Leading up to National Labor Relations Board (NLRB) Member John F. Ring’s departure on December 16, 2022, labor advocates held their collective breath, awaiting what is often a flurry of decisions as Board members push their end-of-term case lists through the pipeline. Given the NLRB’s shift to a Democratic majority in 2021, most anticipated a further pendulum swing in the case law given the change in Board administration. The pendulum swung, albeit with less fanfare than many expected given the numerous legal initiatives already advanced by NLRB General Counsel Jennifer Abruzzo. Here we discuss the most generally relevant end-of-term cases and identify key takeaways for employers.
American Steel Construction, Inc., 372 NLRB No. 23 (Dec. 14, 2022)
The most significant decision was the long-awaited American Steel Construction. After considering amicus briefs, the Board overturned PCC Structurals [1] and returned to the Obama-era precedent of Specialty Healthcare [2], often referred to as the “micro unit” case.
Since 2017 (and prior to 2011), the Board used a “traditional test” in determining the appropriateness of a petitioned-for unit. The Board’s “traditional test,” which considered employee interaction within the proposed unit as well as the interests of those who were excluded from the petitioned-for unit, was reinstated by the Board in PCC Structurals—rejecting the “overwhelming community of interest” standard adopted in Specialty Healthcare that promoted smaller bargaining units often driven by job classification or single department distinctions.
Under American Steel, if a union’s petitioned-for unit consists of a clearly identifiable group of employees who share a community of interest, the Board will presume the unit is appropriate. This means that the burden to show that a petitioned-for unit is inappropriate is now placed squarely on the employer. As Chairwoman McFerran noted, the employer must prove there is no “legitimate basis upon which to exclude certain employees from the petitioned-for unit.” In other words, according to the majority, “if there are more than minimal differences [between petitioned-for employees and excluded employees], the petitioned-for unit has a rational basis” and the petitioned-for unit will stand (emphasis added). This difficult standard will serve to discourage employers from litigating unit scope and instead defer to the union’s proposed unit in manycases.
Members Kaplan and Ring dissented, arguing that the PCC Structurals had properly balanced the interests of employer rights and the need to maintain traditional bargaining units that were appropriate for collective bargaining. The dissent further argued that “[b]y overruling PCC Structurals and Boeing and returning to Specialty Healthcare, the majority guts that standard, undermines labor-relations stability, and shackles the Board in fulfilling its duties under Section 9(b) of the Act.” [3]
In relation to the burden shifting, the dissent noted that the return to Specialty Healthcare “[i]n effect . . . shunted to the employer in a stringent and nearly insurmountable burden shifting more suited to an adversarial proceeding than a representation-case analysis required by statute to be conducted by the Board. This curtailment of the Board’s role in performing a complete analysis of unit appropriateness undermined the mandate of Section 9(b), under which the Board must determine the appropriate bargaining unit.” [4]
Takeaway
The ultimate employer takeaway from this case is that employers must anticipate and prepare for a world where unions will be able to petition for, and sustain, units that comprise any particular department/organization or any particular job description. Employers should plan accordingly for employee relations purposes that, in many cases, they will not be able to obtain a larger unit, even if that unit is supported by ample evidence and may be better reflective of how employees actually work together.
While American Steel was the most impactful case of the end of Member Ring’s term, it was not the only important case. The following recently issued cases—all of which involve pro-union and/or pro-employee holdings—are separated into two categories: (1) outcomes consistent with the standard political pendulum shift and (2) cases that signal a considerable expansion of union/employee protections.
Bexar County Performing Arts Center Foundation, 372 NLRB No. 28 (Dec. 16, 2022) (Bexar II)
Prior Trump-era Board precedent permitted employers to prohibit off-duty employees of contractors to access an employer’s private property for the purposes of engaging in Section 7 activity unless a contractor employee (1) regularly and exclusively worked on the premises and (2) had no reasonable alternative means of communication to exercise Section 7 rights.
The Board in Bexar II overruled that standard and returned to the standard articulated by the Obama-era Board in New York New York Hotel & Casino, 356 NLRB 907 (2011).
Under New York New York, as reinstated by Bexar II, an employer may lawfully exclude off-duty employees of third-party contractors “only where the property owner is able to demonstrate that the contractor employees’ Section 7 activity significantly interferes with the use of the property or where exclusion is justified by another legitimate business reason.” [5]
Takeaway
The Board has determined that nonemployee Section 7 rights outweigh an employer’s ability to control its private property—requiring an employer to now demonstrate “significant interference” or another “legitimate business justification” for prohibiting off-duty contractor employees from engaging in Section 7 activity on the employer’s premises. It would be rational for employers to develop their evidence on both these issues ahead of time.
