As the holiday season approaches, the National Labor Relations Board (“NLRB”) issued four pro-labor decisions of varying impact. One decision maintains the status quo; two decisions return to an Obama-era standard, and the fourth creates an entirely new remedy for unfair labor practice cases. Each case will be addressed in turn below.
Maintaining the Status Quo: When Employee Interviews Are Lawful
In Sunbelt Rentals, Inc., the NLRB opted to maintain the long-standing bright-line standard used by employers when questioning employees in preparation for an unfair labor practice hearing. The NLRB stands by the Johnnie’s Poultry standard, arguing that it balances the employer’s right to defend itself against labor law violations with the employee’s right to be free from coercive questioning.
The NLRB’s decision to maintain the Johnnie’s Poultry standard is in direct contrast with five circuit courts, which have declined to apply the standard. For example, the Second Circuit has instead applied a totality of the circumstances test. See Bourne v. NLRB, 332 F.2d 47 (2d Cir. 1964).
While the standard has existed since 1964, below is a refresher on an employer’s best practices. When an employer questions an employee about an unfair labor practice, the employer should ensure the following:
- Participation of the employee is voluntary;
- The employee knows why he or she is being questioned;
- The employee is assured there will be no retaliation;
- The questions must occur “in a context free from hostility to union organization;
- The questions must not be coercive
- The questions must be limited in scope, and not seek to learn the employee’s opinion; and
- The questions must not interfere with the employee’s statutory rights.
Return to Past Standard: When Micro Units Are Permitted
The second decision, American Steel Construction, returns to the Obama-era standard for approving smaller bargaining units (“micro units”). In 2017, the NLRB adopted a new test for determining whether a petitioned for-unit is distinct enough. Under the 2017 test, the union had to show that the proposed bargaining unit had “meaningfully distinct interests” related to collective bargaining that outweighed existing similarities.
On December 14, the NLRB rejected the 2017 test and revived the old standard. Now, the NLRB will consider whether the proposed unit shares a “community of interest,” whether the group can be easily identified, and whether the division is “sufficiently distinct” from other employees excluded from the micro-unit. If an employer contests the creation of the unit, the employer now must show that there is an “overwhelming community of interest” between the workers in the proposed unit and excluded workers.
Return to Past Standard: When Property Owners Can Lawfully Exclude Contract Workers
On December 16, the NLRB revived the 2011 standard from New York, New York Hotel & Casino for when workers and unions may access physical property following a reversal from the D.C. Circuit Court of Appeals.
In 2019, the NLRB’s then-Republican majority ruled that an employer could lawfully stop contractors from distributing leaflets outside the employer’s facility. Under the 2019 standard, property owners could bar contract workers if the workers did not “regularly and exclusively” work on the property, and if the owner could show that the workers had a “reasonably nontrespassory alternative” for communicating their message. The D.C. Circuit Court rejected the standard two years later, calling it arbitrary and internally inconsistent. This return to the 2011 standard followed.
Now, property owners can only bar off-duty contract workers from protest if they show the activity would significantly interfere with the use of the property, or for another legitimate business reason.
New Standard: What Damages Are Available When Employers Violate Federal Labor Law
On December 13, the NLRB ruled that employers who violate federal labor law will have to pay workers consequential damages. While the NLRB rejected the term “consequential damages,” the decision expressly found that the “make-whole” remedy includes all direct and foreseeable pecuniary injuries suffered by employees.
Historically, remedies imposed by the NLRB included reinstatement of employment, backpay, payment of fines, and notice posted at the work place. Now, the NLRB has opened the door to a wide swath of potential damages.
In issuing the Thryv, Inc. ruling, the NLRB expressly declined to “enumerate all pecuniary harms” that may foreseeably or directly result from unfair labor practices. In other words, the NLRB has not imposed any limit on what constitutes “foreseeable” damages, and instead will evaluate damages on a case-by-case basis.
While the NLRB lacks the ability to levy monetary fines or impose punitive damages on employers, this ruling adds an additional tool to its kit in seeking to discourage unfair labor practices.
In light of this ruling, employers hit with an unfair labor practice charge should be prepared to contest not only the substance of the charge, but also any consequential damages arising therefrom.