Court upholds NLRB's Browning-Ferris joint-employer test

In 2015 the NLRB revised its joint-employer test by (1) putting the focus on whether a putative employer has the right to control the workers (even if that right is not exercised) and (2) considering indirect control (not merely direct control) as a factor. The DC Circuit has affirmed that formulation, although the case was remanded for greater articulation of the scope of "indirect" control. Browning-Ferris v. NLRB (DC Cir 12/28/2018) [PDF]

Most workers at Browning-Ferris's recycling plant are employed by a staffing company, who “has the sole responsibility to counsel, discipline, review, evaluate, determine pay rates, and terminate” the workers that it provides. When a Teamsters union petitioned to represent these workers, the NLRB decided that Browning-Ferris and the staffing company were joint-employers of the workers.

The DC Circuit held that "the right-to-control element of the Board’s joint-employer standard has deep roots in the common law. The common law also permits consideration of those forms of indirect control that play a relevant part in determining the essential terms and conditions of employment. Accordingly, we affirm the Board’s articulation of the joint-employer test as including consideration of both an employer’s reserved right to control and its indirect control over employees’ terms and conditions of employment." However, the court faulted the NLRB for failing to distinguish evidence of indirect control that bears on workers’ essential terms and conditions from evidence that simply documents the routine parameters of company-to-company contracting. Therefore, the court remanded to the NLRB for it to "explain and apply its test in a manner that hews to the common law of agency."

DISSENT: The dissent would have issued no decision at all because the NLRB is now engaged in a rulemaking process directed at precisely the issues that were decided in this case. On the merits, the dissent argued that under the common law "employees of a true independent contractor [here, the staffing company] cannot be considered employees of the company [here, Browning-Ferris] who hired the contractor." The dissent also faulted the majority for ignoring the fact that the common law of joint-employer may vary according to the nature of the business arrangement between companies.

NOTE: The NLRB is engaging in a rulemaking process regarding its joint-employer standard. Interested parties may file comments on or before Monday, January 14, 2019.

Mark Gaston Pearce re-nominated to the NLRB


The President has nominated Mark Gaston Pearce to be a Member of the National Labor Relations Board. [Announcement] That's bit of a surprise, because employer-side advocates have made it quite clear that they do not want him back on the Board. Of course, it could be they don't want any Democrat nominated, and are quite happy to have a 3-1 Republican majority that they have right now, rather than a 3-2 majority. 

Now we get to watch another wrestling match as the Senate decides whether to confirm this nomination. I think the Republicans in the Senate will need to see some major concession from the Democrats if that is going to happen.

Mark Gaston Pearce was sworn in as a Board Member on April 07, 2010, following his recess appointment, and was confirmed by the Senate on June 22, 2010. On August 23, 2013 he was sworn in for a second term that expired on August 27, 2018. He served as Chairman of the National Labor Relations Board from August 27, 2011- January 22, 2017. 

His most recent term expired on August 27, 2018, leaving the Board with only one Democrat vs. three Republicans.

Pearce was a founding partner of the Buffalo, New York law firm of Creighton, Pearce, Johnsen & Giroux, where he practiced union and plaintiff side labor and employment law. Prior to his entry into private practice Mr. Pearce was an attorney and District Trial Specialist in the Buffalo NY Regional office of the NLRB. By appointment of the Governor of the State of New York Mr. Pearce served on several commissions as well as the New York State Industrial Board of Appeals, where he ruled on appeals of wage and hour decisions of the NYS Department of Labor. He has taught at Cornell University's School of Industrial Labor Relations Extension, and is a Fellow in the College of Labor and Employment Lawyers. Mr. Pearce received his Juris Doctor from University at Buffalo Law School of the State University of New York, and his Bachelors degree from Cornell University.

NLRB will revisit employees' access to their employer’s email system

In a notice [PDF] issued August 1, the National Labor Relations Board invites the filing of briefs on whether the Board should adhere to, modify, or overrule Purple Communications, Inc., 361 NLRB 1050 (2014). In Purple Communications, the Board held that employees who have been given access to their employer’s email system for work-related purposes have a presumptive right to use that system, on nonworking time, for communications protected by Section 7 of the National Labor Relations Act. In doing so, the majority in Purple Communications overruled Register Guard, 351 NLRB 1110 (2007), which held that while union-related communications cannot be banned because they are union-related, facially neutral policies regarding the permissible uses of employers’ email systems are not rendered unlawful simply because they have the incidental effect of limiting the use of those systems for union–related communications. In addition, while Purple Communications and Register Guard addressed only email systems, the Board is also inviting comment on the standard it should apply to evaluate policies governing the use of employer-owned computer resources other than email.

Here are the specific questions being asked:

1. Should the Board adhere to, modify, or overrule Purple Communications?

2. If you believe the Board should overrule Purple Communications, what standard should the Board adopt in its stead? Should the Board return to the holding of Register Guard or adopt some other standard?

3. If the Board were to return to the holding of Register Guard, should it carve out exceptions for circumstances that limit employees’ ability to communicate with each other through means other than their employer’s email system (e.g., a scattered workforce, facilities located in areas that lack broadband access)? If so, should the Board specify such circumstances in advance or leave them to be determined on a case-by-case basis?

