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TAX CUT CAUSES EXECUTIVES TO ENTER POLITICAL DISCUSSION

The executives of corporations have increasingly entered the political fray in one way or another.  For example, multi-national companies tend to support issues such as globalization, trade and immigration, and other companies have supported goals such as protecting the environment, ethnic diversity and gay rights.  In doing so, companies must be concerned about the reaction of customers, politicians and their own employees.  There is always a danger in taking a position opposite to those on the other side of an issue.

Some interesting developments occurred earlier this year on this subject, as corporate America seems to come out in full support of the Administration’s tax cut legislation.  Some polls indicate that a majority of Americans do not favor this bill, saying it favors the rich, but corporate America seems to be trying to support the bill with the public and with their own workforces.  A long list of major corporations in the U.S. have made announcements to that effect.  For example, Apple promises to bring hundreds of billions of overseas dollars back to the U.S., paying some $38 billion in taxes on the money and investing tens of billions on domestic jobs.  Boeing announced it would invest $300 million in employee training and improve workplace infrastructure and corporate giving because of the tax bill.  Fiat Chrysler is investing $1 billion in a Michigan truck factory and paying worker bonuses related to the tax cut, announcing that it is only proper that its employees share in the savings generated by tax reform and the resulting improvement in the U.S. business environment.  AT&T announced that all U.S. workers would get a $1,000.00 bonus to celebrate the tax bill.  Several finance and insurance companies have increased their matching contribution to workers’ 401(k) plans in response to the new tax law.  The list of American companies making public announcements linking improvements in worker pay and benefits to the new tax law is long, including not only the aforementioned companies, but also Wal-Mart, American and Southwest Airlines, Wells Fargo, AutoNation, Nationwide, Aflac, SunTrust Banks, Visa, and the list goes on.

Some unions have announced that they hope the bill will generate job growth and higher wages for working families.  The President seems to be enjoying these developments stating that he believes the tax cut will set off a domino effect that will end lean years for American wage-earners.

At least one company, Pfizer, experienced a bit of a push-back in its announcement.  The chief executive wrote its employees about the tax bill being a landmark measure that would improve American business, while making no mention of higher pay bonuses in the announcement.  One employee in a publicized response asked why the boss was sharing his jubilation at the benefits the company would receive without mentioning that some of the benefits might trickle down to the workers.

LABOR DEPARTMENT NOW SUPPORTS UNPAID INTERNSHIPS

On January 5, 2018, the U.S. Department of Labor set forth new guidelines establishing a "primary beneficiary test" for the legality of unpaid internships.  Seven factors will be used to determine whether the internship meets the standard, including whether training is provided that "would be similar to that which would be given in an educational environment."  Another standard indicates the job should complement, not displace, paid workers employees.  The new test is generally considered to be easier for companies to meet than the old test, including the fact that the old test prohibited employers from deriving "immediate advantage from the activities of the intern."   

Other NLRB Reversals of Obama-Era Policies

While the above three cases involving a return to pre-Obama NLRB precedents are perhaps the most heavily publicized, there are other less publicized but also important reversals.  Thus, the new majority has returned to earlier cases giving NLRB administrative law judges the discretion to approve settlement terms proposed by a respondent (usually the employer) over the objection of the NLRB General Counsel and the charging party (usually the union).  UPMC Shadyside Hospital, 365 NLRB No. 153 (2017).  Further, the new NLRB majority has given employers more leeway to make changes based on past practices such as changes in healthcare benefits without bargaining to impasse with the union.  The new majority rule is that such actions do not constitute a change if they are similar in kind and agree with an established past practice consisting of comparable unilateral action.  Raytheon Network Centric Systems, 365 NLRB No. 161 (2017).  In still another ruling, the new Board members indicated in a footnote that the policy allowing for the halting of a union election if a union files unfair labor practice charges against the employer might soon be changed by a Republican-majority NLRB.  ADT Security Services, a case involving a union decertification election.  Further, on December 15, 2017, the Board voted to issue a request for comments on revising or rescinding the NLRB "quickie election" rule, which has resulted in the reduction of the time period from the filing of a union petition for an election to the election day itself, from about 40 days to about 21 days. 

Many likely changes in Board policy can be predicted from a memo to field offices sent out by the new NLRB General Counsel Robb, on November 8, 2017, which directs the NLRB regional officers to consult his office on cases involving precedent set on workers’ rights in the last eight years and others involving "significant legal issues."  This directive also rescinded seven agency guidance memos issues by his predecessor. 

It should be noted, however, that since Republican-appointed member Miscimarra left the Board on December 16, 2017, no reversals of Obama-era precedent are likely to occur until a new Republican-appointed member is confirmed.

