoping – for the graduate students’ union (Graduate Workers of Columbia-United Automobile Workers) to file unfair labor practice charges against it for refusing to bargain over an initial contract. This would then start a litigation and appeals process before the Board and federal court of appeals on the issue of whether graduate students are statutory employees under the Act and, perhaps, even lead to a Supreme Court decision that would settle this matter once and for all. But, doing all of this takes a lot of time and money and that, as well as the fear of an adverse decision, are likely to blame for the union’s failure to file any ULP charges.

Moving forward, unless the University changes its tune and decides to start bargaining with the union (which, at this point, there is a better chance of the Jets winning the Super Bowl!), do not be surprised if similar actions are undertaken by these graduate students down the road. All of this, however, may end up being inconsequential if the proper case comes before the Republican-controlled NLRB and the 2016 Columbia University Board decision that started this mess is overturned. But, with more and more graduate student unions across the country withdrawing their petitions in order to avoid becoming such a vehicle for overturning precedent, it is unclear exactly when this will happen.

Nevertheless, good things do come to those who wait, and ultimately I believe Columbia University – along with the several other private institutions across the country refusing to bargain with their respective graduate student unions – will see the fruits of their labor rewarded when this Board reverses course once again and finds that graduate students are not employees under the Act. 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.

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.

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.

Recently, a majority of employees at the news websites DNAinfo and Gothamist decided to join the Writer’s Guild union to bargain collectively over their terms of employment. In response, the owner of the websites decided to shut down its operations completely. This begs the question: can a business close its doors in response to its employees voting to join a union? Perhaps surprisingly, the answer to that question is, with few exceptions, yes.

Picketing Image

In general, the National Labor Relations Act prevents businesses from retaliating against employees for engaging in protected activities, including voting to join a union. However, the United States Supreme Court held in 1965 that closing a business in response to union activity is “not the type of discrimination which is prohibited by the Act.” Textile Workers v. Darlington Mfg. Co., 380 U.S. 263 (1965). In Darlington, the Court essentially found that the law

does not reach the act of purposefully liquidating a business because restraining a business from taking such an action was too “startling … [to] entertain.” Fundamentally, the rule announced in Darlington is premised on the rationale that an employer that leaves the sphere of business entirely does not gain any advantage by shedding union-represented employees. While this rule may sound odd, given that employers cannot discriminate against employees for their union activities, the law simply does not prevent an employer from going out of business, even when the closing is based solely on anti-union sentiment.

As is usually the case, there are exceptions to this rule. An employer cannot close a facility due to union activity in order to inhibit unionization at other plants. One can imagine a situation where a non-union employer with multiple facilities closes the first plant to unionize in order to make a statement to all of its employees. Where a decision to close is based on anti-union animus and aimed at employees at other locations, such a closing will be deemed to be unlawful.

All that being said, the closing of a business only provides a union with limited grounds to contest a closing as unlawful. In this case of DNAinfo and Gothamist, the Writers Guild most likely need to limit any claims at the NLRB to that theory.

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

With campaigns ongoing across the country aimed at raising the minimum wage at a state and local level, one might wonder, why not apply the same pressure on local governments to create their own labor laws? The battle between Uber and the City of Seattle demonstrates the complexities surrounding any attempt to regulate labor relations on a local level.

In 2014, the Seattle City Council passed an Ordinance allowing for ride-sharing drivers, who are classified as independent contractors, to form unions and bargain with Uber and other ride-sharing companies. This arrangement is unique because the National Labor Relations Act, which governs the formation of unions for most employees in the private sector, only covers “employees” and explicitly excludes independent contractors. Thus, the Ordinance is premised on the reasoning that, if the NLRA does not cover these workers, then it should be permissible for local government to step in and provide its own collective bargaining regime. Similar reasoning provides lawful justification for minimum wage laws, and many other local employment laws, for states and municipalities all over the country.   So, what is the problem?

The issue is that the NLRA “preempts” other laws that purport to regulate labor relations for private sector workers. Essentially, it is the only law that governs this field and no other legal structure can interfere with it in any manner, with certain exceptions not relevant here. Even though the NLRA excludes independent contractors, the argument for preemption is that the NLRA must be read as prohibiting collective bargaining with these individuals. In other words, the NLRA commands that only employees can engage in collective bargaining.

Since the passage of the Ordinance in 2014, the court battle has been ongoing between the lawyers for Uber and the City of Seattle. In August 2017, a U.S. District Court Judge allowed the law to go into effect, but, on September 8, 2017, a federal Appeals Court enjoined the law pending an appeal. We will need to wait and see whether the courts will allow states and municipalities to enact local labor law covering independent contractors. If the law becomes effective, we can expect a rash of similar laws in the labor-friendly parts of this country. Stay tuned.

