5 big NLRB decisions in 2 days

Why 5 big NLRB decisions in 2 days? Well, there's an unwritten NLRB rule: There must be at least 3 votes in order to make a major change. Member Wilcox's term expired August 27, leaving only 3 Members, 2 D's and 1 R, so this became a deadline.

Card check: [Blog] When a union requests recognition on the basis that a majority of employees in an appropriate bargaining unit have designated the union as their representative, an employer must either recognize and bargain with the union or promptly file an RM petition seeking an election.  However, if an employer who seeks an election commits any unfair labor practice that would require setting aside the election, the petition will be dismissed, and—rather than re-running the election—the Board will order the employer to recognize and bargain with the union. Cemex Construction Materials Pacific (NLRB 08/25/2023) [PDF]

Unilateral changes: [Blog] (1) No more unilateral changes affecting a unionized workforce during a contractual hiatus or during negotiations for a first contract. (2) An employer’s past practice of unilateral changes that was developed under a management-rights clause in a collective-bargaining agreement cannot authorize unilateral changes made after the agreement expires and while bargaining for a new agreement is under way.  Wendt Corporation (NLRB 08/26/2023) [PDF] and Tecnocap, LLC (NLRB 08/26/2023) [PDF].

Concerted activity: [Blog] A single employee complaining in front of other employees can support an inference that the employee was seeking to induce group action. If so, that can be "concerted" activity rather than individual "griping" which would not be protected concerted activity. Miller Plastic Products (NLRB 08/25/2023) [PDF]

Mutual aid or protection: [Blog] Concerted advocacy by statutory employees on behalf of nonemployees is protected by the National Labor Relations Act when it can benefit the statutory employees. American Federation for Children (NLRB 08/26/2023) [PDF].

Wright Line: [Blog] NLRB cleared up some confusion that was caused by Tschiggfrie Properties, Ltd., 368 NLRB No. 120 (2019). Intertape Polymer Corp (NLRB 08/25/2023) [PDF].

Board Restores Protections for Employees Who Advocate for Nonemployees

NLRB August 31, 2023 press release:

In a decision issued today in American Federation for Children, Inc. (decided on August 26th), the Board reversed its 2019 decision in Amnesty International, returning to longstanding precedent that concerted advocacy by statutory employees on behalf of nonemployees is protected by the National Labor Relations Act (the Act) when it can benefit the statutory employees.

In Amnesty International, the Board found that the statutory concept of “mutual aid or protection” did not encompass the efforts of statutory employees to help themselves by helping others who are not statutory employees.  This was at odds with consistent prior Board, Circuit Court and Supreme Court precedent.  In reversing Amnesty International, the Board explained that such efforts by employees toward non-statutory individuals can benefit employees by improving their own working conditions or by leading nonemployees to later return the help they have received.

“The previous Board in Amnesty International failed to recognize that ‘mutual aid or protection’ easily covers situations where employees extend help to nonemployees, especially those who work alongside them,” said Chairman McFerran. “Standing in solidarity can be a protected act regardless of the employment status of those you stand with—the question is simply whether, in helping others, employees might help themselves and get help in return.”

The Board also reaffirmed established precedent that job applicants are statutory employees and that the immigration status of workers is typically immaterial to their employee status under the Act,  although in this case, the Board found the activity was protected regardless of whether the applicant was a statutory employee.

Members Wilcox and Prouty joined Chairman McFerran in issuing this decision. Member Kaplan dissented.

NLRB: Individual complaint can be "concerted" activity

A single employee, complaining in front of other employees, can support an inference that the employee was seeking to induce group action. If so, that can be "concerted" activity rather than individual "griping" which would not be protected concerted activity.

In Miller Plastic Products (NLRB 08/25/2023) [PDF] the NLRB made it easier to find that employee action is "protected concerted" action.

The Board overruled Alstate Maintenance, LLC, (2019), which effectively narrowed the test for determining concerted activity.  The Board explained that Alstate Maintenance had adopted an unduly restrictive test for defining concerted activity by introducing a mechanical checklist of factors in place of the Board’s traditional, fact-sensitive approach.

