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Recap of 2013 and preview of 2014: Federal agencies on the labor scene

February 6th, 2014  |  Pamela Wolf

By Pamela Wolf, J.D.

Those who have been watching developments on the labor front know that it’s been quite an interesting year for some of the federal agencies that impact the world of labor law. Indeed, some of the challenges faced by these agencies in 2013 have landed in the lap of the U.S. Supreme Court. For these and other reasons, 2014 may turn out to be a similarly notable year in the labor law arena.

To understand the most significant developments at the federal labor agencies in 2013, among other things, and learn what may be in store for 2014, Employment Law Daily reached out to a team of experts on its Editorial Advisory Board, including Chris Bourgeacq, General Attorney with AT&T, and Will Anthony, Jackson Lewis Partner and Chair of the Class Action and Complex Litigation Practice Group.

LOOKING BACK

Our experts outlined the most important agency activities on the labor front in 2013. According to Will Anthony, they centered around three key developments:

(1) The President’s recess appointments to the National Labor Relations Board (which are now before the U.S. Supreme Court in NLRB v Noel  Canning);
(2) The NLRB’s “increased expansion” of the concept of “protected concerted activity”; and
(3) The Department of Labor’s consideration of changes to the Labor-Management Reporting and Disclosure Act (LMRDA) “advice” exemption.

Recess appointments. “If, as may be the case based on the recent oral argument in Noel Canning, Dkt No 12-1281, the Supreme Court holds that the President’s recess appointments were invalid, then the NLRB was acting without a quorum for several years,” Anthony explained. “In that case, the Board decisions and rulemaking during the relevant time period are likely to be found invalid.” That means the Board will need to reconsider all of the decisions it made during the relevant period. The issue of NLRB’s legitimacy “has resulted in the finality and import of numerous NLRB decisions being called into question,” he said.

The D.C. Circuit’s Noel Canning decision invalidating President Obama’s NLRB recess appointments was likewise at the top of Chris Bourgeacq’s list as the most notable agency development of 2013. He observed that two other appellate courts (the Third and Fourth Circuits) have reached the same conclusion as the D.C. Circuit reached in Noel Canning. “The decision places in limbo virtually all decisions issued by the Board since January 2012 until it attained its full quorum last August,” Bourgeacq said.

What was the impetus for the Noel Canning decision? It may have been many instances of overreaching by the Board in its rulemaking activities, which were also struck down by the courts, as well as the NLRB’s administrative decisions that have overturned decades of precedent, according to Bourgeacq. He said the D.C. Circuit issued more than one decision against the NLRB last year in addition to Noel Canning, suggesting the circuit’s frustration with the manner in which the Board has conducted its regulatory activities.

On the political front, Noel Canning probably also contributed in large part to the Senate’s finally consenting to President Obama’s subsequent Board nominees, Bourgeacq suggested — a move that resulted in the first fully-constituted Board since George W. Bush was President.

Expansion of protected activity. With regard to the NLRB’s increased expansion of “protected concerted activity,” Anthony points out that there has been “a significant increase in Board unfair labor practice charges relating to policies on social media, confidentiality, at-will disclaimers, class action waivers, and many areas where employers and employees did not realize that the National Labor Relations Act might apply.”

The impetus for the expansion of “protected concerted activity,” according to Anthony, is “the NLRB’s efforts to make the NLRA more relevant to both unionized and union-free workplaces.” He said that the LMRDA changes appear to help unions since, among other things, employers may decide they want to forego their right to obtain competent confidential legal advice in dealing with union issues.

The NLRB’s “protected concerted activity” initiative, Anthony said, has provided additional opportunities for employees and unions to file charges against employers based on a perception that the Board is more receptive. “All employers — whether unionized, union-free, or somewhere in between — are impacted by the Board’s decisions and related advice memoranda applying the provisions of the NLRA in terms of protected concerted activity in a new and broader fashion,” he said. “In fact, from a broader perspective, all employers are at risk of running afoul of the NLRA under new NLRB interpretations on issues ranging from individual social media postings to newly organized bargaining units to dues collection after union contract expiration.”

