NLRB: Changing Winds Blow in Favor of Health Care Employers

28 February 2018 Health Care Law Today Blog
Authors: Mark J. Neuberger

The Trump administration’s mark is certainly evident at the National Labor Relations Board (NLRB) and health care employers are breathing a sigh of relief.

The NLRB is a five member Board that decides cases governing most aspects of private sector labor relations in the health care industry.  The manner in which Board members’ terms are staggered allows a sitting President to eventually place three of the five members from his own political party. In fact, President Trump recently appointed two new Republican members, which, for the first time in almost seven years, created a Republican majority.

In a flurry of recent decisions, the NLRB shifted some key legal holdings decisively in favor of employers and repudiated some of the more pro-union decisions issued by the NLRB during  the Obama administration.

Three Key NLRB Decisions Affecting Health Care Employers

PCC Structural, Inc., 365 NLRB No. 160 (Dec 15, 2017)

Union Organizing Drives.  A big win for employers seeking to prevent union organizing drives came when the NLRB issued its decision in PCC Structural, Inc., which reversed Specialty Healthcare, 357 NLRB No. 83 (2011), a decision issued by the NLRB when it was controlled by Democratic appointees. Specialty Healthcare allowed unions seeking to organize an employer’s workforce to petition for an election in what is commonly referred to as “micro-units,” which are very small portions of an employer’s workforce. Conventional wisdom holds that it is easier for a union to organize a micro-unit and easier for an employer to prevent a union drive by petitioning for a larger bargaining unit. Prior to the Specialty Healthcare decision, the NLRB would not normally allow unions to attempt to organize micro-units if there was a “community of interest” in a larger grouping.  In PCC Structural, the Board found that simply because a petitioning union preferred a small unit, and could show some community of interest, a micro-unit would not be appropriate when the community of interest of the larger group was present.

Hy-Brand Industrial Contractors, 365 NLRB No. 156 (Dec. 14, 2017).

Joint Employers.  In another significant decision for health care employers, the NLRB reversed  its controversial 2015 decision in Browning-Ferris Industries when it decided Hy-Brand Industrial Contractors.   In Browning-Ferris, the Board adopted an expansive standard for determining when two separate legal entities are deemed to be joint employers of a common group of employees. This scenario frequently arises in the health care industry where it is common to contract out various portions of the operation or enter into various forms of operating agreements. This leads to the potential for an employer to be held liable for the claims of the contractors’ employees. Browning-Ferris overruled the longstanding NLRB precedence when it ruled that two entities can be considered joint employers for purposes of the National Labor Relations Act based on the existence of the opportunity to exercise “indirect control” over the essential terms and conditions of the contractor’s employees. The most criticized aspect of the Browning-Ferris decision was that it left most employers believing that they almost always would be held liable for their contractors’ employment problems. As a result, the Browning-Ferris decision was widely criticized by employers, business groups, legal commentators, and legislators. In December 2017, the decision in Hy-Brand Industrial Contractors reversed Browning-Ferris and returned the Board’s prior precedent. Going forward, a finding of joint-employer status requires proof that the alleged joint employer entities have:

  • Actually exercised joint control over essential employment terms (rather than merely having “reserved” the right to exercise control);
  • The control must be “direct and immediate” (rather than indirect); and
  • Joint employer status will not result from control that is “limited and routine.”

Boeing Co., 365 NLRB No. 154 (Dec. 14, 2017)

Privacy in the Workplace.  A third striking reversal occurred in Boeing Co, which decided that employer policies, such as Boeing’s ban on the use of cameras and cell phones, are lawful.  The Obama Board previously decided a number of cases that gave employees expanded privacy rights in the workplace, which many employers believed unfairly impinged on their right to have rational security and confidentiality measures in place to protect their information and technology. Since all healthcare employers are concerned about patient privacy and many have no camera in the workplace rules, this decision is a must read.

Possible Changes to “Quickie Election Rules” Being Considered

One other legacy of the Obama-era NLRB are the so-called “quickie election rules.” In 2014, the NLRB issued rules which mandated union organizing elections be held in as little a ten days from when the union petitioned the NLRB.  Every one with a stake in the union election process agreed it was designed to increase union wins in such elections. The new Trump NLRB is soliciting public comments on these rules which signals they are at least considering some changes if not our right revocation.

How Do These NLRB Decisions Affect Health Care Employers?

There will likely be more pro-employer NLRB decisions over the next few years. During the Obama Administration, the NLRB took a dramatic and unprecedented turn to the left, overruling many longstanding precedents of established labor law. The shift to a Republican-controlled NLRB will no doubt continue to undo many more decisions. Health care employers need to stay in tune with the changes in the law of labor relations and also be vigilant about new tactics that unions will have to adopt in order  to stay viable and continue to organize new members.

For more information on labor relations including the team, publications, and other materials, visit Foley’s Labor and Employment Team.

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