Given the recent, whiplash-like reversals of labor law precedent by the National Labor Relations Board (NLRB) (depending on which presidential administration is in power), employers naturally wonder if the current version of the NLRB under President Joe Biden will present a similar about-face from decisions made under the Trump administration. While you can safely assume the NLRB will be more prolabor under the Biden administration, a recent decision from the D.C. Circuit, emphasizing the importance of precedent in Board decisions, may assuage some fears of ongoing uncertainty in labor-management relations.

Background on federal labor relations law, generally

National Labor Relations Act (NLRA). The NLRA was enacted in 1935 to promote employees’ and employers’ rights, encourage collective bargaining, and curtail certain private-sector labor and management practices that can harm the general welfare of workers, businesses, and the U.S. economy. Congress believed some employers’ refusal to let employees organize or accept collective bargaining led to industrial strife or unrest, which adversely obstructed commerce.

Further, it was thought the inequality of the bargaining power between (1) employees who don’t have full freedom of association and (2) employers that are organized in the corporate or other forms of ownership substantially burdened and affected the flow of commerce by depressing wage rates and wage earners’ purchasing power. Thus, the NLRA was intended to protect employees’ right to organize and bargain collectively, which would serve to promote the flow of commerce by removing the sources that cause industrial strife and unrest.

NLRB. The NLRB is the federal agency charged with overseeing and administering the NLRA. The Board facilitates elections and prevents and remedies unfair labor practices (ULPs). It’s made up of two separate branches:

• The Board is a group of five persons appointed by the U.S. president. It sits in a judicial capacity and decides whether improper labor practices have occurred.
• The other branch is the General Counsel, which essentially investigates and prosecutes parties who engage in ULPs.

The NLRB is not a partisan body that favors employers or employees. Because U.S. presidents appoint the members, however, the Board has long generally reflected the acting administration’s own union versus management preferences.

Uncertainty of NLRB precedent

Many observers agree the NLRB under former President Barack Obama’s administration was very aggressive in implementing several prounion decisions in the areas of joint employment, bargaining unit makeup, workplace rules, elections, and expanded definitions of practices that might constitute ULPs. The Board under former President Donald Trump’s administration, which was run by a Republican majority, worked aggressively to engage in a large-scale reversal of the Obama-era legacy. So, what should we expect with the transition to President Biden’s new Board?

The Biden era started with a bang! In one of his first acts, President Biden fired NLRB General Counsel (GC) Peter Robb some 10 months before his term was set to expire. The move was a marked departure from the norm whereby most newly elected presidents would allow the GC to serve out the term.

Immediately after Robb’s removal, new NLRB GC Peter Sung Ohr issued 10 separate directives aimed at rolling back Trump-era changes to the Board’s enforcement policies. Do the actions support a conclusion that the new agency will substantially—and successfully—move toward a prolabor position?

Court curtailment

Not necessarily so. In a recent case, the D.C. Circuit refused to uphold the NLRB’s enforcement and sent the matter back to the Board because it (1) can’t ignore its own established precedent and (2) must explain why it departs from the same.

In the case, Davidson Hotel appealed the NLRB’s decision that it had engaged in ULPs by refusing to bargain with a union about two separate, Board-certified bargaining units. The two units comprised the hotel’s housekeeping and food and beverage employees. The union previously sought to represent both units as a single unit, excluding front-desk employees.

When Davidson objected to the single unit by claiming it was fractured and lacked a community of interest, the NLRB’s regional director agreed and dismissed the union’s petition. At the time, the regional director found the commonalities between the food and beverage and the housekeeping employees also were shared with the excluded front-desk workers, although the decision implied separate bargaining units between the housekeeping and the food and beverage employees may be appropriate.

Only a day after that determination, the union refiled two petitions seeking to represent the very same housekeeping and food/beverage employees as two distinct units (again, excluding the front-desk workers). The regional director and the new, interim GC certified the two separate units as appropriate, and separate elections were held—both resulting in union certification.

Davidson Hotel challenged the validity of the elections’ certification by refusing to bargain. It then appealed the NLRB’s subsequent order that sought to compel bargaining. (It was essentially challenging the fact that the regional director objected to the exclusion of the front-desk employees from the first proposed bargaining unit but didn’t object in the context of the two, split bargaining units.)

The D.C. Circuit found the NLRB and the regional director acted arbitrarily because they (1) didn’t provide a reasoned explanation for the second decision, (2) didn’t distinguish the previous denial, and (3) otherwise failed to distinguish directly analogous precedent. The matter was sent back to the Board. Davidson Hotel Co. LLC. v. NLRB.

Takeaway: Precedent matters in NLRB context

The D.C. Circuit’s opinion should provide some comfort to employers. While the pendulum may tilt in a prolabor manner under the Biden administration, the mere fact that a current version of the NLRB disagrees with a predecessor version doesn’t render precedent meaningless.

Hopefully, employers and unions will be able to rely on NLRB precedent when making decisions about employee relations. With every changing of the guard, we don’t need a wholesale reversal of the previous administration. It doesn’t seem substantiable, but, of course, only time will tell.