Following is an excerpt:

The National Labor Relations Board (“NLRB” or “Board”) announced in its 3-1 decision in Miller & Anderson, 364 NLRB #39 (2016) that it will now conduct representation elections and require collective bargaining in single combined units composed of what it refers to as “solely employed employees” and “jointly employed employees,” meaning that two separate employers will be required to join together to bargain over such employees’ terms and conditions of employment.” …

The potential for confusion and uncertainty is enormous. In an attempt to minimize these concerns, the Board majority stated that the so-called user employer’s bargaining obligations will be limited to those of such workers’ terms and conditions that it possesses “the authority to control.”

Read the full post here.

The US Department of Labor has finally issued its long awaited Final Rule radically reinterpreting the “Advice Exemption” to the Labor Management Reporting and Disclosure Act of 1959 (“LMRDA.”).  The Final Rule eviscerates any meaningful use of the Advice Exemption, which would be swallowed up by the new expansive definition of persuader activity which could include discussion regarding strategy, reviews of employer drafts and myriad other ways labor attorneys currently aid their clients including essentially any meaningful advice or counsel provided by labor counsel. The move comes just over two years to the day from the DOL’s 2014 postponement of its issuance of the Final Rule. …

Read the full post here.

When:  Thursday, October 15, 2015    8:00 a.m. – 3:00 p.m.

Where:  New York Hilton Midtown, 1335 Avenue of the Americas, New York, NY 10019

This year, Epstein Becker Green’s Annual Workforce Management Briefing focuses on the latest developments that impact employers nationwide, featuring senior officials from the U.S. Department of Labor and the Equal Employment Opportunity Commission. We will also take a close look at the 25th anniversary of the Americans with Disabilities Act and its growing impact on the workplace.

In addition, we are excited to welcome our keynote speaker Neil Cavuto, Senior Vice President, Managing Editor, and Anchor for both FOX News Channel and FOX Business Network.

Our industry-focused breakout sessions will feature panels composed of Epstein Becker Green attorneys and senior executives from major companies, discussing issues that keep employers awake at night.  From the latest National Labor Relations Board developments to data privacy and security concerns, each workshop will offer insight on how to mitigate risk and avoid costly litigation.

View the full briefing agenda here. Contact Kiirsten Lederer or Elizabeth Gannon for more information and to register.   Seats are limited.

The U.S. Supreme Court today held that the US Senate was not in recess on January 4, 2012, when President Obama made three “recess” appointments to the National Labor Relations Board under the Constitution’s Recess Appointment Clause. In simple terms that means that the recess appointments were not proper and decisions in which the recess appointees participated were not valid.

What this now means is that hundreds of cases decided by the NLRB following the January 4, 2012 recess appointments to the Board from January 4, 2012 until the Senate confirmed the current Board members who joined the NLRB as of August 12, 2013, were unconstitutionally decided because the Board lacked a quorum and could not decide cases or issue orders. Additionally, while Noel Canning concerned the January 2012 recess appointments, there is also doubt as to earlier decisions in which previous recess appointees participated going back to August 2011.

The Court’s decision upheld the January 2013 decision of the US Court of Appeals for the District of Columbia Circuit which found that the panel of the NLRB that had previously decided an unfair labor practice case against Noel Canning, a Pepsi bottler, was unconstitutionally constituted and therefore the decision was invalid. There the DC Circuit held that because the Senate, whose advice and consent is required for appointments to the NLRB had not been in recess when the President made his appointments, the company’s “understanding of the constitutional provision is correct, and the Board’s is wrong. The Board had no quorum, and its order is void.” The Court of Appeals for the Third Circuit had also reached a similar conclusion concerning the lack of a quorum due to the Senate not having been in recess when the January 2012 appointments were made.

This decision now casts into doubt and makes suspect more than 1,300 NLRB decisions, including both published and unpublished, issued by the NLRB. An excellent summary of the cases that are implicated by the Court’s decision, and the issues involved in each has been prepared by the US Chamber of Commerce Litigation Center.

