NLRB Decisions

July 10, 2018

Supreme Court Ruling Affects Collective and Class Employment Actions in New Jersey

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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April 25, 2018

NLRB Vacates 2017 Ruling on “Joint Employment” that Favored Employers

by Resnick Law Group, P.C.

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.

March 23, 2018

NLRB Reverses ALJ Ruling in Sex Discrimination Case

by Resnick Law Group, P.C.

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.

February 9, 2018

Federal Law Restricts Employers’ Ability to Enact Mass Layoffs in New Jersey and Nationwide

by Resnick Law Group, P.C.

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.

February 2, 2018

NLRB Reverses 2016 Decision, Gives ALJs Greater Authority to Force Settlements in New Jersey Labor Disputes

by Resnick Law Group, P.C.

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.

July 10, 2017

NLRB Judge Rules in Favor of Workers in Wrongful Termination Claim

by Resnick Law Group, P.C.

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.

April 25, 2017

NLRB Counsel Issues Memo on Labor Practices at Universities

by Resnick Law Group, P.C.

The National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., protects a wide range of activities by employees related to organizing for collective bargaining and other purposes. Whether or not a particular individual is an “employee” within the meaning of the NLRA is a critically important component of determining whether the statute applies. This has been a contentious issue on college and university campuses around the country in recent years. The National Labor Relations Board (NLRB) has issued several opinions affecting people who work, or who perform services that resemble “work,” for colleges and universities, including faculty members, student assistants, and scholarship athletes. A memorandum issued by the NLRB General Counsel in late January, identified as GC 17-01, offers new guidance in light of three of these decisions. While the memorandum does not have the force of law, it could have an impact on future decisions by both the NLRB and the courts.

Employees have the right to “self-organization” under the NLRA, which includes forming or joining labor unions and engaging in “concerted activities” aimed at collective bargaining or “other mutual aid or protection.” 29 U.S.C. § 157. The plain language of the statute indicates that employers are only obligated to respect this right for “employees.” The NLRA’s basic definition of “employee” as “any employee…not…limited to the employees of a particular employer” is not very helpful. Id. at § 152(3). The statute identifies specific exclusions from the definition of “employee,” such as agricultural laborers and independent contractors, but it offers little guidance otherwise. The task of identifying who falls under the statute’s definition has mostly fallen to the NLRB, and the university environment has shown the difficulty of defining the term.

The first case cited by the NLRB counsel involved the board’s jurisdiction over private colleges and universities that identify themselves as religious in nature. Pacific Lutheran University, 361 NLRB No. 157 (Dec. 16, 2014). The U.S. Supreme Court had determined that church-operated schools were not subject to the NLRB’s jurisdiction in NLRB v. Catholic Bishop of Chicago, 440 U.S. 490 (1979). The Pacific Lutheran decision modified the NLRB’s earlier interpretation of the Supreme Court ruling, finding that the school must establish that “First Amendment religious rights…are even implicated” before claiming a religious exemption. Pacific Lutheran at 6.

February 26, 2017

Court Rules Against “Persuader Rule” Regarding Union Organizing Rights

by Resnick Law Group, P.C.

The U.S. Department of Labor (DOL) issued a final rule, known as the “persuader rule,” in early 2016. The rule dealt with actions by employers, both direct and indirect, “to persuade employees about how to exercise their rights to union representation and collective bargaining.” 81 Fed. Reg. 15923, 15924 (Mar. 24, 2016). It marked a significant change from the agency’s previous interpretation of an employer’s obligation to disclose communications related to labor organizing activity. A court permanently enjoined implementation of the new rule in November, however, finding that the DOL exceeded its rulemaking authority. The old version of the rule, based on the old interpretation of the statute, remains in effect.

The Labor Management Reporting and Disclosure Act (LMRDA) of 1959, 29 U.S.C. § 401 et seq., requires employers to disclose various payments and communications made to labor organizations, employees, and others with regard to union organizing activities. For example, an employer must disclose payments made to an employee or a group of employees to induce them “to persuade other employees” with regard to “the right to organize and bargain collectively through representatives of their own choosing.” Id. at § 433(a)(2). The statute might also require the disclosure of communications involving attorneys or consultants specifically involved in advising an employer about ongoing labor negotiations.

