Through a series of decisions issued in late 2019, the National Labor Relations Board (“NLRB” or “Board”) has signaled a return to common sense in its approach to the rules governing labor relations.  Here are a few of the Board’s decisions that are of interest to employers.

Employers May Require Employees to Maintain Confidentiality in Workplace Investigations

In Apogee Retail, LLC d/b/a/ Unique Thrift Store, 368 NLRB No. 144 (Dec. 16, 2019), the NLRB upheld an employer’s right to require that employees maintain confidentiality in workplace investigations.  In doing so, the NLRB overruled Banner Estrella Medical Center, in which the Board previously created a presumption that confidentiality rules unduly infringed on employees’ Section 7 rights to organize or engage in concerted activities, and required employers to demonstrate the need for confidentiality based on facts specific to the investigation.

In balancing employees’ Section 7 rights against the needs of employers to maintain confidentiality in the investigation process, the Board observed that the confidentiality rules at issue in this case did not prohibit employees from discussing either the incident or any resulting discipline.  Instead, “they narrowly require that employees not discuss investigations of such incidents or interviews conducted in the course of an investigation.”  Id. at 8 (emphases in original).  Finally, the Board also recognized that even after the conclusion of an investigation, there may be legitimate reasons for prohibiting employees from discussing interviews that occurred during the investigation, but stated that rules requiring post-investigation confidentiality required “individualized scrutiny.”

Employers May Restrict Union Buttons at Work

In Wal-Mart Stores, Inc., 368 NLRB No. 146 (Dec. 16, 2019), the NLRB addressed whether a dress code policy that limits, but does not prohibit, the wearing of buttons and insignia violated the National Labor Relations Act (“NLRA”).  Wal-Mart maintained a policy that limited employees to wearing “small, non-distracting” union insignia no larger than the size of their name badges.

Applying the analysis for “facially neutral” workplace policies established in its 2017 Boeing decision, which requires the Board to weigh the nature and extent of the potential impact on union rights against the employer’s legitimate justifications, the Board held that Wal-Mart’s policy limiting employees to wearing “small, non-distracting” union insignia while interacting with clients and customers did not violate the NLRA.  The Board did clarify, however, that a parallel policy was unlawful in “employee-only” zones.

The Wal-Mart decision thus permits employers to restrict the type and manner of insignia, including union buttons, that employees may wear when working in customer-facing positions.

NLRB Returns Control of Company Email to the Company

In Caesars Entertainment d/b/a/ Rio All-Suites Hotel and Casino, 368 NLRB No. 143 (Dec. 16, 2019), the Board overturned the Obama-era decision Purple Communications, Inc. and restored an employer’s right to restrict use of its communication systems to business purposes.  Under Purple Communications, the Obama Board stated that employers with access to company email had a presumptive right to use it to organize, on nonwork time.  Now, under Caesars, the Board held that employees do not have a statutory right to use employers’ email and other information-technology (IT) resources to engage in non-work-related communications.  Rather, employers have the right to control the use of their equipment, including their email and other IT systems, and they may lawfully exercise that right to restrict the uses to which those systems are put, provided that in doing so, they do not discriminate against activities protected by Section 7 of the NLRA, such as discussing wages, hours, and terms and conditions of employment.

This means that employers may return to policies prohibiting personal use of company communications systems – such policies are once again “facially neutral” and presumptively lawful.  Though this is welcome news, employers must still be mindful about enforcing a rule prohibiting personal use of company email.  If employees are allowed to discuss personal matters, enforcing a “work use only” rule regarding Section 7 protected activity may still be deemed discriminatory and unlawful.

