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Tagged with: Labor Law
Having made it past the halfway point of 2022, at IRI, we are advising our clients to take a step back and gain some perspective. Perspective on the impact of the NLRB in 2022, and on what the first 18 months of the Biden administration have brought us. We're also looking ahead to what is coming in the political arena that could impact the ability to maintain a direct connection with employees. And (perhaps most importantly) what every employer can do to prepare for even a stronger NLRB push for increasing unionization.
Right now, we're seeing a dramatic increase in the number of organizing attempts (more on that in a moment), particularly among younger workers. Traditional campaign messaging has shifted to include far broader demands than wages and working conditions. We expect that unions will enjoy an increase in win rates in the second half of 2022. President Biden has repeatedly stated that he intends to be the "most pro-union President, leading the most pro-union administration in American history." He has kept his promise by appointing NLRB General Counsel Jennifer Abruzzo, (who many US labor leaders have hailed as the most vigorously pro-union general counsel in decades). Biden also created the Department of Labor's White House Task Force on Worker Organizing and Empowerment, and regularly appears with union leaders to ensure the optics on his position remain pro-union.
As the mid-term elections approach, we at IRI are pausing to examine the state of labor right now, including the idea of belonging in the workplace, internal worker unions, national organizing campaigns and worker sentiment, and what is likely to be ahead.
Now is the time to ask if your organization is prepared to thrive in an employment and labor landscape that has changed dramatically.
Indicative of the changes is the number of petitions the NLRB has received this year - up 56 percent for the first three quarters of the federal Fiscal Year 2022. That means we've seen more petitions at this point than we did in all of 2021. Organizers today are leveraging public sentiment and political support. It's an uncertain strategy, because many employees are still saying "no" to unions - but those workers often get little public attention in this pro-union environment. In the last fiscal year, the NLRB also saw a 15% increase in Unfair Labor Practice (ULP) charges, Offers of reinstatement increased from under 1000 to over 6000, and backpay increased from $39 to $56 million
As the mid-terms approach, we expect the NLRB to issue a variety of decisions - here are four things you need to know about the mid-term elections and pending NLRB decisions, especially those expected to be released before the election.
Topping the list of items for the NLRB in 2022 update is captive audience meetings. For seven decades, employers have held captive audience meetings. These are mandatory employee attendance meetings during which your leaders have opportunities to explain the organization's perspective on labor unions, how the organizing campaign works, employer rights during unionizing campaigns, the right of employees to not form a labor union, and how the company can improve.
Holding these meetings is recognized as one of the most important employer strategies for discussing unionization with employees and presenting the arguments against joining a union. Certainly, employees hear a lot of arguments from labor union representatives for unionizing, so captive audience meetings are crucial to the employer's ability to communicate the other viewpoint.
In an April 7, 2022 memo, Abruzzo says she wants to end captive audience meetings and asks the NLRB to find these meetings unlawful. She wants these meetings to be strictly voluntary. The basis for her argument is that forcing employees to attend meetings and listen to their employer urge them to reject union representation violates their free speech rights and "chills employees' protected right to refrain from listening to this speech."
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The Joy Silk legal standard is on the NLRB 2022 update list because it is on Abruzzo's radar. The Joy Silk Mills, Inc. doctrine harkens back to a 1949 case which held that an employer presented with a request from a labor union for recognition must bargain with the union if the employer doesn't have a good-faith doubt as to whether the union has a majority status when refusing the union. The employer must demonstrate good-faith doubt to the NLRB but would automatically lose the argument if committing an unfair labor practice (ULP) after the refusal. Joy Silk allowed the NLRB to recognize a union if a majority of employees completed union authorization cards of support. No formal union election was necessary.
In 1969, the Joy Silk legal standard was supplanted by the NLRB v Gissel Packing Co. case. In this case, the Supreme Court adopted a new doctrine in which the NLRB could order an employer to bargain with an uncertified and unrecognized union only if the NLRB could prove the employer committed ULPs that made a fair union election impossible.
Some legal analysts believe the Gissel case has played a large role in the decline of unions and support returning to the Joy Silk doctrine as labor reform. NLRB's Abruzzo released a memo (GC 21-04) stating she wants to revive the Joy Silk doctrine for bargaining orders. Abruzzo wants Joy Silk reinstated because it requires employers to demonstrate a good reason as to why the union won't be recognized when a majority of union authorization cards are submitted. Abruzzo wants to make it easier for unions to win without an election. She also believes that employers commit a lot of Unfair Labor Practices (ULPs) during the election process, so bypassing an election protects workers.
