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On April 25, 2017, Dorothy Dougherty, Deputy Assistant Secretary of the Occupational Safety and Health Administration (“OSHA”) and Thomas Galassi, Director of OSHA’s Directorate of Enforcement Programs, issued a Memorandum to the agency’s Regional Administrators notifying them of the withdrawal of its previous guidance, commonly referred to as the Fairfax Memorandum, permitting “workers at a worksite without a collective bargaining agreement” to designate “a person affiliated with a union or community organization to act on their behalf as a walkaround representative” during an OSHA workplace investigation. …

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NLRB Acting Chair Philip Miscimarra has given the clearest indication to date of what steps a new Republican majority is likely to take to reverse key elements of the Labor Board’s hallmark actions of the Obama administration once President Trump nominates candidates for the Board’s two open seats and the Senate confirms. In each of these cases, Miscimarra highlighted his earlier opposition to the majority’s changes in long standing precedents and practices. …

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This week, an activist group calling itself “Strike4Democracy” has called for a day of “coordinated national actions” – purportedly including more than 100 “strike actions” across the country – on February 17, 2017. The group envisions the February 17^th strike as the first in “a series of mass strikes,” including planned mass strikes on March 8 (organized by International Women’s Day and The Women’s March) and May Day, and a general “heightening resistance throughout the summer.” The organizers are encouraging people not to work or shop that day. …

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The National Federation of Independent Business (‘NFIB”) filed suit to challenge an OSHA Standard Interpretation Letter (the “Letter”), which sets forth the agency’s position that an employee of a union that does not represent the workers at the site may accompany the OSHA representative conducting an inspection. The Federation argued on behalf of itself and one of its members because OSHA had permitted a representative of the Service Employees International Union (“SEIU”) to accompany him despite the fact the SEIU did not represent the workers at the facility. The lawsuit asserts that in allowing this, OSHA had violated its own rules and gave the union rights that it did not have under the law. In the Letter, issued in February 2013, OSHA gave a new definition of “reasonably necessary,” which supported its holding, for the first time, that a third party’s presence would be deemed “reasonably necessary,” if OSHA concluded that the presence of the third party “will make a positive contribution” to an effective inspection. The NFIB’s lawsuit contradicted both the OSHA statute itself and OSHA regulations issued in 1971 following formal rulemaking.

While OSHA asked the Court to dismiss the lawsuit, claiming that the NFIB lacked standing to bring the lawsuit because it could not demonstrate that it had been harmed, and that the lawsuit was procedurally flawed for a number of other reasons as well, Judge Sidney A. Fitzwater denied the U.S. Department of Labor’s Motion to Dismiss, finding that “NFIB as stated a claim upon which relief can be granted,” and that “the Letter flatly contradicts a prior legislative rule as to whether the employee representative” in such a walk-around inspection “ must himself be an employee.”

The rule Judge Fitzwater referred to, 29 U.S.C Section 1903.8(c) contained OSHA’s policies for what are referred to as “safety walk-arounds,” which are on site workplace inspections. The Letter gives employees in the workplace the right to have a representative present during such an inspection. OSHA’s own rules make clear that such “authorized representative(s) shall be an employee(s) of the employer,” but that when “good cause is shown why accompaniment by a third party who is not an employee of the employer (such as an industrial hygienist or a safety engineer) is reasonably necessary to the conduct of an effective and thorough physical inspection of the workplace, such third party may accompany the Compliance Safety and Health Officer during the inspection.” (emphasis added)

If the ultimate outcome of the case, which seems likely, is a finding that OSHA does not have the authority to permit union representatives to participate in OSHA inspections of workplaces where they do not represent the workers, the effect would be to deny unions a potentially potent tool for organizing. As Judge Fitzwater described in his Memorandum and Order, unions such as the UAW in its ongoing organizing campaign at Nissan in Tennessee have come to rely upon participation in OSHA inspections as a valuable tool.

While it is too soon to say whether the Department of Labor will continue to defend the 2013 Letter and the position that OSHA has the right to permit union representatives to participate in safety and health inspections, Judge Fitzwater’s denial of the motion to dismiss raises serious doubt as to the long term viability of OSHA’s position.

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The National Labor Relations Board (NLRB or Board), which continues to apply an ever expanding standard for determining whether a company that contracts with another business to supply contract labor or services in support of its operations should be treated as a joint employer of the supplier or contractor’s employees, is now considering whether a company’s requirement that its suppliers and contractors comply with its Corporate Social Responsibility (CSR) Policy, which includes minimum standards for the contractor or supplier’s practices with its own employees can support a claim that the customer is a joint employer. …

Employers are well advised to review the full range of their operations and personnel decisions, including their use of contingent and temporaries and personnel supplied by temporary and other staffing agencies to assess their vulnerability to such action and to determine what steps they make take to better position themselves for the challenges that are surely coming.

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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.”

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Changes to the Advice Exemption

The LMRDA requires employers and their consultants to report any conduct that constitutes “persuader activity”—that is, activity undertaken with a direct or indirect purpose to persuade employees to exercise (or not exercise) their rights to organize and bargain collectively, i.e., to be represented by a union. Under the statute’s Advice Exemption, however, “advice” given to employers by outside consultants does not constitute reportable persuader activity.

