Trump’s NLRB Reverses Course on Obama-Era Rules

February 22, 2018

In the final weeks of 2017, the National Labor Board Relations Board, packed with Trump appointees, put an end to two important Obama-era labor rules.

Joint Employer Test Clarified for Businesses

In Hy-Brand Indus. Contractors, Ltd. and Brandt Construction Co., the now Republican-majority NLRB overturned the joint employer standard established under Obama, and returned to the prior standard that governed for decades before. The current standard requires that two entities must share actual control over (verses a mere reservation of the right to control) the essential terms and conditions of employment (e.g. hiring, firing, supervision, pay, etc.) in order for the NLRB to find a “joint employer” relationship. The NLRB also noted that the control must be “direct and immediate” verses indirect. Finally, the NLRB will analyze joint employment both in form, i.e. the contract between the entities, as well as in substance, i.e. the actual practice of the employers.

Most experts believe that this standard for determining joint employment is more objective and provides greater clarity than the Obama-era standard. Most believe the new rule benefits employers by allowing them to more accurately assess whether they may be responsible for the conduct of a separate entity with whom they contract and whose employees have overlapping responsibilities to both entities. This is especially true for employers whose business model involves the use of franchises, subcontractors, or even temp agencies.

Employer Policies Legitimately Restricting Employee Speech More Likely Enforceable

In Boeing Co. and Society of Professional Engineering Employees in Aerospace IFPTE Local 2001, the NLRB ordered that it would give greater consideration and deference to employers’ explanations of facially-neutral employment policies in determining whether such policies interfere with, restrain, or coerce employees in the exercise of their right to engage in union organizing or other concerted activity protected by the NLRA. This decision ends the Lutheran Heritage Village-Livonia standard where facially-neutral employment policies could be found to violate the NLRA if employees would reasonably construe the policy’s language to prohibit concerted activity.

Under this Obama-era rule, even well-intentioned and important employment policies like those prohibiting harassing or defamatory statements on social media sites, abusive or profane language in the workplace, disparaging the employer online, or establishing standards of confidentiality in sexual harassment investigations could be viewed as violating the NLRA. Under the current rule, such policies presumably would not be found to violate employee rights to engage in concerted activities to the extent the NLRB will give greater weight to the employer’s stated reason for having the policy. Employers should feel much more comfortable establishing facially-neutral employment policies that are legitimately intended to protect important employer interests while also balancing the rights of employees to collectively bargain or join together as a group to advance their interests as employees as is their right under the NLRA.