The Board's decision included this unremarkable statement: "The question of whether an employee has engaged in concerted activity is a factual one based on the totality of the record evidence."

NLRB: 2 changes for making unilateral changes

On August 30, 2023, the NLRB issued two full-Board decisions, Wendt Corporation and Tecnocap, LLC, (both decided on August 26, 2023), addressing the statutory duty of employers to bargain with unions before making changes in terms and conditions of work.

The NLRB press release:

In Wendt, the Board overruled Raytheon Network Centric Systems (2017), which had given employers greater latitude to make unilateral changes affecting a unionized workforce during a contractual hiatus or during negotiations for a first contract.  The Board explained that allowing employers to justify discretionary unilateral changes during such time periods as a “past practice” was both inconsistent with the Supreme Court’s decision in NLRB v. Katz, 369 U.S. 736 (1962) and undermined the pro-bargaining policies of the National Labor Relations Act. The Board in Wendt also reaffirmed the longstanding principle that an employer may never rely on an asserted past practice of making unilateral changes before employees were represented by a union (when the employer had no duty to bargain) to justify unilateral changes after the workers select a bargaining representative.

In Tecnocap, the Board overruled a different aspect of Raytheon that had not been addressed in Wendt. The Board held that an employer’s past practice of unilateral changes that was developed under a management-rights clause in a collective-bargaining agreement cannot authorize unilateral changes made after the agreement expires and while bargaining for a new agreement is under way. The Board explained that the Raytheon holding harmed the collective-bargaining process in two ways:  It forced unions to bargain to regain terms of employment lost to post-expiration unilateral changes, and it discouraged unions from agreeing to management-rights clauses in the first place.

Members Wilcox and Prouty joined Chairman McFerran in issuing the decisions. In Wendt, Member Kaplan concurred in finding that the employer acted unlawfully but but did not agree with the majority’s decision to reach the validity of Raytheon upon remand. In Tecnocap, Member Kaplan dissented.  

NLRB clarifies the General Counsel's Wright Line burden

In Intertape Polymer Corp (NLRB 08/25/2023) [PDF] the NLRB cleared up some confusion that was caused by Tschiggfrie Properties, Ltd., 368 NLRB No. 120 (2019).

The Board said:

"In Tschiggfrie, the Board majority, then-Member McFerran concurring in the result, sought to clarify the General Counsel’s burden under Wright Line in response to criticism from the United States Court of Appeals for the Eighth Circuit and what it described as confusion in a number of the Board’s decisions. As discussed below, however, the majority’s clarification was unnecessary and subject to misinterpretation. In our decision today, we explain that the Board in Tschiggfrie did not add to or change the General Counsel’s burden under Wright Line. Rather, the Board merely reaffirmed the principle, already embedded in the Wright Line framework, that the General Counsel is required to establish that protected activity was a “motivating factor” in the adverse employment action alleged to be unlawful. To the extent Tschiggfrie has been interpreted as modifying or heightening the General Counsel’s Wright Line burden, we reject that interpretation, and we reaffirm that the General Counsel’s burden under Wright Line remains the same as it has been throughout decades of Board jurisprudence."

The problem was that Tschiggfrie had suggested that the General Counsel’s burden was to show more than a reasonable inference that animus toward union or other protected activity was a motivating factor in an employer’s decision to take adverse action against an employee, and the GC had to have evidence of “particularized” animus toward the employee’s own protected activity. The Board has now clarified that a “particularized” animus toward the employee’s own protected activity is not part of the GC's burden.

Bargaining without an NLRB election – New framework

The NLRB's new card check decision is not quite Joy Silk, yet it is a major shift.

Here is the NLRB's press release:

Today, the Board issued a decision in Cemex Construction Materials Pacific, LLC announcing a new framework for determining when employers are required to bargain with unions without a representation election.  The new framework will both effectuate employees’ right to bargain through representatives of their own choosing and improve the fairness and integrity of Board-conducted elections.