Section 203(c) of the LMRDA, id. at § 433(c), exempts certain communications from the disclosure requirement. The persuader rule determines how far this exemption applies. Under the previous interpretation of the persuader rule, disclosure was only required if a consultant communicated directly with employees. The DOL concluded that this “left a broad category of persuader activities unreported” and therefore “den[ied] employees important information” they might need to make an informed decision about union representation. 81 Fed. Reg. at 15924. It modified the persuader rule to include the disclosure of both “direct” and “indirect” activities aimed at “persuading” employees. See 29 C.F.R. § 406.2(a).

December 16, 2016

NLRB Rules in Favor of Employees Disciplined for In-Store Protest

by Resnick Law Group, P.C.

The National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., protects the rights of workers to engage in various activities related to labor organizing and collective bargaining. It prohibits employers from interfering in such activities and from retaliating against workers for engaging in protected activities. The National Labor Relations Board (NLRB) investigates alleged violations and adjudicates complaints. This summer, it considered whether an employer violated the NLRA by disciplining a group of employees who participated in a brief work stoppage. It found that the employees’ actions were protected and that the employer was in the wrong. Wal-Mart Stores, Inc., 364 NLRB No. 118 (Aug. 27, 2016).

Section 7 of the NLRA grants broad protection to “self-organization,” “bargain[ing] collectively through representatives of [employees’] own choosing,” and “concerted activities” related to those purposes. 29 U.S.C. § 157. Employers may not “interfere with, restrain, or coerce employees” who are exercising these rights, according to § 8(a)(1) of the statute. Id. at § 158(a)(1). Since the list of protected activities in § 7 is quite expansive, the NLRB and the courts have interpreted its extent in various situations through caselaw.

The “concerted activities” described in § 7 include “mutual aid and protection.” Id. at § 157. The NLRB has interpreted this to include work stoppages and other “activities engaged in for the purpose of applying economic pressure on employers.” Wal-Mart, slip op. at 3, citing Atlantic Scaffolding Co., 356 NLRB 835, 836–837 (2011). It developed a 10-part test for balancing employees’ and employers’ rights, with factors including the reason for the work stoppage, whether it was “peaceful,” whether it “interfered with production or deprived the employer access to its property,” the duration of the stoppage, employees’ “opportunity to present grievances to management,” and the reasons for disciplinary action. Quietflex Mfg. Co., 344 NLRB 1055, 1056–1057 (2005).

September 29, 2016

Employer’s Social Media Policy Found to Violate Federal Labor Law by NLRB

by Resnick Law Group, P.C.

The National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., protects workers’ right to engage in various activities related to organizing for the purpose of collective bargaining. In early 2016, an administrative law judge (ALJ) ruled in favor of a worker who alleged that his employer terminated him, in part, because of critical messages posted to the social media platform Twitter. The employer claimed that the employee had violated its social media policy. The ALJ ordered the employee’s reinstatement and further ordered the employer to rescind its social media policy and other policies, finding them to be in violation of the NLRA. The National Labor Relations Board (NLRB) affirmed the ALJ’s ruling. Chipotle Services LLC et al., No. 04-CA-147314, ALJ dec. (NLRB, Mar. 14, 2016); 364 NLRB No. 72 (Aug. 18, 2016).

Employees’ “right to self organization,” to collective bargaining, and to “concerted activities” directed towards these goals are commonly known as “Section 7 rights,” after § 7 of the NLRA, 29 U.S.C. § 157. An employer engages in “unfair labor practices” when it “interfere[s] with” or “restrain[s]” an employee’s efforts to exercise those rights. NLRA § 8(a)(1), 29 U.S.C. § 158(a)(1). The internet, social media, and other new communications technologies have vastly expanded opportunities for concerted activities protected by § 7. The NLRB has addressed numerous disputes over which, if any, restraints employers may place on employees’ use of social media.

The respondent in the Chipotle case operates a nationwide chain of restaurants. According to the ALJ’s ruling, it required employees to abide by a “social media code of conduct” that prohibited “disparaging, false, misleading, harassing or discriminatory statements about or relating to” the employer and other parties. Chipotle, ALJ dec. at 4. The employer stated that it reserved the right to “ take disciplinary action, up to and including termination,” for violations of this policy. Id.