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NLRB Must Reconcile Precedent Applying NLRA Definition of Labor Organization to Internal Company Organizations: DC Circuit
Practical Law Legal Update w-030-6434 (Approx. 4 pages)
NLRB Must Reconcile Precedent Applying NLRA Definition of Labor Organization to Internal Company Organizations: DC Circuit
by Practical Law Labor & Employment
| Law stated as of 12 Jan 2024 • USA (National/Federal) |
In Communications Workers of America v. NLRB, the DC Circuit held that the National Labor Relations Board (NLRB) must reconcile its precedent concerning whether an internal company organization falls within the National Labor Relations Act's (NLRA) definition of a labor organization.
On April 16, 2021, in Communications Workers of America v. NLRB, the DC Circuit examined NLRB precedent interpreting the requirement in the NLRA's definition of labor organization that the organization exist at least in part to "deal with" an employer concerning conditions of work, among other things, to determine whether the employer unlawfully dominated a labor organization in violation of Section 8(a)(2) (29 U.S.C. §§ 152(5), 158(a)(2)). Specifically, the court:
- Compared cases cited by:
- the NLRB for its position that an entity does not "deal with" an employer, and therefore is not a labor organization under the NLRA, unless it makes "group proposals" for the employer's acceptance or rejection (Electromation, Inc., 309 N.L.R.B. 990 (1992); E.I. du Pont de Nemours & Co., 311 N.L.R.B. 893 (1993); EFCO Corp., 327 N.L.R.B. 372 (1998); Polaroid Corp., 329 N.L.R.B. 424 (1999)); and
- the union indicating that employee committees or teams whose individual members advance proposals for the employer's consideration on a representational basis on behalf of other employees may be labor organizations within the NLRA's purview (Dillon Stores, 319 N.L.R.B. 1245 (1995); Reno Hilton Resorts Corp., 319 N.L.R.B. 1154 (1995)).
- Remanded the Section 8(a)(2) allegation for the NLRB to clarify its standard for distinguishing group proposals from proposals of employee representatives for purposes of determining whether an internal company organization constitutes a labor organization under the NLRA.
However, the court affirmed as supported by substantial evidence the NLRB's determination that the employer did not unlawfully solicit grievances during an ongoing union organizing campaign in violation of Section 8(a)(1) of the NLRA when it created an internal organization to solicit employee and customer "pain points" (see Leland Stanford Jr. Univ., 240 N.L.R.B. 1138 (1979)). This program did not reasonably tend to undermine employee support for union organization because:
- There was no outstanding representation petition when the program was established.
- The record contained no evidence of the union's organizational efforts among employees at that time.
The DC Circuit's decision in Communications Workers of America affords the NLRB an opportunity to clarify inconsistent precedent and articulate the standard that it will apply going forward when determining what constitutes a labor organization under the NLRA. The agency's decision on remand should allow employers to better determine which internal company programs, committees, or other similar entities may be vulnerable to being deemed labor organizations with the potential to give rise to Section 8(a)(2) concerns.
UPDATE:
On November 18, 2022, in T-Mobile USA, Inc., a Board panel majority held that the employer's system of employee representatives raising customer and employee "pain points" to management constituted a labor organization under Section 2(5) of the NLRA. The panel majority rejected the principle that employee representatives must raise "group proposals" approved by employees for the employer's acceptance or rejection to be considered a labor organization. As there was no dispute that the employer dominated and supported this feedback channel system with employee representatives at times addressing employment conditions, the NLRB held that the employer violated Section 8(a)(2) of the NLRA. (T-Mobile USA, Inc., 372 N.L.R.B. No. 4 (Nov. 18, 2022).)
UPDATE:
On January 12, 2024, the DC Circuit affirmed the NLRB's conclusion.. The court denied the employer's petition for review and granted the NLRB's cross-application for enforcement of the order requiring T-Mobile USA, Inc., to disband the employee feedback channel, end all support for the channel, and post notices to call-centers where the feedback channel operated. (T-Mobile USA, Inc. v. NLRB, (D.C. Cir. Jan. 12, 2024); for more information, see 2024 Traditional Labor Law Developments Tracker: Section 8(a)(2): Employer Dominance Over or Unlawful Assistance to Union.)