The Court’s holding, which found that the Senate was not in recess while it was conducting pro forma sessions during December 2012, arose in the context of a challenge to a Board Order in which recess appointees participated; the implications however are far greater and may implicate a wide range of other Board actions such as the appointment of Regional Directors, the consolidation of Regional offices and other administrative and personnel actions requiring Board approval or authorization. Notably, in a case decided by a District Court in the Eastern District of Washington last August an employer successfully challenged not only the Board’s authority to authorize a Regional Director to pursue an injunction under Section 10 (j) of the National Labor Relations Act, but the appointment of then Acting NLRB General Counsel Lafe Solomon, who was then a recess appointee. That case turned on other provisions of the Pay Act, a federal law authorizing the payment of salary to properly appointed recess appointees.

In a relatively understated press release following the Court’s decision, Board Chair Mark Gaston Pearce emphasized the fact that “the National Labor Relations Board has a full contingent of five Senate-confirmed members who are prepared to fulfill our responsibility to enforce the National Labor Relations Act.”

What this means to Employers, Unions and Others With Cases Before the NLRB

If the Board’s actions following the Supreme Court’s decision concerning an earlier attempt by the NLRB to delegate its decision making authority to a two member panel in the face of earlier disputes between the President and the Senate is any precedent, it is likely that at least three members of the current five member Senate confirmed Board will try to essentially adopt and approve as many as possible of the Board Orders and actions that would be invalid under Noel Canning. As shown in the Chamber’s chart, there are a large number of cases that are essentially on hold in Courts of Appeal across the country that have been waiting for the Court’s ruling today. It is likely that the courts will dismiss these matters or that the NLRB will seek to withdraw those in which it is seeking enforcement of Board Orders.

However, as we and others have pointed out since the issue of the 2012 and earlier recess appointments were placed in doubt, employers and others with matters before the Board, the most prudent course of action would have been to make sure that in addition to any other defenses or grounds for appeal, that parties specifically raise the issue that the Board lacked a quorum and the authority to act when it made decisions, issued orders and took other action. However even in those cases that were decided by the Board during the period that it lacked a proper quorum, parties may be able to raise the lack of quorum argument in light of today’s decision. Each matter will require an analysis based on its own individual facts and issues.

Additionally, today’s ruling has broad impact even in cases which are currently being investigated at the Regional level or are currently pending before the Board. Not only can we expect even further delay in Board action (including at the Regional level) as the agency attempts to deal with the backlog created by having to address hundreds cases directly impacted by the Decision. Specifically, there are thousands of cases which are currently being prosecuted or advanced at various stages which explicitly or tangentially rely on theories or precedents relying on a now invalid Board decision. Specifically, cases involving at-will employment agreements, arbitration agreements, employee investigations, employee access, dues deductions post-contract expiration, and bargaining over employee discipline have all now been stripped of much of the precedence on which a Region, a union or an employee may be relying. Again each matter will require an analysis based on its own individual facts and issues.

Management Missives

• If the “invalid” Board issued a decision impacting an employer it should promptly analyze its options;
• If an employer has a case in abeyance or pending based on Noel Canning it should obviously expect action in the coming weeks;
• Employers should look for settlement opportunities with Regions, unions and individuals which may be present as these adverse parties may be more amendable to now that the theory of the case now lacks valid authority or based on their increased workloads;
• Employers should explore filing supplemental position statements or other filings in any case where a Region, union or employee is relying on an “invalid” decision;
• Employers should still remain cautious as while many decisions have been put into question, the current composition of the Board provides absolutely no reason for employers to rejoice or be less vigilant, as the current, lawfully confirmed, Board is unlikely to view most issues any differently.

Below is an excerpt from the blog post:

As we noted in “First Kill All The Lawyers,” last November the DOL announced its intention to move forward this month with the Administration’s Proposed Rule change which would eviscerate the Advice Exemption to the Persuader Rule . Yesterday, the DOL again delayed its timeline for finalizing the Rule.

