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Labor Regulations

Labor Relations

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The Issue

The National Labor Relations Board has reversed itself on two Obama-era rulings opposed by NRF – one that increased retailers’ exposure to lawsuits over employment disputes and another that made it easier for organized labor to unionize retail businesses. And the panel has announced that it is considering whether to reconsider regulations that have allowed unions to hold “ambush” elections without giving employers sufficient time to present arguments against unionization.

All three actions came in December 2017 after the Senate confirmed two new members of the NLRB nominated by President Trump, giving the panel a 3-2 Republican majority. NRF said the reversals showed the realigned board “is serious about restoring common sense to the rulings governing America’s workplaces.”

In the first case, the NLRB overturned a 2015 ruling that a business could be considered a “joint employer” with subcontractors or franchisees even if it had no direct control over those companies’ workers. Instead, it reinstated a standard followed for 30 years that said a business must have direct control of workers to be a joint employer. NRF said the broader definition set in 2015 had “created an impossible scenario” where one company could be held responsible for the actions of another and had exposed companies to “almost limitless liability” to lawsuits over labor issues.

In the second case, the NLRB reversed a 2011 ruling that allowed the creation of “micro-unions” that could be as small as a single store within a retail chain or a single department within a store. NRF said that ruling had “created divisions in workplaces, undermined retail operations and limited opportunities for hardworking people.”

The NLRB followed those two moves by asking for input on whether it should also reverse ambush election regulations issued in 2014 that allow a union organizing election to be held as soon as two weeks after it is requested rather than the previous average of five weeks.

The developments came six months after the Department of Labor reversed a pair of its own rules that also expanded the definition of a “joint employer.” DOL is also reconsidering an Obama plan to dramatically expand overtime eligibility, and NRF has praised both the DOL and NLRB for moving back toward their traditional roles as neutral arbiters of labor disputes rather than advocates for organized labor.

Why it Matters to Retailers

Faced with years of declining membership in traditional strongholds such as manufacturing, union leaders have made it clear that they want to target traditionally non-union industries. Among these is retail, where only about 5 percent of employees are union members. Both the micro-union ruling and the ambush election regulations made unionizing workers easier, the first by allowing unions to concentrate on smaller groups of workers and the second by giving employers less time to respond. The micro-union ruling also had the potential to make it difficult for a national or regional retailer to move workers between stores or departments or cross-train them for different jobs. The expanded joint employer definition exposed companies to more lawsuits over labor disputes, potentially laying the groundwork for unionization attempts.

NRF advocates for balanced labor laws

NRF chairs the lobbying committee of the Coalition for a Democratic Workplace, which was formed to oppose anti-business labor laws, regulations and rulings that threaten job creation and economic growth. NRF supports workplace rules that promote workplace flexibility and economic growth, while opposing onerous policies that intrude on business operations, undermine employees’ privacy rights, and lead to unnecessary costs for retailers. NRF has worked with the White House and Congress and in the courts to oppose the joint employer, ambush election and micro-union measures.

Despite the NLRB and DOL decisions to drop their expanded definitions of joint employers, told a House committee that legislation is needed to ensure “a commonsense standard of joint employer liability” that would provide employers with “lasting certainty in labor relations” even if political control of the two agencies changes in future years. NRF supports the Save Local Business Act, which would restore the requirement for direct control before a company can be considered a joint employer.

NRF and the Coalition for a Democratic Workplace undertook a years-long series of legal actions to block the ambush election regulations. In addition to allowing elections to happen more quickly, the regulations require employers to provide workers’ personal contact information to unions within two days of a request. NRF argued that the rules were unconstitutional and went beyond the NLRB’s authority, and said they would deprive employers of adequate time to argue against unionization. A federal judge nonetheless upheld the regulations in 2015. Two bills that would reverse the rules – the Workforce Democracy and Fairness Act and the Employee Privacy Protection Act – are pending in Congress.

NRF also fought the micro-union ruling, saying it was legally flawed. The NLRB nonetheless approved formation of a micro-union for cosmetics and fragrances workers at a Macy’s store in Massachusetts. And micro-unions were upheld in the courts despite friend-of-the-court briefs filed by NRF and other business groups. As with the joint employer and ambush election issue, two bills are pending – the Representation Fairness Restoration Act and the Workforce Democracy and Fairness Act – that would permanently block micro unions regardless of control of the NLRB.