While it may come as a surprise, the NLRB has long held that employees are sometimes entitled to use profane language while engaging in labor activities.  In recent years, the Board has found that employee speech was protected where:

  • An employee posted online that his supervisor was a “NASTY MOTHER F**KER don’t know how to talk to people!!!!!! F**k his mother and his entire f**king family!!!!” while also noting an upcoming union election.
  • An employee used racist language while on a picket line during a strike.

When evaluating profane (and even overtly racist) language, the Board weighs various factors to determine whether the profane statements are not so egregious so that the employee will lose protection of the NLRA.  The Board often notes the high emotional context of labor disputes to justify vulgar behavior of employees.  In recent years, Courts of Appeals have been questioning whether such activities should remain protected under federal labor law, including in both cases mentioned above.

With this context, the Board has requested briefs in a case that involves, among other things, an employee’s statement that his supervisor could “shove it up his ass.”  Usually, an invitation for briefs signals that a majority of the Board is ready to overturn or modify precedent.  Given that the Board has selected a case with an egregious statement like this, it may be a safe bet that the NLRB will be unveiling a new standard for profane language in the near future.

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

The National Labor Relations Board recently invalidated an arbitration agreement that would require employees to arbitrate all “all claims or controversies” with their employer, holding that such a provision would unlawfully restrict employees’ access to the Board to adjudicate labor disputes.

The Board’s decision in Prime Healthcare could reverberate widely because the language it declared invalid is particularly common in arbitration agreements.

In the ruling, the Board revisited a topic on which it has previously found itself at odds with the U.S. Supreme Court.

In an earlier ruling, the Board struck down an arbitration agreement on the grounds that it was contrary to the collective rights contained in the National Labor Relations Act to engage in concerted actions with other employees, including engaging in class action litigation. But the Supreme Court overruled this position in Epic Systems v. Lewis and found that employers could lawfully prohibit the use of the class action vehicle in arbitration.

The Epic Systems decision, however, did not eliminate all potential restrictions to arbitration agreements based on the NLRA. While the justices expressly allowed employers to prohibit class actions in arbitration, they did not address the issue of employee access to the Board. Accordingly, employers should not regard Epic Systems as a panacea for NLRA-based challenges to arbitration agreements.

Several factors suggest that the Prime Healthcare decision may have staying power.

First, it was not decided with a partisan split between Board members, as is the standard operating procedure at the NLRB when controversial issues arise. Unlike past decisions on class action in arbitration, Prime was unanimously decided without a dissent from Republican-nominated members.

Second, the Board reviewed the question of Board access using the test expressed in Boeing(generally considered an employer-friendly test) which balances an employer’s legitimate interests against the interests of employees to pursue claims against their employers. The Board in Prime Healthcare rejected any justification for the arbitration agreement that restricted employees, even implicitly, from taking complaints to the NLRB.

Third, and perhaps most importantly, the Prime Healthcare decision is likely to affect boilerplate arbitration agreements in place around the country. The specific language at issue – “all claims or controversies” – is extremely common in arbitration agreements. By finding that this routine, boilerplate language renders an arbitration agreement void, the Board has effectively invalidated scores of arbitration agreements.

Therefore, employers should be aware that this unanimous NLRB decision creates a bright-line rule that prohibits broad employment arbitration agreements that confine “all claims or controversies” to the arbitration process. It would be wise to review the language of all arbitration agreements for compliance with the Prime decision and make sure that these agreements allow employees to access to the NLRB.

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

Federal labor law protects neutral (secondary) employers from becoming entangled in labor disputes between another (primary) employer and unions.  For most of the past decade, however, the NLRB has allowed unions to set up various displays – including an inflatable rat (otherwise known as “Scabby”) and an inflatable “fat cat” – near neutral employers’ premises or work sites with relative impunity.Management & Labor Report - Default Social Share Image

A recent memo from the NLRB’s Division of Advice signals a change in position of the Board’s prosecutorial arm.  The memo concerned  a construction site in Chicago where a union placed agents with a large banner and a large inflatable cat clutching a construction worker by the neck.  The banner and inflatable cat indicated that the union had a labor dispute with the general contractor (primary) on the project, even though the electrical subcontractor (secondary) was the entity truly targeted by the union.

The purpose the banner and rat was to try to force the general contractor to use an employer, i.e., subcontractor, that was a signatory to the union’s collective bargaining agreement.  Due to this purpose, labor law limited the methods at the union’s disposal to protest the general contractor.  As such, the union was prohibited from engaging in picketing, which has a technical meaning in this context and was limited to patrolling an area or creating a physical barrier at the work site.  The union was also prohibited from engaging in coercive conduct that is tantamount to picketing, which has, in past Board decisions, included the use of extremely loud megaphones or even by way of a signal to others of an invisible picket line.

