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Full Steam Ahead: NLRB Top Lawyer Signals Continued Focus On Injunction Actions

Last month, the U.S. Supreme Court issued a decision in Starbucks v. McKinney clarifying the standards courts must use when evaluating requests by the National Labor Relations Board (NLRB) for injunctive relief under Section 10(j) of the National Labor Relations Act (NLRA). Many view this as, at least in some jurisdictions, heightening the standard the agency must meet in these cases.

NLRB General Counsel Jennifer Abruzzo issued a memo on July 16 noting this ruling will not affect how her office views Section 10(j) cases. According to the press release, “General Counsel Jennifer Abruzzo reaffirmed her commitment to seeking Section 10(j) injunctions after the Supreme Court’s recent decision in Starbucks Corp. v. McKinney, which set a uniform four-part test applicable to all Section 10(j) injunction petitions.”

The statement then goes on to note, “General Counsel Abruzzo explained that, while the Supreme Court’s decision in Starbucks Corp. provides a uniform standard to be applied in all Section 10(j) injunctions nationwide, adoption of this standard will not have a significant impact on the Agency’s Section 10(j) program as the Agency has ample experience litigating injunctions under that standard and has a high rate of success in obtaining injunctions under the four-part test — a success rate equivalent to or higher than the success rate in circuit courts that applied the two-part test.”

Employers should take note, as the NLRB does indeed have a high success rate when seeking these injunctions against employers. For example, in fiscal year 2020, the agency prevailed in every 10(j) case it brought. These actions can be costly from a time and resources perspective for companies, as they are then forced to defend against alleged labor violations before both the NLRB and in federal court simultaneously.

Accordingly, while the recent Supreme Court ruling did offer a uniform standard and clarity around the legal framework for 10(j) cases, it appears this won’t cause a dip in the amount of such matters the NLRB brings.

U.S. Supreme Court Raises Standard for Labor Board When Seeking 10(j) Injunctions

The U.S. Supreme Court issued a decision directing district courts to use the traditional four-part test when evaluating whether a preliminary injunction should issue at the request of the National Labor Relations Board pending litigation of a complaint under the National Labor Relations Act. No. 23-367 (June 13, 2024).

The decision settles the split among the federal circuit courts over the standard that should be applied when the Board files a motion for a “10(j)” injunction, named for the section of the Act that authorizes the Board to seek injunctive relief. Circuit courts were split on which test should apply: the traditional four-part test, a more lenient two-part test, or a hybrid of the two.

The Court’s decision raises the bar for the Board, requiring it to meet each prong of the four-part test for a court to grant an injunction. In particular, it will be more difficult for the Board to establish it is “likely to succeed on the merits,” as opposed to the more lenient standard espoused by the Board that “there is reasonable cause to believe that unfair labor practices have occurred.”

The Court vacated and remanded the case to the U.S. Court of Appeals for the Sixth Circuit to reevaluate the merits of the injunction request under the four-part test.

10(j) Injunctions

Section 10(j) of the Act allows the Board to seek preliminary injunctions before federal district courts against both employers and unions to stop alleged unfair labor practices during the pendency of the Board’s administrative processing of an unfair labor practice charge. Section 10(j) authorizes a district court “to grant to the Board such temporary relief … as it deems just and proper.”

The requests are rare; the Board has sought only 20 such injunctions since 2023, according to the Board’s website. Nonetheless, the standard a court will use in evaluating the injunction request has been determinative of whether the relief was granted.

Prior Standards

The U.S. Court of Appeals for the Sixth Circuit, as in this case, used a two-part test to assess whether the Board was entitled to an injunction. The two-part test examined whether “there is reasonable cause to believe that unfair labor practices have occurred,” and “whether injunctive relief is ‘just and proper.’” McKinney v. Ozburn-Hessey Logistics, LLC, 875 F.3d 333 (2017). The Supreme Court noted in its latest decision that the Board could establish reasonable cause “by simply showing that its ‘legal theory [was] substantial and not frivolous.’”

Conversely, other courts, such as the U.S. Court of Appeals for the Seventh and Eighth Circuits applied the four-part test used for preliminary injunctions in traditional litigation settings set forth in Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008). Under the Winter framework, a party seeking injunctive relief must “make a clear showing” that:

He is likely to succeed on the merits;
He is likely to suffer irreparable harm in the absence of preliminary relief;
The balance of equities tips in his favor; and
An injunction is in the public interest.

