THE AMERICAN LAW INSTITUTE Continuing Legal Education. Current Developments in Employment Law July 28-30, 2016 Santa Fe, New Mexico

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1 391 THE AMERICAN LAW INSTITUTE Continuing Legal Education Current Developments in Employment Law July 28-30, 2016 Santa Fe, New Mexico The NLRB Impact on Labor and Employment Law By Daniel L. Bonnett Martin & Bonnett PLLC Phoenix, Arizona

2 392 Table of Contents I. Joint Employers - Browning Ferris... 1 II. Franchisor/Franchisee Upheaval The Board Addresses Issues Surrounding Joint Liability for the Employment Claims of a Franchisees Employees... 4 III. The NLRB s Ambush Election Rules in Practice... 5 IV. The NLRB s Impact and Actions on Employer-Mandated Class/Collective Action Waivers V. The NLRB s Reaction to Social Media, and Other Use and Access Restrictions on Protected Concerted Activity VI. NLRB s Proposed Rule Giving Union Organizers Equal Time to Campaign in the Workplace VII. Fractional Bargaining Units After Specialty Healthcare VIII. Miscellaneous Cases and Board Decisions... 28

3 393 The NLRB Impact on Labor & Employment Law 1 By Daniel L. Bonnett Martin & Bonnett. PLLC Phoenix, Arizona I. Joint Employers - Browning Ferris On August 27, 2015 the National Labor Relations Board issued its decision in Browning-Ferris Industries of California, Inc., d/b/a BFI Newby Island Recyclery and FPR-II, LLC, d/b/a Leadpoint Business Services (32-RC ; 362 NLRB No. 186), August 27, A Board majority restated the joint-employer standard that two or more entities are joint employers of a single work force if they are both employers within the meaning of the common law, and if they share or codetermine those matters governing the essential terms and conditions of employment. Where a common-law employment relationship exists, the inquiry turns to whether the putative joint employer possesses sufficient control over employees essential terms and conditions of employment to permit meaningful collective bargaining. The Board held that it will no longer require that a joint employer not only possess the authority to control employees terms and conditions of employment, but also exercise that authority. The relevant inquiry is whether authority is reserved which allows an employer to control terms and conditions of employment, even if not exercised. The Board also held that it will no longer require that a statutory employer s control must be exercised directly and immediately. Control exercised indirectly such as through an intermediary may now establish joint-employer status. The Board stated that previous limiting requirements left the Board s joint-employment jurisprudence increasingly out of step with changing economic circumstances, particularly the recent dramatic growth in contingent employment relationships. Browing-Ferris Industries of California, Inc. ( BFI ) operated a recycling facility at which 240 full-time, part-time and on call workers provided by Leadpoint through a temporary labor service agreement performed sorting duties. BFI and Leadpoint had separate supervisors over their respective employees at the facility, however, BFI maintained the right to reject any Leadpoint personnel and discontinue the use of any personnel for any or no reason. The service agreement also established a rate schedule used to compensate Leadpoint for each worker's wages. Leadpoint was prohibited from paying these employees a higher hourly rate without BFI's approval. Working hours, the number of shifts, productivity standards and some training were established or provided by BFI. The service agreement required all employees to comply with BFI safety policies. Applying its joint-employer standard, the Board found that that Browing-Ferris Industries of California, Inc. ( BFI ) and Leadpoint were joint-employers of the employees in the petitionedfor unit sorters, screen cleaners, and housekeepers. In so finding, the Board relied on, among other things, BFI s possession of control over who Leadpoint can hire to work at its facility; 1 This paper is primarily compromised of summaries of the Board s activities over the past twelve months as it relates to the topics described in this paper. These summaries were obtained from the National Labor Relations Board website at 1