Board Returns to Rule That Employer May Cease Mandatory Dues Deductions upon Expiration of CBA

The general rule is that the employer has an obligation under Section 8(a)(5) of the NLRA to continue to apply the terms of a CBA event after it has expired unless and until it has bargained with the union to impasse.  Traditionally, one exception to this rule has been “checkoff” provisions, which obligate an employer to deduct and remit union dues from employees’ paychecks (the other exceptions are no-strike/lockout provisions, arbitration provisions, and management rights clauses).  The Board held in a 1962 case called Bethlehem Steel that an employer’s statutory obligation to honor contractual checkoff provisions terminates when the contract expires.  In other words, the employer could halt the checkoff practice automatically and without bargaining with the union upon contract expiration.  In a 2015 decision called Lincoln Lutheran of Racine, the Obama Board overruled Bethlehem Steel and held that the employer’s checkoff obligation survived expiration of the contract.

In Valley Hospital Medical Center, Inc., 368 NLRB No. 139 (Dec. 16, 2019), the Board overruled Lincoln Lutheran of Racine and returned to the Bethlehem Steel standard.  The decision applies retroactively.  In addition, the Board made clear that the “new” rule applied even if the contract at issue did not contain a union security provision, i.e., a provision that requires employees to become union members or at least pay union dues as a condition of employment.

PCC Structurals Decision Overruling Specialty Healthcare Micro-Unit Standard Applies Retroactively

Unions historically sought to organize large bargaining units consisting of, for example, all the employees at a facility.  However, it often proved difficult for unions to organize facility-wide units given the need to obtain showing-of-interest cards from 30 percent of the employees. In 2011, the Board addressed this “problem” in Specialty Healthcare by endorsing union efforts to organize “micro units,” which typically consisted of the employees in a particular department.  Under Specialty Healthcare, the union had the initial burden to show that the employees in the micro unit shared a basic community of interest.  Once the union satisfied this burden, it was up to the employer to demonstrate that a larger unit was necessary because the employees in the micro unit and the larger proposed unit had an “overwhelming” community of interest.  This was an all-but-impossible burden for the employer to satisfy.

In 2017, the Board overruled Specialty Healthcare in PCC Structurals.  Under PCC Structurals, when a union petitions to represent a micro unit and the employer counters that a larger unit is necessary, the Board decides the question based on the basic community-of-interest standard.  Our previous post about the PCC Structurals decision is here.

One question PCC Structurals did not answer was whether the “community of interest” standard would apply on a retroactive basis to cases currently pending before the Board.  In Cristal USA, Inc., the Board answered the question with a resounding “yes.”  The Board’s usual practice is to apply new policies and standards retroactively to all pending cases no matter what stage of the proceedings they have reached.  The exception to this principle is when retroactive application would cause a “manifest injustice,” which the Board determines by considering the extent to which the parties relied on the prior state of the law, the effect of retroactive application on accomplishing the purpose of the NLRA, and whether any particular inequities arise from retroactive application based on the facts of the case.  Applying these factors, the Board concluded that retroactive application was appropriate even though the union had already been certified under the Specialty Healthcare standard approximately one year before the decision in PCC Structurals.

Quickie Elections Slow Down to Ensure “Fair and Efficient” Elections

The NLRB was also active in rulemaking, undoing the Obama-era “Quickie Elections” rules that dramatically accelerated the election process, as we wrote about here.  Those rules reduced the median time between petition and election from 38 to 23 days for stipulated elections, and from 59 to 36 days in a contested election, reducing an employer’s ability to educate employees and prepare for the election.  The new rules come with a number of important changes, which Chairman Ring described as “common sense changes to ensure expeditious elections that are fair and efficient”:

  • Employers will have five business days, up from two, to post and distribute the Notice of Petition for Election and to provide voter lists;
  • Disputes about representation, unit scope, and voter eligibility will be decided before the election, rather than after an election, only if the matters had a material impact on the results;
  • Pre-election hearings will generally be scheduled 14 business days after notice of a hearing, up from eight calendar days;
  • Elections will be scheduled no sooner than 20 business days following the direction of an election; and
  • Post-hearing briefs are again permitted without “special permission” from the regional director.

The new rules go into effect April 16, 2020.  Once they do, employers will have a chance to catch their breath after receiving an election petition.