New Standard for Labor Board

In holding that the four-part test applies to 10(j) injunction requests by the Board, the Court declined to allow Section 10(j) language “to supplant the traditional equitable principles governing injunctions.” Rather, courts should apply standard principles involved in granting injunctive relief, not 10(j)’s “discretion-inviting directive.”

The Court explained that the reasonable-cause standard in the two-part test “goes far beyond simply fine tuning the traditional criteria to the Section 10(j) context—it substantively lowers the bar for securing a preliminary injunction by requiring courts to yield to the Board’s preliminary view of the facts, law, and equities.” It noted there is a substantial difference between the “likely”-to-succeed-on-the-merits standard versus a finding that the charge was “substantial and not frivolous.” Under the “less exacting” standard, courts could evaluate injunction requests giving significant deference to the Board under even a “minimally plausible legal theory” without assessing conflicting facts or questions of law.

Accordingly, the Board must satisfy the traditional standard that requires it to make a clear showing it is likely to succeed on the merits of the claim under a valid theory of liability.

The Court’s decision to standardize 10(j) injunction requests not only raises the Board’s burden of proof, but it creates more consistency across district courts at a time employers increasingly face injunction requests by an activist Board general counsel.

Supreme Court Weakens NLRB’s Ability to Obtain Injunctions in Labor Cases

On June 13, 2024, the Supreme Court of the United States held that courts must assess requests for an injunction by the National Labor Relations Board (NLRB) using the traditional four-factor test for preliminary injunctions. The ruling weakens the Board’s ability to obtain quick court orders to maintain the “status quo” in favor of workers in pending labor cases.

Quick Hits

The Supreme Court held that federal courts must apply the traditional four-factor equitable test for preliminary injunctions when considering the NLRB’s request for a 10(j) injunction.
The ruling found the NRLA does not require courts to defer to the NLRB’s initial findings of a labor violation.
The ruling weakens the NLRB’s ability to quickly stop employer actions it alleges are unfair labor practices.

The Supreme Court held that when considering temporary injunction requests under Section 10(j) of the National Labor Relations Act (NLRA), courts must apply the traditional equitable four factors as set forth in the high court’s 2008 decision in Winter v. Natural Resources Defense Council, Inc. The decision means that courts must consider 10(j) injunction requests under the same equitable principles that they do for other preliminary injunctions without deferring to the NLRB’s determination that an unfair labor practice had occurred.

The unanimous decision comes in a labor dispute in which the trial court issued a preliminary injunction against an employer after applying a two-part test that only asked whether “there is reasonable cause to believe that unfair labor practices have occurred” and whether an injunction is “just and proper.” The injunction was later affirmed by the Sixth Circuit Court of Appeals.

The NLRA prohibits employers from engaging in certain unfair labor practices and allows workers to file a charge with the NLRB. The NLRA provides the NLRB with authority to seek a temporary injunction in federal court and Section 10(j) states that courts may “grant the Board such temporary relief … as it deems just and proper.”

However, the Supreme Court held that the NRLA does not strip courts of their equitable powers, and they must apply the traditional four-factor rule as articulated in Winter when considering a request for a 10(j) injunction. Under that rule, a plaintiff must show “he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.”

The Supreme Court rejected the NLRB’s argument that Section 10(j) informs the application of equitable principles and that courts should use a “reasonable cause” standard as applied by the Sixth Circuit in the case. The NLRB had pointed to the context that Congress has given it the authority to adjudicate unfair labor practice charges in the first instance and that courts must give deference to the NLRB’s final decisions.

Justice Clarence Thomas, in the Court’s opinion, stated that the reasonable cause standard “substantively lowers the bar for securing a preliminary injunction by requiring courts to yield to the Board’s preliminary view of the facts, law, and equities.” Justice Thomas stated the fact that the NLRB is the body that will adjudicate unfair labor practice charges on the merits does not mean courts must defer to what amounts to be the NLRB’s initial litigating position. Section 10(j) “does not compel this watered-down approach to equity,” Justice Thomas stated.

In a partial dissent, Justice Ketanji Brown Jackson agreed that the NRLA does not strip courts of their equitable powers and that the injunction in the case should be overturned. However, Justice Jackson argued the Court should not ignore the fact that Congress, through the NRLA, granted the NLRB authority over labor disputes.

