President Biden has signaled support for many legislative and regulatory proposals that, if enacted, will significantly change the labor law landscape. For example, on March 9, 2021, the U.S. House of Representatives passed the Protecting the Right to Organize Act, known as the PRO Act, with a largely party line vote of 225-206. The implications of the PRO Act, should it be enacted into law, are discussed below. Further, other aspects of national labor law policy are actionable within President Biden’s discretion.
NLRB Developments
NLRB Member Appointments Subject to Senate Confirmation
Readers of our column will know that appointments to positions on the National Labor Relations Board (“NLRB”) are shared 3-2 in favor of the party holding the presidential appointment power. Currently, the Board consists of four members (two Republicans and two Democrats). The one open Board seat that President Biden is expected to fill soon will tip the balance of power. President Biden has already appointed and the Senate has confirmed Lauren McFerran as the new Board Chair. Chair McFerran previously served as a Member of the Board from 2014 until 2019, prior to which her career, unlike many members, predominantly was as staff to Senate committees or elected officials.
Once the next appointment is made and confirmed it is predictable that labor relations policy as dictated by the NLRB will take a hard swing in favor of organized labor and away from protection of rights of individual workers and employers. Such areas as protected and concerted actions by employees and employee solicitation in support of unions at the workplace are likely targets for reversal of Trump-era or earlier rulings.
Some of the more vulnerable rulings include:
Reinstate Specialty Healthcare
The Biden NLRB will likely reinstate Specialty Healthcare (2011), which was overturned by the NLRB in 2017. Under Specialty Healthcare, the NLRB presumes a bargaining unit is appropriate when it is composed of employees that perform the same job at the same facility, regardless of whether other employees share a community of interest with that unit. This allows organizing efforts to focus on a smaller group of employees, called a “micro unit,” at a company. The easier it is for a labor organization to identify a permissible unit, and especially, smaller units where fewer adherents are required, the more success in organizing is expected.
Reinstate the Joint-Employer Test
It is also likely that the Biden NLRB will reinstate the joint-employer test found in the Obama-era decision Browning-Ferris Industries (2015). In Browning-Ferris Industries, the NLRB expanded the joint-employer standard by holding that an employer’s status as a joint employer rests on its reserved right to control employees, either directly or indirectly. A return to this standard would enable employees to assert a right to bargain with both their direct employer and the company that contracted their services, leading to increased bargaining in many industries and likely greater leverage on the part of the labor organization.
Reinstate Purple Communications
The Biden NLRB is on our opinion likely to reinstate Purple Communications, which was overturned by the NLRB in 2019. The original ruling determined that as long as the employer makes any use whatsoever of its electronic mail system to address or counter union organizing efforts, the employer would be acting with unlawful anti-union bias if it enforced a rule prohibiting employees from using the same system for pro-union efforts and communications, despite that the employer clearly owns, controls and provides the instrumentality (the email platform). Purple Communications was at the time of its issuance, and still is, seen as a retreat by the NLRB from more traditional deference to employer property rights in opposing organizing efforts.
NLRB General Counsel
The President also has the appointment power subject to Senate confirmation over the powerful position of NLRB General Counsel. The “GC” has significant “policy-setting” authority in issuing guidance and expectations of NLRB “interpretation” of the National Labor Relations Act, and “prosecutorial” decision making authority to determine what cases and issue will – and will not – be pursued.
President Biden upon taking office dismissed former NLRB General Counsel Peter B. Robb, and on January 25, 2021, designated Peter Sung Ohr as Acting General Counsel of the NLRB.
Legislative Developments
Protecting the Right to Organize Act
President Biden has voiced his support for the PRO Act, which was passed by the U.S. House of Representatives on March 9, 2021. That proposal seeks to legislate protection for union organizing efforts, regulation of which otherwise falls under the ambit of the NLRB itself, including:
- Provisions instituting financial penalties on companies that interfere with workers’ organizing efforts, including firing or otherwise retaliating against workers. Currently, remedies for such alleged “violations” of the National Labor Relations Act are crafted and determined by the NLRB, are subject to review by the U.S. Circuit Courts of Appeals, and thus are not uniform across the nation. Current NLRB-fashioned remedies are specifically intended not to be “punitive” in the sense of penalizing employers, but merely, “remedial” to protect workers determined to have been subjected to unfair labor practices.
- During the election campaign, then-candidate Biden indicated he would push for legislation that goes even further than the PRO Act, seeking to impose stiffer penalties on corporations and potentially holding company executives personally liable for interfering with organizing efforts. Further, the possibility of imposition of criminal liability when election interference is deemed “intentional,” is being considered. This proposal, if adopted, would be virtually unprecedented. No labor relations law in history has even suggested criminal liability except where, for example, financial theft or fraud has been proven, for example, in the recent Chrysler/UAW series of cases.
- The PRO Act would also significantly alter the standards for determining whether an independent contractor is an employee by adopting the “ABC test” established by California’s Department of Labor. The ABC test provides that an individual performing any service shall be considered an employee and not an independent contractor, unless:
- the individual is free from control and direction in connection with the performance of the service, both under the contract for the performance of service and in fact;
- the service is performed outside the usual course of the business of the employer; and
- the individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.
Looking Ahead
It’s all but certain that significant changes are on the way to the nation’s labor and employment laws. The extent of changes, and how they will be implemented, remains to be seen. We will continue to keep you informed of new developments and their implications for your business.
If you have any questions, please contact Dave Houston or your Fraser Trebilcock attorney.
This alert serves as a general summary, and does not constitute legal guidance. All statements made in this article should be verified by counsel retained specifically for that purpose. Please contact us with any specific questions.
Fraser Trebilcock Shareholder Dave Houston has over 40 years of experience representing employers in planning, counseling, and litigating virtually all employment claims and disputes including labor relations (NLRB and MERC), wage and overtime, and employment discrimination, and negotiation of union contracts. He has authored numerous publications regarding employment issues. You can reach him at 517.377.0855 or dhouston@fraserlawfirm.com.
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