In November the DOL’s announcement asserted that it intended to publish a Final Rule in March. On March 6, according to Bloomberg BNA, a DOL spokesman asserted that the Proposed Rule would NOT be made final this month. The DOL did not give a new target date for finalizing the Rule, rather it stated it would provide a new date in its Spring Regulatory Agenda which is not scheduled to be released for some months.

Read the full blog post, “Persuader Rule Postponed: Employers Get Temporary Reprieve from Assault on Attorney-Client Privilege.”

As previously predicted by the Management Memo on August 1, 2013 and October 30, 2013, the National Labor Relations Board (the “Board”) issued a second Notice of Proposed Rulemaking (“NPRM”) to amend its existing rules and regulations governing union elections procedures. If they look familiar when you see them, there is a good reason for that: you have seen them before.

As readers of the Management Memo are well aware, the NPRM is the latest development in the long saga of organized labor’s attempts to “fix” the representation election process in its favor. Most significantly, the Board’s current attempt only comes after having its more modest 2011 attempt struck down by a federal judge.

The present proposal is identical “in substance” to the Board’s original proposals first contemplated on June 22, 2011, and as such are more aggressive than the Rules ultimately adopted on December 21, 2011, and later struck down. The Board claims the proposed amendments are necessary to, among other things, facilitate the swift resolutions of questions concerning representation, simplify representation-case procedures, eliminate needless litigation, and consolidate all requests for review of regional directors’ determinations into one post-election request. However, if adopted as written, the proposed rules will radically up-end 75 years of Board practice and make it considerably easier for unions to organize employees and win elections.

History of Proposed Rule

The Board first contemplated the proposed amendments in a notice of proposed rulemaking on June 22, 2011. Following a period of public comment, the Board issued a final rule on December 22, 2011, that adopted some of the proposed amendments but deferred other more controversial aspects of the proposed amendments for further consideration. The final rule was immediately challenged in federal court. See Chamber of Commerce of the U.S. v. NLRB, 879 F. Supp. 2d 18, 21, 24 (D.D.C. 2012). In May 2012, the D.C. District Court struck down the final rule on procedural grounds. In response, the Board suspended the implementation of changes to its election representation case process.

Proposed Amendments to the Election Procedure

To the favor of unions, the proposed amendments announced this week would significantly change the existing procedures for union elections in the following ways:

• Permit electronic filing of election petitions.
• Require pre-election hearings to be held within 7 days after a hearing notice is served, shortening the time period between the petition and election.
• Require employers to file a detailed statement of position on any and all issues involved in the petition before the hearing commences (i.e., within 7 days of first receiving notice of the petition). Failure to present an issue in the statement would constitute waiver of the issue in all future proceedings.
• Grant hearing officers the authority to limit the issues to be heard at the hearing, depriving employers of their ability to litigate valid legal/factual positions prior to an election.
• Defer resolution of voter-eligibility issues to post-election challenges until after an election, replacing the longstanding practice of having a pre-election hearing to determine such issues. This will allow unions to claim that some supervisors should be included in the bargaining unit, which could prevent an employer from utilizing them in the campaign to communicate its own position to the employees they supervise.
• Grant hearing officers the authority to deny an employer the ability to file a post-hearing brief.
• Eliminate an employer’s ability to seek Board review of a Regional Director’s rulings, which would also reduce the time between the petition and election.
• Shorten the time for holding an election to as early as 10 days after the Regional Director’s direction of election (down from the typical 25 to 30 day minimum that now exists)
• Require an employer to provide the NLRB with the list of voters’ names and addresses within 2 days after the Regional Director’s direction of an election instead of 7 days.
• Require employers to provide the phone numbers and email addresses of all eligible voters as well as specifying each employee’s work location, shift, and classification. Currently, employers must only provide name and mailing address to the NLRB, which it then provides to the union. Since unions will use be able to use this information during the days before the election, it is feared that instances of organizers harassing and coercing employees will significantly increase.
• Grant the Board discretion to deny review of post-election rulings. Currently, the Board is required to decide post-election disputes.

