Delivering for Best-in-Class Wholesaler-Distributors
June 25, 2019

The Department of Labor (DOL):

During the eight years of the Obama Administration, DoL and the National Labor Relations Board (NLRB) were among the most aggressive federal agencies, successfully advancing a pro-labor agenda with often-publicly-stated anti-business bias.

The Trump Labor Department got off to a slow start, with Secretary Alex Acosta not taking office until April, 2017, the last of the Cabinet members to be confirmed. In addition, key positions in the agency remained vacant for another year. Moreover, the Department has been subject to some criticism from the business community for the slow pace at which they are moving to implement policy initiatives. Nonetheless, despite the late start and slow pace, the Department has undertaken some key major policy initiatives.

The Persuader rule:  The Obama Administration DOL’s Persuader rule – which would have made it difficult for an employer to obtain advice and/or legal counsel during a union organizing campaign – was enjoined in late 2016 by a federal court in Texas.

In May, 2017, DoL sent to the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) a new proposed rulemaking rescinding the Persuader rule. Under the standard process, OIRA reviews a new rule and, assuming they approve it, the regulating agency then publishes the proposed rule in the Federal Register and opens it up for public comment.

OMB/OIRA completed its review of the rescission rule on June 6, 2017, and on June 13th DoL’s Office of Labor-Management Statistics issued a new notice of proposed rulemaking (NPRM). The public comment period on the rescission rule ended on August 11, 2017. NAW participated in this new rulemaking through the Coalition for a Democratic Workplace.

A final rule rescinding Persuader was issued on July 17th, 2018.

The FLSA/Overtime Rule:  The Obama Administration’s Fair Labor Standards Act Overtime Rule was also halted by the courts in a lawsuit in which NAW was a plaintiff. The Trump Labor Department published a Request for Information on the issue in September, 2017, and NAW participated in that process through the Partnership to Protect Workplace Opportunity, the business coalition on the issue which we help manage. DoL finally promulgated a new rule on March 22 2019, proposing a much more reasonable threshold salary of $35,308. NAW surveyed our members on the impact of the new rule and submitted comments to DoL based on the feedback we received. In addition to the proposed salary levels, our comments addressed issues of how bonuses and commissions are treated, and the antiquated provisions covering inside sales personnel.

OSHA “Walk Around Rule:”  In February 2013, the Occupational Safety and Health Administration issued a controversial “opinion letter” announcing that a non-employee union representative could accompany an OSHA official in an inspection of a worksite even if the company is not unionized and has no collective bargaining agreement. In early May, 2017, just weeks after Secretary Acosta’s confirmation, the OSHA directive was rescinded.

The National Labor Relations Board (NLRB):

Like the Department of Labor, the National Labor Relations Board got off to a slow start in the Trump Administration. The Board is a five-member independent agency on which there must be at least three seated members for them to conduct business. It wasn’t until April, 2018, that a three-member majority and Trump-appointed General Counsel were fully in control of the Board.

The Republicans quickly began the process of reversing Obama-era rules and precedents. In addition to the Board actions, the new General Counsel aggressively and effectively joined the effort, issuing a memorandum that promised dramatic reversal of Obama-Board actions.

Specific actions of the Trump-appointed Board:

Joint Employer:  The Obama Board radically changed the standard on what constituted a joint employer for purposes of labor union organization, reversing the long-held standard that an employer had to have direct control over the terms and conditions of employees to be considered a joint employer. The Obama Board changed that standard to one in which “indirect control” is sufficient for joint employer status (in which employees can be included in a collective bargaining unit without the consent of both employers).

In May 2018, Board Chairman John Ring announced that the Board would propose a formal regulation to create a new Joint Employer standard. NAW has participated and will continue to participate in this rule-making through the Coalition for a Democratic Workplace, which we help manage. Based on Board actions and comments in recent months, the business community is optimistic that a new rule will restore a “direct control” Joint Employer standard.

The “Ambush Election Rule:”  The Board published a Request for Information seeking comment on whether the Obama Board’s Ambush rule – which facilitated faster union certification elections and limited employer rights in the process – should be retained without changes, retained but modified, or rescinded. NAW joined allied associations in submitting comments on the RFI, and joined an amicus brief on the issue in October, 2018.

Specialty Healthcare:  The Board reversed the “Specialty Healthcare” decision which had facilitated the creation of “micro-bargaining units” within a single workplace, restoring the “community of interest” standard that had been used for decades to determine appropriate collective bargaining units.

