Another One Bites the Dust? NLRB Request for Briefing on Independent Contractor Standard Suggests Another Trump-Era Decision Is About To Be Overruled

Weeks after inviting public briefing on a potential change in the standard for determining the appropriateness of proposed bargaining units (discussed here), the National Labor Relations Board (NLRB) has again invited briefing in a pending case involving the standard for determining whether workers are properly classified as independent contractors under the National Labor Relations Act.

The current test was adopted by the NLRB under the Trump administration and is focused largely on whether the workers in question have sufficient “entrepreneurial opportunity” to increase their earnings (by performing more work for the same company or for other companies simultaneously, subcontracting work to others, hiring their own employees, etc.) and/or risk of loss. Prior to the Trump-era test, the NLRB under the Obama administration downplayed the significance of entrepreneurial opportunity/risk in favor of a multitude of other factors, including the extent to which the company controls the hours and earnings of the workers in question, the degree to which the work performed is related to the company’s primary business, the level of skill involved, the level of supervision, etc. The wide array of factors taken into consideration under the Obama-era standard generally made it much harder for companies to anticipate the outcome of potential legal challenges to independent contractor status, resulting in much higher risk.

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The First Domino to Fall? NLRB Solicits Public Input on Test for Determining Appropriate Bargaining Units

In a somewhat ominous sign of things to come, the National Labor Relations Board (NLRB or the Board) has invited briefing on whether to change the test for determining whether a union has proposed an appropriate employee voting group (i.e., a “voting unit”) in petitioning for an NLRB representation election.

The current standard that applies in such cases was adopted during the Trump administration. To be clear, the chances of the NLRB’s newly constituted Democratic majority retaining the Trump-era test fall somewhere between the probability of the sun rising in the west and the likelihood of the Cleveland Browns winning the Super Bowl this season (or ever) — which is to say, zero.

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Money, Money, Money Is Not Always Funny or Sunny – Just Take a Look at the NLRB’s Substantial Increases in Monetary Remedies and Job Reinstatements

On Nov. 5, 2021, the iconic Swedish band ABBA released its first album of new material in 40 years, and, amazingly, it is their highest-charting album ever on the Billboard 200. (If for some reason you are not familiar with ABBA – and we are not really sure how that could possibly be – check out the album “ABBA Gold: Greatest Hits”). Indeed, it seems as if the National Labor Relations Board (NLRB or Board) was channeling ABBA’s hit “Money, Money, Money” when it issued a news release earlier this month boasting about “a dramatic increase” in monetary remedies and job reinstatements in fiscal year 2021. The Board announced that it recovered nearly $57 million (most of which was in back pay) and obtained job reinstatement offers for 6,307 individuals in FY 2021. To provide context for the Board’s “Dancing Queen”-esque jubilation over these numbers, this surge represents about a 44 percent increase in monies recovered and close to a 550 percent increase in job reinstatement offers from FY 2020. “Mamma Mia,” indeed!

This massive spike in remedies and reinstatements, however, should not be a surprise “Waterloo” for employers, given the clear and pronounced pro-labor stance of the NLRB’s general counsel, Jennifer Abruzzo. Since her Senate confirmation in July 2021, Abruzzo has not been shy about her “Winner Takes It All” intention to overturn business-friendly Board precedent (as we previously blogged about here) and to expand the remedies that the NLRB seeks in unfair labor practice (ULP) proceedings. Indeed, in September, Abruzzo released a memo to all regional offices directing them to “Take A Chance” on seeking further and extensive remedies, such as consequential damages, in ULP cases. Around the same time, she separately issued another memo in which she ordered the regions to seek comparably expansive remedies in settlement agreements. What should cause employers to send an “S.O.S.” over the FY 2021 data is the fact that the Board reached these numbers before Abruzzo and the new Democratic majority of the NLRB even had served a full fiscal year. (Okay, we’re out of ABBA song titles.)

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Spoiler Alert: The NLRB Is Poised to Dramatically Rework Its Joint Employer Standard

When I was a kid, it was a thrill (and, yes, it still is today) to watch all the movie trailers before the main feature. Unfortunately, some of those trailers actually spoiled the movie they were previewing (thinking of you, Kingsman: The Golden Circle). Well, the National Labor Relations Board (NLRB or the Board) has likely spoiled the ending to its looming review of the current joint employer standard that applies under the National Labor Relations Act (NLRA).

On Nov. 5, NLRB Chairperson Lauren McFerran notified several members of Congress that the Board’s two newest members (Gwynne Wilcox and David Prouty) will participate in the Board’s ongoing consideration of its joint employer standard. Why is that newsworthy? Because the Service Employees International Union (SEIU) — one of the largest labor unions in the United States — is currently suing the NLRB in federal district court to overturn the current standard, and Wilcox and Prouty were both previously employed by two prominent SEIU locals. Prouty is a prior general counsel of SEIU Local 32BJ and Wilcox formerly served as associate general counsel for SEIU’s United Healthcare Workers East chapter. Both were vocal in opposing the current joint employer standard. While NLRB members are required to have a “neutral” stance on matters, there’s little mystery as to where Wilcox and Prouty will land on this issue.