Key Takeaways

The Supreme Court’s ruling raises the bar for the NLRB to seek injunctions by requiring courts to make their own assessment of the equitable factors for issuing preliminary injunctions without deference to the NLRB’s initial findings that an unfair labor practice has occurred. Under the reasonable cause standard, the NLRB merely had to show that its legal theory was not frivolous and that an injunction was necessary to protect the “status quo” pending the NLRB’s proceedings. That standard had allowed the NLRB to quickly put a stop to employer actions that its in-house attorneys believe are labor violations during the pendency of an administrative proceeding on the merits, which could take years to resolve.

Federal Court Strikes Down NLRB Joint Employer Rule

On March 8, 2024, just days before it was set to take effect, U.S. District Judge J. Campbell Barker of the Eastern District of Texas vacated the National Labor Relations Board’s (“NLRB’s”) recent rule on determining the standard for joint-employer status.

The NLRB issued the rule on October 26, 2023. It established a seven-factor analysis, under a two-step test, for determining joint employer status. Under the new standard, an entity may be considered a joint employer if each entity has an employment relationship with the same group of employees and the entities share or codetermine one or more of the employees’ essential terms and conditions of employment which are defined exclusively as:

Wages, benefits and other compensation;
Hours of working and scheduling;
The assignment of duties to be performed;
The supervision of the performance of duties;
Work rules and directions governing the manner, means and methods of the performance of duties and grounds for discipline;
The tenure of employment, including hiring and discharge; and
Working conditions related to the safety and health of employees.

Set to take effect on March 11, 2024, the NLRB’s decision would have rescinded the 2020 final rule which considered just the direct and immediate control one company exerts over the essential terms and conditions of employment of workers directly employed by another firm. The new rule would have expanded the types of control over job terms and conditions that can trigger a joint employer finding.

In the lawsuit, filed by the United States Chamber of Commerce and a coalition of business groups, the Chamber and coalition claimed that the NLRB’s rule is unlawful and should be struck down because it is arbitrary and capricious. Judge Barker agreed as he held that the NLRB’s new test is unlawfully broad because an entity could be deemed a joint employer simply by having the right to exercise indirect control over one essential term. Judge Barker faulted the design of the two-step test which says an entity must qualify as a common-law employer and must have control over at least one job term of the workers at issue to be considered a joint employer, finding that the test’s second part is always met whenever the first step is satisfied. The Court vacated the new standard and indicated it will issue a final judgment declaring the rule is unlawful.

The NLRB quickly responded to the Court’s ruling. In a statement on March 9, 2024 NLRB Chairman Lauren McFerran said the “District Court’s decision to vacate the Board’s rule is a disappointing setback but is not the last word on our efforts to return our joint-employer standard to the common law principles that have been endorsed by other courts.” According to the NLRB, the “Agency is reviewing the decision and actively considering next steps in this case.”

What Employers Need to Know

The legality of the NLRB’s joint-employer standard has been a contested issue since the October 2023 announcement. The rule will not go into effect as scheduled, but Judge Barker’s decision is unlikely to be the final word on the matter.

It’s Protected: NLRB Finds “Black Lives Matter” Insignia on Employee Uniform Constitutes Protected Activity Under Circumstances

The National Labor Relations Board (“NLRB”), in a 3-1 decision, held that an employee’s display on their work uniform of “BLM,” an acronym for Black Lives Matter, constituted protected concerted activity under Section 7 of the National Labor Relations Act (“Act”). Accordingly, the NLRB reversed an Administrative Law Judge (“ALJ”) decision, and found that the employer (Home Depot) violated Section 8(a)(1) of the Act by directing the employee to remove the BLM insignia because it violated the company’s uniform policy. The employee resigned instead of removing the insignia from their uniform.

Procedural History

In June 2022, an ALJ found that the employer did not violate the Act by requiring the employee to remove the BLM messaging, because the insignia lacked “an objective, and sufficiently direct, relationship to terms and conditions of employment.” The ALJ concluded that the BLM messaging was “primarily used, and generally understood, to address the unjustified killings of Black individuals by law enforcement and vigilantes … [and] while a matter of profound societal importance, is not directly relevant to the terms, conditions, or lot of Home Depot’s employees as employees.” (emphasis in original).