NLRB Overturns "Micro-Unit" Determinations

In order for a union to petition the NLRB to conduct a union election, the union must establish that the election will be held in an appropriate voting unit.  During the Obama-era, in a case called Specialty Healthcare, if a union petitioned for an election among a particular group of employees, those employees shared a community of interest, and the employer took the position that the smallest appropriate unit had to include additional employees, the Board would find the petitioned-for unit appropriate unless the employer proved that the excluded employees shared an "overwhelming" community of interest with the petitioned-for group.  The Board has now abandoned the "overwhelming" community-of-interest standard and returned to the traditional community-of-interest test that the Board has applied through most of its history.  PCC Structurals, Inc. 365 NLRB No. 160 (2017). 

The Specialty Healthcare issue became known as the "micro-unit" issue, as the concept allowed unions to carve out voting units that were most favorable to union representation.  Some cases even allowed individual departments in department stores to vote on union representation.  In the PCC case itself, the union was attempting to organize 100 employees out of 2,500 workers in a plant where the welders worked alongside other workers.  More employers in the future will undoubtedly organize their facilities in a manner to lessen the opportunity for a union to "carve out" a pro-union voting unit.

The new decision is already having an effect, as evidenced by the situation at Volkswagen in Chattanooga, Tennessee.  At Volkswagen, the United Auto Workers has been trying to organize the plant for many years, losing a major election even though the company pledged "neutrality" and did not campaign against the union. Thereafter, the NLRB held that the Specialty Healthcare decision supported the union’s request for a vote among maintenance employees only.  Four days after the PCC Structurals’ ruling, the NLRB filed a motion to reconsider the earlier ruling.

NLRB Overturns Obama-Era Joint Employer Rules

In a controversial 2015 decision, a 3-2 Democratic majority NLRB ruled that indirect or even potential control over a subcontractor’s employees might lead to a joint employment relationship.  That case, Browning-Ferris, was of great concern to contractors, franchisors, and others who might be found jointly liable with another entity for that entity’s employment or labor law violations.  On December 14, 2017, the new NLRB majority overruled the Browning-Ferris decision, and returned to the pre-Browning-Ferris standard for making joint employer determinations.  The traditional standard generally required proof that a company actually exercised some "direct and immediate control" over the essential employment terms of another company’s employees.  Hy-Brand Industrial Contractors, 365 NLRB No. 156 (2017).  The new NLRB majority explained that evidence of indirect control or contractually-reserved (but never exercised) authority is probative of joint-employer status only to the extent that it supplements and reinforces evidence of direct control.  The majority concluded that its restored pre-Browning-Ferris standard adheres to the common law and is supported by the Labor Act’s policy of promoting stability and predictability in bargaining relationships.

One company undoubtedly particularly happy about the new NLRB ruling is McDonald’s, as the NLRB’s previous General Counsel issued a complaint arguing that the company exercised enough control over local franchise restaurants that it could be considered a joint employer.  Nevertheless, even under the new Board ruling confirming the traditional test, the company can still be considered a joint employer if it exercises actual control over another entity’s employees.

NLRB Changes In Handbook Standards

On December 14, 2017, the new NLRB majority overturned the Obama-era rule that placed severe limits on employer handbook and policy rules that had been declared illegal if an employee might interpret the rule as prohibiting the exercise of union or concerted activities.  Such broad rules were said to be illegal because they "chilled" legitimate union or concerted activities.  In place of the "reasonably construe" standard, the NLRB has established a new test that focuses on "(I) the nature and extent of the potential impact on NLRB rights, and (ii) legitimate justifications associated with the rule."  The Boeing Company, 365 NLRB No. 154 (2017).  If the justification for the rule outweighs the potential impact on employees’ rights, the rule is not deemed unlawful.  Applying the new test to Boeing’s no-camera rule, the majority found that the employer’s justifications for the rule, including the protection of information implicating national security, proprietary trade secrets, and employees’ personal information, outweighed any potential impact on employees’ protected concerted activity. 

Under the Boeing case, any employer rules are lawful to maintain if they cannot be reasonably interpreted to impinge on NLRA rights, or the employer’s interests are sufficiently justified.  The Board indicated in the Boeing ruling that in general, civility policies requiring workplace harmony are now acceptable for employers to enforce.  Many expressed concern about Obama-era rulings which seem to create a conflict between the employers’ anti-harassment rules and NLRB policies.  The new Boeing precedent is likely to ultimately result in changes in NLRB policies toward confidentiality rules and other types of behavioral rules.   With so many changes now being made to the NLRB handbook and policy rules, employers will have to decide how aggressive they want to be regarding the uncertainty between the Obama-era rules and the new rules as established in the Boeing case. 

NEW NLRB RULINGS CHANGING THE LANDSCAPE

In late 2017, the NLRB had its first Republican majority of three members in many years.  The majority was short-lived, however, as the term of the Republican Chairman Miscimarra expired on December 15, 2017.  Miscimarra had been on the Board during the many years of Obama-era NLRB rulings, during which some 92 NLRB precedents were overturned.  It is not surprising that Chairman Miscimarra was part of some major reversals of NLRB Obama-era rulings in the weeks prior to the expiration of his term.  Now a new NLRB member will have to be confirmed before the Republicans will again have a majority, as currently the Board is 2-2.


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