Employee Handbook Rules:  The previous Board greatly increased the Board’s reach into even non-union workplaces by expansion of so-called “protected concerted activity,” holding employee handbook rules invalid if the rule could conceivably be interpreted by an employee as impacting his/her right to participate in collective bargaining activity. In December, 2017, the Board established a more balanced – and employer friendly – test, and in June, 2018, the General Counsel issued a comprehensive new guidance for Board decisions on employee handbook rules.

Employee access to employer email:  In 2014, in the Purple Communications case, the Obama Board held that employees who have access to their employer’s email system for work-related purposes have the right to use that employer’s email system for non-work-related purposes, including union organizing activity. On August 1, 2018 the Trump Board announced it was inviting briefs on whether they should adhere to, modify or overrule Purple. They also expanded the issue to evaluate policies governing employee use of other employer-owned computer systems. In October, 2018, NAW joined an amicus brief in a case, Caesar’s Entertainment, which will reverse the Purple standard if successful.

In addition to these and other specific Board actions, General Counsel Peter Robb issued a Memorandum on December 1st, 2017, in which he outlined controversial decisions of the Obama-era Board and opened the door for reconsideration of those decisions. In addition to the issues described above, GC Robb made note of:

  • Decisions requiring that employers provide access to work premises to off-duty employees;
  • Expansion of the range of permissible conduct by union representatives;
  • Requiring an employer to provide witness statements to unions; and
  • Requiring an employer to continue dues check-off after the expiration of a collective bargaining agreement.

We fully expected a continued effort by the NLRB to reverse Obama-Board pro-labor rules and decisions to restore balance to the Board policies.

Congressional Agenda:

On May 2, 2019, the Democratic controlled House of Representatives introduced the Protecting the Right to Organize (PRO) Act, H.R. 2474 and S. 1306. This radical legislation is a smorgasbord of pro-Union legislation written to increase union membership at any cost, including attempting to implement policies that have been rejected by the judicial system, opposed on a bipartisan basis in congress, and/or abandoned by the agencies asked to enforce them.

Specifically, the PRO Act would:

  • Strip away workers free choice in union elections as well as their privacy rights;
  • Codify into law the NLRB’s controversial Browning-Ferris Industries joint-employer standard that has threated small and local businesses;
  • Curb opportunities for people to work independently through gig economy platforms or more traditional independent contractor roles;
  • Eliminate Right-to-Work protections for workers across the country, including in the twenty-seven states that have passed Right-to-Work laws;
  • Interfere with attorney-client confidentiality and make it harder for businesses to secure legal advice on complex labor law matters (the Persuader Rule);
  • Prohibit arbitration agreements in employment contracts;
  • Infringe on the due process rights of employers; and
  • Strip away “secondary boycott” protections that prevent unions from using their anti-trust exemptions and immunity from certain state laws to target businesses for anti-competitive purposes other than organizing.

The PRO Act would codify the shortened representation election time frames created by the Obama-era National Labor Relations Board (NLRB). These shortened time frames serve no other purpose than silencing debate about the possible disadvantages of unionization generally or the specific union in question. The PRO Act would also eliminate employers’ ability to challenge union misconduct during elections and greatly expand the Board’s power to foist union representation on employers and employees without an election. Additionally, the bill mandates employers provide to union organizers the contact information for all employees without prior approval from the employees themselves. Employees would not be able to opt out of this requirement and would not have a say in which contact information is provided, needlessly exposing them to potential harassment and intimidation tactics.

The PRO Act would codify the NLRB’s controversial 2015 Browning-Ferris Industries “Joint Employer” (BFI) decision (described above) nullifying any effort by the current NLRB to roll back the Obama-era decision.

The PRO Act includes a provision that would eliminate freedom of contract by mandating compulsory, binding arbitration on the employer and employees if the two parties do not reach a collective bargaining agreement within the first 120 days of negotiations. Under the PRO Act an arbitrator, who would be unfamiliar with the business’ operations, would impose terms that are binding upon both parties, even if one or both find those terms unacceptable. Employees are not even provided with the opportunity to vote on whether they approve of their new contract. Furthermore, employers have very limited avenues for redress if they cannot afford the terms imposed. Thus, if an arbitrator miscalculates what wages or benefits the company can afford or forces the company into failing multiemployer pension plans, the employer may simply be forced out of business.

It should be noted that the current Republican controlled Senate is likely to block this radical legislation should it pass out of the House of Representatives. However, should the Democratic party regain unified control of the House, Senate, and Presidency, this type of pro-labor legislation is likely to become the law of the land.