Further, the ALJ determined that the employee’s motivation for displaying the BLM message (i.e., their dissatisfaction with their treatment as employees) was not relevant. The petitioner sought review before the NLRB.

NLRB Finds Wearing BLM Insignia at Work Constitutes Protected Activity

On review, the NLRB concluded that the employee’s refusal to remove the BLM insignia was protected concerted activity under Section 7 of the Act because the activity was for “mutual aid or protection,” as it was a “logical outgrowth” of the employee’s and other employees’ complaints about race discrimination in the workplace that allegedly occurred over the preceding months.

According to the NLRB, an individual employee’s actions are a “logical outgrowth” of the concerns expressed by the group where “the record shows the existence of a group complaint,” even though “the employees acted individually and without coordination.” In this case, the fact that the group complaints post-dated the employee’s initial display of the BLM insignia was not dispositive. Instead, and contrary to the ALJ’s conclusion, the NLRB focused on whether the employee’s subsequent refusal to remove the BLM insignia was a “logical outgrowth” of the prior protected concerted activity.

Additionally, the NLRB found that no special circumstances existed, such that there was a sufficient justification for the company to preclude their employees from wearing such insignia. For instance, this was not a situation where display of the insignia might jeopardize employee safety, exacerbate employee dissention, or unreasonably interfere with the company’s public image. In this regard, the NLRB concluded that the company’s public image was not at issue because it encourages employees to customize their uniforms. Likewise, the NLRB held that the company failed to put forth evidence of any non-speculative imminent risks to employee safety from the public and/or any violent or disruptive acts or threats thereof by other employees connected to the BLM insignia.

The NLRB ordered the employer to, among other things, (1) cease and desist from prohibiting employees from taking part in “protected concerted activities,” such as displaying “Black Lives Matter” insignia on their uniform aprons; (2) reinstate the employee without prejudice and compensate him for lost back pay and any adverse tax consequences; and (3) post notice of the decision for 60 days at the store where the dispute arose. The company may still appeal the Board’s decision to a federal appeals court.

Significantly, the NLRB declined to adopt a broader objective advanced by the NLRB General Counsel that protesting civil rights issues on the job is “inherently concerted” activity that is protected by Section 7 of the Act. The fact-intensive reasoning behind the NLRB’s decision here reflects that the underlying circumstances in each situation will play a significant role in the legal outcome as to whether the conduct at issue is protected, and it is not advisable to adopt a broad, one-size fits all rule from this decision.

OSHA and NLRB Set Forth MOU to Strengthen Protections for the Health and Safety of Workers: A 2024 Outlook

On October 31, 2023, the National Labor Relations Board (NLRB) and Occupational Safety and Health Administration (OSHA) entered into a Memorandum of Understanding (MOU) to strengthen their interagency partnership. The purpose of this partnership is to establish a process for information sharing, referrals, training, and outreach between the agencies. Additionally, the agencies wish to address certain anti-retaliation and whistleblowing issues through this collaboration.

Since 1975, the NLRB and OSHA have engaged in cooperative efforts during investigations. According to NLRB General Counsel Jennifer Abruzzo and OSHA Assistant Secretary Doug Parker, the MOU seeks to strengthen this interoffice coordination in an effort to provide greater protection for workers to speak out on unsafe working conditions without fear of punishment or termination.

Exchange of Information

According to the MOU, the NLRB and OSHA “may share, either upon request or upon the respective agency’s own initiative, any information or data that supports each agency’s enforcement mandates, whether obtained during an investigation or through any other sources.” This information may include complaint referrals and information in complaint or investigative files. The MOU notes that this information will be shared only if it is relevant or necessary to the recipient agency’s enforcement responsibilities and ensures that the sharing of information is compatible with the purposes of the agency that is collecting the records.

For example, if OSHA learns during an investigation that there are potential victims of unfair labor practices who have not filed a complaint with the NLRB, OSHA will explain the employees’ rights and provide them with the NLRB’s phone number and web address. Additionally, if an employee files with OSHA an untimely complaint of retaliation, OSHA may then advise the employee to file a complaint with the NLRB, because the NLRB has a six-month time limit for filing such complaints whereas OSHA’s time limit is only 30 days. As a result, employers may be facing both agencies during an investigation.