Under a line of Board cases from 2010 and 2011, the activity involving the banner and the rat have been lawful as non-picketing activity which is not otherwise coercive.  The banner and the rat have been considered to be stationary objects, even when accompanied by union agents, that do not create a physical or psychological barrier that would affect the business of the neutral employer.

The new Advice memo indicates that the Board’s General Counsel will urge reconsideration of Board precedent in this area.  In the memo, the Division of Advice found that the banner and the inflatable cat strangling a construction worker was tantamount to picketing or constituted signal picketing.  Whether it is actually picketing, or just a signal standing in for picketing, the conduct coerces employees, suppliers, or vendors from entering the site to work for or do business with the neutral electrical subcontractor general contractor.  Based on this reasoning, the Division of Advice ordered that a complaint be issued. and instructed NLRB attorneys handling the case to argue for the reversal of precedent on this topic.

Does this mean that Scabby the rat is dead?  Can unions no longer use banners and inflatable animals to protest?  The answer is no.  Scabby is likely alive and well, at least for now.  The NLRB itself would need to overturn the applicable precedent; the position of the Division of Advice is not precedential nor sufficient to change the NLRB’s position.  In fact, a NLRB Administrative Law Judge recently found that a union acted lawfully by using an inflatable rat, passing out handbills, and using a bullhorn at high volume when targeting a neutral employer on a construction site.

And even if the NLRB agreed with the General Counsel’s new position, the holding could be limited to conduct including both a banner and an inflatable object at the same time, where the inflatable animal used here was shown straggling a construction worker – an act of physical violence.  If unions contain their activity to one “prop” at a time, or at least just use Scabby the rat without any depictions of violence, they will be in a better position to maintain the status quo on secondary activity.  The case will now progress to the complaint stage, which, if not settled, may eventually bring the case before the Board.  For now, Scabby the rat and the Fat Cat live on.

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

Since the emergence of the “gig economy” in the last decade, courts and government agencies have grappled with the question of whether gig workers should be classified as employees or contractors.  The answer to that question has enormous consequences for employee coverage under various federal and state employment laws, ranging from anti-discrimination statutes like Title VII to wage-and-hour laws like the Fair Labor Standards Act.  Generally, these laws usually only cover employees, and exclude contractors.

The National Labor Relations Board, which administers the National Labor Relations Act, recently weighed in on the issue.  The Division of Advice, which is within the office of the NLRB’s General Counsel, recently published a memorandum describing the reasons why Uber drivers are considered to be contractors, not employees for purposes of the NLRA.  This means that Uber Drivers do not enjoy the protections of the NLRA, including, among other privileges, the right to strike and organize with fellow employees to try to improve wages and working conditions.

Like other employment laws, the NLRA applies only to employees, and expressly excludes independent contractors from its coverage.  When a worker’s classification as an employee or contractor is in question, the NLRB applies a factor test that is rooted in the common law of agency.  Of the many factors that may be considered (the list of factors is non-exhaustive), the NLRB especially looks to the extent of control by the purported employer over the worker and the extent of “entrepreneurial opportunity” of the worker.  The greater the worker’s entrepreneurial control, the more likely the worker will be considered a contractor, rather than an employee.

The memo found that Uber drivers are contractors for two core reasons.  First, Uber does not exert a sufficient amount of control over drivers to be consider their employer.  The drivers have “near complete control” of their schedules, and can log on or off the platform at any time for any reason.  Uber does not assign rides to particular drivers, provide cars or other equipment (drivers supply their own cars), or supervise drivers while they are logged into the app and working, which is essentially outsourced to the passenger rating system.  Indeed, Uber has a “hands off” approach to its drivers.

Second, the system created by Uber for drivers generally allows for drivers to control their own entrepreneurial destiny.  Uber’s lack of control provides room for the drivers to serve their own economic objectives and interests (i.e., the more you work, the more you can potentially earn and vice-versa).  Of note, Uber’s rules allow for drivers to utilize other ridesharing apps or pursue other transportation-related businesses in addition to driving for Uber.

Due to Uber’s lack of control over drivers and the entrepreneurial opportunity of drivers, the General Counsel found that the drivers were contractors who do not enjoy the protections of the NLRA.  For this reason, the Division of Advice ordered that the driver’s complaints be dismissed.

The drivers can appeal the dismissal to the NLRB’s General Counsel or withdraw their complaints prior to formal dismissal.  It is expected that the General Counsel would agree with the conclusions of the Advice memo.  While the memo is not technically binding on the NLRB, the General Counsel’s office controls the cases that are brought before the NLRB, so, without a case on which to rule, the NLRB cannot “overrule” it.

