Status

Since President Joe Biden took office in January 2021, he has taken a series of controversial and unprecedented actions to reshape the leadership of the National Labor Relations Board. At the direction of this leadership, the Board has issued several radical rulemakings, memoranda and decisions that threaten businesses and the rights of workers. In response, ABC has filed legal challenges and supported legislation to counter the aggressive direction the NLRB has taken.

The reshaping of the NLRB began on President Biden’s first day in office when he fired incumbent NLRB General Counsel Peter Robb, a move without precedent since the establishment of the Office of the General Counsel in 1947. This action was followed by President Biden’s nomination of Jennifer Abruzzo to serve as general counsel of the NLRB in July 2021. Abruzzo had a long history of pro-union policies and work experience, and she had served on President Biden’s transition team for the NLRB, which recommended Biden terminate Robb. In response to her nomination, the ABC-led Coalition for a Democratic Workplace wrote the U.S. Senate urging they reject her nomination. Abruzzo was confirmed to serve as general counsel only with a tie-breaking vote by Vice President Kamala Harris. Since her confirmation, Abruzzo has worked to overturn numerous and significant NLRB precedent and dramatically expand the NLRA’s interpretation and reach.

Democrats have held a majority on the NLRB since August 2021. Together, this Democrat-led NLRB, with General Counsel Abruzzo, has advanced radical changes to federal labor law and overturned many of the commonsense policies adopted during the Trump administration.

Chair Lauren McFerran’s current term expires in December 2024. However, President Biden renominated McFerran on May 23 to serve another five year term as a member of the NLRB. If McFerran is successfully confirmed, there will be a Democratic majority on the Board through August 2026, regardless of who wins the presidency in 2024.

Decisions

• Secret Ballot Elections: In August 2023, the NLRB issued its decision in Cemex, rewriting union representation election rules to make card check the default method for determining worker representation. Card check is a system in which workers choose union representation via signed authorization cards with no guarantee of privacy, rather than via secret ballots in an NLRB-supervised election. Card check is notoriously flawed, as the U.S. Supreme Court, Congress and others have argued.
  
  The Cemex decision exposes workers to union coercion, intimidation and lies while violating a worker’s right to a private ballot. The NLRB advanced this significant policy change without accepting public input, specifically rejecting the ABC-led Coalition for a Democratic Workplace’s request to allow for amicus briefs.
  
  The Cemex decision was appealed to the U.S. Court of Appeals for the Ninth Circuit. ABC joined CDW and 14 other employer organizations in filing an amicus brief in February 2024.


• Right To Challenge Union Election Results: In ArrMaz Products, General Counsel Abruzzo called on the Board to make it an unfair labor practice for employers to challenge union election results by refusing to bargain with a union, despite this right being explicitly guaranteed by the NLRA. The NLRB’s general counsel also called for employees to be compensated for the time the employer refuses to bargain. In conformity with NLRB General Counsel Abruzzo, the NLRB ruled that refusing to bargain with a union is an unfair labor practice. However, the NLRB severed Abruzzo’s call for employees to be compensated for the time the employer refused to bargain, allowing it to issue a decision on the case while leaving the remedy’s decision up for future consideration.
  
  The ABC-led CDW filed a motion for the NLRB to accept its amicus brief in the case, in which CDW asserted that Abruzzo’s proposed remedy would “chill the rights of every employer seeking to petition the courts to review the Board’s certification of a union.”
  
  The Board’s decision in the case is undergoing consideration by the U.S. Court of Appeals for the Eleventh Circuit.


• Employee Handbook Provisions: In August 2023, the NLRB issued its decision in Stericycle, overturning the Trump-era NLRB’s 2017 Boeing decision. In Stericycle, the Board adopted a strict new standard for determining if an employer’s workplace rules violate the NLRA and workers’ right to collectively bargain.
  
  ABC joined CDW in filing an amicus brief in the case calling on the Board to reaffirm the Boeing standard, which required the Board to consider the impact of a workplace rule on the employees’ rights as well as the legitimate business justification for that rule.


• Employee Classification: In June 2023, the NLRB issued its decision in The Atlanta Opera, which narrowed the independent contractor standard under the NLRA, making it nearly impossible for workers to qualify as independent contractors. The standard severely undervalues the significance of a worker’s entrepreneurial opportunity for economic gain when determining the worker’s classification.
  
  ABC joined CDW in filing an amicus brief in the case, highlighting that federal courts have already rejected the NLRB’s standard on two separate occasions.