Currently, you can force a union election to be held by refusing to recognize the union. If Joy Silk is reinstated, you would have to demonstrate "good faith doubt" about the union's majority. It's easy to see that this sets up an adversarial position from the beginning because, in essence, an employer has to prove the union organizers are lying. The burden of proof is on the employer, and the case would be made to a union-supporting NLRB. It's not difficult to predict the NLRB will mostly rule against the employer.
The status of gig workers is included in this NLRB 2022 update because changes to labor laws could have enormous consequences for employers and the labor market. The NLRB is looking for ways to change the status of gig workers from independent contractors to employees, so they can join a union and get employer benefits. Changing the laws has proven difficult, as California learned when Proposition 22 passed and exempted several app-based businesses (i.e., Uber, Lyft, etc.) to classify workers as independent contractors, only to be declared unconstitutional by an Alameda County Superior Court Judge. The legal battle rages on.
In the meantime, the NLRB is looking for ways to get independent contractors reclassified and has taken action , including considering overturning the 2019 Super Shuttle.decision.
Abruzzo also wants misclassifications to be considered a violation of the NLRA and thus subject to hefty fines. Just recently, the law firm of Barnes & Thornburg reported that a Bloomberg Law report said, "The federal labor board has agreed to review a decision granting West Coast port truckers the right to form a union, signaling the board will take up the thorny issue of who's an independent contractor and who's an employee." The NLRB decision was that west coast port truckers (gig workers) could unionize, meaning they are reclassified as employees.
Labor attorney David Pryzbylski advises, "Employers of independent contractors should watch this development closely, as the NLRB's potential modification of the current framework determining the distinction between employees and independent contractors may require employees labeled as independent contractors to be reclassified. Misclassification of workers can result in significant legal liability on an employer under the NLRA as well as other labor laws."
The 2022 mid-terms are likely to be incredibly disruptive. All 435 seats in the House of Representatives and 35 in the Senate will be decided. Democrats face an uphill battle to keep their control of Congress. Democrats currently have a slim 221-208 edge in the House, and the Senate is split 50-50 tie, with Vice President Kamala Harris as the tie-breaking vote. Swing states, including Arizona, Georgia, Nevada, Pennsylvania, and Wisconsin, all have Senate seats in play.
The mid-term elections are looming in November 2022, and a lot is at stake regarding which political party will control the House of Representatives and Senate. The Democrats hope to retain the House and maintain their 50 seats in the Senate. If the Republicans were to take control, the path of disruption would change, but there is likely to be an effort to stop Abruzzo from pursuing her pro-union agenda. When she was confirmed by the Senate, it was a 50-50 vote requiring VP Harris to cast the tiebreaker. No matter whether the Democrats or Republicans take control of Congress, you will need to stay on top of actual and potential changes in labor law.
Public sentiment has swung in favor of unions, particularly among younger workers. Gallup reports that unions have an approval rating of 77% among young adults aged 18-34. Workers making less than $40,000 a year give unions a 72% approval rating. Even so, union membership numbers have continued to decline.
National campaigns, including Starbucks, Amazon and a national push to organize cannabis workers have proven effective. Large employers are considering the implications of union organizing campaigns in multiple locations.
We have both written and spoken in recent months about the Age of Affiliation. It's quickly becoming apparent that this idea - that the needs of today's employees go far beyond compensation and benefits - is permeating the workforce as a whole. This shifting mindset has led to activism and employee empowerment. Let's explore these three trends in depth, as they're likely to continue throughout the midterm season.
Motivational and emotional needs are of enormous importance in recruiting and retaining today's employees. Finding candidates who are good matches with organizational values can be key to retaining those employees and maintaining a direct connection with them.
Millennials and Gen Z workers are at the center of the Age of Affiliation. These younger employees often feel disconnected and look to affiliate with others to bring about social change. This desire has created a cultural and mindset shift among these workers. Instead of looking only at benefits programs, compensation plans, and leave time policies, today's labor pool is looking at the work itself, as well as the work setting, requiring recruiters to do the same. Instead of thinking only in terms of production and performance goals, companies are now going deeper: does the work create a sense of personal achievement and align with our employees' personal values? Are employees recognized? Are there opportunities for every team member to make a difference?
And especially, do employees have a strong voice in the workplace? Employee voice influences all the motivational and emotional factors. For example, do employees believe they can voice their single OR collective opinions about the workplace and organizational operations? Can they present new perspectives to decision-makers – your leaders? Millennials and Gen Z are united in their need for affiliation, which is one reason the new worker populations are leading a resurgence in unions.
One of the major implications of the Age of Affiliation is that companies should employ recognition and reward systems that reinforce group achievement. An organizational culture that creates employee belonging and collaboration establishes a strong sense of belonging.