4 394 BFI s direct and indirect control over work processes and task assignments; and BFI s significant role in determining employees wages. The effect of the Board decision required Leadpoint to recognize the petitioning union as the exclusive bargaining representative of the employees it provided to BFI and to bargain with the union of wages, hours and terms and conditions of employment. The Board noted, however, that the joint employer's duty to bargain only extends to the terms and conditions over which the joint employer possesses the authority to control. Other recent Board action regarding joint-employer and single employer issues. Adams & Associates, Inc. and McConnell, Jones, Lanier & Murphy, LLP (20-CA and 20-CA ; 363 NLRB No. 193), May 17, The Board adopted the Administrative Law Judge s findings that Adams & Associates, Inc. and McConnell, Jones, Lanier & Murphy, LLP (Respondent) are a single employer within the meaning of the National Labor Relations Act ( NLRA ); that the Respondent is a legal successor to Horizons Youth Services, LLC; that the Respondent violated Section 8(a)(3) and (1) by discriminatorily refusing to hire five Horizons employees in an attempt to avoid a bargaining obligation; and that it violated Section 8(a)(5) and (1) by unilaterally imposing initial terms and conditions of employment on unit employees, discharging four unit employees pursuant to unilaterally imposed disciplinary policies, removing bargaining unit work, and banning the Union president from the facility. Reversing the judge, the Board further found that the Respondent is a perfectly clear successor within the meaning of Spruce Up Corp., 209 NLRB 194 (1974), enfd. per curiam 529 F.2d 516 (4th Cir. 1975), and that this independently made unlawful its unilateral setting of initial terms. Finally, the Board additionally found that the Respondent violated Section 8(a)(3) and (1) by refusing to hire the union president because of her union activities as well as to avoid a bargaining obligation. Ace Masonry, Inc., d/b/a Ace Unlimited and Bella Masonry, LLC, alter egos and Bella Furniture Solutions, Inc. and Henry Bellavigna, Lisa Bellavigna, Robert P. Bellavigna and Domenick Bellavigna, Individuals (03-CA , et al.; 363 NLRB No. 181), May 3, In this compliance decision, the Board adopted the administrative law judge s recommendation to pierce the corporate veil of Ace Unlimited and hold respondents, Lisa and Robert Bellavigna, jointly and severally liable for remedial payments totaling approximately $140,082 owed by Ace for the unfair labor practices found in the Board s underlying decision. The Board also adopted the ALJ s findings that Domenick Bellavigna and his solely owned corporation, Bella Furniture Solutions, Inc., were not jointly and severally liable under pierce-the-corporate-veil doctrine because they were too removed from the ownership and management of the other two corporate entities where the unfair labor practices were committed. Oliva Supermarkets LLC and RL Markets I LLC, alter egos (22-CA ; 363 NLRB No. 170), May 3, The Board affirmed the ALJ s conclusions that respondent, RL Markets, was the alter ego of respondent, Oliva Supermarkets; that they are a single employer within the meaning of the NLRA; and that they violated Section 8(a)(5) and (1) by failing and refusing to recognize the union as the collective-bargaining representative of unit employees at its Whippany, New Jersey location, and by failing to apply to unit employees the existing collective 2

5 395 bargaining agreement between Oliva and the union. The Board also found that the respondents had violated Section 8(a)(5) and (1) by repudiating the collective-bargaining agreement. Airway Cleaners, LLC (29-RC ; 363 NLRB No. 166), April 18, Denying an intervenor s Request for Review of Decision and Direction of Election, a Board panel majority relied on Browning-Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (2015), and Management Training Corp., 317 NLRB 1355 (1995), to hold that the joint-employer test outlined in Browning-Ferris did not alter the Board s jurisdiction over the non-exempt Employer. Green JobWorks, LLC/ACECO, LLC (a Joint Employer) (05-RC ) Baltimore, MD, March 8, A Board panel majority granted the petitioner s Request for Review of the Regional Director s Decision and Direction of Election on the ground that it raised substantial issues warranting review. Member Miscimarra dissented, explaining that he would have denied the petitioner s Request for Review because he would not apply the joint-employer standard established in BFI Newby Island Recyclery, 362 NLRB No. 186 (2015), and that the petitioner had failed to raise a substantial issue warranting review under pre-bfi precedent. The decision also discusses the overwhelming community of interest standard set forth in Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011). Lederach Electric, Inc. and Morris Road Partners, LLC (a single employer), Board Case No. 04-CA (reported at 362 NLRB No. 14); 2016 WL , January 9, In an unpublished opinion, the court enforced the Board s order and affirmed its finding that the two companies in this case constitute a single employer and therefore are jointly and severally liable for backpay. Lederach was an electrical contracting company located in Lederach, Pennsylvania, which was formed in 1985 and, as of late 2012, was no longer in business. Morris Road is a commercial realty company that was formed in 1986, and owns the Lederach Commons Building. In 2011, the Board issued a decision finding that Lederach violated Section 8(a)(3) and (1) of the NLRA by laying off four employees because of their protected, concerted activities for filing claims with the Pennsylvania Department of Labor and Industry, and for their union membership. In 2013, after the first compliance proceeding, the Board issued a supplemental decision and order specifying amounts of backpay owed to the employees. After the second compliance proceeding brought on the issue whether the companies were a single employer, the Board issued a second supplemental decision answering that question in the affirmative. In doing so, the Board applied the well-settled, four-factor test that assesses: (1) functional integration of operations, (2) centralized control of labor relations, (3) common management, and (4) common ownership. On review, the court agreed with the Board s application of that test. Two factors common management and ownership the court noted, were not in dispute. And it held that substantial evidence supported the Board s finding that there was functional integration of their operations. On the final factor, the court agreed with the Board that, even though there was no evidence of centralized control of labor relations, that lack of evidence on that one factor is not fatal to the finding that there is single employer status, particularly here where one entity Morris Road has no employees. Accordingly, the court enforced the Board s backpay order in full. 3