Coordinated Investigations and Enforcement

The NLRB and OSHA will determine whether to conduct coordinated investigations and inspections in order to facilitate appropriate enforcement actions. If coordinated investigations occur and there are overlapping statutory violations, each agency may take relevant enforcement actions. In practice, employers should assume that if either agency is conducting an investigation into alleged retaliation, that agency will consider involving the other.

Takeaways for Employers

Heading into 2024, employers can expect to see more interagency coordination between the NLRB and OSHA during investigations. While the two agencies remain separate, there is a clear entanglement of enforcement action as the NLRB seeks to increase federal agency collaboration. As such, employers may presume that information collected by one agency will be provided to the other. As the agencies seek to increase worker protection across the board, employers will want to ensure that their management personnel are trained and up-to-date on the anti-retaliation and whistleblowing provisions of the Occupational Safety and Health Act and the National Labor Relations Act.

New Year, (Potentially) New Rules?

SOMETIMES, THE ONLY CONSTANT IS CHANGE. THIS NEW YEAR IS NO DIFFERENT.

In 2023, we saw several developments in labor and employment law, including federal and state court decisions, regulations, and administrative agency guidance decided, enacted, or issued. This article will summarize five proposed rules and guidance issued by the Department of Labor (“DOL”), the National Labor Relations Board (“NLRB”), the United States Equal Employment Opportunity Commission (“EEOC”), and the Occupational Safety and Health Administration (“OSHA”), which will or may be enacted in 2024.

DOL’s Proposed Rule to Update the Minimum Salary Threshold for Overtime Exemptions

In 2023, the DOL announced a Notice of Proposed Rulemaking (“NPRM”) recommending significant changes to overtime and minimum wage exemptions. Key changes include:

Raising the minimum salary threshold: increasing the minimum weekly salary for exempt executive, administrative, and professional employees from $684 to $1,059, impacting millions of workers;
Higher Highly Compensated Employee (HCE) compensation threshold: increasing the total annual compensation requirement for the highly compensated employee exemption from $107,432 to $143,988; and
Automatic updates: automatically updating earning thresholds every three years.

These proposed changes aim to expand overtime protections for more employees and update salaries to reflect current earnings data. The public comment period closed in November 2023, so brace yourselves for a final rule in the near future. For more information: https://www.federalregister.gov/documents/2023/09/08/2023-19032/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and

DOL’s Proposed Rule on Independent Contractor Classification under the Fair Labor Standards Act

The long-awaited new independent contractor rule under the Fair Labor Standards Act (“FLSA”) may soon be on the horizon. The DOL proposed a new rule in 2022 on how to determine who is an employee or independent contractor under the FLSA. The new rule will replace the 2021 rule, which gives greater weight to two factors (nature and degree of control over work and opportunity for profit or loss), with a multifactor approach that does not elevate any one factor. The DOL intends this new rule to reduce the misclassification of employees as independent contractors and provide greater clarity to employers who engage (or wish to engage) with individuals who are in business for themselves.

The DOL is currently finalizing its independent contractor rule. It submitted a draft final rule to the Office of Management and Budget (OMB) for review in late 2023. While an exact date remains unknown, the final rule is likely to be announced in 2024. More information about the rule can be found here: https://www.federalregister.gov/documents/2022/10/13/2022-21454/employee-or-independent-contractor-classification-under-the-fair-labor-standards-act

NLRB’s Joint-Employer Standard

The NLRB has revamped its joint-employer standard under the National Labor Relations Act (“NLRA”). The NLRB replaced the 2020 standard for determining joint-employer status under the NLRA with a new rule that will likely lead to more joint-employer findings. Under the new standard, two or more entities may be considered joint employers of a group of employees if each entity: (1) has an employment relationship with the employees and (2) has the authority to control one or more of the employees’ essential terms and conditions of employment. The NLRB has defined “essential terms and conditions of employment” as:

Wages, benefits, and other compensation;
Hours of work and scheduling;
The assignment of duties to be performed;
The supervision of the performance of duties;
Work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
The tenure of employment, including hiring and discharge; and
Working conditions related to the safety and health of employees.

The new rule further clarifies that joint-employer status can be based on indirect control or reserved control that has never been exercised. This is a major departure from the 2020 rule, which required that joint employers have “substantial direct and immediate control” over essential terms and conditions of employment.

