November 10, 2020

Potential Changes to Labor Policy Under a Biden Administration

Employers should anticipate major changes to national labor policy when President-elect Joe Biden assumes the Oval Office. Changes will likely seek to increase union membership by facilitating organizing, shortening election periods and reducing the bargaining period for the first collective bargaining agreement. The Biden administration will seek to effectuate these policy changes using a combination of legislation and revisiting Trump-era National Labor Relations Board (NLRB) decisions.

In February 2020, the House of Representatives passed the Protecting the Right to Organize Act of 2019 (PRO Act), one of the most significant pieces of labor legislation since the Taft-Hartley Amendments of 1947. The PRO Act did not pass the Republican-controlled Senate.

Among other things, the PRO Act would ease employee classification, facilitate faster organizations, and shorten representative elections by codifying several Obama-era decisions and rule-makings. Most significantly, the PRO Act would substantially alter the test for determining whether an independent contractor is really an employee by codifying the “ABC” test used by the California Department of Labor. Under the “ABC” test, to prove that a worker is an independent contractor rather than an employee, the employer must demonstrate that:

  1. the employer does not control or direct the performance of the work both under the terms of the employment contract and in practice.
  2. the work performed is outside the usual course of business for the employer.
  3. the worker ordinarily performs the same work as part of an independently established trade, occupation or business.

Because the “ABC” test requires an employer to meet all three prongs before classifying workers as independent contractors, its application tends to favor the classification of individuals as employees. This is important because, under the National Labor Relations Act (NLRA), only employees have the right to organize.

Even if the Democrats are unable to regain control of the Senate in January, it is likely that a newly-appointed Biden NLRB would revisit a number of Trump NLRB decisions, particularly those that overturned Obama-era determinations.

First, a Biden NLRB would likely reinstate Specialty Healthcare, 357 NLRB 934 (2011), which the Trump NLRB overruled in 2017. In Specialty Healthcare, the Obama NLRB endorsed the concept of “micro-units” when evaluating potential bargaining units. Under the “micro-unit” standard, the NLRB presumes that a bargaining unit is appropriate when it is composed of employees that perform the same job at the same facility regardless of whether other employees share a community of interest with that unit. This means that organizing efforts can target a smaller group of employees to organize, allowing the Union to gain a “toe-hold” in an employer’s operation from which it can expand its representation.

Second, a Biden NLRB would likely also reinstate Purple Communications, 361 NLRB 1050 (2014), which the Trump NLRB overturned in 2019. In Purple Communications, the Obama NLRB determined that employees had a NLRA-protected right to use their work email accounts for organizing purposes even if the employer prohibited non-work related use of work emails accounts. Reinstating this decision would be a boon for organizers looking to use employer provided email accounts as a way to organize — and it would require employers to review their handbooks to make sure their email use rules do not run afoul of NLRB law.

Finally, a Biden NLRB would likely return to the joint-employer test articulated in the Obama-era decision Browning-Ferris Industries, 362 NLRB 1599 (2015). In that decision, the NLRB expanded the joint-employer standard by holding that an employer’s status as a joint-employer hinges on the employer’s reserved right to control employees as well as its indirect control over employees. The Browning-Ferris decision relaxed the previous joint-employer standard, which required a demonstration that the putative joint-employer actually exercise direct control over the employees in question. By relaxing the joint-employer standard, employees may assert their right to bargain with both their direct employer and the company that contracted their services. Browning-Ferris has the potential to lead to increased bargaining across a variety of industries, particularly those industries that rely on a franchise model.

In sum, major changes to labor policy do not hinge solely on the Democrats winning both January run-off elections in Georgia. Regardless of the outcome of the Senate run-off elections, the composition of the NLRB will change under the Biden administration, likely resulting in a return to Obama-era precedent in key areas, including unit composition, joint-employer status and the rules around organizing activity. If you have any questions about the possible labor policy changes that may be pursued by the Biden administration or how those potential changes will affect your business, please contact an attorney on the Faegre Drinker labor management relations team.

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