Senate Hearing on National Labor Relations Board

On Thursday, July 13, the NPMA Public Policy Team attended the Senate Health, Education, Labor, and Pensions Committee Hearing on the Nomination for Deputy Secretary of Labor and Members of the National Labor Relations Board (NLRB). The following individuals were nominated and testified for the corresponding positions Patrick Pizzella – Deputy Secretary of Labor, Marvin Kaplan – Member of the National Labor Relations Board, and William Emanuel – Member of the National Labor Relations Board. This hearing is very important for the future of American labor law. The NLRB under President Obama issued several controversial rulings by allowing micro-unions, expediting union elections, and re-defining the joint employer standard. It is expected that by confirming Kaplan and Emanuel, it will shift the balance of power of the NLRB and several of the controversial opinions issued by the NLRB under the Obama administration could be reversed.

Joint Employer Standard: Primarily, this 2015 NLRB rule would affect pest management businesses that operate within a franchisee/franchisor business model or if a pest management business were to contract out work with another employer or company. In 2015, Browning-Ferris v. NLRB, according to the Competitive Enterprise Institute, the Board crafted a vague, broad definition of joint employer. Please find NPMA’s briefing document on Browning-Ferris v. NLRB here. Under the rule, a company may be held liable for labor violations by other employers they contract with, by merely exercising indirect control or possessing unexercised potential control. In other words, the NLRB said a company is considered a joint employer with a contractor if it has “indirect” control over the terms and conditions of employment or has the “reserved authority to do so.” According to labor legal experts Charles S. Birenbaum and Jamie R. Adams, in practice, that means franchisors can now be held responsible for labor law violations committed by their franchisee. Joint-Employer Standard rule is currently facing a legal challenge in the D.C. Court of Appeals. Additionally, President Trump’s Labor Secretary Alex Acosta has announced DOL’s intention to roll back the rule, however, despite the roll back, the NLRB still has the authority to apply the Obama-era interpretation of the rule, but this would become less likely after the Senate confirmation of Trump’s NLRB nominees Emanuel and Kaplan. In addition to the pending court case, DOL rollback, and the NLRB member changes, House Republicans defunded enforcement of the joint employer standard in their appropriations bill that passed on July 12, and Congressional Republicans are also working on legislation that would re-define the standard to be more aligned with the pre-Obama era rule of what constitutes the term, “joint employment.”

Micro-unions: In 2011, the NLRB allowed the first micro-union to exist under the company, Specialty Healthcare, a rehabilitation center, where a group of nursing assistants unionized, but the rest of the employees did not. Essentially, micro-unions allow for segments of employees at a work place to join a union and the other employees have the choice to join the micro-union, form a different micro-union, or not join a union at all. For another example as to how micro-unions operate, it is helpful to imagine a grocery store where the bakers could form a micro-union, the deli workers could form their own micro-union, and the remaining workers (checkout workers, shelve stockers, produce workers, etc.) are not unionized, so employers could be negotiating with numerous entities within a workforce. The U.S. Chamber of Commerce in their Workforce Freedom Initiative argued that the formation of micro-unions allows labor officials to “cherry pick” workers who are more likely to unionize and gain a foothold at a business even if a majority of the workers to not support unionization. It is expected that the existence of micro-unions could be reversed or fundamentally changed after Emanuel and Kaplan are confirmed by the U.S. Senate.

Expediting Union Elections: In 2015, the NLRB issued a final rule allowing union elections to speed-up by shortening the number of days between filing a petition (i.e. requesting a vote) and holding a union election. Under the 2015 rule, the elections could be held between 10-21 days of filing a petition, compared to the median timeframe of 38 days under the old rules, according to employment law expert, Daniel Drewry. Another significant change under the 2015 rule made it significantly more difficult for employers to challenge employee voter eligibility for a union vote. In most cases, the rule only allows employers to challenge voter eligibility only after employees vote to unionize. Opponents argue that this Obama-era decision makes it significantly easier for workers to unionize and makes it more difficult to challenge the validity of the vote.

Occupational Licensing Reform: After fielding a question on occupational licensing reform from Georgia Senator Johnny Isakson (R-GA), Deputy Secretary of Labor Nominee, Patrick Pizzella said that he supports streamlining occupational licensing reform in the states to remove employment barriers and that the DOL should provide leadership on the issue. NPMA is very interested in occupational licensing discussions because many of the efforts in state legislatures to reform occupational licensing requirements would strongly affect our industry.

We expect a full Senate confirmation vote on the nominees in the coming weeks. NPMA will continue our engagement and keep members apprised of developments on all pertinent labor issues.