The new standard will take effect on February 26, 2024, and will not apply to cases filed before the effective date. For more information on the final rule: https://www.federalregister.gov/documents/2023/10/27/2023-23573/standard-for-determining-joint-employer-status

EEOC’s Proposed Enforcement Guidance on Harassment

A fresh year brings fresh guidance! On October 2023, the EEOC published a notice of Proposed Enforcement Guidance on Harassment in the Workplace. The EEOC has not updated its enforcement guidance on workplace harassment since 1999. The updated proposed guidance explains the legal standards for harassment and employer liability applicable to claims of harassment. If finalized, the guidance will supersede several older documents:

Compliance ManualSection 615: Harassment (1987);
Policy Guidance on Current Issues of Sexual Harassment(1990);
Policy Guidance on Employer Liability under Title VII for Sexual Favoritism (1990);
Enforcement Guidance on Harris v. Forklift Sys., Inc. (1994); and
Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors(1999).

The EEOC accepted public comments through November 2023. After reviewing the public comments, the EEOC will decide whether to finalize the enforcement guidance. While not law itself, the enforcement guidance, if finalized, can be cited in court. For more information about the proposed guidance: https://www.eeoc.gov/proposed-enforcement-guidance-harassment-workplace

OSHA’s Proposed Rule to Amend Its Representatives of Employers and Employees Regulation

Be prepared to see changes in OSHA on-site inspections. Specifically, OSHA may reshape its Representatives of Employers and Employees regulation. In August 2023, OSHA published an NPRM titled “Worker Walkaround Representative Designation Process.” The NPRM proposes to allow employees to authorize an employee or a non-employee third party as their representative to accompany an OSHA Compliance Safety and Health Officer (“CSHO”) during a workplace inspection, provided the CSHO determines the third party is reasonably necessary to conduct the inspection. This change aims to increase employee participation during walkaround inspections. OSHA accepted public comments through November 2023. A final rule will likely be published in 2024.

For more information about the proposed rule to amend the Representatives of Employers and Employees regulation: https://www.federalregister.gov/documents/2023/08/30/2023-18695/worker-walkaround-representative-designation-process

Preparing for 2024

While 2023 proved to be a dynamic year for Labor and Employment law, 2024 could be either transformative or stagnant. Some of the proposed regulations mentioned above could turn into final rules, causing significant changes in employment law. On the other hand, given that 2024 is an election year, some of these proposed regulations could lose priority and wither on the vine. Either way, employers should stay informed of these ever-changing issues.

by: Emily G. Massey of Ward and Smith, P.A.

For more news on 2024 Labor and Employment Laws, visit the NLR Labor & Employment section.

A Holiday Surprise: New York Governor Vetoes the Proposed Non-Compete Ban

On December 22, New York State Governor Kathy Hochul provided New York State employers with a welcome holiday surprise by announcing her veto to the proposed ban on non-compete agreements. As noted in our prior client alert concerning the New York legislatures’ 2023 passage of its non-compete ban bill, S3100, its restriction was expansive and would have provided a broad ban on non-compete agreements.

The bill sat on Governor Hochul’s desk awaiting her signature for several months, keeping New York State employers in a state of uncertainty. Earlier this month, Governor Hochul publicly commented that she would consider a bill which struck the right balance to protect low and middle-income workers, while she recognized that higher income workers have more negotiating power and are in industries that are an important part of New York’s economy.

In recent weeks, many anticipated that a compromise may be reached behind the scenes. While it is clear that a compromise has not yet been reached with regard to this specific bill, the Governor has stated that she is open to legislation banning agreements that limit workers’ mobility.

We will continue to monitor the situation. Given the debate concerning New York’s law in this area, as well as an evolving patchwork of state legislation nationally and a growing movement to restrict such agreements at the federal level (such as proposed by the Federal Trade Commission and the National Labor Relations Board), we recommend that employers take proactive steps now. Employers should consider evaluating their existing confidential information protections exclusive of restrictive covenants; specifically, their policies, confidentiality agreements, employee handbooks, and employee training in light of the evolving current law, and take action to update those protections.

What Are the Top 3 Labor Law Developments of 2023 (So Far)?

It’s hard to believe the end of 2023 is upon us. This year is one for the history books on the labor law and labor relations fronts. In a year packed with significant legal landscape changes and high-profile labor disputes, it’s worth a quick recap of what are – in my view – the top 3 developments.

