Hunton Employment & Labor Perspectives

Raytheon Network Centric Systems, 365 NLRB No. 161 (Dec. 15, 2017) (“Raytheon”), is one of several decisions issued this month by the National Labor Relations Board’s (the “Board”) new Republican majority which reverse Obama-era precedent.  Raytheon overrules the Board’s decision E.I. du Pont de Nemours, 364 NLRB No. 113 (2016) (“DuPont”), which limited the changes employers can make unilaterally in a union environment.  Raytheon clarifies the degree to which employers may rely on past practice to make unilateral changes to terms of employment once a collective bargaining agreement has expired, and, more specifically, offers welcome guidance to employers with regard to continuation of health benefits under those circumstances.

Earlier this month, the U.S. Department of Labor’s Wage and Hour Division issued a Notice of Proposed Rulemaking (“NPRM”) seeking to repeal a 2011 rule that significantly impacted the compensation of hospitality workers.  Specifically, the NPRM proposes to allow hospitality employers to control the distribution of the tips they pool assuming their employees are paid the full minimum wage.  By way of background, the FLSA requires employers to pay employees a minimum wage (currently $7.25 per hour) plus overtime for all hours worked over 40 in a single workweek.  Employees who “customarily and regularly receive tips” must still receive the minimum wage, but employers may elect to take a “tip credit” by counting up to $5.12 per hour of those employees’ tips toward the minimum wage, meaning employers may pay a reduced wage of $2.13 to tipped employees.  Historically, employers that take the tip credit have been prohibited from sharing money from a tip-pooling system to employees who do not traditionally receive direct tips (cooks, dish washers, etc.).  In 2011, the DOL extended the tip-pooling prohibition to apply to employers even if they do not take the tip credit and pay their employees the full federal minimum wage.

During a week that brought several notable decisions, the National Labor Relations Board issued a ruling on Friday, December 15, 2017, overturning its controversial 2011 Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011) (“Specialty Healthcare”) decision, which held that in order for employees to be included in a collective bargaining unit, employers had to prove the employees shared an “overwhelming community of interest” with one another.  The unions argued that the “overwhelming community of interest” burden was all but impossible to meet and effectively allowed unions to create “micro-units” of any number, group, or sub-group of employees the unions saw fit.  This in turn meant that an employer could be faced with negotiating collective bargaining agreements with multiple groups of employees who often shared the same schedule, workplace, and general terms and conditions of employment, but nonetheless were represented by different locals or divisions of the same or multiple unions.  In one particularly glaring example, the Board approved a union’s request for separate bargaining units in each of nine different graduate student departments at Yale University despite the fact that the union already represented existing, university-wide bargaining units.

On December 14, 2017, in a 3-2 decision along party lines, the National Labor Relations Board (the “Board”) issued a decision in The Boeing Company, 365 NLRB No. 154 (2017) case.  This is a significant and long-awaited victory for employers grappling with unfair labor practice charges stemming from facially neutral workplace rules and signals the Board’s intent to retreat from regulating non-union activity.  Specifically, Boeing  rescinds the onerous workplace rule standard in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004) in favor of a new, more rational test.

The National Labor Relations Board issued a much-anticipated decision on Thursday, overruling its controversial 2015 Browning-Ferris decision that unions and employees argued drastically expanded the definition and scope of the Board’s joint-employer doctrine.  In Browning-Ferris, the Board departed from decades of precedent and held that entities who merely possessed—as opposed to directly and immediately exercised—control over workers would be deemed joint employers for purposes of assessing liability under the National Labor Relations Act.  The Board used the Browning-Ferris decision to expand its reach under the joint-employer doctrine to include, for example, companies that relied on staffing agencies and in some cases, parent companies that did not exercise immediate or direct control over a subsidiary’s workers, but had the potential authority to affect certain terms and conditions of employment.  The Browning-Ferris decision faced heavy criticism from employers as well as an appeal of the decision itself to the D.C. Circuit Court of Appeals.