4. The policy at issue in this case applies to employees’ use of the Respondent’s “[c]omputer resources.” Until now, the Board has limited its holdings to employer email systems. Should the Board apply a different standard to the use of computer resources other than email? If so, what should that standard be? Or should it apply whatever standard the Board adopts for the use of employer email systems to other types of electronic communications (e.g., instant messages, texts, postings on social media) when made by employees using employer-owned equipment?

SCOTUS: Public sector union agency fees violate the 1st amendment (5-4)

Janus v. AFSCME (US Supreme Ct 06/27/2018)

The US Supreme Court has ruled (5-4) that it is a violation of the 1st amendment for a state to require nonconsenting public sector employees to pay agency fees to a union, overruling Abood v. Detroit Bd. of Ed., 431 U. S. 209 (1977). "We conclude that this arrangement violates the free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern." The Court characterized agency fees as compelled subsidy of the speech of other private speakers, and emphasized the inherently political nature of public-sector bargaining. The Court applied "exacting scrutiny" (less than strict; more than rational basis) to the issue and concluded that agency fees do not "serve a compelling state interest that cannot be achieved through means significantly less restrictive of associational freedoms."

Thus, neither an agency fee nor any other form of payment to a public-sector union may be deducted from an employee, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.

The Court found that agency fees cannot be upheld on the ground that they promote an interest in labor peace because labor peace can readily be achieved through less restrictive means. As for the argument that agency fees are needed to eliminate free riders, the Court said that in non-agency-fee jurisdictions, unions are quite willing to represent nonmembers in the absence of agency fees, and any event States can avoid free riders through less restrictive means.

The Court said that Abood is not supported by the 1st amendment's original meaning. Also, Abood was never based on Pickering v. Board of Ed., 391 U. S. 563 (1968), and even under some form of Pickering, agency-fee arrangements would not survive. 

Stare decisis was not enough to save Abood. The Court said Abood was poorly reasoned, applied a deferential analytical standard, did not take into account the difference between the effects of agency fees in public- and private-sector collective bargaining, did not anticipate administrative problems with classifying union expenses as chargeable or nonchargeable, did not foresee practical problems faced by nonmembers wishing to challenge those decisions, and did not understand the inherently political nature of public-sector bargaining. 

DISSENT: The dissent views Abood as striking "a stable balance between public employees' First Amendment rights and government entities' interests in running their workforces as they thought proper," and says "the majority subverts all known principles of stare decisis."

NLRB joint employer issue may go to rulemaking

Really, what's next? The NLRB is now considering using its rulemaking authority to address the standard for determining joint employer status under the National Labor Relations Act. [Press release] Meanwhile, there's a minor Twitter war between Chairman Ring, Member Lauren McFerran, and Member Mark Gaston Pearce. What is this? Junior High School?

My guess is that the Board majority has been looking for a case in which neither Chairman Ring nor Member Emanuel has a conflict of interest – a tough job because they both came out of a huge law firms that represent parties in Board cases.

So the Board is considering using rulemaking. That's typically a much slower process than deciding an actual case, but in today's climate it might be faster.

In December 2017 the Board decided Hy-Brand Industrial Contractors, Ltd. (Hy-Brand I), 365 NLRB No. 156 (2017) [PDF], which overruled Browning-Ferris Industries, 362 NLRB No. 186 (Aug. 27, 2015). This changed the rules for determining when a company is considered a "joint employer." Hy-Brand I adopted a "direct control" test rather than Browning-Ferris' "indirect control" test.

Then in February three Members (not including William Emanuel) vacated Hy-Brand I, having decided that Emanuel ought not to have participated. Hy-Brand Industrial Contractors, Ltd. (Hy-Brand II), 366 NLRB No. 26 (2018) [PDF]. It's pretty clear that Emanuel was blind-sided by this action.

I think the handwriting on the wall is pretty clear. Right now the Browning-Ferris standard prevails. Just as quickly as the Board majority can get it done (either through rulemaking or by deciding a case), they will adopt the standard articulated in Hy-Brand I.

Fast food store employees vote for union – first in the country


Portland. Oregon. Of course.

For the first time ever, a fast food store has unionized following an NLRB election. On April 23 workers at Burgerville voted 18-4 in favor of being represented by Industrial Workers of the World (IWW) [often known as Wobblies], Portland Chapter, d/b/a Burgerville Workers Union.

So now the question is whether this is a flash in the pan or the opening of nation-wide floodgates.

Mark Medina, a worker at the store, said, “Burgerville leaves a lot of us workers poor, hungry, and homeless. “With the company’s use of e-verify, some of us even face possible deportation.”

“Employees at Burgerville Store #41 have voted to unionize in the fair and free election overseen by the NLRB. Our employees have spoken, we hear them, and we support their decision. We will navigate this new working relationship together in a positive, productive way and bargain in good faith with the union at Burgerville Store #41,” said Beth Brewer, Senior VP of Operations for Burgerville. “We are proud of our relationship with our coworkers, and we will continue to provide a fair, positive work environment for all.” "With the same pioneering spirit that Burgerville is known for, we are ready to support the nation’s first unionized fast-food store.”

Burgerville is a regional chain, operating in Oregon and Southwest Washington.