1. NLRB Revamps the Union Organizing Process

At the top of my list are changes the National Labor Relations Board (NLRB) made to the union organizing process. The board did several things in this regard. First, the NLRB reinstated the Obama-era “ambush” election rules that accelerate the union election timetable. Specifically, these rules truncate the amount of time between an election petition being filed and a vote being held (i.e., shorten the amount of time a company has to campaign).

Second, the agency issued arguably one of its most groundbreaking decisions in decades in Cemex. In that case, the NLRB altered the framework for how unions can and will be recognized and significantly loosened the standard for Draconian bargaining orders in some cases. Bottom line: The legal landscape, relatively speaking, makes it exponentially easier for workers to vote in unions now.

2. UAW Strikes at the Big 3

Labor relations issues haven’t been top headlines in recent decades. That changed this year. The ongoing nationwide union push at Starbucks over the last two years has garnered much attention, along with some other high-profile union pushes and disputes. But the United Auto Workers’ (UAW) coordinated strike efforts at Detroit’s “Big Three” automakers truly was remarkable in terms of the national attention it garnered. For the first time, the UAW struck General Motors, Ford, and Stellantis (aka Chrysler) at once.

The UAW took a creative approach: it targeted specific plants for work stoppages while leaving others operational. This approach had two primary benefits to the union: 1) it allowed it to slow the cash burn on their strike pay bank (estimated to be north of $800 million at one point) and 2) it allowed the union to keep the companies guessing as to which plants the UAW may bring offline next – creating operational inefficiencies and uncertainty. Ultimately, this strategy resulted in deals with each of the Big 3, and most view the UAW as having come out on top in these negotiations.

3. NLRB Starts to Scrutinize Non-competes

On May 30, the NLRB’s top lawyer, Jennifer Abruzzo, turned heads when she issued a memo signaling that her office was taking the view that non-compete agreements, in some circumstances, violate the National Labor Relations Act (NLRA). This development was somewhat surprising to some given that the NLRA was passed nearly 100 years ago and was not cited previously as a basis to invalidate standard restrictive covenants found in countless employment agreements around the country.

Abruzzo further announced the NLRB will be coordinating enforcement and a potential crackdown on non-competes with the other agencies, including the Federal Trade Commission – which this year also signaled an emphasis on these agreements – and the Department of Justice.

Given there’s a month left to go before the end of 2023, there may be other significant developments to come, but, for now, these are my top three. Happy Holidays!

Competition for Control of College-Athletes Enters New Playing Field

November 7, 2023, may become a monumental day in the history of the National Collegiate Athletic Association (NCAA). It is the first day of a potentially groundbreaking hearing. Region 21 of the National Labor Relations Board will be hearing a case brought by members of the football, men’s basketball, and women’s basketball teams against the University of Southern California (USC), the PAC-12, and the NCAA. The crux of their argument is that the three major entities should be considered “joint employers” who have systematically misclassified the players as “student-athletes” rather than as employees.

The implications of this Board hearing could have far-reaching implications across the country. The NLRB General Counsel Jennifer Abruzzo has already signaled that, in her opinion, certain players at colleges and universities should qualify as employees of their institutions. If the administrative law judge were to agree with Abruzzo’s opinion, the impact on the national landscape of collegiate athletics would be immediate.

If these players are found to be employees, each player would be entitled to the benefits of traditionally employed individuals, such as compensation, overtime, social security, worker’s compensation, health and safety protections, protections against discrimination and harassment, and a statutory right to unionize and collectively bargain for a share of collegiate sport revenues.

While being found to be employees would be looked at as a major win for the impacted players, such a determination would cause complicated issues for colleges and universities across the country. These issues include compliance with Title IX of the Education Amendments of 1972 and the Immigration Nationality Act, among others. Further, having some teams but not others qualify likely will create a two-tier system throughout the country. This divide would be even further enhanced if the Board finds certain players, but not others, qualify as employees.

Testimony will not be heard until the week of December 18, at the earliest. Higher education institutions, players, and fans alike will be monitoring this hearing as it progresses.

For more news on Student Athletes as Employees, visit the NLR Entertainment, Art & Sports section.

Tag: NLRB

Full Steam Ahead: NLRB Top Lawyer Signals Continued Focus On Injunction Actions

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