Under the new framework, when a union requests recognition on the basis that a majority of employees in an appropriate bargaining unit have designated the union as their representative, an employer must either recognize and bargain with the union or promptly file an RM petition seeking an election.  However, if an employer who seeks an election commits any unfair labor practice that would require setting aside the election, the petition will be dismissed, and—rather than re-running the election—the Board will order the employer to recognize and bargain with the union. 

The Board explained that the revised framework represents an effort to better effectuate employees’ right to bargain through their chosen representative, while acknowledging that employers have the option to invoke the statutory provision allowing them to pursue a Board election.  When employers pursue this option, the new standard will promote a fair election environment by more effectively disincentivizing employers from committing unfair labor practices. 

The new Cemex standard differs from the historical Joy Silk standard, which required an employer to bargain with a union unless it had a good-faith doubt of the union's majority status.

“Today’s decision, along with the Board’s recently issued Final Rule on Representation, will strengthen the Board’s ability to provide workers across the country with a timely and fair process for seeking union representation,” said Chairman Lauren McFerran. “The Cemex decision reaffirms that elections are not the only appropriate path for seeking union representation, while also ensuring that, when elections take place, they occur in a fair election environment. Under Cemex, an employer is free to use the Board’s election procedure, but is never free to abuse it—it's as simple as that.”

In Cemex, the Board found that the employer engaged in more than 20 instances of objectionable or unlawful misconduct during the critical period between the filing of the election petition and the election.  Accordingly, the Board found that the employer was subject to a bargaining order under both the Supreme Court’s decision in NLRB v. Gissel Packing Co. and under the newly announced standard, applied retroactively in this case.

Members Wilcox and Prouty joined Chairman McFerran in issuing the decision. Member Kaplan joined the majority in part and dissented in part.

Bye-bye "ultimate employment decision"

The 5th Circuit – en banc – has ruled that a Title VII plaintiff is not required to plead an "ultimate employment decision": hiring, granting leave, discharging, promoting, or compensating. Hamilton v. Dallas County (5th Cir en banc 08/18/2023) [PDF].

The Dallas County Sheriff’s Department gives its detention service officers two days off each week. The department uses an admittedly sex-based policy to determine which two days an officer can pick. Only men can select full weekends off—women cannot. Instead, female officers can pick either two weekdays off or one weekend day plus one weekday. Bottom line: Female officers never get a full weekend off.

The 5th Circuit's response to these facts:

"Today we hold that a plaintiff plausibly alleges a disparate-treatment claim under Title VII if she pleads discrimination in hiring, firing, compensation, or the “terms, conditions, or privileges” of her employment. She need not also show an “ultimate employment decision,” a phrase that appears nowhere in the statute and that thwarts legitimate claims of workplace bias. Here, giving men full weekends off while denying the same to women—a scheduling policy that the County admits is sex-based—states a plausible claim of discrimination under Title VII."

Many courts have adopted the "ultimate employment decision" requirement, even though it has absolutely no connection to the text of the statute. One horrible example is the case in which a Black employee alleged that he and his Black team members had to work outside without access to water, while his white team members worked inside with air conditioning. The 5th Circuit turned him down for lack of an "ultimate employment decision." Peterson v. Linear Controls, 757 F. App’x 370, 373 (5th Cir. 2019) (per curiam), cert. dismissed, 140 S. Ct. 2841 (2020).

The current decision from the "conservative" 5th Circuit is most welcome.

Note: A similar case is pending at the US Supreme Court. A police sergeant alleged that she was the victim of sex discrimination because she was involuntarily transferred from her position in the Intelligence Division to a patrol position because her supervisor wanted to hire a man for her job. The Supreme Court narrowed the question presented to "Does Title VII prohibit discrimination in transfer decisions absent a separate court determination that the transfer decision caused a significant disadvantage?" Muldrow v. City of St. Louis (US Supreme Ct cert granted 06/30/2023) [Briefs]  

2022-2023 Supreme Court Employment Law Roundup

The US Supreme Court is in recess for the summer. Here are some recent decisions employment lawyers need to know about.

Title VII: Title VII requires an employer that denies a religious accommodation to show that the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business. Groff v. DeJoy (06/29/2023) [PDF].

