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Last week, the National Labor Relations Board (NLRB) reversed two significant Obama-era Board decisions that had paved the way for allowing micro-unions and increased joint employer liability.

MICRO-UNIONS

In a 3-2 decision involving PCC Structurals, Inc., the National Labor Relations Board overruled Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011) (Specialty Healthcare), and reinstated the traditional community-of-interest standard for determining an appropriate bargaining unit in union representation cases. Under the Specialty Healthcare decision, unions were able to organize smaller units within a workplace that allowed a minority of workers supporting the establishment of unions in the workplace to organize. In the decision, the Board stated that “there are sound policy reasons for returning to the traditional community-of-interest standard that the Board has applied throughout most of its history, which permits the Board to evaluate the interests of all employees—both those within and those outside the petitioned-for unit—without regard to whether these groups share an ‘overwhelming’ community of interests.”

“We commend the Board on their decision which we believe restores fairness to employees and employers that was absent while the Specialty Healthcare decision was in effect,” said James Balda, Argentum President & CEO. “For senior living, we believe this will allow a majority of employees in a workplace to determine whether they wish to be represented by a union and avoids workplace fragmentation that existed under the Specialty Healthcare decision.”

JOINT EMPLOYER LIABILITY

In a 3-2 decision involving Hy-Brand Industrial Contractors, Ltd. (Hy-Brand) and Brandt Construction Co. (Brandt), the National Labor Relations Board last week overruled the Board’s 2015 decision in Browning-Ferris Industries, 362 NLRB No. 186 (2015) (“Browning-Ferris”), and returned to the pre–Browning Ferris standard that governed joint-employer liability.

In all future and pending cases, two or more entities will be deemed joint employers under the National Labor Relations Act (NLRA) if there is proof that one entity has exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control) and has done so directly and immediately (rather than indirectly) in a manner that is not limited and routine. Accordingly, under the pre–Browning Ferris standard restored, proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will not be sufficient to establish a joint-employer relationship.  The Board majority concluded that the reinstated standard adheres to the common law and is supported by the NLRA’s policy of promoting stability and predictability in bargaining relationships.

Since the Browning-Ferris decision, Argentum had become greatly concerned that senior living companies were becoming vulnerable to expansive joint-employer interpretations by the NLRB and its regional offices, potentially leading to increased liability with companies where there was no direct or immediate control.

 

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