The Second Obama Term: NLRB Outlook
by:Labor and Employment Practice
Employers should expect a continuation of the policies from the last four years as the NLRB seeks to extend the reach of the NLRA to nonunion workplaces and promotes increased unionization and collective bargaining.
As the second term for the Obama administration begins, employers can expect that the next four years will bring more of the same at the National Labor Relations Board (NLRB or Board), although it is likely that new members will join the Board. Legislative changes to the National Labor Relations Act (NLRA or Act) remain highly unlikely in the near term, and, as such, the Board is expected to continue pursuing a similar agenda. This agenda will include its union-election and notice-posting rulemaking initiatives, both of which currently are subject to challenge in the federal courts. The Board also may pursue other rulemaking initiatives, including electronic voting procedures for union representation elections. With respect to Board decisions, employers should expect the continued interpretation of the Act as extending rights and protections to nonunion employees in a variety of situations.
Composition of the NLRB
The composition of the Board will continue to be a point of interest during President Obama's second term. With the expiration of Republican Board Member Brian Hayes's term on December 16, 2012, the Board is now composed of three Democratic members only—Mark Pearce, Sharon Block, and Richard Griffin. The validity of the recess appointments of Members Block and Griffin, however, remain subject to challenge in Noel Canning v. NLRB. The U.S. Court of Appeals for the District of Columbia Circuit held oral argument in that case on December 5, 2012, and a decision is expected in early 2013, with potential U.S. Supreme Court review later in 2013 or 2014. In addition to deciding the validity of the recess appointments, the Noel Canning case also has implications for the validity of any Board decisions issued since January 2012.
Over the next year, President Obama may seek to confirm a package of new nominees, including one or two Republicans, and will likely encounter opposition to his appointees given congressional acrimony over labor issues. As such, President Obama may consider additional recess appointments during his second term. In either case, the Board will likely continue to be dominated by Democratic appointees.
The Board will continue to pursue the rulemaking initiatives it commenced during President Obama's first term, including the defense of its newly promulgated rules before the courts. On December 21, 2010, the Board announced a proposed rule that would require all employers subject to the Board's jurisdiction—the vast majority of employers doing business in the United States—to post a notice in the workplace informing employees of their rights under federal labor law. On August 25, 2011, the NLRB announced that it would release a final notice-posting rule but that the rule had not taken effect. The employer community has since pursued multiple court challenges to the rule, with one federal district court striking down part of the new rule and another district court striking down the entire rule. Appeals are pending at the U.S. Courts of Appeal for the District of Columbia and Fourth Circuits. A decision is expected in the D.C. Circuit case by spring 2013.
On June 22, 2011, the NLRB published a proposed rule that would, among other things, dramatically shorten the period of time between a union filing an election petition with the Board and the actual holding of the election. The proposed rule also would restrict an employer's ability to mount an effective communications campaign with its employees on whether or not to select union representation. On December 21, 2011, the Board announced a final rule that represented a "slimmed down" version of the proposed rule, as outlined by the Board in a resolution that was adopted by a 2-1 vote in a public meeting on November 30, 2011.
The U.S. District Court for the District of Columbia struck down the entire election rule in May 2012, finding that the final rule was issued with the votes of only two Board members, which was below the statutory quorum requirement of three members. The court concluded that Member Hayes's prior participation (as a dissenting member) in developing the rule did not establish the requisite quorum for the final vote on the actual rule in December 2011. An appeal of the district court's decision remains pending in the D.C. Circuit, with oral argument now scheduled for April 4 and a decision expected by summer or fall of 2013.
If either the notice-posting or union-election rule ultimately is struck down in the federal courts, the Board almost certainly will have an opportunity to issue new or modified rules over the next four years. The Board also may pursue other rulemaking initiatives, including electronic voting procedures similar to those used by the National Mediation Board for airline and railroad representation elections. There also is potential for rulemaking that provides increased union access to an employee's personal information and employer workplaces during union-organizing campaigns.
Over the last four years, the Board has issued a number of decisions extending the NLRA's protections to nonunion workplaces, with the larger policy goal of increasing the enforcement of the Act in an overwhelmingly nonunion private sector. In D.R. Horton, the Board prohibited mandatory arbitration agreements that waive the right to class action litigation as a condition of employment. In Banner Health, the Board restricted the ability of union and nonunion employers to impose blanket confidentiality requirements during workplace investigations. New decisions concerning employee off-duty access policies similarly have made it harder for employers to prevent off-duty employees from using break rooms and other interior facilities to engage in union organizing. The Board also undertook consideration of social media and handbook policies, most notably in its Costco and Knauz BMW decisions. There, the Board confirmed that it will broadly view social media and confidentiality policies with an eye toward implicit restrictions on activities protected by Section 7 of the NLRA. Moreover, in Hispanics United, the Board considered whether an employer could discharge an employee for social media comments that allegedly harassed and bullied a co-worker. In that case, the Board found that such comments were protected by the Act. Finally, although comparatively fewer decisions were issued concerning union elections, the Board's decision in Specialty Healthcare made it easier for unions to organize smaller groups of employees.