This obvious conflict of interest prompted several members of Congress to write to Chairperson McFerran about potential ethical concerns with Wilcox’s and Prouty’s participation in consideration of the NLRA joint employer standard. Chairperson McFerran, however, responded that Wilcox and Prouty “have each determined that their participation in the Board’s decision-making regarding this matter is appropriate.” Well, that’s comforting.

No need for popcorn here — the ending is spoiled, especially for employers.

Takeaways:

  • Employers should review whether workers deemed “independent contractors” are properly classified as such.
  • Employers that utilize temporary or contract workers should review their agreements with vendors, staffing agencies and other similar companies to ensure managers are not exerting direct or indirect control over the terms and conditions of those workers’ employment.

What Are We Supposed To Do Now? Recommended Next Steps for Unionized Employers Regarding OSHA’s COVID-19 Vaccination/Testing Rule

On Nov. 4, 2021, the Occupational Safety and Health Administration (OSHA) released its emergency temporary standard (ETS) on COVID-19 vaccinations. In summary, the ETS provides that employers with at least 100 employees must either mandate COVID-19 vaccinations of their workforces or require unvaccinated employees to wear face coverings and undergo weekly COVID-19 testing. Employers covered by the ETS will be required to have a compliant policy by Dec. 5, 2021 and will be required to start enforcing the weekly COVID-19 testing requirements by Jan. 4, 2022.

Or maybe they won’t. The announcement of the ETS spawned a rash of lawsuits seeking to put a stop to OSHA’s enforcement of the ETS. Those lawsuits will be consolidated in the near future before a single federal court, to be decided by lottery. But in the interim, the federal Court of Appeals for the Fifth Circuit issued an order on Saturday, Nov. 6, temporarily suspending the ETS. That order may or may not be lifted once the cases are consolidated.

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Through the Looking Glass, Part 2: What Does ‘Protected Concerted Activity’ Look Like?

As explained in a prior post, the National Labor Relations Act (NLRA) gives employees the right to engage in “protected concerted activity” when such activity is intended to improve their wages, benefits and working conditions. We also discussed NLRB General Counsel Jennifer Abruzzo’s intention to expand what falls within the definition of “working conditions” in determining whether concerted employee activities are protected under the NLRA. In short, she believes that working conditions should include social justice and political advocacy issues, even if such activities take place outside of work and are not directly connected to a particular employer.

But what does protected concerted activity look like? Perhaps the most common misconception concerning protected concerted activity is the notion that it has to be connected to union organizing or other matters associated with union representation. In truth, while many forms of protected concerted activity relate to union representation, that isn’t a legal requirement. Any activity engaged in by two or more employees in regard to their working conditions may be protected under the NLRA, regardless of whether it relates to union representation.

Thus, where two or more employees complain together about a company policy or where an individual employee brings a group concern to the attention of management, such individuals generally are protected by federal labor law. Similarly, an employee who seeks to initiate or encourage group action is also protected under the NLRA.

In the contentious context of mandatory vaccinations, for example, protected concerted activity could (in some cases) include such activities as initiating, signing and/or submitting a petition to protest the employer’s vaccination policy, demanding to meet with management for a discussion of the policy, etc. In a more extreme example, a group of employees that stages a walkout to protest a vaccination policy may, in many circumstances, be protected under the NLRA.

But not all concerted activities are protected. For example, intentional work slowdowns, sit-downs, refusals to work mandatory overtime and refusals to perform only a portion of typically assigned duties are “partial strikes” that are not protected under the NLRA, even if multiple employees participate. “Intermittent” strikes, where employees adopt a planned strategy to refuse to report for work on a sporadic and repeated basis over a prolonged period of time, are also unprotected in some instances. Finally, strikes intended to force the employer to violate applicable law can, in some circumstances, lose the protection of federal labor law and subject participating employees to be disciplined.

Takeaways

  • Protected concerted activity under the NLRA is not limited to issues concerning union representation and can include many other forms of activity that involve two or more employees.
  • Not all employee concerted activities are protected under the NLRA, but the distinction between those activities that are protected and those that are not can be subtle and extremely fact dependent.
  • Because current NLRB General Counsel Jennifer Abruzzo intends to take a very broad view of the activities that are protected under the NLRA, employers should exercise extreme caution in disciplining employees who raise group concerns.

The Continuing Adventures of the Congressional Reconciliation Package: NLRA Civil Penalties Trimmed in Latest Version of Legislation

For a bit of a pleasant change, there’s some positive labor relations news for employers on the legislative front. But it’s not exactly rainbows and unicorns.

