Articles Posted in NLRB Decisions

The “sharing economy” has brought significant changes, both good and bad, to many aspects of the job market. Rideshare companies, for example, give drivers flexibility in terms of when and how long they work, but this has come with disadvantages. Some rideshare drivers have sought the protection of employment statutes in claims for unpaid wages and other matters. The question of whether they are employees, who are eligible for relief under those employment laws, or independent contractors remains largely unresolved. Various courts and administrative agencies have reached different conclusions. Two federal agencies, the National Labor Relations Board (NLRB) and the Department of Labor’s Wage and Hour Division (WHD), recently issued opinions holding that rideshare drivers are independent contractors. The bases for their conclusions differ from the legal standard used in New Jersey.

A worker in New Jersey is deemed an “employee,” and therefore not an independent contractor, unless their employer can satisfy the three-prong “ABC test.” First, the employer must demonstrate that they do not exercise control over how the person does their job, and that their agreement with the person indicates that they will not exercise such control. Next, they must show that the job performed by the person is not part of their usual business, or that the person does their work away from the employer’s place of business. Finally, they must establish that the person has their own “independently established trade, occupation, profession or business.” N.J. Rev. Stat. § 43:21-19(i)(6).

The New Jersey Supreme Court adopted the ABC test in a 2015 ruling. Several other states have also adopted it. The test generally applies to employee misclassification claims under state law. The 2015 case, for example, involved alleged violations of New Jersey’s wage and hour statutes. Claims under federal law may require separate analyses.
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A collective bargaining agreement (CBA) is a contract between a labor union, which is legally authorized to negotiate on the employees’ behalf, and the company that employs the union’s members. When ownership of a business changes hands, the new owner is only subject to all of the terms of an existing CBA if it is a “perfectly clear successor” to the previous owner. The National Labor Relations Board (NLRB) developed a set of guidelines, known as the “perfectly clear successor” (PCS) rule, based on a 1972 ruling by the U.S. Supreme Court. In April 2019, the NLRB issued a ruling that seems to limit the scope of the PCS rule.

The National Labor Relations Act (NLRA) prohibits employers from interfering with or restraining efforts by employees to organize for the purpose of collective bargaining, either by forming a union or joining an existing organization. Employers may not discriminate or retaliate against employees who exercise any of the rights protected by the statute. Once an employer and a union enter into a CBA, the employer commits an unlawful act if it refuses to negotiate with its employees’ authorized representative.

In 1972, the Supreme Court ruled that a successor employer must recognize a union’s authority when it has retained a majority of the union members as employees. This does not mean, however, that the successor employer is bound by the substantive terms of its predecessor’s CBA. The court held that a successor is not bound by the old CBA and is therefore free to set the initial terms for employment, unless “it is perfectly clear that the new employer plans to retain all of the employees in the unit.” NLRB v. Burns Int’l Security Services, Inc., 406 U.S. 272, 294-95 (1972).
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The National Labor Relations Act (NLRA) protects workers’ rights to engage in activities related to labor organizing. The statute established the National Labor Relations Board (NLRB) to investigate and adjudicate alleged violations. Union organizing can now take place both online and in real life, and the NLRB regularly considers questions involving communications technologies like email. Its rulings can affect not just New Jersey employment law but workers in New Jersey and all over the country. In 2007, the NLRB ruled that employers can place restrictions on employees’ use of company email for non-work purposes, even if it might restrict employees’ ability to engage in NLRA-protected activities. It overturned that decision in 2014, but now the NLRB is asking the public to file briefs addressing whether it should return to the standard it established in 2007.

Section 7 identifies workers’ “right to self-organization,” and to engage in activities related to “bargain[ing] collectively through representatives of their own choosing.” 29 U.S.C. § 157. An employer commits an “unfair labor practice” under § 8 of the NLRA if it “interfere[s] with, restrain[s], or coerce[s]” an employee attempting to exercise a protected right. Id. at § 158(a)(1). Congress enacted the NLRA in 1935, and it last amended § 7 in 1947. The nature of union organizing has changed in many ways since that time, and the job of interpreting § 7 in light of new technologies has largely fallen on the NLRB.

