NLRB Reverses Several Obama Board Rulings, Begins Process To Review Ambush Election Rule

December 15, 2017

On the brink of losing a Republican majority, the Trump NLRB issued three key decisions this week regarding joint employer liability, micro-units and employee handbooks, re-establishing stability in critical areas of labor law.  Chairman Philip Miscimarra’s term expires on December 16, with no replacement yet nominated, so additional reversals are likely to have to await the White House nominating a successor.  Yet, this week’s rulings address two of the most controversial areas.  More on the key decisions:
  • In Hy-Brand Industrial Contractors, the Board overturned by a 3-2 vote its 2015 Browning-Ferris decision, which significantly expanded its joint employer standard to require only a "potential" right to exercise "indirect" control of another employer's employees.  The new decision restores the Board's previous standard, which requires an employer to have direct and immediate control over the employment terms of another company's employees for joint employer liability to be established.  The Association has actively advocated for clarifying the joint employer standard at the NLRB, in the courts, and, more permanently, with House-passed legislation that would amend both the National Labor Relations Act and the Fair Labor Standards Act.  With regard to the latter, the U.S. Supreme Court is considering granting review of a lower court decision, which established an even broader standard than the Browning-Ferris decision.  
  • In another 3-2 decision, the Board also overturned its 2004 Lutheran Heritage standard for weighing the legality of employee handbook policies, noting that the standard prevents the Board from giving meaningful consideration to "real world" complexities associated with employee policies, work rules, and handbooks, and creates "rampant confusion for employers, employees, and unions."  Though decided by a Republican majority, Lutheran Heritage had been applied in an overly broad manner by the Obama Board, striking down many common employer policies based on whether an employee "would reasonably construe" them as prohibiting pro-union activity that might occur in the future.
  • In PCC Structurals, Inc., the Board, again by a 3-2 vote, reversed the controversial 2010 Specialty Healthcare decision, which enabled a union to seek to carve up a workforce into smaller, easier-to-organize units.  The Board returned to the previous rule, which did not create an often insurmountable hurdle for employers requiring that they show an “overwhelming community of interest” with the larger unit.
Separately, the Board also requested information on its 2014 expedited election rule, which significantly altered the process for conducting union organizing elections, speeding up the timeframe between the filing of a petition for an election to the holding of an election to as few as 14 days.  The rule also denies employers many procedural safeguards with the objective of obtaining a quick election.  The Board asked for public input on whether the rule should be retained without change, retained with modifications, or reversed to the pre-2014 rules.  The public comment period ends on February 12, 2018, and it will likely be two years before any changes are made.