Trouble for the NLRB’s joint employer doctrine? 

The NLRB famously expanded its joint employer doctrine in its 2015 Browning-Ferris decision. There, the Board effectively eliminated the requirement that a company have actual control to be a joint employer, in other words, it eliminated its decades old “direct and immediate” control requirement. Instead it can be enough now — at least according to the Board — if the company has “reserved” some form of control, that isn’t exercised, even if “indirect.” The Board’s ruling in Browning-Ferris is currently on appeal at the DC Circuit.

Unwilling to wait for a decision, Congress is considering a House Bill, the Save Local Business Act, that would jettison the NLRB’s “reserved” or “indirect” standard and reinstate the “direct and immediate” standard, not only for purposes of the NLRA (the federal labor law governing union relatioins) but also the FLSA (the federal wage-hour law).

Here the DC Circuit considered a slightly different aspect of the NLRB’s new joint employer doctrine (its “share or codetermine” standard). While the DC Circuit went out of its way to say it was expressing no opinion on the Browning-Ferris issue (“direct and immediate”), it held the Board had improperly laxened its “share or codetermine” caselaw, reversed and remanded the case to the Board to reconsider.

Source: NLRB v. CNN Am. Inc.

Individual employee non-competes struck for failure to bargain with the workers’ union

Unionized employers may not implement unilateral changes to wages, hours and working conditions without first providing the union notice and an opportunity to bargain. A union is not required to bargain.

In a previous post this blog summarized a Sixth Circuit case, Detroit Edison, that held an employer, who gave notice, was not required to negotiate with a union that merely griped about changes without actually requesting negotiations.

In this case, the company failed to give notice. Instead the company simply started requiring union-represented employees to sign a confidentiality agreement that contained non-competes, invention assignment language, non-interference language, and non-solicits as to both employees and customers. While this type of agreement is not, itself, unusual in the American workplace, unionized employers need to remember that unions are the exclusive bargaining agent of represented workers, so the company must give notice of changes to wages, hours and working conditions, and if negotiations are requested, negotiate over the changes with the union.

Worse, this agreement contained an at-will disclaimer. Again, an at-will disclaimer is common in the American workplace, but here it contradicted the “just cause” discharge clause that the union had bargained for in its collective bargaining agreement with the company.

The D.C. Circuit had no difficulty upholding the NLRB’s decision against the company.

Furthermore, the Court affirmed the Board’s holding that the non-solicits were themselves violative of NLRA rights (under section 7 of the NLRA). (Section 7 rights apply even to employees who are not represented by a union.) Under section 7, employees have the right to engage in protected concerted activity to further their wages, hours and working conditions. Doing so through a union is just one way they may exercise this right. Another is to solicit support from a company’s customers by way of a customer boycott. Here the customer non-solicit prohibited employees from “directly or indirectly” soliciting customers “to terminate or otherwise alter his, her or its relationship with the Company.” This aspect of the Court’s ruling appears highly controversial. It remains to be seen if other courts will interpret section 7 so broadly as to bar a customer non-solicit like this.

The case was Minteq International, Inc. v. NLRB, case no. 16-1276 (D.C. Cir. 4/28/17).

NLRB overruled by D.C. Circuit

The D.C. Circuit overruled the NLRB in a case involving a broad range of issues, including Weingarten rights, retaliation, surveillance and coercion.

The court’s analysis began with the Weingarten issue. Weingarten is a case that held a union-represented employee may demand a representative be present at any interview where the employee anticipates discipline may follow. Weingarten allows an employer three options in response to such a demand: (1) grant the request and permit the representative to be present then hold the interview, (2) cease the interview or (3) permit the employee to choose between ceasing the interview or proceeding without a representative. The third option allows an employee to choose to continue the interview if he thinks that what he has to say will be helpful to himself, or to waive the interview entirely and thereby allow the employer to make decisions without the benefit of his information. In this case, when the employee requested a Weingarten representative, the employer attempted to find the representative, even asking HR for help finding the rep. When they could not find the representative, they gave the employee the third option, and he chose not to be interviewed. In this case, the D.C. Circuit held the company met its Weingarten obligations.

At that point, the company put the employee on paid leave pending investigation. The NLRB had held that doing so was retaliatory, but the D.C. Circuit — preserving for employers the important tool of being able to suspend pending investigation — reversed the Board, holding that doing so was not retaliation.

Thereafter, the employee dawdled in a work area before leaving. A supervisor observed him there and instructed him to leave. Here too the D.C. Circuit reversed the Board, holding that it was not an act of prohibited surveillance, but was rather a “routine” observation.

As the employee was told to leave, he was told to stop his discussion with a co-worker – a discussion that centered on the employee’s criticism of management. The D.C. Circuit reversed the Board here as well, holding this was not coercion of protected speech or protected conduct. “As noted above, given the circumstances in this case, it was perfectly reasonable for the Company to instruct (the employee) to leave the workplace pending investigation of his alleged wrongdoing.”

The case illustrates the importance of understanding Weingarten in unionized workforces. The Weingarten issue became the foundation for all of the Court’s analysis. The case also illustrates, in all workplaces, unionized or not, the proper use of suspensions pending investigation.

The case was Bellagio v. NLRB, ____ F.3d ___ (4/25/17).