Significantly, however, the memo’s proposition that Uber drivers are contractors is also supported by recent Board precedent.  In SuperShuttle DFW, 367 NLRB No. 75 (2019), which was decided before the Uber memo, the Board found that drivers of a shared airport ride service were independent contractors, not employees, and thus were not covered by the Act.  Although this Board decision did not concern workers of rideshare companies, it is still expected to have a wide-ranging impact on gig economy companies reliant on a freelancing and/or sporadic workforce.  In fact, in finding that SuperShuttle drivers were independent contractors, the Board relied on several facts about their work that are also true for Uber drivers (e.g., Uber drivers decide when to work and what hours to work, which trips to accept, and when to turn on the device that alerts them to an available trip).

In sum, this Advice memo and the SuperShuttle decision clarifies Board precedent in this area. This precedent will likely affect not just these particular Uber drivers subject to the complaints before the NLRB, but also the gig economy as a whole (e.g., Lyft or Via drivers).  In addition, although this opinion may be limited to the NLRA, courts and other agencies apply similar factor tests under other laws (Title VII, FLSA, FMLA, etc.).  Therefore, this memo may be cited, or its arguments may be relied upon, by parties in future disputes over employee/contractor status.  The memo represents an important step to provide clarity for businesses operating in the modern gig economy.

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

On Monday, February 4, Governor Phil Murphy made good on a campaign promise and signed into law a new bill (A-15) that will raise the State’s minimum wage to $15 per hour by 2024. This hike in minimum wage, however, will not happen immediately and increases will be phased in over time.

Currently, the minimum wage rate in New Jersey is $8.85 per hour. Under the new law, this rate will jump to $10 per hour on July 1, 2019 and will again increase to $11 per hour by January 1, 2020. At that point, these two increases will amount to an almost 25% increase in minimum wage in about 11 months. After January 1, 2020, the statewide minimum wage will increase by $1 per hour every year on January 1 until the rate reaches $15 per hour on January 1, 2024. Afterward, any further increase in minimum wage would be in accordance with the consumer price index (CPI) for urban wage earners and clerical workers as calculated by the U.S. Department of Labor, Bureau of Labor Statistics. In other words, the federal government uses the CPI to measure the cost of living and, thereafter, the New Jersey Department of Labor and Workforce Development (“NJLWD”) evaluates any changes to the CPI and adjusts the minimum wage as necessary.

Notably, this new minimum wage law places New Jersey in an exclusive group of other states and districts – California, Massachusetts, New York and the District of Columbia – who have similarly authorized such increases in minimum wage.

However, the new minimum wage law will not affect every employee equally – at least at first – and comes with exceptions for certain workers. For instance, seasonal workers and small business employees (businesses that employ five or less individuals) will experience wage increases at a slower rate and have to wait until 2026 for the minimum wage to reach $15 per hour. Specifically, these employees’ minimum wage – currently at $8.85 per hour – will increase to $10.30 per hour by January 1, 2020 and every year thereafter by $.80 per hour until January 1, 2025. Then, a final $.70 increase on January 1, 2026 will be implemented to bring their minimum wage to $15 per hour.

Agricultural workers in New Jersey will also see a similar – and slower – progression in minimum wage increases as their rate will only jump to $12.50 per hour by January 1, 2024. Then, by no later than March 31, 2024, the NJLWD Commissioner and the Secretary of Agriculture (“Secretary”) will decide whether to continue minimum wage increases up to $15 per hour by 2027. (If the Commissioner and Secretary cannot agree on how to move forward, the Governor shall appoint a member of the public – subject to the advice and consent of the Senate – to serve as a tie-breaking vote, if necessary.)

Additionally, tipped workers – who currently earn $2.13 per hour – will see their minimum hourly wage increase to $5.13 per hour by 2024. Further, starting January 1, 2020, employers will be able to pay newly hired employees enrolled in an established on-the-job or other training program a “training wage” of not less than 90% of the established minimum wage at the time. Employers can pay these new employees this training wage for their first 120 hours of work (or first three weeks on-the-job based on a 40-hour workweek), provided the new employee has no previous similar or related experience. The NJLWD Commissioner will implement and adopt standards by which a training program must abide.

