2023 was a landmark year for labor in the US, and 2024 is on track to keep up. Last year, the NLRB’s General Counsel was relentless in overturning precedential decisions and standards impacting both unionized and non-unionized employers. The result was an overall employee-friendly shift to labor laws encouraging both unionization and concerted employee actions
In this 60-minute session, our team will highlight what employers in New York and the surrounding areas need to know to effectively navigate 2024, with practical tips to handle the latest developments including:
In 2023, we helped US employers overcome a host of new challenges across the employment law landscape. Many companies started the year with difficult cost-cutting decisions and hybrid work challenges. More recently, employers faced challenges around intense political discourse boiling over in the workplace. We’ve worked hard to keep our clients ahead of the curve on these
Many thanks to our Franchise, Distribution & Global Brand Expansion colleague Will Woods for co-authoring this post.
On October 25, 2023 the National Labor Relations Board issued a final joint employer rule (accompanied by a fact sheet) making it easier for multiple companies to be deemed “joint employers” under the law. This legal classification can have profound consequence by making independent entities now liable for labor law violations as well as obligations to negotiate with unions.
Under the new rule, an entity may be considered a joint employer of a group of employees if the entity shares or codetermines one or more of the employees’ “essential terms and conditions of employment.” The Board defines the essential terms and conditions of employment as:
In issuing the final rule, the NLRB rescinded the prior 2020 joint employer rule (a remnant of the Trump-era Board), which provided that a business is a joint employer only if it both possesses and exercises substantial direct and immediate control over one or more essential terms and conditions of employment-with “substantial” meaning control that is not exercised on a “sporadic, isolated, or de minimis basis. ” (For more on the 2020 rule, see our prior blog here.) The 2020 rule’s higher threshold meant a lower likelihood that businesses would be considered joint employers. The new rule’s impact on employers could be wide-ranging, and particularly difficult for non-unionized employers who are not used to navigating typical union activity such as being required to show up at the bargaining table, handling unfair labor practice charges, or dealing with picketing by a vendors’ employees (which would have previously been considered an illegal secondary boycott).
The new rule rejects the previous rule’s focus on “direct and immediate control.” Instead, now, indirect or reserved control is sufficient to establish joint employer status. Thus, if a company has contractual authority over certain employment terms but never acts on that authority, that may be enough to establish a joint employer relationship. The same goes for a company that exercises authority over another company’s workers through a “go-between” company or intermediary, or a company requiring a vendors’ employees to follow certain health and safety rules while on-premises. In these instances, liability under the National Labor Relations Act, including the requirement to negotiate with a union, could ensue.Continue Reading NLRB Announces Most Expansive Definition of Joint Employment Yet, With Potential Significant Implications for Franchisors, Staffing Agencies and More
Employee handbooks are at the top of employers’ key priorities.
Why? The NLRB’s recent decision in Stericycle adopted a retroactive “employee friendly” standard for workplace rules, including those often included in handbooks. In addition, the new year often rings in new laws requiring changes to workplace policies often included in handbooks. And, the US Supreme
The National Labor Relations Board has continued its recent spate of employee-friendly decisions with a new one that will require employers to think through work rules, policies and handbook provisions to determine whether they could–hypothetically, from an employee’s perspective–restrict an employee’s Section 7 rights.
On August 2, 2023, the National Labor Relations Board (“NLRB” or “the Board”) issued a 3-1 split decision in Stericycle, Inc., bringing back and modifying a prior standard for assessing whether an employer’s facially neutral work rules and policies unlawfully “chill” an employee’s Section 7 rights. Under the new standard, the NLRB will peer through the lens of a “reasonable employee” (more on that below) to determine whether an employer’s work rules and policies have a tendency to restrict Section 7 rights. For employers, this means a complete reassessment of their workplace rules and policies–and the handbooks that those rules and policies are housed in.
The new standard (which is the Board’s prior Lutheran Heritage standard, brought back to life and modified) requires the NLRB General Counsel to prove that a challenged work rule has a reasonable tendency to “chill” employees from exercising their Section 7 rights. (Quick reminder: Section 8(a)(1) of the National Labor Relations Act (NLRA) makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the Act, including the right to form, join or assist labor unions, to bargain collectively and to engage in other concerted activities for the purpose of collective bargaining.)
How is this done? That’s the rub for employers.
As an initial matter, the Board will interpret the challenged work rule from the perspective of an employee who is (i) subject to the rule, (ii) economically dependent on the employer, and (iii) also contemplates engaging in a protected concerted activity.
In addition:
The Stericycle standard has the potential to render a multitude of employment policies and workplace rules unlawful, and will be applied retroactively. Employers should review existing (or new) employee work rules, policies, and handbook provisions to ensure:
As discussed in our blog here, in February the National Labor Relations Board issued the McLaren Macomb decision prohibiting employers from “tendering” to employees separation or severance agreements that require employees to broadly waive their rights under the National Labor Relations Act.
Then, on March 22, the NLRB General Counsel Jennifer Abruzzo issued guidance addressing
We are pleased to share a recent HRD America article, “Severance agreements can’t include non-disparagement, confidentiality clauses,” with quotes from Michael Brewer. This article discusses the recent NLRB ruling that companies can no longer offer severance agreements that include non-disparagement and confidentiality clauses. This ruling could potentially discourage some companies from offering severance packages altogether, while other
On February 21, the National Labor Relations Board (NLRB) issued a decision in McLaren Macomb holding that employers may not offer employees separation or severance agreements that require employees to broadly waive their rights under the National Labor Relations Act (NLRA). In McLaren, a hospital furloughed 11 employees, presenting each with a severance agreement and general release that contained confidentiality and non-disclosure provisions. (See the exact provisions copied below.) The Board majority held that merely “proffering” a severance agreement containing unlawful confidentiality and non-disparagement provisions violated the NLRA because conditioning the receipt of benefits on the “forfeiture of statutory rights plainly has a reasonable tendency to interfere with, restrain, or coerce the exercise of those rights.”
At first blush, this may feel like a sweeping change requiring immediate action. However, it is important to consider this decision with a grain (or two) of salt, breathe and thoughtfully plan your next steps. The key points identified below are designed to help you think through a tailored approach for your organization¾there is not a one-size-fits-all solution. Your approach will depend on the type of workforce you have, your risk tolerance and what you are trying to protect. We are standing by, ready to assist, should you need further guidance.
Key Points
Special thanks to Scott McMillen.
Looking Ahead: Exploring the Key Themes and Recommendations for US and Global Employers in 2023
Between maintaining business continuity and keeping your workforce safe, we know there’s been little time to track the rapidly changing employment, compensation and mobility law landscape — in Illinois, across the US, and globally.