Employee activism is closely related to affiliation and belonging. Activism almost always relies on workers affiliating with people who appear to have the same focus and goals. Meeting the emotional and motivational needs of employees requires a shared sense of purpose, based on shared values. For example, employees hold a one-day protest because they believe their employer is conducting business with companies that violate human rights or are harming the environment. Herbert Smith Freehills predicted a continuing increase in employee activism that was already evident as far back as 2019.
As Career Counselor Arlene Hirsch succinctly explains, "Employee activism is often associated with actions that employees take in response to specific societal events or company policies and practices, and these actions often take the form of public protests, social media campaigns, information distribution to fellow employees and more." ESG (Environment, Social, Governance) is a flashpoint for businesses. Touting a belief in ESG implies a company is taking real action on issues like climate change, diversity, and leadership ethics and aligning policies and operational practices with the mission.
Third, affiliation and activism are connected to employee empowerment. Employees are willing to join together to take action as they push for change, and demand their employer listen. Employee empowerment is expressed through employee voice and actions, such as a walkout, protest, whistleblowing to the media, or joining or forming a labor union. Employees once worried about their jobs and would not publicly criticize their employers, but that is not true anymore.
Today, employee empowerment can look like:
Of course, technology makes it easier every day for employees to communicate and mobilize.
Millennials and Gen Z workers are quick to demonstrate the power of empowerment. In a tight labor market and with a desire to have meaningful jobs where their values and corporate values are aligned, the younger employees are willing to take risks or quit their jobs and find an employer who meets their needs. Employees want a voice internally and externally and a say in the organizational culture.
Employee activism will likely increase going forward. The increasing unionization of workers at companies like Starbucks and in unlikely industries like the gaming industry is sending a clear message that employee empowerment is important and can lead to activism.
First, be sure your company policies are kept in line with current NLRB policies. We may well see a return to the 2009-2016 era in which many standard policies and handbooks were determined to violate the NLRA. Work with your labor attorney to avoid ULPs, wage & hour violations and more.
The concepts of affiliation and belonging are quickly becoming what defines today's approach to positive employee relations. Your employees will be choosing who to affiliate with: a political party, a movement, or a union. Many times, affiliation begins online through their use of social media. Employees seek a sense of belonging, and that motivates them to choose an affiliation.
To create belonging and community among employees, there are two clear steps you can take now:
Defining your brand as an employer is not the same thing as building a marketing brand or a position in the marketplace. It's not about competitive differences in the marketplace. SHRM defines the employer brand this way:
"An employer brand is an important part of the employee value proposition and is essentially what the organization communicates as its identity to both potential and current employees. It encompasses an organization's mission, values, culture, and personality. A positive employer brand communicates that the organization is a good employer and a great place to work. Employer brand affects recruitment of new employees, retention and engagement of current employees, and the overall perception of the organization in the market."
"Your employer brand is also is a key factor in determining your organization's ability to remain union-free," says Walter Orechwa, Director of Digital Solutions at IRI Consultants, "because an employer brand includes a wide range of activities like union avoidance training, developing leadership communication skills, evaluating the wage and benefit structure, and giving employees a voice, to name a few."
At IRI Consultants, we provide resources to help support the creation and communication of your employer brand proposition. You can begin with questions such as
Employee belonging refers to the sense of inclusion and acceptance a person feels for a group. It is a feeling of support and security. Employees with a sense of belonging bring their authentic selves to the workplace. The feeling of belonging is not only an affiliation motivator. It is also correlated to the level of employee engagement experienced.
Following are some suggestions for developing a community of belonging.
Build affiliation and belonging with every message and every medium. Regarded as a "prophet of the information age," Marshall McLuhan (1911-1980) developed the theory that the "medium is the message." He recognized that technology was an extension of the users. The message and the medium are intertwined.
The implication is that the medium - way your message is delivered to employees - can have as much impact as the content. Connect with employees where they are; the medium is part of the affiliation and belonging you are creating. If you're not sure how to do that, a skilled communication consultant can help you craft your strategy.
Employers are struggling to manage the confluence of so many changes occurring at once. The mid-term elections and the changes coming from the NLRB in 2022 present one set of challenges that, as an employer, you have little power over.. However, the challenges of affiliation, activism, and empowerment, as well as defining your employer brand and creating a sense of belonging are all within your power.
Working to evolve your positive employee relations strategy in order to maintain a direct connection with employees requires attention to a wide variety of factors. IRI's team of consultants has the real-world experience you need to manage demographic changes, divisions among your workforce, and communication challenges.
As the mid-terms approach, we anticipate greater urgency around these proactive measures. But no matter if we see card check come to pass, lose the ability meet with employees about unionization, or see a change in gig worker status, the steps you take now can ensure the future of your company's direct relationship with employees.