At this time, it is critical that employers start preparing themselves for the effect of these increases. For example, employers must think about overtime and the increased amount they will have to pay nonexempt employees for each hour over 40 worked per workweek. Moreover, employers should consult experienced labor and employment attorneys before making any changes to their payment practices and/or business model in an attempt to offset these forthcoming increases in minimum wage, e.g., laying off employees or reducing work hours. Noncompliance with the new minimum wage law could result in substantial penalties and lengthy/costly litigation, as well as possibly lead to unwanted attention from, and increased oversight by, the NJLWD.

Further, unionized employers should be aware that future increases in the State’s minimum wage rates, e.g., $12-$15 per hour, might be higher than the negotiated wage rates in their then-current collective bargaining agreements. In such instances, it is possible – if not likely – that the parties will need to re-open negotiations as to wages to meet the current statutory minimum wage (and this is a certainty where parties provide for such specific re-openings in their contracts themselves).

In sum, New Jersey employers must remain vigilant, proactive, and cautious in complying with these impending changes to the minimum wage rates as their failure to do so could result in serious legal consequences.

Employee complaints must be “concerted” to enjoy the protections of federal labor law.  This requirement, contained in the language of the NLRA, stems from the collective nature of rights guaranteed by the NLRA, which ensure protection for union activity or activity that is made for “mutual aid or protection.”  Despite rather clear statutory language, the labor bar has debated the meaning of “concerted” for many decades and the NLRB’s case law has alternated between restricted and expansive definitions over time.

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In Alstate Maintenance, the NLRB has swung the pendulum back toward the literal meaning of “concerted” by excluding individual employee complaints from protection of the Act.  The facts of the case involved skycap/baggage handler who refused to assist some passengers because he expected little or no tip.  The skycap complained to managers about his perceptions regarding the passengers in front of other employees.  After being terminated for his actions and complaint, the skycap brought his dispute to the NLRB.

The NLRB found that the skycap’s complaint, even though it was made in front of other employees, was not made “in concert” with those employees.  The employee did not bring a truly group compliant to the attention of management or take some other action to induce group action of employees.  Essentially, the employees merely “griped” about his individual thoughts about a single employment incident after it was concluded.  The NLRB discounted the fact that the employee used the language “we” in his complaint.

Alstate is an important development for several reasons.  First, the NLRB has returned its standard for “concerted” activities to cover only group complaints.  Second, it has clarified that complaining in front of employees, or using the words “we” or “us” in a complaint, does not convert an individual complaint to a group complaint.  Third, and possibly most the important aspect of this decision, the NLRB’s narrowing of the “concerted” standard will have the greatest impact in non-union workplaces where employees lack union protection and mainly rely on the protections for concerted activities embodied in Section 7 of the NLRA.  Alstate will likely be a significant tool for employers defending against NLRB charges related to protected concerted activity.

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

There is another yet another development in saga of the NLRB’s joint employer standard.  This issue, which has caused consternation in the business community, concerns the Board’s standards for finding that two entities are jointly responsible under federal labor law as the employers of a certain group of employees.  Just before the New Year, the federal Court of Appeals for the District of Columbia upheld the joint employer standard issued by the Board in 2015 in the Browning-Ferris Industries case.

We’ve covered this topic here, and here, but a quick review of the background is in order:  In 2015, the Board issued Browning Ferris Industries, 362 NLRB No. 186 (2015) (“BFI”), which loosened the standard from “direct and immediate control” to “share or codetermine,” which could lead to a joint employer finding based solely on indirect or reserved control over employees.  In late 2017, the Board returned to the “direct and immediate control” standard in Hy-Brand Contractors Ltd., 365 NLRB No. 156 (2017).  Then, only a few months later in February, 2018, the Board reversed Hy-Brand due to possible ethical concerns related to the representation of one of the parties in BFI by the former law firm of a Board member.  After vacating Hy-Brand the Board announced that it would engage in rule-making to publish joint employer rules.

All the while, the appeal of the 2015 BFI case was pending before the D.C. Circuit, which held off on issuing a decision while the Board dealt with Hy-Brand.  Now, the D.C. Circuit has issued its’ decision upholding the looser “share or codetermine” standard, including indirect control over employees, as a matter of law.  Since the Board had been applying the BFI standard after it abandoned Hy-Brand, there will be no immediate impact on labor relations around the country.  However, the D.C. Circuit partially remanded the case to the NLRB to clarify the application of the “share or codetermine” test to the facts of the case.

Even though the D.C. Circuit partially remanded the matter back to the NLRB, the Board may not be able to use BFI to change the joint employer standard back to the pre-BFI framework.  On this issue, the Board is not just constrained by the fact that the case could be appealed to the Supreme Court and heard prior to the Board’s decision on remand.

