Labor and Employment Update - Winter 2018

IN DECEMBER 2017, THE NATIONAL LABOR RELATIONS BOARD ISSUED THREE SIGNIFICANT EMPLOYER-FRIENDLY DECISIONS

On three consecutive days in December of 2017, the National Labor Relations Board issued a 3-2 opinion that reversed key rulings that had been decided by the Democratic majority that existed before President Trump designated Philip A. Miscimarra as Chairman in April 2017 and filled two vacant spots with Republican Members, Marvin Kaplan and William Emanuel.

On December 14, 2017, in Hy-Brand Industrial Contractors Ltd. and Brandt Construction Co., (Hy-Brand), the Board rejected the joint employer standard that has been in place since the 2015 decision Browning-Ferris Industries, (Browning-Ferris). According to the Board, in Hy-Brand and in all future and pending cases, the Board would and will apply the pre-Browning-Ferris joint employer standard. Thus, going forward:

two or more entities will be deemed joint employers under the National Labor Relations Act if there is proof that one entity has exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control) and has done so directly and immediately (rather than indirectly) in a manner that is not limited and routine. Accordingly, under the pre-Browning Ferris standard restored today, proof of indirect control, contractually reserved control that has never been exercised, or control that is limited and routine will not be sufficient to establish a joint employer relationship.

On December 15, 2017, in PCC Structurals, Inc. and International Association of Machinists & Aerospace Workers, AFL–CIO, District Lodge W24, the Board overruled the decision in Specialty Healthcare & Rehabilitation Center of Mobile (“Specialty Healthcare”), which allowed for the formation of so-called "micro" bargaining units. Specifically, under Specialty Healthcare, employers who challenged the scope of a unit had to “demonstrate that the additional employees the proponent [sought] to include share[d] an overwhelming community of interest with the petitioned-for employees, such that there [was] no legitimate basis upon which to exclude certain employees from the petitioned-for unit because the traditional community-of-interest factors overlap[ped] almost completely.” In PCC Structurals, the Board abandoned this “overwhelming” community-of-interest standard. Now, the Board will decide “in each case whether the group of employees a union seeks to represent constitutes a unit that is ‘appropriate’ for collective bargaining.”

The Board justified the PCC Structurals decision by stating that “there are sound policy reasons for returning to the traditional community-of-interest standard that the Board has applied throughout most of its history," because it enables the Board to evaluate the interests of all employees, not just those within the petitioned-for unit, "without regard to whether these groups share an ‘overwhelming’ community of interests.”

Further, on December 16, 2017, in The Boeing Co. & Soc. of Prof’l Eng’g Employees in Aerospace (“Boeing”), the Board overruled a portion of the 2004 decision Lutheran Heritage Village-Livonia, which has been relied upon countless times to find that the mere maintenance of a workplace policy is an unfair labor practice if the policy reasonably could be construed to prohibit NLRA-protected conduct. In Boeing, the Board overruled the reasonably construed standard and announced a new two-step test for evaluating a “facially neutral” policy, which essentially balances the potential impact on NLRA rights with the employer’s justification for the policy. In particular,

[i]n cases in which one or more facially neutral policies, rules, or handbook provisions are at issue that, when reasonably interpreted, would potentially interfere with Section 7 rights, the Board will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the requirement(s).

Thus, while the Board still must determine first if the subject rules, when reasonably interpreted, “tend[] to interfere with the free exercise of employees rights under the Act,’” the rule will not be unlawful if the employer’s plausible business justification for it outweighs the adverse impact it could have on Section 7 rights under the NLRA.

These opinions are important not only because of the “new law” they have created, but also because they send a very clear message that other prior positions held by the Board, no matter how long-established, may be changed or abandoned all together. Therefore, before acting, employers should consult their labor attorneys to ensure that they have the most up-to-date understanding of the Board’s current view of the law.

Lee D. Moylan
lmoylan@klehr.com

SEXUAL HARASSMENT PREVENTION IN THE #METOO ERA

Ever since the Harvey Weinstein saga broke and more and more stories have come out about sexual harassment in the workplace, leading to the downfall of many others in the entertainment and business community, employers have been re-examining the atmosphere in their offices and the potential liability for not properly addressing sexual harassment allegations.

Arguably, people should not have to change their conduct unless they were acting inappropriately previously. However, the spotlight is on everyone and actions are magnified or can be misinterpreted — even seemingly innocent interactions. Certainly, men and women have changed the way they view interactions with each other:

What can I say?
Do I hug or shake hands?
Do I compliment individuals on their apparel?
Should I travel alone with a colleague of the opposite sex?

Given the gravity of the consequences – for individuals as well as companies – awareness of sexual harassment needs to be a top priority for employers.

While many employers already have a sexual harassment policy in place, it’s important to review the language of the policy and how it’s actually worked in practice. It should be re-issued/re-emphasized to every employee that the company takes its obligation to eradicate sexual harassment in the workplace seriously. At its basic core, employers must have:

• a strong written policy;
• an “easy” complaint procedure that allows for prompt and effective investigation in response to any complaint; and
• regular company-wide training.

The sexual harassment policy should be distributed to all employees either via:

• the employee handbook;
• a separate hard copy policy; and/or
• the company intranet.

The policy should be reviewed and updated periodically to incorporate any recent changes in the law and should be drafted by a law firm or human resources professional. The policy should set forth the complaint procedure clearly and openly. Staff employees must understand that their complaints will be taken seriously and investigated. Management must understand its obligations to intervene and/or report any conduct that it observes as well if it believes the conduct violates the policy. Failure by management to do so can expose the company to liability.

Regular training of all employees should be done. Management should be trained both with regular employees and separately so that they understand their obligations under the policy and to the company. Companies should not try to do it with in-house personnel. Just as the policy should be drafted by professionals, the training should be done by professional trainers whether they be lawyers or human resources professionals who have conducted such training. It will be money and time well-spent.

Charles A. Ercole
cercole@klehr.com