New Report Makes Case for NLRB Reform

For the last several years the National Labor Relations Board often has behaved as if it were the National Organized Labor Promotion Board. President Trump has a real opportunity to reverse the board’s many wrong turns by filling two current vacancies. A new monograph released a few weeks ago by the U.S. Chamber of Commerce’s Workforce Freedom Initiative, “Restoring Common Sense to Labor Law:  Ten Policies to Fix at the National Labor Relations Board,” can serve as a guide. The 43-page report summarizes the ways in which the NLRB during the Obama era stretched the boundaries of labor law, often to bizarre lengths, to accommodate union leaders. Rather than balance the interests of employers and workers, the board issued a series of rulings that overturned longstanding and reasonable precedent.

The National Labor Relations Board, created under the National Labor Relations Act of 1935 (NLRA), is a federal agency charged with the responsibility of supervising union elections and adjudicating employer-employee disputes. The official mission of the five-member board – it has operated short-handed at least as often than not during the past decade – is “(to guarantee) the right of most private-sector employees to organize, to engage in group efforts to improve their wages and working conditions, to determine whether to have unions as their bargaining representative, to engage in collective bargaining, and to refrain from any of these activities. It acts to prevent and remedy unfair labor practices committed by private-sector employers and unions.” This sounds even-handed. However, things haven’t necessarily worked out that way.

During the Obama administration, unions rarely had a more forceful advocate than the ostensibly “neutral” National Labor Relations Board. According to a study published last December, the NLRB during that time overturned the equivalent of more than 4,500 years of established substantive precedent in almost 100 separate cases. Part of the reason for this sharp turn is the board’s composition. Though not bound formally by such a rule, it has been customary for decades that the board have a three-to-two majority reflecting the party in power. By definition, the coming of the Obama administration in 2009 meant that the board, at full strength, would consist of three Democrats and two Republicans. Democratic members almost inevitably have a background as union lawyers or pro-union congressional staffers. Yet another reason for the aggressive advocacy is that the Democrats on the board often veered even further leftward than Democrats during prior administrations. One of them, Craig Becker, a former associate counsel to the AFL-CIO and the Service Employees International Union who served 21 months on the board starting in April 2010, long had held that an employer has no right to challenge a union’s behavior during an organizing drive. He’s now general counsel for the AFL-CIO.

This kind of thinking has permeated a number of recent NLRB decisions. Among other things, the board has ruled that: a parent company qualifies as a “joint employer” alongside a contractor and thus can be forced to collectively bargain over workplace issues over which it has little or no direct control (Browning-Ferris Industries of California); employees with access to an employer email system can use that system for union organizing during nonworking hours (Purple Communications); and an employer must continue to collect dues from union members via automatic checkoff even after the expiration of a contract (WKYV-TV). The board also issued an “ambush election” rule that has made it a good deal harder for employers to mount opposition to union organizing drives; became more disdainful than ever toward enforcement of the Supreme Court’s Beck decision (1988) affirming the right of nonmember workers under contract to withhold dues beyond core union functions; and perhaps most egregiously, signed a cooperative agreement with Mexico’s Foreign Ministry in 2013 to promote the rights of Mexican workers, regardless of legal resident status, on American soil.

The NLRB’s overall message to employers thus appears to be: “Heads you lose, tails you lose.” The U.S. Chamber of Commerce, as part of its Workforce Freedom Initiative, thinks such a course is bad for the economy and bad for management-worker relations. Moreover, it believes that the board in the Trump era, given the president’s power to appoint members, can reverse course on key issues. That’s what “Restoring Common Sense to Labor Law,” is all about. The monograph discusses 10 ways in which the board has abandoned its historic mission of protecting the rights of dissenting employees and reluctant employers as well as those of union workers. The lodestar is NLRA Section 7, which grants employees the right to “engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection.” Through often strange twists in reasoning, the NLRB has used this clause as a pretext for denying employers, including unionized ones, the right to take reasonable steps to provide a safe and efficient workplace.

The report lists and discusses ten workplace issues in which the National Labor Relations Board has exceeded its legal authority: 1) micro-bargaining; 2) the “ambush election” rule; 3) joint employer status; 4) arbitration agreements; 5) erosion of management rights clauses; 6) restriction of employer discipline before first contracts; 7) access to employer email for organizing; 8) restriction of an employer’s right to take action against obnoxious or harassing onsite union behavior; 9) safeguarding the confidentiality of statements by witnesses to objectionable union behavior; and 10) expansion of the right to picket in off-limits work areas. Here are a few summaries.

Micro-bargaining. In its 2011 ruling in Specialty Healthcare, the NLRB radically widened the definition of an appropriate collective bargaining unit. This decision gave a green light for unions to create small, fragmented units at a single job site whether or not a majority of all workers, or even close to a majority, wants representation. It is labor law’s equivalent of political gerrymandering. In practice, micro-bargaining is difficult to challenge because the employer must show that additional workers share an overwhelming “community of interest” with the petitioned-for union. The NLRB subsequently has upheld this doctrine in Macy’s Inc., Bread of Life and Volkswagen Group of America Inc.

Joint employer status. The National Labor Relations Board took a big step in the wrong direction in August 2015 when it ruled in Browning Ferris Industries of California, Inc. to expand the circumstances under which an employer can be forced to bargain alongside a subsidiary or contractor. The board replaced the longstanding “direct and immediate control” test for determining joint employer status with far broader and more vague “indirect” and “potential” control tests. As a result, parent companies are now more likely to be forced into bargaining with workers whom they do not employ or set wage rates for. Fast food restaurants and other franchise-heavy industries especially will be affected; NLRB General Counsel Richard Griffin these past few years has been targeting McDonald’s for reclassification as a joint employer. The case is far from resolved.

Arbitration agreements. For many years, employers have been able to reach arbitration agreements with unions through the use of class action waivers. In 2012, however, the NLRB ruled in D.R. Horton that such waivers deprive employees of their Section  7 rights. In that case, the board concluded that arbitration agreements requiring employees to waive their right to file class action suits violated the National Labor Relations Act. Even when the U.S. Court of Appeals, Fifth Circuit, refused to enforce this ruling, the NLRB has gone ahead and struck down various such agreements. The board has made clear its refusal to recognize circuit court rulings on the issue in lieu of a Supreme Court ruling.

In these and other ways, the National Labor Relations Board has been redefining workplace labor relations in ways that go well beyond the original intent of the National Labor Relations Act or even pre-Obama pro-union rulings. This is not a welcome trend. Despite their rhetoric about representing “working families” and “working Americans,” unions first and foremost protect their own. They fight only on behalf of employees who join and pay dues. With less than 7 percent of the U.S. private-sector work force currently belonging to unions, it is more than understandable why labor leaders are pulling out the stops. That is their right. But it is not the job of the NLRB, an ostensible objective party, to intervene on behalf of unions. If the board continues along this path, it will have laid the groundwork for a serious erosion of worker liberty and property rights in this country.

Fortunately, the Trump administration can rectify much of the harm. At present, the NLRB has only three active members – Philip Miscimarra (acting chairman), Mark Gaston Pearce and Lauren McFerran.  Miscimarra is the lone Republican. As the board is operating two members short, President Donald Trump has an opportunity to restore the board’s nonpartisan mission. His two Republican appointments should be the sorts of people who reach conclusions rather than start with them. It shouldn’t be that hard to find them.