Throughout the summer of 2019 and into early September, the National Labor Relations Board (“the Board”) issued numerous decisions that reconfigured the standards and frameworks applicable under the National Labor Relations Act (“the Act”) in ways that may significantly impact employers. All decisions were applied retroactively, making the changes effective immediately.

Misclassification of Workers:

In Velox Express, Inc., the Board held that an employer’s misclassification of employees as independent contractors does not constitute a per se violation of the Act. 368 NLRB No. 61 (Aug. 29, 2019). The Board reasoned that the classification of workers as employees or independent contractors is a legal opinion privileged by Section 8(c) of the Act, regardless of whether it is erroneous. The Board further concluded that because the mere misclassification of employees as independent contractors is not coercive and does not prohibit employees from engaging in Section 7 activities, such misclassification is not a Section 8(a)(1) violation. The Board also found that imposing strict liability on employers for misclassifications would improperly shift the burden of proof onto employers to prove that employees were independent contracts contravening Section 10(c) of the Act, which requires the General Counsel to establish that an employer engaged in a unfair labor practice by a preponderance of the evidence. Thus, the Board held that an employer’s mere misclassification of employees as independent contractors does not violate the Act.

Bargaining Units:

In 2017, the Board returned to the community-of-interest test for determining whether a petitioned-for bargaining unit is appropriate. PCC Structurals, Inc., 365 NLRB No. 160 (2017). In Boeing Company, the Board sought to clarify the process for determining an appropriate unit under the community-of-interest test. 368 NLRB No. 67 (Sept. 9, 2019). The Board held that the community-of-interest test is satisfied by engaging in the following three-step process:

  1. Identifying “an internal community of interest” shared by the petitioned-for unit;
  2. Comparing and weighing the shared internal interests of the petitioned-for unit against the distinct interests of the employees excluded from the unit; and
  3. Considering the Board’s previous decisions on appropriate units in a particular industry.

Unilateral Action by Employers:

In MV Transportation, Inc., the Board addressed the issue of what standard should apply when determining whether a collective bargaining agreement grants an employer the right to take an action unilaterally. 368 NLRB No. 66 (Sept. 10, 2019). Overruling its previous affirmation of the “clear and unmistakable waiver” standard in Provena St. Joseph Medical Center, 350 NLRB 808 (2007), the Board adopted the less-burdensome “contract coverage” standard. The Board reasoned that the “contract coverage” standard was more appropriate because the standard will ensure that all provisions of a collective bargaining agreement are given effect, ensure that the Board stays within its authority to interpret contracts, and reduce forum shopping by aligning with the standard applied by arbitrators and courts. Under the “contract coverage” standard, an employer may make a unilateral change in a term or condition of employment if the change is covered by or within the scope of a contract provision that grants the employer the right to act unilaterally. The “contract coverage” standard does not require that the contract mention or refer to the specific action in order for an employer to act unilaterally.

Anticipatory Withdrawals:

In Johnson Controls, Inc., 368 NLRB No. 20 (July 3, 2019), the Board adopted a new standard for an employer’s withdrawal of recognition of a union upon the expiration of a collective bargaining agreement.

Previously, a union could challenge an employer’s withdrawal of recognition through an unfair labor practice charge. An employer committed an unfair labor practice in violation of Section 8(a)(5) if, even after making a lawful anticipatory withdrawal, there was evidence that the union reacquired majority status in the time between the anticipatory and actual withdrawal of recognition by the employer. As a remedy, the union’s presumptive majority status was reestablished, and an affirmative bargaining order was issued.

The Board now holds that an employer’s receipt of evidence of a union’s actual loss of majority support within 90 days prior to the expiration of a collective bargaining agreement rebuts the union’s presumptive continuing majority status when the agreement expires. To reestablish its majority status, a union must file a petition for a Board election within 45 days of the employer’s notice of an anticipatory withdrawal. For more information on the Johnson Controls decision, see our previous alert.

Employers’ Property Rights:

A. Exclusion of Contractor Employees

In Bexar County Performing Arts Center Foundation, the Board overruled its previous precedents and held that a property owner may exclude off-duty contractor employees seeking to engage in Section 7 activities on its property. 368 NLRB 46 (Aug. 23, 2019). The Board reasoned that contractor employees are not entitled to the same Section 7 access rights as the property owner’s own employees because contractor employees’ access rights are defined by their employer’s right to access the owner’s property and off-duty contractor employees are trespassers.

However, the Board held that a property owner could be compelled to permit off-duty contractor employees onto its property for Section 7 activities if (1) the employees worked regularly and exclusively on the property, and (2) the property owner cannot establish that the contractor employees have a reasonable, non-trespassory, alternative means to communicate with their target audience.

B. Exclusion of Non-Employee Union Agents

In Kroger Limited Partnership I Mid-Atlantic, the Board announced a new interpretation of the Babcock discrimination exception, overruling Sandusky Mall Co. and other similar precedents. 368 NLRB No. 64 (Sept. 6, 2019).

Under the Babcock discrimination exception, an employer cannot exclude non-employee union agents from its property while permitting other non-employees to engaged in distribution activities on its property. NLRB v. Babcock & Wilcox, Inc., 351 U.S. 105, 112 (1956). In its decision in Sandusky Mall Co., 329 NLRB 618 (1999), the Board interpreted this exception to require an employer to permit non-employee union agents to access its property for any purpose if the employer permitted other non-employees to conduct civic, charitable, and commercial activities on its property.

The Board now holds that the Babcock discrimination exception only applies when non-employee union agents seek to access the employer’s property to engage in “activities similar in nature” to those which other non-employees are permitted to conduct. Thus, under the new interpretation, an employer may exclude non-employee union agents that seek to engage in protest activities even though non-employees are permitted to access the employer’s property for other distribution activities.

Takeaway for Employers

Employers are advised to consider how these significant shifts in labor law may affect their labor relationships. Employers should also ensure that their existing practices comply with the new changes in the law.

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If you have any questions regarding this alert, or any other issue, please do not hesitate to contact us.

Putney, Twombly, Hall & Hirson LLP