In 2007, the NLRB ruled that “employees have no statutory right to use the [employer’s] e-mail system for Section 7 purposes.” The Guard Publishing Co. d/b/a The Register-Guard, et al, 351 NLRB 1110 (2007). The employer in that case, a newspaper, installed a computer system in 1996 that provided email accounts for many of the employees. It maintained a policy prohibiting employees from using their email accounts for “non-job-related solicitations.” Id. at 1111. An employee alleged violations of § 7 after the employer issued several written warnings to her about using her company email account to send notices about union activities. The NLRB affirmed an administrative law judge’s (ALJ’s) 2002 ruling that the employer’s policy did not violate § 8, but that the employer violated § 8 by enforcing the policy in a discriminatory manner.
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New Jersey labor laws protect the rights of workers to organize for the purpose of collectively asserting their workplace rights, such as by forming a union to engage in collective bargaining with their employer’s management. At the federal level, the National Labor Relations Act (NLRA) protects a wide range of activities related to organizing, and prohibits employers from interfering with employees in the exercise of those rights. The National Labor Relations Board (NLRB) is charged with investigating and, in some cases, issuing rulings on alleged violations of the NLRA. An ongoing issue of dispute between employers and employees is the extent to which employers can bar their employees from engaging in organizing activities on the employer’s property. The NLRB recently ruled that an employer’s ban on solicitation on company property was an unfair labor practice under the NLRA. UPMC, 366 NLRB No. 142 (2018).

Section 7 of the NLRA protects workers’ “right to self-organization,” which includes the right “to form, join, or assist labor organizations.” 29 U.S.C. § 157. It is an “unfair labor practice” for employers “to interfere with [or] restrain…employees in the exercise of the rights guaranteed in” Section 7. Id. at § 158(a)(1). Employees may file complaints alleging unfair labor practices with the NLRB.

The NLRB’s website states the agency’s position regarding employees’ solicitation of their fellow employees for union membership: “Working time is for work.” Employers, according to the NLRB, are permitted to “maintain and enforce non-discriminatory rules limiting solicitation and distribution,” but they cannot prohibit such activity “during non-work time, such as before or after work or during break times.” It bases this position on U.S. Supreme Court decisions affirming the right to engage in solicitation outside of work hours. The UPMC case involves businesses providing healthcare services. The Supreme Court has ruled that “health care facilities [must] permit employee solicitation and distribution during nonworking time in nonworking areas,” provided that the employer has not shown that such activities cause “disruption of health care operations or disturbance of patients.” Beth Israel Hospital v. NLRB, 437 U.S. 483, 507 (1978).

Class actions and collective actions allow numerous individuals with similar claims to bring a single lawsuit against a common defendant, rather than hundreds or thousands of individual lawsuits. A New Jersey employee, for example, could file a collective action on behalf of themselves “or other employees similarly situated” for violations of state minimum wage law. See N.J. Rev. Stat. § 34:11-56a25. This offers many benefits for plaintiffs, particularly in situations where the cost of filing suit individually, when compared to the potential recovery, would make it too expensive to assert one’s legal rights. One could also argue that class actions help defendants by consolidating all claims against them into a single lawsuit, rather than hundreds or thousands of lawsuits. That is not how employers and other defendants usually see class actions, however, and they frequently argue against allowing employees to pool their claims in a single lawsuit. The U.S. Supreme Court recently sided with employers regarding collective arbitration, similar to collective or class actions. Epic Systems Corp. v. Lewis, 584 U.S. ___ (2018).

The ruling in Epic Systems arose from a conflict between two federal statutes: the Federal Arbitration Act (FAA) of 1925, 9 U.S.C. § 1 et seq.; and the National Labor Relations Act (NLRA) of 1935, 29 U.S.C. § 151 et seq. The FAA generally states that arbitration clauses in written contracts “involving commerce” are “valid, irrevocable, and enforceable.” 9 U.S.C. § 2. Courts have authority to order parties to such a contract to participate in arbitration, and to enforce the recommendations of the arbitrators. A court may only vacate or modify an arbitration award on grounds specified by the statute. See id. at §§ 10, 11. The Supreme Court held that the FAA applies to contracts executed under both state and federal law in Southland Corp. v. Keating, 465 U.S. 1 (1984).

The NLRA protects the rights of workers to organize for the purpose of collective bargaining—i.e. to form or join labor unions—and “to engage in other concerted activities for” those purposes. 29 U.S.C. § 157. It is an “unfair labor practice” for employers to “interfere with” or “restrain” employers engaged in these protected activities. Id. at § 158(a)(1). Courts have given rather broad interpretation to the meaning of “concerted activities.” The question in Epic Systems concerned whether collective arbitration was a “concerted activity” protected by the NLRA, or whether the FAA required enforcement of arbitration clauses in individual employment contracts.
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Establishing an employer-employee relationship is the first step in claims under most federal and New Jersey employment statutes, but that relationship is not always easy to identify. Multiple individuals or organizations can act in the capacity of an employer over a particular worker. They can cause the same harm that employment statutes were created to address, so courts have recognized the concept of “joint employment” for this type of situation. In 2015, the National Labor Relations Board (NLRB) expanded the earlier standard for determining joint employment in cases brought under the National Labor Relations Act (NLRA). Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015). Two years later, the NLRB reversed this ruling in Hy-Brand Industrial Contractors, Ltd. (“Hy-Brand I”), 365 NLRB No. 156 (Dec. 14, 2017), but this victory for employers was short-lived. The NLRB vacated its ruling after finding that one of the board members who voted in Hy-Brand I should have recused himself. Hy-Brand Industrial Contractors, Ltd. (“Hy-Brand II”), 366 NLRB No. 26 (Feb. 26, 2018).