For the past 50 years, the DOL has used a bright-line test to interpret whether or not the activities of consultants, including lawyers, constituted reportable persuader activity. When an employer’s consultants (including labor counsel) directly communicated with the employer’s employees to persuade them about unionization, that activity was reportable. If, on the other hand, an employer’s lawyer or consultant did not directly communicate with the employer’s employees, but simply provided advice that the employer was free to accept or reject, such activity fell within the Advice Exemption and did not need to be reported. Under the DOL’s previous statutory interpretation, therefore, labor counsel did not engage in reportable persuader activity when assisting an employer during a union election campaign by providing strategy and guidance, or assisting in the preparation and drafting of materials (speeches, letters, or other written communications).

Under the new Final Persuader Rule, the DOL has significantly narrowed the scope of the Advice Exemption. Specifically, the agency has abandoned the long-standing bright-line test that distinguished between consultants’ direct communications with employees (which were clearly reportable) and other consultant activities that did not involve direct communications with employees and that the employer was free to accept or reject (which was clearly not reportable). Assuming that the Final Persuader Rule takes effect, employers and their consultants must report a broad range of activity that formerly fell within the Advice Exemption—even activity that does not involve a consultant directly communicating with employees. According to the DOL, only communications between the employer and its consultants that pertain solely to legal advice remain within the scope of the Advice Exemption.

Impact on Employers

The Final Persuader Rule, which will apply to arrangements and agreements made on or after July 1, 2016, will require both employers and consultants to report that they have engaged in the following activities, whenever they are taken with a direct or indirect object to persuade employees about unions:

• planning, directing, or coordinating supervisors or managers;
• drafting or providing persuader materials (including speeches or materials intended for distribution or dissemination to employees);
• conducting seminars for supervisors or other employer representatives; or
• developing or implementing personnel policies to persuade employees.

If a labor consultant or counsel reports engaging in even a single act of reportable persuader activity, the consultant or counsel must also file an annual Form LM-21, listing the names and addresses of all the employers for which the consulting or law firm provided “labor relations advice or services” during the year—regardless of whether or not such advice or services involved persuader activity.

Legal Challenges to the Final Persuader Rule

The Final Persuader Rule, which was first proposed by the Obama administration in June 2011, has been the subject of intense criticism over the past five years from a wide range of sources (including Senators, employer and employee rights groups, and the American Bar Association), all of whom objected to the rule’s potential for compromising and interfering with the attorney-client relationship, and for mandating the release and disclosure of information long understood to be protected by the attorney-client, work product, and other legal privileges.

Three federal lawsuits challenging the Final Persuader Rule have already been filed in U.S. district courts across the country, and the plaintiffs in one such suit have sought a preliminary injunction and expedited hearing on their motion. There has also been ongoing activity before Congress, as the business community, management lawyers, and other employer advocates have criticized the rule. During a recent hearing before a House Education and the Workforce subcommittee, management-side lawyers emphasized that the Final Persuader Rule’s negative effects will likely be compounded by other recent union-friendly rules. For example, the recent “quickie election” rules adopted by the Board drastically reduced the time that an employer has to prepare for an election campaign. The Final Persuader Rule will likely increase the already onerous burdens on these employers as they seek expedited assistance from their consultants and labor counsel.

A version of this article originally appeared in the Take 5 newsletter “Five New Challenges Facing Retail Employers.”

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The US Court of Appeals for the Seventh Circuit in Chicago has now sided with the National Labor Relations Board (NLRB or Board) in its decision in Lewis v. Epic Systems Corporation, and found that an employer’s arbitration agreement that it required all of its workers to sign, requiring them to bring any wage and hour claims that they have against the company in individual arbitrations “violates the National Labor Relations Act (NLRA) and is unenforceable under the Federal Arbitration Act FAA).” …

The decision of the Seventh Circuit, finding that the Board’s view was not inconsistent with the FAA, sets the ground for continued uncertainty as employers wrestle with the issue.  Clearly, the question is one that is likely to remain open until such time as the Supreme Court agrees to consider the divergent views, or the Board, assuming a new majority appointed by a different President, reevaluates its own position.

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In a further incursion into the area of the gig and new age economy, the Regional Director for the National Labor Relations Board’s Los Angeles office has issued an unfair labor practice complaint alleging that it is a violation of the National Labor Relations Act (the “Act”) for an employer to misclassify an employee as an independent contractor. …

The issuance of the complaint in this case comes less than a month after the Board’s General Counsel issued General Counsel Memorandum 16-01, Mandatory Submissions to Advice, identifying the types of cases that reflected “matters that involve General Counsel initiatives and/or priority areas of the law and labor policy.”  Among the top priorities are “Cases involving the employment status of workers in the on-demand economy,” and “Cases involving the question of whether the misclassification of employees as independent contractors,” which as reflected in the IBT complaint the General Counsel contends violates Section 8(a)(1) of the Act.

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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. …

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