Congressional Republicans Call for Reform at NLRB

By Allen Smith, J.D. Feb 17, 2017

​The National Labor Relations Board (NLRB) has made employers' operations unnecessarily cumbersome over the past eight years of President Barack Obama's administration, according to Republican members of the House Education and the Workforce Committee during a Feb. 14 oversight hearing. Democratic members responded that the Republicans were unfairly taking aim at unions and employees.

The NLRB is supposed to be a neutral arbiter, "although you wouldn't know it from the actions it has taken in recent years," said Rep. Tim Walberg, R-Mich., and chairman of the Subcommittee on Health, Employment, Labor and Pensions, which conducted the hearing.

He faulted the Obama board for greenlighting:

"Small business owners and entrepreneurs deserve better," Walberg said. "Workers and families deserve better. And this Congress will demand better. In the weeks and months ahead, we will do everything we can to turn back this failed, activist agenda and restore balance and fairness to the board."

Hearing Testimony

"The board itself must undertake some of these changes—or at least take a second look at the controversial decisions issued under the previous administration," testified Kurt Larkin, an attorney with Hunton & Williams in Richmond, Va. "This cannot take place, however, until the board is fully constituted. Only three members are presently serving terms, leaving two seats open. The board has a long tradition of not overruling precedent without a three-member majority. With two Democrats and one Republican currently sitting on the board, changes are unlikely to happen."

The new joint employer standard in particular has left franchisees in limbo, as franchisors are now more hesitant to help out franchisees for fear of being labeled joint employers, testified Reem Aloul, the president of Zay Enterprises, doing business as BrightStar Care of Arlington, Va., a home care franchise.

"The decision by government officials here in Washington to change the joint employer standard is a baffling one," Aloul said. "The new joint employer standard created by the NLRB in August 2015 is based on indirect control and even reserved, unexercised control. The policy is so broad and unpredictable, it could be applied to nearly any conceivable business relationship. Under this joint employer policy, it's a wonder why franchisors provide any guidance or support to, or even communicate in any way with, their franchisees out of fear of joint employment lawsuits."

Susan Davis, an attorney with Cohen, Weiss and Simon in New York City, rejoined that she was "here to respond to some of the overheated rhetoric and criticism related to recent actions of the NLRB." The win rate of unions following the modernized election rules was no different than before the rules revision, she said. And the average median number of people in collective bargaining units remained the same—26—as it did before the supposed proliferation of micro-bargaining units.

As for the decision broadening the definition of joint employer, the board found that prior decisions "improperly repudiated its earlier reliance on reserved control and indirect control as indicia of joint employer status without any analysis or justification," she testified.

The NLRB general counsel's treatment of another franchisor, Freshii (which bills itself as a deli with fresh food), is illustrative of the individual analysis that will be applied in each case, she added. Freshii did not exert sufficient control over the terms and conditions of employment of its franchisees' employees to be considered a joint employer, even when applying the board's broader standard.

The board's decisions finding class-action and collective waivers to be unlawful "has also engendered unjustified criticism," she said. She asserted that there was nothing new about these rulings, but instead "long-accepted law" was applied to employer policies that effectively nullified employees' right to act collectively.

Board Decisions Have Real Impact

Rep. David Roe, R-Tenn., called the "ambush" election rule "a solution looking for a problem."

Larkin said it severely impinges on the amount of time employers have to communicate with employees about unions during an election.

Representing an opposing viewpoint, Rep. Marcia Fudge, D-Ohio, criticized the hearing as "the 25th hearing on this same exact subject" since the Republicans took control of the House of Representatives in 2011. She claimed the Republicans were trying "to eviscerate all workers' rights" and that the hearing was an "attack on unions."

Rep. Carol Shea-Porter, D-N.H., recalled that she once worked in a nonunionized factory where a worker fainted on the line and was told to "'pick up check. You're done.'" Without union protections, employees may have no recourse or protections against these kinds of actions. She urged those at the hearing to remember that they were talking about people who typically earn a minimum wage that's "impossible to live on."

"Remember we have real people's lives at stake," she said—people who don't have the opportunity to defend themselves in these kinds of settings.

Davis noted that individuals in nonright-to-work states, where unions can be organized, on average earn $6,000 less than those in right-to-work states and that 80 percent of them have health care versus 50 percent in right-to-work states.

But Raymond LaJeunesse Jr., vice president and legal director of the National Right to Work Legal Defense Foundation in Springfield, Va., testified that when cost of living is taken into account, people earn more in right-to-work states.

[SHRM members-only HR Q&A: Right-to-Work: What is a "right-to-work state"?]

And Rep. Rick Allen, R-Ga., said he was disturbed by the pitting of employers versus employees. He told of one employee working at his business for 40 years who was out of work for six weeks to donate a kidney. The business paid for the whole time off. "I don't think we would have if we'd been unionized," he said. Paid time off might not be provided for in some collective bargaining agreements (CBAs), and unionized companies might hesitate to depart from the terms of painstakingly negotiated CBAs.

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