Rulemakings

• Joint Employer: In March 2024, in a victory for ABC, a federal judge in the U.S. District Court for the Eastern District of Texas vacated the Board’s 2023 joint employer final rule and the Board’s rescission of the preexisting ABC-supported 2020 rule. This means the 2020 NLRB final rule, which provides clear criteria for companies to apply when determining joint-employer status under the NLRA, remains in effect. The Board has appealed the decision to the U.S. Court of Appeals for the Fifth Circuit.
  
  ABC is pleased the court blocked the NLRB’s radical and overbroad joint employer standard, which would have disrupted long-established, efficient operational processes that are followed by construction service providers who work together to build America. See ABC’s statement in support of the decision.
  
  Under the 2023 final rule, contractors would have been vulnerable to increased liability and risk, making them less likely to hire subcontractors, most of which are small businesses. The rule clearly would have had a harmful effect on a significant segment of the construction industry: small businesses.
  
  By reinstating the 2020 final rule, contractors will be better able to work and coordinate with multiple employers without fear of being unexpectedly and unfairly found to be joint employers.
  
  In November 2023, ABC joined the U.S. Chamber of Commerce and a coalition of business groups in filing a lawsuit challenging the NLRB’s final rule for violating the NLRA and for acting arbitrarily and capriciously in violation of the Administrative Procedure Act.
  
  Moreover, on April 10, 2024, Congress passed a Congressional Review Act resolution disapproving and nullifying the NLRB’s joint employer rulemaking. ABC sent a key vote letter to senators urging them to support the resolution. Unfortunately, President Biden vetoed the resolution, and the House’s 214-191 vote to override the veto fell short of garnering the two-thirds majority required to pass the measure. However, the resolution’s passage in the House and Senate sends a strong message to the administration as they continue to implement harmful labor policies.


• “Ambush” Election Rule: Despite years of litigation, the Biden administration’s NLRB revived a controversial policy from the Obama era in the form of its representation-case procedures final rule. The direct final rule, issued without notice or the opportunity to comment, essentially restores provisions of the 2014 “ambush” election rule and rescinds the remaining ABC-supported provisions of a 2019 final rule that largely tried to unwind the 2014 rulemaking. The rule applies to representation petitions filed on or after Dec. 26, 2023. Under the rule, employers will have less time to respond to representation petitions.
  
  The Board’s efforts to again reduce the amount of time between when a union files a representation petition and an election takes place imposes unnecessary urgency on employers, leaving them susceptible to violations of their due process rights and deprives employees of the time needed to become fully informed before deciding whether or not to unionize. Ultimately, the rule infringes on the rights of employers and employees to a fair pre-election process and will have a particularly adverse impact on small construction firms, which typically do not employ legal counsel.
  
  To learn about the changes included in the 2023 final rule, see ABC’s Newsline article, NLRB comparison chart of prior and new representation case procedures, NLRB fact sheet, NLRB press release and ABC general counsel Littler Mendelson’s analysis of the final rule.


• Representation Election Procedures: In November 2022, the NLRB issued another proposed rulemaking altering the representation-case procedures, which addresses election-blocking charges, voluntary recognition and construction industry bargaining relationships. The proposal would rescind the ABC-supported 2020 NLRB final rule, which was intended to “better protect employees’ statutory right of free choice on questions concerning representation.”
  
  In February 2023, ABC submitted comments in opposition to the proposed rule. ABC also signed on to the CDW’s comment letter along with 12 other employer organizations. The CDW argued that the proposed rulemaking would “negatively affect the Board’s representation case jurisprudence, undermine the agency’s statutory goals and reputation, diminish employee free choice and upset the balance of countervailing interests.”

Memos

• Captive Audience Meetings: In April 2022, General Counsel Abruzzo issued a memo to all NLRB field offices declaring that mandatory meetings held by employers to discuss unionization with workers violates a worker’s “right to not listen to such speech.”
  
  This memo essentially eliminates employers’ free speech rights during union organizing campaigns in the workplace as well as workers’ right to be fully informed when considering union representation. The NLRB has protected employer speech rights for 74 years, and the Supreme Court has repeatedly recognized these meetings as an extension of employers’ First Amendment rights.


• Noncompetes: In May 2023, NLRB General Counsel Abruzzo issued a memo to all NLRB field offices declaring that overbroad noncompete agreements were unlawful except in cases where their purpose is to restrict managerial or ownership interests in a competing business. This decision may deter employers from investing in employee advancement.

Desired Outcome

The NLRB was intended to serve as a neutral arbiter of federal labor law. ABC supports balanced policies that reflect the NLRB’s original mission to fairly interpret and enforce the NLRA. Unfortunately, the NLRB under the Biden administration has decidedly abandoned its role and is now solely focused on expanding and reinterpreting the law to favor unions at the expense of workers and employers alike.