Arbitration: When there is an interlocutory appeal from a denial of a motion to compel arbitration, a district court must stay its proceedings while the appeal is ongoing. Coinbase v. Bielski (06/23/2023) [PDF].

NLRA Preemption: The NLRA did not preempt an employer’s state tort claims related to the destruction of company property during a labor dispute where the union failed to take reasonable precautions to avoid foreseeable and imminent danger to the property. Glacier Northwest v. Teamsters (06/01/2023) [PDF].

FLSA: A highly-paid employee ($200,000+) is not exempt from the FLSA because he was paid on a daily basis, not on a salary basis. Helix Energy v. Hewitt (02/22/2023) [PDF].

Jurisdiction: A Pennsylvania law requiring out-of-state companies that register to do business in Pennsylvania to agree to appear in Pennsylvania courts on “any cause of action” against them comports with the due process clause. Mallory v. Norfolk Southern Railway (06/27/2023) [PDF].

FLRA: The Federal Labor Relations Authority has jurisdiction over a dispute between a state National Guard and a union of dual-status technicians serving in their civilian role. Ohio Adjutant General v. FLRA (05/18/2023) [PDF].

SCOTUS will decide "adverse employment action"

The US Supreme Court has granted certiorari in Muldrow v. St. Louis (US Supreme Ct cert granted 06/30/2023) [Briefs].

The formal issue is: "Does Title VII prohibit discrimination in transfer decisions absent a separate court determination that the transfer decision caused a significant disadvantage?"

Federal Circuit Courts are hopelessly divided on this important question.

The facts in the case are simple. Muldrow was transferred to a different job (she says because of sex). The duties were different, but there was no change in pay and no negative effect on future career prospects. The 8th Circuit held that this was not a Title VII violation because there was no "material adverse action."

But here's the problem – Title VII's text says nothing about "adverse employment action" or "material adverse action." Those ideas have been invented by the lower courts.

Title VII does say:
"It shall be an unlawful employment practice for an employer - (1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin."

In case you haven't noticed, the Supreme Court is usually not happy about courts adding requirements that Congress did not add. Pretty simple.

Look for oral arguments in the fall of 2023, and a decision in 2024.

Unanimous SCOTUS: No more "de minimis cost."

Title VII requires an employer that denies a religious accommodation to show that the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business. Groff v. DeJoy (US Supreme Ct 06/29/2023) [PDF].

This "clarification" of Trans World Airlines, Inc. v. Hardison, 432 U. S. 63 (1977) will be a game-changer for determining whether an employer must accommodate an employee's religious beliefs and practices. Employers must now consider forcing other employees to work overtime, voluntary shift swapping, and other options.

No liability for a false drug test

A drug test.
A false positive.
The employee loses his job.
Is the drug-test lab liable to the employee?
In Texas, the answer is NO, because "the third-party testing entities hired by an employer do not owe a common-law negligence duty to their clients’ employees."

Houston Area Safety Council v. Mendez (Texas 06/23/2023) (6-3).
Opinion of the Court
Concurring Opinion
Dissenting Opinion

An arbitration win for employers

A win for employers ---- When a defendant files an interlocutory appeal from an order denying a motion to compel arbitration, the trial court MUST stay the trial court proceedings. Period.

FCA qui tam suits unconstitutional?

US ex rel Polansky v. Executive Health Resources (US Supreme Ct 06/17/2023) [PDF] was unremarkable as to its actual holding – the government can let a False Claims Act qui tam case proceed for years and then intervene and get it dismissed quite easily.

What needs to be noticed is that three Justices opined that “[t]here are substantial arguments that the qui tam device is inconsistent with Article II and that private relators may not represent the interests of the United States in litigation."

