Labor Management Relations
Policy Watch

Labor Management Relations


Private sector unionization rates continue to decline. According to the U.S. Bureau of Labor Statistics, only 6.7 percent of people working in the private sector in 2015 were members of a union. Furthermore, the overall U.S. workforce union membership rate was 11.1 percent in 2015, down from 20.1 percent in 1983, with global union membership rates mirroring this trend.

The National Labor Relations Act of 1935 (NLRA) states that a union can be certified as the exclusive collective bargaining agent for an organization's employees in one of two ways: a secret-ballot election or, under limited circumstances, a "card check" process in which a majority of employees in a specific work unit sign a card authorizing a union to represent their collective interests. With union membership rates declining, the U.S. Department of Labor (DOL) and the National Labor Relations Board (NLRB) have promulgated numerous workplace rules and decisions to make organizing easier, including a focus on nonunion workplaces and increased scrutiny of whether employer policies interfere with employees' right to organize under the NLRA. 

Joint-Employer Standard

In August 2015, the NLRB decided the Browning–Ferris Industries of California, Inc. case, overturning a three-decades-old standard in which two employers were found to be "joint employers" only when they exerted direct and significant control over the same employees or jointly determined the essential terms and conditions of employment. Under the new standard, the NLRB will consider "indirect control" to be the main factor in determining whether a joint-employer relationship exists.

The new standard will have implications for a large number of employers, increasing the risk of establishing a joint-employer relationship for franchisors and employers that contract with staffing agencies. This ruling could ease organizing efforts by including larger groups of employees and other workers in potential bargaining units. It could also subject employers to new joint bargaining obligations and expand liability for unfair labor practices and breaches of collective bargaining agreements.

Outlook: As a result of the Browning–Ferris case, Senate and House leaders introduced legislation to restore the previous joint-employer definition. While the legislation has gained some traction, neither the Senate nor the House has enough votes to override an expected presidential veto.

The 115th Congress should allow for continued oversight over the NLRB and its decisions. Congressional Republicans could severely limit funding for the NLRB, lessening the impact of the board's decisions over employers and employees. President Trump is able to appoint two new Republican members of the board and a new general counsel, with Senate confirmation, sometime in 2017. Once the newly-constituted NLRB is in place, they are likely to overturn Browning-Ferris when faced with a new joint-employer case. In the meantime, Browning–Ferris has appealed the NLRB's decision to the D.C. circuit court for review. 

Persuader Rule

In March 2016, DOL issued a final regulation significantly narrowing the "advice exemption" under Section 203 of the Labor-Management Reporting and Disclosure Act (LMRDA). The change to the "persuader" rule expands an employer's obligation to report the financial expenditures for consultants and others they hire to provide the employer advice on unionization matters.

Until now, neither employers nor lawyers and consultant were required to report such arrangements as long as they communicated only with management. The new rule requires reporting any activity when the object of the services is to directly or indirectly "persuade" employees. The rule could also impact professional and trade associations that provide certain types of training to employers on unionization issues. 

Outlook: Several lawsuits were immediately filed challenging the legality of the rule. On November 16, 2016, the federal District Court for the Northern District of Texas issued a nationwide permanent injunction preventing the rule's implementation. ​