While the Supreme Court may, of course, take the case and overrule BFI, the Board may be hampered in changing the BFI standard by decision or rulemaking because the D.C. Circuit made clear that the joint employer question is a matter of law, which is not subject to administrative agency interpretation.  The Board may apply the legal joint employer test to distinct situations, but it cannot fundamentally change the joint employer standard (by decision or rulemaking).  The meaning of “employer” is restricted, and subject to court review, because it is defined by traditional principles of agency under the common law.  Therefore, unless the Supreme Court weighs in soon, it is likely that this issue will be debated by the Board, in case law and rulemaking, and the federal appeals courts around the country.  Labor practitioners, brace yourselves accordingly.

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


In Silvan Industries, 367 NLRB No. 28 (2018), the Board decided that an employer, upon being presented with evidence that creates well-founded uncertainty as to a union’s majority support, may file an election petition despite previously agreeing to a collective bargaining agreement with the union that had not yet taken effect.  This Board decision reviews important principles of labor law applicable to employers in a unique situation wherein the majority status of the union representing its employees is challenged.

Generally, employers may file election petitions with the NLRB (referred to as “RM” petitions) only under certain circumstances.  Unlike employees, who may solicit or poll fellow employees as to union support or lack thereof, employers are usually prevented from doing so and must passively react to information provided by employees.  Thus, where a union already represents its employees, an employer must demonstrate that it has a “reasonable good-faith uncertainty” of majority status by the union.

For example, an employer may base its uncertainty on a petition presented by employees seeking to oust their union.

This is exactly what occurred in Silvan Industries.  In this case, Silvan’s employees were represented by a union, but did not have a collective bargaining agreement in place.  After reaching a tentative agreement with the union that was set to take effect one month later, Silvan management received a petition from an employee that led it to question the union’s majority support.  Silvan immediately filed an RM petition with the Board and continued to recognize the Union and followed the terms of the collective bargaining agreement.

Following a delay of approximately two months, the Board’s Regional Director dismissed the petition.  While there was nothing wrong with the petition or the employer’s good faith uncertainty as to majority support of the employees, the Regional Director found that the petition was barred by the Board’s contract bar doctrine.

The contract bar doctrine prevents any party, including unions, employers, or employees, from filing an election petition while a collective bargaining agreement is in effect for up to three years.  The Regional Director found that the tentative agreement reached between the employer and the union, which had not yet gone into effect, barred the processing of the petition.

The Board reversed the Regional Director’s ruling.  It noted that the contract bar doctrine only prevents the filing of petitions while agreements are in effect and, since the contract between Silvan and the union had not yet taken effect, there was no bar in that situation.  Furthermore, the contract bar rule equally applies to employee decertification petitions seeking to oust unions, something which could have been filed by the employees who presented the petition to Silvan management.  Since the employees could have filed a decertification petition, the there are no valid reasons, in the eyes of the Board, that justified barring the employer from filing the RM petition in this case.  This is especially so where the employer’s other alternative would be to unilaterally withdraw recognition from the union, which is disfavored on policy grounds by the Board and risky for employers since under that circumstance it must be able to prove actual loss of majority status instead of “reasonable good-faith uncertainty.”

In sum, employers faced with evidence of lack of support for unions representing their employees must consider not only whether the grounds for the uncertainty will withstand scrutiny, but also – under certain scenarios – whether the contract bar doctrine will prevent the filing of an RM petition.

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

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Can employees engage in a concerted stretching exercise during work hours?  The NLRB recently said yes.

The NLRA allows employees to engage in demonstrations to support their union, including demonstrations in support of contract proposals.  However, the law does not protect employees from engaging in work slowdowns or other refusals to perform work.  Strikes are protected, but they generally are an “all or nothing” proposition.  The general rule is that employees must completely stop work and leave the premises to enjoy the protections of the NLRA for strike activity.  Employees must normally show this support for their union in nonworking areas of the workplace during nonworking time.

In Consolidated Communications, a group of employees stood up from their workstations at an appointed time and engaged in stretching exercises in unison.  But, they did so during working time and in working areas.  So, how did the Board find that this action was protected?

The majority of the board panel viewed the action as protected because they found that the employees did not refuse to perform work or engage in a “slowdown.”  The majority noted that there was no rule against stretching, that employees had normally stretched from time-to-time at their workstations, and that the stretching activity did not result in work not being performed.  Seeing no refusal to work, the Board majority concluded that the action remained protected even if it occurred during working time in working areas.

In dissent, Member Emanuel viewed the matter differently.  By participating in the stretching action during work time, the employees necessarily engaged in a refusal to work.  Even if the time away from work was minimal, it had to result in some lost work time.  As such, he viewed the action as being unprotected and thought that the employer could lawfully discipline the employees.

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