In Browning-Ferris, the NLRB revised its standard for determining joint employment. The standard in place at the time looked at the extent of control actually exercised over an employee by an alleged joint employer. The NLRB found that this standard was too narrow. It held that an alleged joint employer does not need to exercise control “directly and immediately.” Browning-Ferris at 1. Instead, indirect control, “such as through an intermediary,” could suffice to establish joint employment. Id. The key was that an alleged joint employer had the authority to exercise control, and therefore it could do so at any moment.

In Hy-Brand I, the NLRB reversed Browning-Ferris by a 3-2 vote. It affirmed the finding by the administrative law judge (ALJ) that the companies at issue were joint employers under the NLRA, but it went on to address the legal standard that the ALJ used. It found the Browning-Ferris standard to be “a distortion of common law,” “contrary to the [NLRA],” and “ill-advised as a matter of policy.” Hy-Brand I at 2. It restored the earlier standard, holding that joint employers must “have actually exercised joint control over essential employment terms” and that “the control must be direct and immediate” rather than “limited and routine.” Id. at 35.

The National Labor Relations Act (NLRA) regulates numerous interactions related to to labor organizing. It allows employees to assert New Jersey sex discrimination claims against both employers and unions for unfair labor practices. Labor unions’ obligations under the NLRA include a duty of fair representation. A recent decision by the National Labor Relations Board (NLRB) addressed an employee’s claim that a labor union breached this duty by discriminating against her on the basis of sex. The ruling harshly criticized the administrative law judge (ALJ) who ruled in the union’s favor. The NLRB vacated the ALJ’s ruling, finding that he “erred by relying in part on improper bases in making his credibility determinations.” International Longshoremen’s Association, Local 28 (Ceres Gulf Inc.) (“ILA”), 366 NLRB No. 20 at 1 (Feb. 20, 2018).

Labor organizations commit an unfair labor practice when they “restrain or coerce employees in the exercise of the rights guaranteed” by the NLRA. 29 U.S.C. § 158(b)(1)(A). Courts have identified specific ways that labor unions might unlawfully interfere with employees’ NLRA rights. The U.S. Supreme Court has held that a union has a duty “to represent nonunion or minority union members…without hostile discrimination, fairly, impartially, and in good faith.” Steele v. Louisville & N. R. Co., 323 U.S. 192, 204 (1944). A union violates the duty of fair representation “when it acts in a manner that is ‘arbitrary, discriminatory, or in bad faith.’” Vaca v. Sipes, 386 U.S. 171, 207 (1967). The NLRB views a breach of the duty of fair representation as an unfair labor practice.

The charging party in ILA has been a member of the union since 2001, usually working as a truck driver. According to the ALJ’s ruling, she began receiving union work referrals again in 2015 after an eight-year “union employment break.” ILA at 2. She alleges that she asked the union’s training coordinator to put her in training classes offered by the union several times during 2016, but he refused all of her requests. She further alleges that the coordinator sexually harassed her “when she periodically stopped by [his] office to request training.” Id. at 3. She allegedly made 36 requests for training, and she experienced sexual harassment while making 10 of those requests. She filed a complaint with the NLRB, alleging breach of the duty of fair representation through sex discrimination. She claimed that the coordinator denied her training opportunities because of her sex, and also because she refused his advances.

The National Labor Relations Act (NLRA) enables workers to organize themselves for the purpose of collective bargaining with their employers. A current dispute between a major telecommunications company and its employees’ union alleges that the company is planning mass layoffs, in violation of the collective bargaining agreement (CBA) between the parties, and with the alleged intent of “diminish[ing] the Union’s bargaining strength.” Commc’ns Workers of Am. (CWA) v. AT&T Southwest, No. 1:17-cv-01221, complaint at 6 (W.D. Tex., Dec. 30, 2017). The union also filed a charge with the National Labor Relations Board (NLRB). AT&T Southwest, No. 16-CA-212398, charge (NLRB, Dec. 29, 2017). The case grew out of assertions made by prominent telecommunications companies regarding recent political issues, including recent tax cuts and changes to federal “net neutrality” rules. While the defendant employer claims the layoffs are due to a lack of work, the plaintiff asserts that the telecommunications business is booming. The issues raised by the lawsuit are likely to affect New Jersey labor rights as well.

