New NLRB rules present fresh challenges for HR departments

2023 has been a bit of a blockbuster year for the National Labor Relations Board, with changes ranging from how to determine joint-employer status to whether company policies “chill” employees’ free expression.

Anne Marie Buethe, an attorney at Stinson’s Minneapolis, Minnesota office, specializes in employment issues. She discusses how employers can respond to many broad changes coming out of the NLRB this year.

The new joint-employer rule

On Oct. 26, the NLRB issued its Final Rule that addresses the standard for determining joint-employer status. The Final Rule, which takes effect Dec. 26, is broader than the current standard, permitting the Board to determine that there is joint-employer status so long as an entity possesses the authority to control one or more of seven enumerated essential terms and conditions of employment.

“The biggest change [in this rule] is that the exposure level for an employer has gone up through a joint-employer finding,” said Buethe. “The risk of being found a joint employer, even if that is not your intention … has gone up.”

Buethe says that employers who frequently engage in subcontracting or working with temp agencies are at increased risk. Before the new joint-employer rule, contracts with those temp agencies could be crafted in a way that the employer could retain the ability to indirectly control the employment relationship with the temp agency’s employees. However, employers now have the onus to show that they are not joint employers. If employers’ contracts reserve the ability to indirectly impact employment relationships with the temp agency’s employees, it could now be enough to prove a joint-employer relationship.

This can have tremendous impacts on those employers, who then have the obligation to uphold and comply with the National Labor Relations Act, including employees’ Section 7 rights. That obligation is not only for the employer’s employees but also for those of the joint employer.

Things get even more complicated if you are in a joint employer relationship with a company that is unionized and you are not.

“You will have the obligation to bargain with that union over the terms and conditions that you control in that relationship,” Buethe said. “You will have to bargain with a group of employees that you maybe did not even intend to be your employees and you did not intend to have that bargaining relationship.”

Other big changes

Buethe maintained that the biggest changes announced this year will impact unionized and non-unionized employers alike. In February 2023, the NLRB issued a decision in McLaren Macomb, which held that employers may not offer severance agreements requiring employees to broadly waive their rights under the National Labor Relations Act.

“As an employer, look at the particular separation and ask whether you need, in this particular context, to insist on confidentiality or non-disparagement,” Buethe said.

This requires looking at the relationship and seeing if you need those protections. If you do, Buethe explained that they need to be narrowly tailored. If not, Buethe recommends skipping them. “Under the law, even offering those and using the wrong language can be unlawful,” she cautioned.

In August of 2023, the NLRB issued a decision in Stericycle, Inc., which adopted a new legal standard when evaluating employer work rules that have been challenged as facially unlawful under Section 8(a)(1) of the NLRA.

“Employers — unionized and nonunionized alike — should be reviewing practically all of their handbook policies,” Buethe advised. “What the Board is looking for under this law is do these policies and is the language framed in such a way that an employee can reasonably view it as limiting their ability to talk about their wages and the terms and conditions of their employment.”

Rather than the previous standard, which looked at whether speech was actually chilled, the new standard requires showing whether it could chill the speech. Additionally, it previously used the objective person standard and now it looks at whether the employee is economically dependent. “And all employees are economically dependent.” Buethe added.

Social media policies are another area where employers could get into trouble. While it used to be permissible to instruct employees to not speak about the employer on Facebook, things have changed. For instance, if an employee wants to vent on Facebook about a pay raise that they do not believe was fair, that is a protected right. If the social media policy in the handbook is so broad that an employee believes that he is unable to do that, then it could be rendered unlawful.

Just a few weeks after Stericycle, the NLRB issued a decision in Cemex Construction Materials Pacific, LLC. This introduced a new framework to determine when employers are required to bargain with unions without a representation election. For decades, Buethe noted, a union coming in to represent the employees would need to file a petition with the NLRB and then have an election. The onus has shifted to the employer now. If the union believes it has the requisite support it will go to the employer and ask for recognition, and, if the employer declines, the employer then has 14 days to file a petition for an election. If the time period is waived, the employer could have the obligation to bargain with and recognize the union.

Looking ahead

“This is kind of a prime time for HR. At the end-of-year, as you are looking at rolling out updates to a handbook, look at this as an organic opportunity to revisit your policies with the closest eyes on social media, confidentiality, use of employer technology policies,” Buethe recommended. “Those are restrictions [that] tend to be the most vulnerable to [failing to comply with] what the Stericycle case is requiring.”

If a company believes that those policies need to be in the handbook, Buethe stated, then they should take action to put clarifications in so that they are not in violation.

“Conflict-of-interest policies, depending on how broad they are, can raise concern,” Buethe stated.

She also recommended that everyone take a look at their severance agreement templates. “The law is such that if you offer it and it has the wrong language, you are in violation,” Buethe cautioned.

Her final recommendation as employers enter 2024 is to look for organic, proactive opportunities to connect with employees, especially with remote or hybrid workforces. These could be larger check-ins or one-on-ones. “Employers need more touchpoints with employees so they are not out of the loop until they learn too late that there has been dissatisfaction,” she said.