United States: It's A New Day At The NLRB: Four Recent Decisions Leap Back To More Employer-Friendly Times

Depending on whom you ask, labor law during the Obama administration was "the best of times, the worst of times, the age of wisdom, the age of foolishness, the epoch of belief, the epoch of incredulity . . ." – you get the point.

Under the Obama administration, the National Labor Relations Board ("Board") overturned or modified long-standing NLRB precedent in a way that afforded assistance to organized labor in its battle against shrinking membership and perceived declining relevance. Policy change in the other direction was expected under the Trump administration, and recently Board decisions have validated this expectation.

For example, one Obama-era decision, Lincoln Lutheran of Racine,¹ held that an employer could not unilaterally end automatic deduction and payment of employee union dues – expressly overturning a decision that had governed since 1962. In another decision, Purple Communications, Inc.,² the "Obama" Board ruled that employees who use their company email for work have an almost absolute right to use company email to communicate information protected under the National Labor Relations Act (NLRA), such as information about hours, wages, and other working conditions – thus overturning a 2007 Board decision ruling that companies could restrict such use in the same manner as they restrict other non-work-related use.

Fast forward to December 2019 – it's a new day. In Valley Hospital Medical Center, Inc.,³ the "Trump" Board overturned Lincoln Lutheran and skipped back to 1962 precedent – holding that employers have the right to stop collecting and remitting union dues to the union after a collective-bargaining agreement expires. Returning to its 1962 decision in Bethlehem Steel,⁴ the Board held that "a dues-checkoff provision properly belongs to the limited category of mandatory bargaining subjects that are exclusively created by the contract and are enforceable . . . only for the duration of the contractual obligation created by the parties." It further found that, "[t]here is no independent statutory obligation to check off and remit dues after expiration of a collective-bargaining agreement containing a checkoff provision, just as no such statutory obligation exists before parties enter into such an agreement." The practical effect of Valley Hospital Medical Center is that unions that do not reach agreement on a new CBA at the bargaining table before the current CBA expires can no longer rely upon continued union dues revenue, thus arguably putting pressure on local unions to finalize a deal before CBA expiration (or bargain to extend dues remittance past the expiration date of the CBA).

In the December 2019 decision of Caesars Entertainment,⁵ the "Trump" Board overturned Purple Communications, holding that "employees have no statutory right to use employer equipment, including IT resources" for the purposes of communicating information that is protected under Section 7 of the National Labor Relations Act. Such information includes information typically communicated as part of a union organizing drive. However, the Board continued to recognize an exception "in those rare cases where an employer's email system furnishes the only reasonable means for employees to communicate with one another." Also, employers cannot target communication of information protected under Section 7 for harsher treatment than non-protected, non-work-related communications. So for example, if an employer permits the non-work-related use of its email system for 200 hours of fantasy football communications, and discharges an employee for sending one union-related email, this may constitute a violation of the NLRA under the new/old standard. The practical effect of this decision is that employers who implement and enforce a neutral policy limiting non-work-related use of email and other information technology systems may limit employees' use of such systems without automatically running afoul of the NLRA.

Additionally, the December decision of United Parcel Service, Inc.⁶ revisited the "Obama" Board arbitration deferral standard in Babcock & Wilcox Construction Co., Inc.⁷ The 2014 decision in Babcock had the practical effect of limiting the number of cases that could be deferred to arbitration by the NLRB by making it more difficult to defer unfair labor practice charges and other pre- and post-arbitral matters to arbitration. In reversing Babcock and returning to the former pre-Obama Board standard, the Board undid what it viewed as a "radical contraction of deferral policy . . . not persuasively shown to be necessary to protect either employees' Section 7 rights or the Board's jurisdiction to resolve unfair labor practice allegations."

Finally, in Wal-Mart Stores, Inc.,⁸ the Board tackled the issue of whether Wal-Mart violated the NLRA by maintaining two dress code policies that limit – but do not prohibit – the wearing of union insignia. In upholding the employer's policy as permissible under the law, the Board applied its own decision in Boeing Co.,⁹ which reinforced an employer's right to promulgate facially-neutral policies under the law even where they may result in the restriction of an employee's rights under the NLRA. Both Boeing and Wal-Mart signify a shift from the standard in Lutheran Heritage Village-Livonia,¹⁰ which previously ruled that employers violated the NLRA by maintaining workplace rules that do not explicitly prohibit protected activities, were not adopted in response to such activities and were not applied to restrict such activities, if the rules would be "reasonably construed" by an employee to prohibit the exercise of NLRA rights. In place of the Lutheran Heritage standard, the current Board established a new test: when evaluating a facially-neutral policy, rule or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the Board will evaluate the nature and extent of the potential impact on NLRA rights and also the legitimate justifications associated with the rule.

How should business leaders interpret the restoration of long-standing labor law precedent by the National Labor Relations Board under the current administration? First, monitor these developments and be prepared to adjust practices accordingly. Second, identify appropriate opportunities to consider challenging the standards set by the prior administration. And finally, provide applicable training and support throughout the business to assist compliance and avoid preventable problems.

Footnotes

[1] 362 NLRB 188 (2015).

[2] 361 NLRB 1050 (2014).

[3] Valley Hospital Medical Center, Inc. d/b/a Valley Hospital Medical Center and Local Joint Executive Board of Las Vegas, 368 NLRB 139 (Dec. 16, 2019).

[4] 136 NLRB 1500 (1962).

[5] Caesars Entertainment d/b/a Rio All-Suites Hotel and Casino, 368 NLRB 143 (Dec. 16, 2019).

[6] 369 NLRB 1 (Dec. 23, 2019).

[7] 361 NLRB 1127 (2014), rev. denied sub nom. Beneli v. NLRB, 873 F.3d 1094 (9th Cir. 2017).

[8] 368 NLRB 146 (Dec. 16, 2019).

[9] 365 NLRB 154 (2017).

[10] 343 NLRB 646 (2004).

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