DOL’s persuader rules. The DOL’s proposed changes to the “advice” exemption — the so-called persuader rules — are a significant development because they would change the interpretation of the LMRDA exemption such that employers seeking confidential legal advice on labor relations matters would be subject to a reporting requirement, according to Anthony, who noted that employers’ legal counsel would also have a reporting requirement for providing legal advice.

Currently, employers and labor consultants are required under LMRDA Sec. 203 to report agreements or arrangements that they enter into with the intention of persuading employees concerning their rights to organize and bargain collectively, or for purposes of supplying the employer with information about the activities of employees or a union in connection with a labor dispute involving the employer.

Those who oppose the rule change note that almost continuously since 1963, in the absence of some deceptive arrangement between the employer and the consultant, employer and labor consultant reporting has been exempted through the “advice” exception where the consultant has no direct contact with employees and the employer is free to accept or reject the consultant’s advice or materials.

Under the DOL proposal, there would be a significant change to the definition of “advice” that would limit the exception to oral or written recommendations. Opponents are concerned that as a result of the change, if an employer were to distribute to employees a document created by a consultant that describes employee rights, both the employer and the consultant would be required to file a report with DOL’s Office of Labor-Management Standards.

Anthony suggested that the proposed LMRDA changes would have “a tremendous impact” on employers, employees, and their attorneys. “Application of the proposed DOL rule to employers and attorneys will undermine both the confidential attorney-client relationship and employers’ fundamental right to counsel.”

Best practices in light of these developments? Anthony shared these best practice suggestions related to the three important developments he identified:

• Work with clients to ensure that they have reserved their legal rights in any proceedings involving the NLRB in light of the recess appointment issue.
• In 2014, now that the Board is at full strength, given anticipated additional decisions expanding and/or explaining the bounds of “protected concerted activity,” employers should, among other things,
o review their policies and procedures with legal counsel to ensure compliance, and
o conduct executive/management/supervisory training so their management team applies the policies correctly under current law.
• Legal counsel should be aware that the attorney-client privilege would be impacted by the new DOL regulations, if finalized in their proposed form, thereby raising a potential conflict between state bar and federal LMRDA requirements, among other things.

Bourgeacq offered this tip: “With a full Board still decidedly pro-union, practitioners representing employers should seriously consider appealing egregious decisions to the D.C. Circuit, where at least for now, its welcome mat for the Board resembles a post-it note.”

WHAT’S AHEAD IN 2014?

What’s on the horizon for 2014 at federal labor agencies? Bourgeacq pointed to the long-awaited final release of the DOL’s persuader rules. The DOL expects to finalize its persuader rules in March 2014. Bourgeacq characterized the proposed rule change as a “not-so-subtle effort to support union organization.” He said that the proposed rule’s “assault on attorney-client privilege” will draw challenges from various groups, and predicts that the rule will almost certainly be stayed and likely struck down by the courts.

The NLRB will also revisit its so-called “quickie election” rules in 2014 with a full quorum, according to Bourgeacq, and will probably adopt a more onerous rule, making it easier for unions to organize and win elections. The Board “has thrown in the towel” on the union rights poster — the notice posting rule that required employers to inform employees of their rights under the NLRA — and probably will not waste its regulatory capital on that pursuit again, he predicted.

Anthony also pointed to the likelihood that the NLRB will renew its rulemaking efforts on accelerated elections, which he, too, thought would go beyond the rules that stalled in the courts because of a quorum-related issue. He likewise noted that the DOL is likely to finalize its proposed LMRDA rules.

In addition, Anthony anticipates that the NLRB will be more active in seeking court-ordered 10(j) relief, which reinstates terminated employees pending an NLRB trial and final determination by an NLRB Administrative Law Judge as to whether the employees were terminated in violation of the NLRA.

Bourgeacq said that we can expect court challenges to any rulemaking, and employers will likely challenge adverse decisions — going to the D.C. Circuit, unless its bench gets “packed” by Obama nominees — in response, for example, to the Board’s likely reversal of its decision in Register Guard (holding no employer duty to provide union access to email network) and expansion of its Specialty Healthcare ruling (interpreted to result in micro bargaining units).

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