Sunbelt Rentals, Inc., 372 NLRB No. 24 (Dec. 15, 2022)
The Board, after inviting briefs from the public, maintained its current standard for determining whether an employer lawfully interrogated an employee in preparing its defense to an unfair labor practice proceeding before the Board.
The Board’s standard, set forth in Johnnie’s Poultry, [6] requires an employer to communicate certain “safeguards” to an employee, such as the purpose of the questioning, that the employee’s participation is voluntary, and that no reprisals will take place, prior to questioning the employee in connection with a Board trial.
Several circuit courts have criticized and rejected the per se rule in Johnnie’s Poultry, opting instead to apply a totality of the circumstances test.
The Board in Sunbelt, however, reaffirmed its position that employer interrogations in this context carry an “inherent danger of coercion” and the per se test in Johnnie’s Poultry addresses this danger while providing stability and predictability for employers and employees.
Takeaway
Employers must continue to provide Johnnie’s Poultry assurances when questioning statutory employees about issues connected to unfair labor practice investigations or trials, or any other litigation process.
Thryv, Inc., 372 NLRB No. 22 (Dec. 13, 2022)
Board considerably expanded its traditional “make-whole” remedies to include “all direct or foreseeable pecuniary harms” resulting from an unfair labor practice.
Under this expanded standard, the Board’s general counsel bears the initial burden—at the compliance stage—of demonstrating the amount of the pecuniary harm and that the harm was direct and foreseeable and resulted from the unfair labor practice. The employer then has an opportunity to rebut those claims.
The Board, citing Chairman McFerran’s dissent in another case, may now award costs for pecuniary harms such as credit card debt or interest, penalties for early withdrawals from retirement accounts, increased transportation or childcare costs, and out-of-pocket medical expenses.
Takeaway
The Board’s expansion of its “make-whole” relief may result in greater—and less easily discernable—monetary liability for employers that lose unfair labor practice litigation. Employers should carefully review evidence during such cases to show that expanded damages are not warranted because the employer neither knew nor should have known for their basis.
New York Presbyterian Hudson Valley Hospital, 372 NLRB No. 15 (Dec. 5, 2022)
In this case, the Board held that the employer unlawfully terminated a nurse for leaving an active surgery to participate in a union meeting.
While working in an operating room (OR) during an active surgery, a nurse—who was a member of the union’s bargaining committee—received notice that union agents had arrived at the hospital and were attempting to meet with hospital management. The nurse, without informing her supervisor or attempting to find another nurse to cover for her, left the OR for almost 30 minutes to participate in the meeting and was later terminated for patient abandonment.
The Board found that the nurse did not act inappropriately and that the hospital’s stated reason for termination, patient abandonment, was pretextual. The Board highlighted, among other factors, that the nurse asked the trainee present in the OR if he felt comfortable covering her duties before leaving, the hospital had assigned another nurse solo OR coverage for a longer period of time, the nurse was gone for “only” 28 minutes, and the lead surgeon in the OR did not believe that the nurse’s conduct warranted discipline as evidence that the nurse leaving the OR without notifying her supervisor was acceptable.
Member Ring, in his dissent, recognized that, while employees should be protected when engaging in Section 7 activity, “there are limits. A nurse leaving a patient in the middle of a spinal surgery must be one.” The Board majority, however, disagreed.
Takeaway
This decision suggests that the Biden-era Board will make every effort to find that an employee’s conduct is protected (or remains protected)—even when that conduct involves walking out of an active surgery or other work obligation. Employers should specify wherever possible what conduct is grounds for discipline, although that conduct should not be described on an exclusive basis.
The long-expected Democratic shift in Board law—not just prosecutions by the NLRB general counsel—is well under way. In our view, the most significant change thus far is the American Steel decision, which has implications for union organizing and bargaining unit structure. The decision could potentially fuel even more representation petitions or recognition demands by unions, based on the difficult burden imposed on employers to challenge the unit scope most favorable to a union’s organizing drive.
And with the NLRB maintaining a 3-1 Democratic majority after Member Ring’s departure, we anticipate 2023 will see numerous other precedential-shifting and pendulum-swinging decisions—moving labor law further in the direction of facilitating both union organizing and unfair labor practice violations for employer conduct that was previously lawful.
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[1] 365 NLRB No. 160 (2017).
[2] 357 NLRB 934 (2011).
[3] 372 NLRB No. 23, slip op. at 23.
[4] Id. slip op. at 19.
[5] Bexar II, 372 NLRB No. 28, slip op. at 1.
[6] 146 NLRB 770, 775 (1964).