March 09, 2020 Workplace Chatter

Year-End NLRB Rulings Boost Employers Into 2020

Adam C. Doerr

The National Labor Relations Board (“NLRB” or “Board”) is an agency of the Executive Branch of the federal government, which is charged with the administration and enforcement of the National Labor Relations Act (“NLRA”). As a result, and despite being an “independent” agency, its jurisprudential ideology tends to shift in the direction of the political party in the White House. During former-President Obama’s administration, the Board’s rulings and doctrines became decisively more liberal and labor-friendly. In the last two years, after President Trump was able to fill the Board with Republican members, the Board’s decisions have shifted back towards a more employer-friendly landscape.

In that regard, 2019 saw a wide range of decisions and rulings that favored employers, including those in the construction industry. And a cascade of December decisions issued as the Board’s term came to a close punctuated the year and boosted employers into 2020.

Requiring Confidentiality of Investigations Now Lawful

On December 17, 2019, the National Labor Relations Board issued its decision in Apogee Retail LLC d/b/a Unique Thrift Store, overruling the Board’s 2015 decision in Banner Health System d/b/a Banner Estrella Medical Center, and holding that employers may now lawfully require employees to maintain confidentiality with respect to ongoing workplace investigations.

Under the Obama Administration’s Board, the NLRB previously found such confidentiality requirements to constitute an unlawful restriction on employees’ right to engage in protected concerted activity unless the employer could affirmatively establish that the circumstances of the particular investigation required confidentiality, for example due to specific concerns of witness tampering.

In Apogee Retail, the Board found its Banner Estrella decision “failed to recognize and weigh the important interests” that both employers and employees have in maintaining confidentiality during such investigations.  Instead, the Apogee Retail Board concluded that “facially neutral investigative confidentiality rules” are lawful, at least with respect to open investigations, because “any adverse impact” such rules have on employees’ Section 7 rights “is comparatively slight,” and that adverse impact “is outweighed by the substantial and important justifications associated” with requiring confidentiality during ongoing investigations. However, to the extent confidentiality rules apply to investigations that have closed, including rules that are silent as to their temporal scope, the Board advised that those rules will be subject to case-by-case scrutiny to determine whether the particular justifications supporting the rule’s broader scope outweighs the adverse impact on employees’ Section 7 rights to discuss terms and conditions of employment, including their own or their colleagues’ discipline.  Thus, while requiring confidentiality of ongoing investigations is now presumptively lawful, employers must still undertake individualized evaluations to determine whether continued confidentiality after an investigation concludes is warranted.

One such circumstance that may warrant ongoing confidentiality is where there is “a reasonable belief that the ability of an investigative target to identify an informant may pose a threat to the safety of the informant.” Other reasons based on the nature of the employer’s business may also justify requiring ongoing confidentiality.  Since construction companies often share jobsites with other companies and contractors, the ability to require confidentiality means construction industry employers will be better able to maintain productivity of all workers on the jobsite and protect the integrity of their investigation.

Employers Regain Control Over Their Email Systems

The same day as its Apogee Retail decision, the Board also issued its decision in Caesars Entertainment d/b/a Rio All-Suites Hotel and Casino, allowing employers to maintain control over, and restrict employees’ non-work use of, company-provided e-mail and other information-technology (“IT”) systems and resources.  Prior to Caesars Entertainment, the Board’s decision in Purple Communications, Inc.likened employers’ IT systems to breakrooms and cafeterias, characterizing e-mail as a virtual “gathering place” for employees to engage in conversations. As a result, the Board in Purple Communications found it unlawful for an employer to prohibit all use of company-provided e-mail and other IT systems for protected concerted activity under the Act.

On December 16, 2019, the Board in Caesars Entertainment overruled Purple Communications and held that employees do not have a right under the NLRA to use their employer’s information-technology and e-mail systems to engage in union organizing and other protected concerted activity. Following Caesars Entertainment, employers are no longer required by the NLRA to permit employees to use their own property and electronic systems for union organizing and similar non-work purposes, so long as employees are otherwise permitted to engage in protected concerted activity face-to-face on non-working time. Since construction workers often work closely together in face-to-face settings, Caesars Entertainment provides construction industry employers an opportunity to regain control over their e-mail and other IT systems.

Expansive “Joint Employer” Doctrine on the Chopping Block

On December 12, 2019, the Board issued a decision approving settlements and terminating proceedings in various cases brought by the Service Employees International Union (“SEIU”). Those cases hinged on the union’s argument for an expansive interpretation of the “joint employer” doctrine under Browning-Ferris Industries. Following Browning Ferris, the Board could broadly find a completely separate entity liable for another company’s labor law obligations and violations so long as the “joint employer” had even the “reserved authority” to “indirectly control the other company’s employees’ terms and conditions of employment. Because of the breadth of that decision, contractor-subcontractor and similar relationships commonly found on construction jobsites often implicate “joint employer” concerns.

Litigation in the SEIU cases relying on and arguing for such a broad interpretation had gone on for nearly five years when a settlement was approved by the Board, over the union’s objection, and reversing the Administrative Law Judge’s decision not to approve the settlement. In those cases, an employer was alleged to be liable for individual franchisees’ alleged violations of the NLRA as a “joint employer.” No specific allegations of wrongdoing with otherwise levied directly against the “joint employer.”

In reversing the Judge and approving the settlement, the Board noted that “further litigation would impose a substantial burden on the parties, without a significant probability of prevailing on the complaint’s joint-employer allegation.” The Board specifically referred to its proposed rule regarding “The Standard For Determining Joint-Employer Status” at 83 Fed. Reg. 46,681, and noted that its rule would likely render any decision concerning the joint-employer standard