The Board’s False Pretenses and True Intended Harm of “Ambush” Elections

The Board asserts these election “fixes” are necessary to address alleged long delays in the representation process; however, such delays are rare. To the extent that the NPRM seeks to address election delays, objective data of NLRB elections conducted between 2008 and 2010 shows that such delays occurred less than 10 percent of the time. In fact, currently median time between petition and election is only 38 days and almost all elections occur within 56 days. The Board’s current proposal, however, could shorten that period to 10 to 21 days, which essentially eliminates the ability for employers to make a full and meaningful presentation of their position or employees to make a truly informed choice.

Typically, union organizers campaign under the radar for months before a petition is filed and unions wait until they believe that they have the support of the majority of the employees in a unit before they file a petition. Shortening the election period so drastically will erode an employer’s ability to respond to the union’s propaganda and communicate its position on union representation. Employees will vote without having the benefit of hearing the employer’s position. This contravenes the express purpose of the Act, which is to protect employee rights— not union rights and would gut the right that employers are granted by the Act to communicate their positions to employees. This one-sided campaign will almost certainly result in more election victories for unions and less real choice for employees.

Management Missives

It is with intention that the Board’s proposed rules will significantly alter the entire union representation election process in favor of unions. Although it is a proposed rule at this point, and the Board will be accepting public comment through April 7, 2014, with a public hearing that same week, it is likely that the final rule will be issued not long thereafter. To prepare for the Board’s “ambush” election rules, employers should promptly adopt any or all of the following strategies:

• Examine your workforce for potential vulnerability to union organizing, including wage and hour violations or uncompetitive wages or benefits.
• Review and update workplace policies that become relevant during union organizing such as solicitation/distribution, electronic communications, and social media.
• Assess your workforce for potential bargaining unit issues like identifying who are supervisors and which employees share a “community of interest.”
• Train your managers and supervisors on recognizing early warning signs of union organizing and responding lawfully to union campaigns.
• Contact legal counsel with any questions or for any assistance with ensuring you are prepared to respond to an organizing campaign consistent with the proposed rules.

On July 30th the Senate confirmed career union lawyer Kent Hirozawa (D) and retired AFL-CIO Associate General Counsel Nancy Schiffer (D) as well as seasoned management labor lawyers Philip Miscimarra (R) and Harry Johnson (R) to serve on the National Labor Relations Board. The Senate also confirmed current NLRB Chairman Mark Gaston Pearce (D).

The confirmations are of course the result of the Senate Republicans backing down in the face of the threat by Senate Democrats to change Senate rules so that they could force a vote, up or down, on President Obama’s nominations for the Board and other positions. The “deal”, inspired by the threat, included the withdrawal of President Obama’s nomination of his recess appointees, Sharon Block and Richard Griffin , whose appointments were held unconstitutional recess. The President, however, merely replaced Block and Griffin with Hirozawa and Miscimarra, and only after consultation with and approval from AFL-CIO President Richard Trumka and Organized Labor.

So with the first fully confirmed five member Board in ten years, the question for employers is now what? Unfortunately the answer is it is probably going to get worse.

As noted Hirozawa spent most of his career representing unions, most recently with New York labor-side firm Gladstein, Reif & Meginniss. For the past three years he served as chief counsel to NLRB Chairman Mark Gaston Pearce. One of his key undertakings in that post involved preparing for the implementation of the Board’s “ambush election rules,” which would have seriously impacted the ability of employers to communicate and campaign in representation elections. Unfortunately, based on his three years at the Board it seems Hirozawa may never have stopped being an advocate for organized labor’s agenda, reportedly working directly on the Board’s invalidated Ambush Election Rules and Notice Posting. This is of course is in addition to the numerous employer-unfriendly decisions Pearce participated in while Hirozawa was his chief counsel.