Additionally, shortly before Member Hayes's term ended on December 16, 2012, the Board issued the following noteworthy decisions:
- WKYC-TV, Inc., 359 N.L.R.B. No. 30 (Dec. 12, 2012), which overturned a 50-year-old precedent that generally has allowed employers to cease union dues checkoff after a collective bargaining agreement expires.
- Supply Technologies, LLC, 359 N.L.R.B. No. 38 (Dec. 14, 2012), which established, in practice, a requirement for employers to specifically reference an employee's ability to file NLRB charges within the language of mandatory arbitration agreements or other dispute resolution or settlement documents.
- Alan Ritchey, Inc., 359 N.L.R.B. No. 40 (Dec. 14, 2012), which established a new duty-to-bargain framework for employers regarding disciplinary action after union certification, but prior to the attainment of a first collective bargaining agreement.
- American Baptist Homes of the West (Piedmont Gardens), 359 N.L.R.B. No. 46 (Dec. 15, 2012), which overturned a 34-year-old precedent that generally allowed employers to refuse to provide unions with copies of confidential witness statements during internal investigations.
One notable pending case to be decided during the second term is Roundy's. There, the Board is considering further restrictions on an employer's ability to keep nonemployee union organizers and officials off of the employer's property. The decision also may reverse the Board's Register-Guard doctrine, which, since 2007, has allowed employers to distinguish between certain kinds of solicitation and distribution, thereby permitting personal and charitable solicitation, while prohibiting commercial, religious, or political solicitation on company equipment and property. Although many employers have found these distinctions helpful, the Board may decide to broadly reject them in Roundy's.
LMRDA "Persuader" Regulations
President Obama's second term also should bring the issuance of the final rules for employer and consultant reporting of so-called "persuader" activity under the Labor-Management Reporting and Disclosure Act (LMRDA). In a move that many considered the Obama administration's boldest attempt to impose employer neutrality in connection with union organizing and collective bargaining, the U.S. Department of Labor's Office of Labor Management Standards (OLMS), in 2011, proposed a sweeping expansion of employer and consultant reporting requirements for persuader activity. If adopted, these regulations would have important implications for employers and consultants dealing with union and nonunion employee groups. Indeed, covered persuader activity under the proposed rule can occur in the context of union-organizing activity, corporate campaigns, normal collective bargaining, strike preparation, and day-to-day employee and labor relations. In addition, consultants, for purposes of the reporting requirements, include both outside legal counsel and labor relations consultants. OLMS is expected to issue final rules as early as spring 2013.
The first four years of the Obama administration have been significant in the area of labor-management relations, with the NLRB proactively pursuing a decisional and regulatory agenda to extend the reach of the NLRA to nonunion workplaces and to promote increased unionization and collective bargaining. During this time, however, some of the NLRB's actions, notably its notice-posting and representation-election rules, have encountered opposition from the federal courts. Additionally, the challenge to President Obama's recess appointments to the Board leaves the status of many Board decisions in doubt as final action by the D.C. Circuit or U.S. Supreme Court in the Noel Canning case or other cases raising this issue may invalidate decisions issued by the Board since the recess appointments in January 2012.
The next four years, however, promise little change—Board decisions will likely apply the Act broadly to union and nonunion workplaces alike, further action may be taken on the notice-posting and representation-election procedure rulemaking, and the Senate will likely oppose NLRB appointments absent some broader agreement over labor issues between the executive and legislative branches. To be sure, all private-sector employers covered by the Act will be impacted by these developing issues in some manner.
The most intriguing question for the next four years, however, is the one without a clear answer—whether the extent of unionization in the private sector, which remains at a historic low of 7%, will begin expanding for the first time in decades.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis attorneys:
Lisa Stephanian Burton
A. John Harper II
Clifford D. Sethness
David A. McManus
Joseph C. Ragaglia
. For more information on the proposed notice-posting rule, see our December 23, 2010, LawFlash, "NLRB Proposes Rule to Require Employers to Post Notice Informing Employees of Their Right to Join a Union and Strike," available here.
. For more information on the final notice-posting rule, see our August 25, 2011, LawFlash, "NLRB to Issue Final Rule Requiring All Employers (Even Nonunion Employers) to Post Notice of Employee Rights Under the NLRA," available here.
. For more information on the court decisions relating to the notice-posting rule, see our March 6, 2012, LawFlash, "D.C. Court Issues Split Decision in NLRB Notice Case," available here, and our April 16, 2012, LawFlash, "South Carolina Court Strikes Down NLRB Notice-Posting Rule," available here.
. For more information on the proposed union-election rule, see our June 22, 2011, LawFlash, "NLRB Proposes New Rules to Significantly Expedite the Union Election Process and Limit Employer Participation," available here.
. See Sodexo Am. LLC, 358 N.L.R.B. No. 79 (2012); Marriott Int'l, Inc., 359 N.L.R.B. No. 8 (2012).
. Costco Wholesale Corp., 358 N.L.R.B. No. 106 (2012); Karl Knauz Motors, Inc., 358 N.L.R.B. No. 164 (2012).
. Hispanics United of Buffalo, Inc., 359 N.L.R.B. No. 37 (2012).
. For more information on the proposed persuader rules, see our June 21, 2011, LawFlash, "OLMS Proposes Significantly Expanded Employer and Consultant Reporting for Employee-Related 'Persuader Activities,'" available here.