Justice Thomas laid it out this way:

"The FCA’s qui tam provisions have long inhabited something of a constitutional twilight zone. There are substantial arguments that the qui tam device is inconsistent with Article II and that private relators may not represent the interests of the United States in litigation. Because “[t]he entire ‘executive Power’ belongs to the President alone,” it can only be exercised by the President and those acting under him. And, as “[a] lawsuit is the ultimate remedy for a breach of the law,” the Court has held that “conducting civil litigation . . . for vindicating public rights” of the United States is an “executive functio[n]” that “may be discharged only by persons who are ‘Officers of the United States’” under the Appointments Clause. A private relator under the FCA, however, is not “appointed as an officer of the United States” under Article II. It thus appears to follow that Congress cannot authorize a private relator to wield executive authority to represent the United States’ interests in civil litigation." [Several citations omitted]

Justice Kavanaugh, joined by Justice Barrett, penned a brief concurring opinion expressing the same view.

The False Claims Act has been the main vehicle for fighting fraud against the government, and private whistleblowers (relators in qui tam language) have collected countless millions of dollars. The chance to collect between 15 and 30 percent has been a big incentive for whistleblowers.

NLRB: Common-law rules govern independent contractor analysis

The NLRB is rejecting the idea that entrepreneurial opportunity for gain or loss should be the “animating principle” for deciding whether a worker is an independent contractor vs. an employee.

Here is the press release:

In a decision issued today in The Atlanta Opera, Inc., the Board returned to the 2014 FedEx Home Delivery (FedEx II) standard for determining independent contractor status under the National Labor Relations Act (the Act), and overruled SuperShuttle (2019). In applying the FedEx II standard, the Board found that the makeup artists, wig artists, and hairstylists who work at the Atlanta Opera—had filed an election petition with the Board seeking union representation—are not independent contractors, excluded from the Act, but rather are covered employees.

In its decision, the Board reaffirmed longstanding principles—consistent with the instructions of the Supreme Court—and explained that its independent-contractor analysis will be guided by a list of common-law factors. The Board expressly rejected the holding of the SuperShuttle Board that entrepreneurial opportunity for gain or loss should be the “animating principle” of the independent-contractor test.

The Board further explained that entrepreneurial opportunity would be taken into account, along with the traditional common-law factors, by asking whether the evidence tends to show that a supposed independent contractor is, in fact, rendering services as part of an independent business.

In reviewing the facts of this case and applying the FedEx II standard in Atlanta Opera, the Board determined that the majority of the traditional common-law factors point toward employee status.  The Board also determined that the evidence did not show that the stylists rendered services as part of their own independent businesses.

“In today’s decision, the Board returns to the independent contractor test articulated in FedEx II, and reaffirms the Board’s commitment to the core common-law principles that the Supreme Court has determined should guide the Board’s consideration of questions involving employee status,” said Chairman Lauren McFerran. “Applying this clear standard will ensure that workers who seek to organize or exercise their rights under the National Labor Relations Act are not improperly excluded from its protections.”

In December 2021, the Board invited parties and amici to submit briefs addressing whether the Board should reconsider its standard for determining the independent contractor status of workers. 

Members Wilcox and Prouty joined Chairman McFerran in issuing the decision. Member Kaplan dissented from the overruling of SuperShuttle, but concurred in finding that the stylists were employees, not independent contractors.

SCOTUS decides NLRA preemption case

SCOTUS: The NLRA did not preempt an employer’s tort claims alleging that the union intentionally destroyed the company’s property during a labor dispute. Glacier Northwest v. Teamsters (US Supreme Ct 06/01/2023) [PDF]

Glacier Northwest delivers concrete to customers using ready-mix trucks with rotating drums that prevent the concrete from hardening during transit. The drivers union called for a work stoppage on a morning it knew the company was in the midst of mixing substantial amounts of concrete, loading batches into ready-mix trucks, and making deliveries. The union directed drivers to ignore instructions to finish deliv­eries in progress. At least 16 drivers who had already set out for de­liveries returned with fully loaded trucks. By initiating emergency maneuvers to offload the concrete, Glacier prevented significant dam­age to its trucks, but all the concrete mixed that day hardened and became useless.

The company sued the union for damages in state court, claiming that the Union intentionally destroyed the company’s concrete and that this conduct amounted to common-law conversion and trespass to chattels. The Washington Supreme Court held that the matter was preempted by the National Labor Relations Act, but the US Supreme Court reversed (8-1), allowing the state-court lawsuit to move forward.