Schiffer’s background brings no more welcome news to employers. Before working directly for the AFL-CIO, Schiffer spent almost twenty years as counsel for the United Auto Workers. She may be best known for her advocacy on the Employer Free Choice Act and similarly advocating that employer’s free speech and Section 8(c) rights should be limited and union’s should be provided additional organizing rights.

Hirozawa and Schiffer join Pearce who, prior to being appointed to the Board in 2010, was also a partner at a firm representing unions. The three former union lawyers will now constitute a majority of the fully confirmed Board. During the Senate floor debate Senator Lamar Alexander (R-TN) questioned their ability to be impartial, stating “I’m not persuaded… that they’re able to transfer their position of advocacy to positions of judge, that they can be impartial when employers come before them.”

If the Senator’s fears are right, employers are actually in a worse position than they were under the recess appointments. Obviously, any new Board decisions cannot be challenged under Noel Canning. Substantively, there is every reason to believe that the new Board will continue the same pro-union agenda that has plagued employers and often defies common sense. The fully confirmed Board may even feel more emboldened to expand union rights and restrict employers’ ability to run their businesses.

In another major defeat for President Obama’s appointees to the National Labor Relations Board (NLRB or Board), the US Court of Appeals for the DC Circuit found that the Board lacked the authority to issue a 2011 rule which would have required all employers covered by the National Labor Relations Act (the “Act”), including those whose employees are not unionized, to post a workplace notice to employees. The putative Notice, called a “Notification of Employee Rights Under the National Labor Relations Act,” is intended to ostensibly inform employees of their rights to join and be represented by unions and to engage in other activity protected by the Act. The rule would also have made it an unfair labor practice for an employer to fail to post the required notice and such failure also could be considered proof of anti-union animus in other Board proceedings.

Although proposed in 2011 and scheduled to become effective on April 30, 2012, the requirement has yet been put into effect. As we discussed previously, last year, the US District Court for the District of Columbia had held that the Board lacked the authority to make it an unfair labor practice for an employer to fail to post the notice, holding that this exceeded the Board’s authority under the Act. Just prior to the rule going into effect, the DC Court of Appeals issued an emergency injunction in support of the District Court’s opinion and the NLRB opted to not enforce the rule pending the appeal.

Perhaps what is most noteworthy about the Court’s recent opinion, authored by Senior Circuit Judge Randolph, is the Court’s reliance on employers’ free speech rights which are protected by Section 8(c) of the Act. That section of the Act ensures employers the right to communicate their views concerning unions to their employees. The Court noted that while Section 8(c) “precludes the Board from finding non coercive employer speech to be an unfair labor practice, or evidence of an unfair labor practice, the Board’s rule does both.” That is because under the rule an employer’s failure to post the required notice would constitute an unfair labor practice and the Board’s rule would have allowed the Board to “consider an employer’s ‘knowing and willful’ noncompliance to be ‘evidence of anti union animus in cases in which unlawful motive [is] an element of an unfair labor practice.”

The Court focused on the question of the right of employers to “free speech,” under both Section 8(c) of the Act and under the First Amendment to the Constitution, noting that the rule would have required employers to disseminate information and that “the right to disseminate another’s speech necessarily includes the right to decide not to disseminate it,” relying on analysis from prior Supreme Court and appellate court decisions which it referred to as “compelled speech” cases.

Interestingly, the Court’s conclusion that the Board’s rule violates Section 8(c) because it makes an employer’s failure to post the Board’s notice an unfair labor practice, and because it treats such a failure as evidence of anti-union animus, suggests the Board might be able to find an alternate route to a notice posting requirement if it did not seek to create such a remedy for an employer’s failure to post the notice. However, the Court refused to leave the portion of the Board’s rule requiring the Notice posting in effect even without the enforcement and remedial provisions, because they were an inherent part of the Board’s purpose in adopting the rule. For now the beleaguered Board will need to decide whether it wishes to appeal this decision to the Supreme Court, attempt to craft a new rule with the currently constituted Board that this same Court of Appeals has ruled was unconstitutionally appointed in its Noel Canning decision or postpone any action until a new Board is confirmed by the Senate.

