Bye Bye, Boeing: The NLRB is Likely to Alter Flight Path under Biden Administration
The National Labor Relations Board (“NLRB” or “Board”) will likely be singing a different tune in the not too distant future, thanks in part to new leadership and a game or two of musical chairs.
Since August 27, 2018, the day Mark Pearce’s term on the Board expired, the Board has operated with only four members: Marvin Kaplan, William Emanuel, John Ring, and Lauren McFerran. During that time, the four-person Board has been predominately Republican, with McFerran being the Board’s lone Democrat. The significance of a Republican majority coupled with only one vacant seat cannot be overstated.
While the NLRB can operate with as little as two members, the Board needs at least three to render a decision. With a 3-1 Republican majority, it has been mathematically impossible for any three-member panel since Pearce’s departure to consist of anything other than a Republican majority. The Republican members have taken advantage of their majority status and issued several significant employer-friendly decisions. But the Republican party’s majority position is coming to a close.
On January 20, 2021, President Biden named Lauren McFerran Chairman of the NLRB. While her promotion to Chairman does little to change the Board’s overall composition, the promotion nevertheless must validate McFerran, whose role has been limited to that of writing dissents in the face of the Board’s employer-friendly rulings. But McFerran needs an ally on the Board if her dissents are to ever become Board policy. As of this writing, the Biden administration has yet to nominate someone to fill the vacant seat left by Mark Pearce nearly two and one-half years ago. We expect that President Biden will try to fill that seat sooner rather than later. However, it’s worth noting that even after the seat is filled, Republicans will hold a 3-2 Board majority. Only in August of 2021, when William Emanuel’s term expires, will President Biden have an opportunity to establish a Democrat majority on the Board.
Once a new majority is established, employers can expect the Board to change its policy related to the analysis of workplace rules. Before December 2017, when the current Board issued its landmark Boeing decision, the Board analyzed workplace rules under the “reasonably construe” standard, which focuses on whether a reasonable employee could conclude that the workplace rule in question prohibits or “chills” the exercise of rights under the National Labor Relations Act (“NLRA”). If so, the Board would strike the rule down. After Boeing, the Board shifted gears and decided that the proper analysis should instead take into account (1) the nature and extent of the potential impact on NLRA rights, and (2) the employer’s legitimate justifications associated with the rule. Furthermore, in an effort to provide employees and employers with “greater clarity and certainty” surrounding workplace rules, the Board began categorizing rules as either Category 1 (categorically lawful), Category 2 (requiring individualized scrutiny), or Category 3 (categorically unlawful) rules.
McFerran has been a vociferous opponent of the Board’s Boeing test and categorization system from day one. In her dissent, McFerran stated that the Boeing decision was the result “of secret rulemaking in the guise of adjudication” and that the Board’s “abuse of process” left “Board law not better, but demonstrably worse.” McFerran’s critique of Boeing has been ongoing. Indeed, her promotion comes merely days after she issued a scathing dissent in Medic Ambulance Service, Inc., 370 N.L.R.B. No. 65 (Jan. 4, 2021), in which she again criticized the Board’s Boeing decision, stating that it “turned the Board’s analysis of employer work rules upside down.”
Based on McFerran’s numerous dissents and the impending shift in the composition of the Board, Boeing’s days appear to be numbered. It’s important to note, however, that any reversal of Boeing, or of any other decisions by the current Board, is unlikely to happen quickly (even following the expected establishment of a new majority later this year). The Board currently has few pending cases, thanks in large part to increased efficiency at both the Board and regional office levels. Therefore, it could be as late as 2022 before the new majority has an opportunity to impose its will. Nevertheless, employers would do well to keep an eye on the NLRB as it begins to change course.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.