As we explained previously, Democrats in the U.S. House of Representatives included provisions in their original reconciliation spending package that would have amended the National Labor Relations Act to require civil penalties for a variety of currently lawful employer actions.  Employers, for example, would have been subject to fines of up to $100,000 for the following:

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Hands Off My Tech: Employers May Not Restrict Employee Communications Transmitted via Third-Party Smartphone Applications

The National Labor Relations Board’s (NLRB) Division of Advice (Advice), which provides guidance to the NRLB’s regional offices regarding difficult and novel issues, recently released an internal memo concerning employee online communications that should be cause for concern among employers. Specifically, Advice found that an employee engaged in protected activity by discussing COVID-19 safety concerns on a third-party messaging application that the employer required its employees to download and that the employer violated the National Labor Relations Act by restricting the employee from engaging in such discussion.

The employer involved in the case required employees to download the third-party app on their personal cell phones to check in and out of shifts, to communicate daily sales statistics, to relay leave-related messages, and for other work-related purposes. The app has a “group chat” function that employees and supervisors use to discuss work-related issues. The employee used the group chat to complain about COVID-19 safety concerns and “other negative items.” The employer removed the employee from the group chat and warned him against using the app to raise such concerns in the future, as well as informing him that employees “are not allowed to share workplace condition information without permission from [their] supervisor first.”

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Through The Looking Glass: The NLRB Seeks To Expand The Concept Of ‘Protected Concerted Activity’ Beyond Its Imaginable Limits

Since the passage of the National Labor Relations Act (NLRA) in 1936, employees have possessed a right to engage in “protected concerted activity,” meaning they have the right to discuss workplace concerns and take action for mutual aid or protection. Indeed, the National Labor Relations Board’s (NLRB or the Board) website explicitly informs employees that they “have the right to act with co-workers to address work-related issues in many ways” and lists as examples (among other conduct) “talking with one or more co-workers about your wages and benefits or other working conditions.”

While “wages” and “benefits” have been defined in a fairly consistent fashion over the decades since the NLRA was passed, the term “other working conditions” has not always been as easy to pin down. Traditionally, however, it has been read to encompass activities such as circulating a petition asking for better hours, participating in a concerted refusal to work in unsafe conditions and the like – issues directly connected to the workplace. Well, that traditional view is over.

According to recent public comments by newly appointed NLRB General Counsel Jennifer Abruzzo (as well as several general counsel memos issued earlier this year), the scope of employee behavior that will qualify as protected under the NLRA will now include political and social justice advocacy. In other words, First Amendment activities like participating in Black Lives Matter (BLM) protests or demonstrating in support of undocumented workers will now be protected under federal labor law, even if such activities have no connection to a particular employer’s workplace.

To be clear, this is not merely theoretical. Recently, the NLRB’s regional office in Minneapolis issued a complaint against a national home improvement retailer, alleging that it discriminated against employees who displayed the BLM slogan on their work uniforms and engaged in “other BLM-related protected concerted activity.”

The region’s decision to issue that complaint reflects Abruzzo’s announced goal of identifying cases to implement “doctrinal shifts” and expand employee rights. (See GC Memo 21-04 here.)

TAKEAWAY: Employers must carefully review their policies relating to political and social justice advocacy and tread carefully in disciplinary cases relating to such matters in light of the Board’s new expansive view of what qualifies as protected concerted activity.

NLRB Given a ‘Mulligan’ in Offensive Speech Case

The Trump National Labor Relations Board’s (NLRB or Board) new standard for cases where an employee is disciplined for using offensive speech in the course of engaging in protected labor activity may have a very short lifespan. The standard was originally announced in July 2020 in a case involving General Motors and is therefore often referred to in shorthand as the “General Motors standard.” While not a rubber stamp in favor of discipline, the standard is generally considered to provide clearer guidance to employers than the prior patchwork of rules that was dependent on the context in which the employee used offensive speech. New NLRB General Counsel Jennifer Abruzzo therefore has made no secret of her intention to seek a reversal of the General Motors standard at the earliest opportunity.

That opportunity may have arrived. Last week, the U.S. Court of Appeals for the District of Columbia Circuit granted the Board’s request for an opportunity to reconsider a case currently on appeal that involved an employee who was terminated for calling the employer’s owner a “stupid jackoff.” The NLRB’s original decision in the case applied the prior standard for offensive speech cases that predated the General Motors decision. The Board based its request ostensibly on the notion that it intends to reconsider its holding in light of General Motors. But given the new Democratic majority on the NLRB, the case may be a vehicle for the Board to overturn General Motors and hold that its application of the pre-General Motors standard was appropriate.

Bottom Line: The NLRB appears poised to discard the General Motors standard and return to the prior, context-dependent approach to cases in which employees use offensive speech in the course of engaging in protected activity. Employers therefore should exercise caution in such cases to ensure that discipline is consistent with legal restrictions.

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