Under the NLRA, employers may not interfere with workers’ efforts to organize, nor may they discriminate or retaliate against employees who engage in protected activity. The law also requires employers to collectively bargain with representatives chosen by the employees in accordance with its provisions. Once an employer and the employees’ representatives have entered into a CBA, it is binding on both parties. The NLRA allows claims to enforce CBA provisions and to collect damages for breaches. It also allows recovery of damages for various unfair labor practices described in § 8 of the statute, 29 U.S.C. § 158.

The plaintiff in CWA describes itself in its complaint as a labor union authorized to bring suit on behalf of the defendant’s employees under § 301 of the Labor-Management Relations Act of 1947. 29 U.S.C. § 185. The parties entered into the current CBA in April 2017. According to the complaint, a representative of the defendant’s labor relations department informed the plaintiff in December 2017 of the defendant’s intention to lay off 152 individuals employed as “Premises Technicians” (PTs) in at least four states. CWA, complaint at 4. The defendant’s representative cited “a reduction in workload” as the reason. Id.

The National Labor Relations Board (NLRB) is the federal government agency responsible for enforcing the statute dealing with labor organizing and unfair labor practices. It consists of a five-member board and a General Counsel (GC), all of whom are appointed by the President and confirmed by the Senate. Complaints of labor law violations are first heard by an administrative law judge (ALJ). The board hears appeals of ALJ decisions, with the GC acting as prosecutor. The Senate recently confirmed two new NLRB appointees, giving Republicans a 3-2 majority for the first time in years. A decision issued by the NLRB in December 2017 seems to support claims that the new board will take a much more “pro-business” approach. The decision in UPMC, 365 NLRB No. 153 (2017), reverses a 2016 ruling that dealt with the NLRB’s authority to impose an employer’s settlement offer over the objections of both the charging party and the GC.

The National Labor Relations Act (NLRA) protects workers’ rights to engage in activities related to organizing for the purpose of collective bargaining. Workers alleging unfair labor practices and other violations of the NLRA may file a complaint with the NLRB. As with many administrative proceedings, the case first goes before an ALJ, who may conduct a trial and issue a ruling. A party can then appeal the ALJ’s ruling to the board. Prior to 2016, ALJs had considerable discretion regarding the disposition of cases. This was a key issue in the UPMC case.

A 2016 decision from the NLRB, U.S. Postal Service, 364 NLRB No. 116, effectively ended an earlier practice that allowed ALJs to impose a settlement offered by a respondent, without the charging party’s or GC’s agreement, if the ALJ determined that the settlement offer was reasonable. The NLRB first allowed this in Electronic Workers IUE Local 201 (General Electric Co.), 188 NLRB 855 (1971), when an ALJ approved a settlement offer as though it were a consent order. The ALJ found that “further hearing herein…could not result in any changes in the proposed Consent Order and Notice,” and the proposed settlement “would be more favorable to the General Counsel and Charging Party” despite their lack of consent. Id. at 857.

Federal labor law, primarily through the National Labor Relations Act (NLRA), protects the right of employees to engage in various activities related to organizing for the purpose of collective bargaining. This includes actions directly related to organizing and “concerted activities” that involve matters of concern to employees. The National Labor Relations Board (NLRB) investigates alleged violations of workers’ rights under the NLRA. An administrative law judge (ALJ) with the NLRB recently ruled in favor of a group of workers who alleged that their employer unlawfully fired them because of an email exchange that criticized the employer and some of its managers. Mexican Radio Corp., Case No. 02-CA-168989 (NLRB, N.Y. Office, Apr. 26, 2017). The ALJ ruled that the workers were engaging in concerted activity protected by the NLRA.

Among other rights, the NLRA protects workers’ right “to engage in…concerted activities for the purpose of…mutual aid or protection.” 29 U.S.C. § 157. Employers may not “interfere with, restrain, or coerce employees” who are exercising their rights under the NLRA. Id. at § 158(a)(1). The NLRA defines “protected concerted activities” very broadly. It protects workers in this regard even if they are not members of a labor union. Workers are not obligated under this provision to “present a specific demand upon their employer to remedy a condition they find objectionable.” Labor Board v. Washington Aluminum Co., 370 U.S. 9, 14 (1962). In that case, the Supreme Court found that the workers’ lack of a bargaining representative, combined with immediate circumstances, required them “to speak for themselves as best they could.” Id.

The respondent in Mexican Radio Corp. operates a restaurant. According to the ALJ’s written decision, three employees made a concerted complaint to the respondent in early October 2015 regarding their work schedules and other employment-related issues. In late October, the three employees, along with a fourth employee, responded to a group email sent by a former employee who had recently resigned. The former employee addressed concerns about work schedules, tip policies, and complaints about a specific manager in the email. The four employees expressed support and agreement with many of the allegations. On the following day, the respondent reprimanded and then terminated all four employees.

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