John Ring’s tenure at the NLRB comes to an end today. It’s a shame to see him go. He’s truly one of the great Board members and chaired during an incredibly difficult time. This week we got a sneak preview of what the next couple of years are going to look like. It’s not pretty.
We’ve had 3 big decisions announced over the last 3 days and expect more through the end of the year. One breaks new ground, one flip-flops and the other keeps things where they were.
The groundbreaking case is Thryv Inc. This decision broadly expands the Board and General Counsel’s authority to seek “foreseeable pecuniary harm” or what’s more commonly called consequential damages. The Board majority (McFerran, Wilcox and Prouty) goes WAY out of their way to say they are NOT awarding consequential damages. That’s because they know they don’t have statutory or constitutional authority to award them. Consequential damages are awarded in torts claims, and the 7thAmendment provides a right to a jury trial in these cases.
Instead of calling these damages “consequential” they call them “foreseeable.” Do you see the difference? Probably not, since they are basically interchangeable terms in tort law. The Board punts the question of foreseeability to compliance proceedings so there will be more to come. But the Board majority dismisses the 7th Amendment implications of their decision based on a 1937 Supreme Court opinion related to back pay awards that are clearly authorized under the statute.
As John Ring and Marvin Kaplan write in dissent: “On its face, this standard would permit recovery for any losses indirectly caused by an unfair labor practice, regardless of how long the chain of causation may stretch from unfair labor practice to loss, whenever the loss is found to be foreseeable. In our view, this standard opens the door to awards of speculative damages that go beyond the Board’s remedial authority.”
There was no reason to attempt this expansion of remedies – the Board majority itself seems to struggle with exactly what harms in this case can’t be remedied under the prior standard. And Federal Courts are not going to let an Administrative agency with suspect credibility (because of overreach and ping-ponging precedent like what you see this week) start holding administrative tort cases. If you think you’ve got a backlog of cases now wait until you see the appeals of these cases.
AMERICAN STEEL CONSTRUCTION
In American Steel Construction the same Board majority decided to bring back micro-units by reinstating the “overwhelming community of interest” standard from the 2011 Specialty Healthcare decision. This decision essentially lets unions cherry pick a bargaining unit out of any group of employees. The only way the unions preferred group can be changed is if the employer proves an overwhelming community of interest between the group picked and other employees.
This standard was flawed in 2011 and it’s flawed now. The normal “community of interest” standard has worked well for virtually the entire life of the Act, and it furthers industrial peace. It ensures that all employees likely to be impacted by union representation get a say on whether they want to be represented. Fractured bargaining units are terrible for everyone but union organizers. The only purpose they serve is to make it easy for a union to get a foot in the door of a location where it can’t prove its value to a large number of workers.
If there is any silver lining to this one, it’s that even under Specialty Healthcare there weren’t that many micro-unit cases. That’s because real union organizers understand that if you can’t convince more than a few people a union is a good idea you’re not going to have a successful bargaining unit anyway (not to mention you lose a massive amount of money trying to bargain and administer contracts for a handful of members). Today’s organizing environment is different, so we may see more micro-units. But the basic economics don’t change – these fractured units make no sense.
The third decision released this week was Sunbelt Rentals which reaffirmed that when an employer interviews an employee to defend an unfair labor practice case, they must provide what’s called a Johnnie’s Poultry disclaimer to the employee. Basically, the employer must reassure the employee that their participation is voluntary and that nothing bad will happen to them if they participate. Further the meeting must be free of coercion, hostility to the union, and the questions must be limited to the legal proceeding versus seeking information about other union matters.
You may be wondering why it’s so important for the Board to issue a big opinion that basically says we’ll keep doing things the way we have been since the 1960’s. Good question. There was a little new ground here. The same Board majority of McFerran, Wilcox and Prouty (get used to that) decided to make the disclaimer a per se rule or a “bright line” test. In other words, if the employer can’t prove they provided the disclaimer they have automatically violated the Act. They also adopted a “totality of the circumstances” standard.
Members Ring and Kaplan note in their dissent that Courts of Appeal have had a problem with this per se standard and, as I mention above, are likely to continue to have problems with Administrative overreach like this. Instead, they propose a reasonable approach of presuming an employer has violated the Act when they don’t provide the disclaimer, but letting them have a chance to rebut the presumption by proving that the meeting was not coercive. But these are not the days for reasonable approaches.
This is just the tip of the iceberg. There will be a number of other big decisions announced over the next several weeks. Very soon we’ll see what the Board majority thinks about a return to Joy Silk, mandatory employee meetings, and much more. Labor law has been surprisingly stable over the last couple of years. So rest up over the holidays. My prediction for 2023 is that we are going to get several years worth of labor law developments in a few months.