Big changes coming at the NLRB will affect suburban businesses
The newly appointed general counsel of the National Labor Relations Board, Jennifer Abruzzo, has just given the business community a road map of her agenda, which will be a polar opposite of the Trump era NLRB.
Abruzzo comes to the key NLRB General Counsel position after serving as an attorney for the Communications Workers of America. On Aug. 12 Abruzzo issued a memorandum to all NRLB regional directors entitled Mandatory Submissions to Advice. This means that NLRB regional offices must seek advice from Washington before acting on cases with certain controversial issues. Abruzzo makes clear that she will address many areas where, in the last several years, the NLRB shifted policy toward a decidedly pro-business slant.
She also identifies other initiatives and areas that the general counsel wants to carefully examine.
The message is clear. Previous pro-business rulings will systematically be reversed. New case law will soon apply.
Most of the areas the new NLRB will address are of interest primarily only to labor lawyers and large businesses. These include expanding the scope of protected concerted activity, burden of proof in unfair labor practice trials, remedial issues, union access to company property, deduction of union dues post contract expiration, deferral and employer conduct in election campaigns.
But here are some areas that do impact local small business. Small business owners should be alert to these issues.
Employee handbook rules
Expect much closer scrutiny of facially neutral handbook rules such as confidentiality, nondisparagement, social media, media communication, civility, respectful and professional conduct, offensive language and no cameras. The prior board had found civility rules to be generally valid. Further, that prior board OK'd rules against defamatory emails, disloyalty, disparagement, self-enrichment, no photography or recordings and confidentiality. The new board can be expected to put a magnifying glass to these rules and issue decisions finding NLRA violations.
Confidentiality provisions/separation agreements and instructions
We will see closer monitoring of separation agreements that contain confidentiality and nondisparagement clauses as well as closer monitoring of workplace investigations where there are confidentiality issues. The prior board issued a clear ruling in 2019 (overturning earlier decisions) that confidentiality of investigation rules do not interfere with employee rights under the NLRA. The facts of the case are important, and in that case the confidentiality rule was limited to the duration of the investigation.
Independent contractor status will become tougher to establish. This, of course, is an issue that goes beyond NLRB concerns which typically address whether independent contractors can vote in an NLRB election.
The independent contractor issue is often seen in IRS, IDES and wage-and-hour cases. It is certain that the NLRB will be aggressive in finding an employer-employee relationship rather than independent contractor. Businesses using independent contractors should consider enhancing their compliance with federal and applicable state independent contractor laws to maximize independent contractor compliance. Independent contractor relationships that are properly structured and documented can help to minimize misclassification liability.
Small business owners should look carefully at their employee handbooks and policies to assure that they are not running afoul of NLRB decisions. The same holds true for confidentiality policies.
Independent contractor relationships will be more vulnerable to challenges in union organizing campaigns. What is certain is that labor and employment lawyers will have to be cautious in giving advice because the rules are about to change.
• Richard Wessels is the founder of Wessels Sherman. He has practiced management-side labor and employment law since 1967.