Reed Smith Client Alerts

With the new year upon us, we have rounded up some of the most important NLRB decisions of 2014. By all accounts, the NLRB was as active as ever in 2014. Its decisions and rulemaking will preoccupy HR and LR professionals in union and non-union environments alike during 2015, and beyond.

Potential trouble for the franchisor-franchisee model In July, NLRB General Counsel Richard F. Griffin Jr. issued a press release expressing his position that McDonald’s is a joint employer with its franchisees, such that it can be deemed liable for its franchisees’ labor law violations. In mid-December, Griffin followed up his announced position through action—filing 13 complaints against McDonald’s and franchisees as joint employers.

If the NLRB agrees with its independent general counsel and if appeals courts uphold that decision, this treatment as joint employers would have wide-ranging implications for a broad range of companies that have franchise-based business models. While the issue is likely to be tied up in litigation for several years as cases wind their way through federal appeals courts, employers utilizing a franchise model will keep careful attention on this issue.

The long-anticipated decision in one case, Browning-Ferris, may shed light on how the Board will come out on GC Griffin’s announced position, as well as what test the Board will apply when assessing the existence of joint employment relationships. The case entails Board review of a regional director’s decision that Browning-Ferris and a staffing agency were not the joint employers of workers at recycling facilities that Browning-Ferris owns. In May, the Board invited the parties and amici to file briefs regarding the Board’s existing joint-employer test—whether it should continue to apply, or if the Board should adopt a different test. The Browning-Ferris case was expected to be decided in 2014, and a decision may yet be imminent.

Company Email Now a Unionization Tool In early December, the NLRB decision in Purple Communications, Inc. invalidated a company policy that prohibited employee use of the employer-provided email system for non-work-related messages. The NLRB decided that employees have a statutory right to use company email during non-working hours for organizing and other concerted activity, such that the company ban against all non-work-related messages was unlawfully broad.

The NLRB noted two limitations to its holding: (1) employers are not required to provide email access to employees; rather, the right of employees to use company-provided email systems for protected activity only attaches once the employer has granted email access in the first place; (2) an employer may justify a comprehensive prohibition of non-work-related emails if it can demonstrate special circumstances that necessitate the ban to maintain production or discipline; even without such a justification for a complete ban, an employer still can consistently enforce uniform controls over its email system to the extent such controls are necessary for maintaining production and discipline.

“Quickie Elections” Rule Published In mid-December, the NLRB published a Final Rule on “quickie elections,” which will take effect in April 2015. According to the Board, the Final Rule will fast-track union election processes by “removing unnecessary barriers to fair and expeditious resolution of representation cases.” The Final Rule includes the following new directives:

  • Petitions may now be filed with the Board electronically
  • Petitions must be filed by the petitioning unit on the other parties, along with a statement of interest and the names and contact information for the union’s representatives
  • Employers are required to post and distribute a Board notice about the petition and the potential of an election
  • One day before the hearing on the election petition, the employer must submit a position statement raising any and all issues it may have with the election petition. Positions not raised are waived.
  • Employers must identify and provide information to the Board and union about all employees who may be in the petitioned-for unit

These new rules increase the authority and discretion of the hearing officer and regional director to control the election hearing. The rules also shorten timelines for many steps in the proceedings, as well as seek to maximize efficiency through use of modern technology and communication tools.

NLRB Asserts Jurisdiction over Religiously Affiliated Colleges and Universities In late December, the Board issued Pacific Lutheran University, which comprises a review of prior Board precedent on the collective bargaining rights of faculty members at religiously affiliated universities. The Board stated that it would now exercise jurisdiction over these schools, unless a particular school can demonstrate “that it holds itself out as providing a religious educational environment.” To avoid Board jurisdiction, a school must also show that the faculty members in a petitioned-for unit perform a religious function, with a specific role in maintaining the school’s religious educational environment.

The NLRB also “refined” its standard for determining the managerial status of university faculty. Going forward, the NLRB will focus on whether the faculty in a university setting “actually or effectively exercise control over decision making pertaining to central policies of the university such that they are aligned with management.” The Board will review a faculty member’s decision-making role in the following areas: (1) academic programs, (2) enrollment management policies, (3) finances, (4) academic policies, and (5) personnel policies and decisions—with the Board placing heavier weight on the first three factors when rendering its decisions.

College Athletics In March, Peter Ohr, NLRB Regional Director in Chicago, concluded that football players who receive scholarship money qualify as statutory “employees” of Northwestern University who have a right to form a union and bargain collectively with their employer.

The matter is pending with the NLRB, which presumably will release a ruling in the coming year. An upholding by the Board of Ohr’s decision would potentially alter the landscape of college athletics at private universities. It also might lead to unionization campaigns in public schools in states that permit public employee unionization.

As expected, the NLRB’s agenda in 2014 was largely pro-union and pro-employee. 2014 saw increases to the number of individuals eligible for collective bargaining rights, as well as efforts to alleviate perceived barriers to unions trying to reach these individuals. As we enter 2015, we expect more of the same from the current NLRB, along with the appellate courts weighing in on the pending or inevitable legal challenges.

Reed Smith will present a one-hour teleseminar on February 17 at 12 p.m. ET on union-avoidance strategies in the wake of the NLRB’s recent activity, particularly the “quickie election” Rule and the Purple Communications decision regarding email use. Interested participants can register here. If you have any questions about the NLRB’s activities and how they affect your organization, please contact John DiNome or Joel Barras, or the Reed Smith attorney with whom you work.


Client Alert 2015-005