What Recent NLRB Rulings Mean For Employers

2018 NLRB Rulings

The National Labor Relations Board (NLRB), the independent federal agency that safeguards employee rights to organize as unions, recently reversed some rulings that affect employers. Three of these rulings may have a significant impact on employers like you.

Joint Employer Ruling

While considering the recent Hy-Brand Industrial Contractors and Brandt Construction case, the NLRB changed the definition of employer from one with “indirect” control to one with “direct” control, which means that your company may be viewed as a joint employer with regard to another company’s workers only if you directly and promptly exercise control over the vital employment terms and conditions.

From 1984 to 2015, the NLRB held that a company is a co-employer only if it wields “direct” control of workers in another business. However, in the 2015 Browning-Ferris Industries case, it churned out a fresh “direct or indirect” standard of control. Under this, your company is potentially responsible for labor law breaches committed by subcontractors or franchises, even if you only had indirect or potential control over the terms and conditions of employment. Moreover, if you were in a “joint employer” relationship with a unionized employer, unions could demand that you engage in collective bargaining.

The new ruling is considered welcome news for businesses that rely on contractors and franchises and a crucial achievement for entrepreneurs and employees nationwide, as the industries and franchises that struggled are expected to recover soon.

However, this does not imply that a finding of joint employment will never occur, because such issues will continue to exist. Instead, it means that the new ruling will be applicable to all unresolved NLRB cases implicating joint employer issues and that you must be cautious when you have immediate and direct control over employees of other employers.

Employee Rights During Union Organizing

“Chilling Effects” Rule

The NLRB also overturned a precedent that barred employee handbook policies and other work rules that could be reasonably decoded by employees to “chill” the exercise of their rights under the National Labor Relations Act (NLRA). Earlier, the board had used that standard in invalidating numerous handbook policies. Since 2013, it had maintained that any handbook rule, irrespective of whether it plays a part in the worker’s complaint, can be interpreted as an infringement of federal labor law.

The fresh rule focuses on the essence and expanse of only the contested rule’s likely influence on employee rights under the NLRA and its licit justifications, rather than finding fault with other parts of company handbooks. This affords you more leeway in the case of facially neutral rules, policies and provisions.

NLRB Company Handbooks

Ruling on Micro-Unions

The NLRB also overturned the Specialty Healthcare decision from 2011, which permitted unions to assemble micro-units or micro-unions. The board reinstated the conventional community-of-interest standard, under which it will evaluate the interests of all employees, both those within and outside the petitioned-for unit, regardless of whether they share an overwhelming community of interest. Unions also will now have to listen to all employees and not just micro-units that share their views.

This means that you no longer have to deal with multiple units of employees, thereby preventing all employees from exercising their rights to vote on union representation.

Unions would find union organizing and union card signing more difficult; micro-units were allegedly used by unions to infiltrate an employer and organize from the inside out.

Review these recent rulings with your lawyers to adjust your practices accordingly because, if you wish to avoid unions, you should understand NLRB decisions, labor laws and union efforts well. Most importantly, you must always maintain a direct line of communication with employees.

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