Management Memo

On August 2, 2023, the National Labor Relations Board (“NLRB” or “Board”) announced a long-anticipated Decision that will affect how employers craft, apply and enforce workplace policies in almost all workplaces, regardless of whether employees are represented by a union. As we anticipated several years ago, the current Board, with a majority of members nominated by President Biden, has now rejected the agency’s 2017 decision in The Boeing Company, in which it adopted a balancing test to evaluate facially neutral employer rules and handbook provisions by examining the nature and extent of their potential impact on employee rights under the National Labor Relations Act (“NLRA” or the “Act”) against legitimate justification(s) for the policies.

The majority opinion in Stericycle Inc. substantively revives the NLRB’s stance on workplace rules as established in the 2004 Lutheran Heritage decision.Under this new framework, any employer’s rule, policy, or handbook provision that  has a “reasonable tendency to chill employees from exercising their Section 7 rights” may be deemed to constitute an unfair labor practice and to be unlawful in violation of the NLRA.

Shocking few NLRB observers, the National Labor Relations Board (NLRB), in The Atlanta Opera, Inc., Case 10-RC-276292, a 3-1 decision issued June 13, 2023, announced its modified standard for analyzing whether  workers are employees or independent contractors of an employer, returning to the test last articulated by the Obama era Board in FedEx II, 362 NLRB 610 (2014), and overruling the Trump era SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019). The new standard is likely to result in findings that more workers unions are seeking to organize and represent are employees and not independent contractors which they would have been found to be under SuperShuttle.

Management-side attorneys and the businesses that they represent will be pleased with the Supreme Court’s holding in Glacier Northwest, Inc. v. International Brotherhood of Teamsters.

The case concerned the issue of whether the National Labor Relations Act, 29 U.S.C. §§ 151–169 (“NLRA” or the “Act”), preempted a state tort claim seeking damages for harm suffered by their employer, caused by employees’ inaction in failing to deliver concrete that had already been loaded into the employer’s trucks or otherwise taking action to prevent the hardening concrete from damaging the trucks, thus intentionally destroying property owned by Glacier. Notably, the striking employees and their union knew that the trucks had been loaded when they began their strike. An eight-justice majority held that the union and its members were, on the facts of the case, not engaged in protected conduct as that term is defined under the NLRA. Justice Barrett delivered the opinion of the Court, in which the Chief Justice and Justices Sotomayor, Kagan and Kavanaugh joined. Justices Thomas, Gorsuch, and Alito concurred. As against this jurisprudentially diverse array, Justice Jackson was the only dissenter.

The National Labor Relations Board (NLRB) has found its first target under recent guidance issued in a memo from its General Counsel claiming that noncompete agreements may violate the National Labor Relations Act (NLRA). According to Bloomberg Law, “[t]he NLRB’s first enforcement action against an employer’s noncompete agreement targeted a Michigan cannabis processor and ended with a recent private settlement resolving the alleged labor law violations.” (The enforcement action predates the guidance memo). Bloomberg obtained redacted documents from the case via a Freedom of Information Act request.

The National Labor Relations Board’s top lawyer, Jennifer Abruzzo, issued  a General Counsel memo today instructing the Labor Board’s Regional Directors of her position  that noncompete clauses for employees protected by the National Labor Relations Act (NLRA) (i.e., nonmanagerial and nonsupervisory employees) in employment contracts and severance agreements violate federal labor law except in limited circumstances. The memo, while not law, outlines her legal theory which she will present to the National Labor Relations Board, which makes law primarily through adjudication of unfair labor practice cases.  The memo instructs the agency’s field offices of the position that the General Counsel is instructing them to take when investigating unfair labor practice charges claiming that such clauses interfere with employees’ rights under the NLRA.

On April 24, 2023, just ten days after Rutgers University faculty ended their week-long strike, Governor Murphy signed bill A4772/S3215 providing workers with increased access to unemployment insurance benefits during labor disputes. The provisions of the bill include:

On Monday, the National Labor Relations Board (the “Board” or “NLRB”), with a majority of appointees by President Biden, i.e., “the Biden-Board,” reversed the short-lived General Motors LLC, 369 NLRB No. 127 (2020) decision and reinstated the Atlantic Steel test for analyzing whether an employee’s grossly unprofessional conduct when engaging in union or other protected concerted activity loses the protection of the National Labor Relations Act (“Act”). The Board issued Lion Elastomers, LLC, 372 NLRB No. 83 (2023) and reinstated Atlantic Steel 245 NLRB 814 (1979) and its progeny, making it more difficult for employers to discipline employees who engage in outrageous, otherwise inappropriate, speech and/or actions in the course of engaging in union or other protected concerted activity.

On Thursday, April 20, 2023, the National Labor Relations Board (“NLRB” or “Board”) released a decision in Noah’s Ark Processors, LLC d/b/a WR Reserve, 372 NLRB No. 80, in which it laid out sweeping remedies the Board will consider imposing in cases involving so-called “repeat offenders” of the National Labor Relations Act (“NLRA” or the “Act”).

In Noah’s Ark, the Board affirmed findings made by an NLRB Administrative Law Judge (“ALJ”) that the employer bargained in bad faith with the union representing its employees, implemented its final offer without achieving overall impasse, engaged in regressive bargaining and other impermissible bargaining tactics, and threatened and interrogated employees because of their protected activity, all of which came on the heels of the employer defying a previous federal court injunction related to earlier bad faith bargaining and other unfair labor practice allegations. The Board not only upheld the make-whole remedies ordered by the ALJ, but also announced “the potential remedies the Board will consider in cases involving [employers] who have shown a proclivity to violate the Act or who have engaged in egregious or widespread misconduct.” In doing so, the Board ordered remedies beyond those imposed by the ALJ, noting that the Board “[has] broad discretion to exercise [its] remedial authority under Section 10(c) of the Act even when no party has taken issue with the judge’s recommended remedies or requested additional forms of relief.”

As featured in #WorkforceWednesday:  This week, we examine how several recent pronouncements and actions by the National Labor Relations Board (NLRB) and its General Counsel’s office are creating new challenges for employers, both union and non-union.

The General Counsel (“GC”) of the National Labor Relations Board (“NLRB” or “Board”), Jennifer Abruzzo, has opened the vault and released previously unseen Advice Memoranda from her Obama-era predecessor General Counsel Richard Griffin, in her bid to continue to upend long-standing Board law.  Abruzzo, who was Deputy General Counsel under Griffin, and who now heads the Office of the General Counsel, has released a slew of historic Advice Memoranda that shed light on her legal theory to limit employer’s free speech rights and their ability to communicate with employees about the real-world consequences of unionization on the workplace and the employer-employee relationship.