President Obama has taken action designed to bolster the National Labor Relations Board’s continuing move to bolster unions and take the National Labor Relations Act further into non-union workplaces. On April 9, 2013, President Obama announced his plan to submit three more nominees to serve the National Labor Relations Board (“NLRB”). If these and the two other pending nominations are confirmed this would bring the NLRB to its full complement of five Members.

These new nominations – who must be confirmed by the U.S. Senate – were announced against the backdrop of the NLRB v. Noel Canning decision in which the U.S. Court of Appeals for the D.C. Circuit ruled that the NLRB now lacks constitutional authority to act because the recess appointments previously made by President Obama in January 2012 were not valid. The NLRB plans to appeal the D.C. Circuit’s decision to the U.S. Supreme Court by April 25, 2013.

The three new nominations include the current NLRB Chairman, Mark Gaston Pearce, and two Republicans, Harry I. Johnson, III, and Philip A. Miscimarra, both lawyers in private practice. While Mr. Johnson and Mr. Miscimarra both have represented management over their careers, Chairman Pearce came to the NLRB from a practice representing unions.

Mr. Pearce has served as NLRB Chairman since August 2011, and has been a Board Member since March 2010. Previously, Mr. Pearce, who started his career at the Board’s Buffalo, New York Regional Office in 1979, was a founding partner of Creighton, Pearce, Johnsen & Giroux from 2002 to 2010. Before founding the Creighton, Pearce firm, Mr. Pearce worked as an associate and junior partner at Lipsitz, Green, Fahringer, Roll, Salisbury & Cambria LLP from 1994 to 2002.

Harry I. Johnson, III is a partner with Arent Fox LLP. Previously, Mr. Johnson worked at Jones Day from 1994 to 2010. Mr. Johnson received a B.A. from Johns Hopkins University, an M.A.L.D. from Tufts University’s Fletcher School of Law and Diplomacy, and a J.D. from Harvard Law School.

Philip A. Miscimarra is a partner with Morgan Lewis & Bockius LLP, a position he has held since 2005. Since 1997, Mr. Miscimarra has also been a senior fellow at the University of Pennsylvania’s Wharton Business School. Mr. Miscimarra received a B.A. from Duquesne University, an M.B.A. from the University of Pennsylvania’s Wharton School of Business, and a J.D. from the University of Pennsylvania Law School.

President Obama previously submitted the nominations of Richard F. Griffin, Jr. and Sharon Block, who are currently serving as Board Members but whose recess appointments were struck down as invalid by the D.C. Circuit in Noel Canning. Member Block came to the NLRB from the US Department of Labor. Both of those nominations are before the Senate.

WHAT EMPLOYERS SHOULD DO NOW

Considering that all five nominations must now be confirmed by the Senate, where the Republican minority has frequently blocked the President’s nominations, it is unclear how and when the Senate will respond, and whether the NLRB will enjoy a full complement of Members in order to conduct lawful business any time soon. Merely announcing the nominations will not pave the way immediately for a full, validly appointed NLRB. Indeed, it may not be until the next Congress, following the 2014 mid-term elections that the Senate even considers a package deal with the White House.

If a compromise could be achieved and all five Members were sworn-in this year or next, the Board would continue with a liberal, union-friendly majority with Chairman Pearce and Members Griffin and Block. They could be expected to continue a pro-union agenda, which would certainly bring continued aggressive enforcement and further broadening of the Board’s view of protected, concerted activity and the Act’s application in non-union workplaces. Moreover, there will be many questions about whether a new NLRB will be able to cure prior decisions that were put into doubt by Noel Canning.

For now, our advice and recommendations to employers remains the same as following the ground-breaking decision of Noel Canning. Employers should closely monitor how courts in their jurisdictions decide similar cases challenging the recess appointments, and watch how the Supreme Court will address it next term, should it take the NLRB’s petition for certiorari, while watching to see what happens in the Senate.