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

Now that most, if not all, employees have smartphones with cameras in their pockets at all times, some employers have prohibited recording in the workplace. However, recent decisions by the National Labor Relations Board (“NLRB” or “the Board”) have found that “no recording” policies are illegal under the National Labor Relations Act (“the Act”). In fact, one case was upheld by a federal circuit court of appeals. Whole Foods Mkt. Grp. Inc. v. NLRB, Civ. 16-0002 (2nd Cir., June 1, 2017) (enforcing Whole Foods Mkt., 363 NLRB No. 87 (2015)). The NLRB essentially finds that these policies conflict with the rights of employees to record themselves engaging protected activities (strikes, protests, etc.) under the Act.

SupermarketIn Whole Foods, the unlawful policy at issue, in relevant part, stated: “in order to encourage open communications, free exchange of ideas, spontaneous and honest dialogue and an atmosphere of trust …. It is a violation of [the Employer’s] policy to record conversations … or company meetings with any recording device … unless prior approval is received ….”

When evaluating employer rules, the NLRB looks to see “whether employees would reasonably construe the language [of the rule] to prohibit [protected] activity.” In undertaking this analysis, the NLRB uses an objective standard to measure how, in the Board’s view, a reasonable employee would read and understand the rule. As such, employer rules are illegal when they tend to chill employees in the exercise of their rights.

Notably, the NLRB has found in past case that employees are, under some circumstances, allowed to make audio/visual recordings of protected activities, which include picketing and documenting alleged unsafe work conditions. Thus, the Board found in Whole Foods that the rule prohibiting all recordings conflicted with this right.

Under the rule explained in Whole Foods, an employer cannot maintain a blanket policy prohibiting recordings in the workplace, unless there is some employer overriding interest. Regarding the interests necessary to override employees’ rights to record, the NLRB has rejected employers’ arguments regarding to free-exchange of ideas in the workplace and dialogue about business strategy. Significantly, an NLRB Administrative Law Judge has even found that recordings cannot be completely banned in a nuclear power plant. Entergy Nuclear Operations, Inc., 01-CA-153956 (May 12, 2017). In one case, however, the Board allowed a hospital to prohibit recordings due to patient privacy concerns. Flagstaff Med. Ctr., 357 NLRB No. 65 (2011).

Thus, unless the employer can prove to the NLRB that an overriding interest is present, employers will need to craft narrow policies that prohibit recordings without tending to “chill” the rights of employees. As it stands now, the Board has suggested that this mission is possible, but has not provided much guidance as to how to design such a narrow policy. At best, the Board might uphold a policy that expressly states employees are allowed to record protected activity or record during non-work time, but only time will tell. However, as the winds of political change blow over the NLRB, the current Board, with a majority of Republican-appointed members, may be more receptive to employer arguments regarding the lawfulness of “no recording” policies.

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

Employers might think it wise to seek input from employees about working conditions, but they must tread carefully to make sure that they do not violate the National Labor Relations Act’s (“NLRA” or “the Act”) prohibition on “company unions.”

An Administrative Law Judge (“ALJ”) of the National Labor Relations Board (“NLRB” or “the Board”) found in T-Mobile USA, Inc., 14-CA-170229 (April 3, 2017) that the company violated the NLRA by setting up an “employer dominated organization” at its call centers. In the case, the company formed the group to give its employees a “voice” on what it called “pain points.” The company selected employees to be representatives in the group; had the employees attend summits away from their regular place of employment; and tracked the group’s “pain points.”

The company claimed the group was merely formed to address the “pain points” (repeated problems) of customers, not employees. However, the ALJ found that the group addressed issues related to employees’ working conditions. For example, on one occasion, the group addressed the issue of taking paid time off. On other occasions, the group raised issues related to employees’ benefits and bathroom conditions, among other matters. The ALJ noted this feedback was solicited from employees and that managers had requested “pain points” on any topics, including those that “enhanced the culture” at work.

Employers often ask their employees for input about all sorts of work and workplace issues. So why would the existence of a group such as this one violate the Act?

The major reason is that, when passing the NLRA in 1935, Congress expressly sought to prohibit employee groups that were dominated by employers and essentially functioned as “fake” unions. The NLRB has defined a dominated group as one that is “by virtue of the employer’s specific acts of creating the organization itself and determining its structure and function.” The employee group described above satisfied this test because it was established by company management and management dictated its structure and direction by “establishing its goals and meeting agendas, requiring face to face meetings with management, and determining how to enter the ‘pain points.’” In sum, the group would only exist with the further support and direction of management.

It’s entirely proper for employers to create employee groups for the purpose of resolving a variety of work, production, safety and customer issues. But this recent decision by an NLRB ALJ highlights the risks that are created when the group’s purpose – or perhaps even its unanticipated discussions – focus on “terms and conditions of employment.” When the employer creates and sponsors an employee group where the discussion turns to subjects such as employee pay, employee benefits, or even matters such as employee work schedules, this creates a risk that the NLRB might find that the employer has improperly created something that is the equivalent of an employer sponsored union. This risk had been especially high during the Obama administration, during which the NLRB has been very aggressive in supporting both unions and employees. Because the law here is unclear and subject to change, employers should exercise caution – and consider consulting with legal counsel — when creating or sponsoring employee groups where the discussions may involve any set of terms and conditions of employment.

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