National Labor Relations Act (NLRA)

Overview of the National Labor Relations Act (NLRA)

The NLRA created the NLRB and empowered it to administer and enforce the Act. The NLRB was originally comprised of three members who served five-year terms, but subsequently was expanded to five members in 1947. Although not mandated by law, it is customary that no more than three of the five NLRB members may belong to the sitting president’s political party at any given time, and the political ideology of the members frequently influences how they approach particular issues.

National Labor Relations Act: The NLRA provides employees with certain rights to join together to improve their wages and working conditions, with or without a union. The NLRA essentially limits how employers may react to employees who form or join labor unions, conduct collective bargaining, or take part in strikes and other forms of concerted activity. The NLRA covers all employers involved in interstate commerce, except airlines, railroads, agricultural operations and government entities, which are governed by other federal or state laws (i.e., the Railway Labor Act, the California Agricultural Labor Relations Act, etc.). The reach of the NLRA also is subject to certain jurisdictional limits. The NLRA sets forth the following basic employee rights:

To self-organize
To form, join or assist labor organizations
To bargain collectively about wages and working conditions through representatives of their own choosing
To engage in other protected “concerted activities” (such as acting together for purposes of collective bargaining or other mutual aid or protection)
To refrain from any of these activities (however, a union and employer may, in a state such as California, where such agreements are permitted, enter into a lawful union-security clause)

The NLRA prohibits both employers and unions from violating these employee rights by engaging in any unfair labor practices. If an individual, an employer or a union files a ULP charge, the regional office of the NLRB investigates the facts to determine whether there is reasonable cause to believe a ULP was committed. If the NLRB concludes that reasonable cause existed, it will either attempt to settle the case or, in the absence of settlement, issue a ULP complaint.

Covered Employers: The National Labor Relations Act covers a broad spectrum of employers, but not all. Some exclusions can be found in the NLRA itself, while others result from the exercise of discretion by the NLRB. Thus, an initial inquiry must be made whenever a representation petition or ULP charge is filed as to the NLRB’s jurisdiction over the employer. The minimum number of employees required for the Board’s jurisdiction is two; however, the employer must meet the test for engagement in interstate commerce.

Excluded Employees: Because of the limits set by the jurisdictional standards, the NLRA does not cover the following employees:

Agricultural laborers
Domestic servants
Any individual employed by his parent or spouse
Independent contractors
Supervisors (supervisors who have been discriminated against for refusing to violate the NLRA may be covered)
Individuals employed by employers, such as railroads and airlines, subject to the Railway Labor Act
Federal, state and local government employees, including those employed at public schools, libraries and parks, Federal Reserve banks and wholly-owned government corporations
Faculty members in church-operated schools
Employed by any other person who is not an “employer” as defined in the NLRA

Confidential Employees: The NLRB defines “confidential employees” as employees who assist and act in a confidential capacity to persons who formulate, determine, and effectuate management policies with regard to labor relations, or regularly substitute for employees having such duties. Board policy excludes confidential employees from bargaining units because the employees have access to confidential business information. A bargaining unit is a group of employees that are represented by a labor union. Despite this exclusion, confidential employees may still enjoy the NLRA’s protections.

Rights of Employees: The NLRA provides covered employees certain rights to join together to improve their wages and working conditions, with or without a union. Two sections of the NLRA create far-reaching protections for employees in non-union workplaces: Section 7 sets forth the rights of employees, and Section 8 defines unfair labor practices, which can be committed by either employers or labor organizations. Section 7 of the NLRA sets forth the principal rights of employees:

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8(a)(3).

Examples of employee rights under Section 7 of the NLRA include:

Forming or attempting to form a union among the employees of a company
Joining a union, whether the union is recognized by the employer or not
Assisting a union to organize the employees of an employer
Engaging in concerted activity, such as picketing or striking, to secure better working conditions
Refraining from activity on behalf of a union
Taking advantage of the NLRB’s processes
Non-union employees coming together to demand an increase in wages or changes to work rules or working conditions

Section 8 of the NLRA covers unfair labor practices committed by either employers or labor organizations. Under Section 8(a), employers are prohibited from committing the unfair labor practices of interfering with, restraining or coercing employees from taking any actions related to the Section 7 guarantee rights.

Supervisors and Managers: Supervisors and managers who meet the standards contained in the NLRA and defined by the Board also are excluded from NLRA coverage. The NLRA defines a managerial employee as an employee has discretion in the performance of his/her job and who has authority to formulate, determine, or effectuate employer policies by expressing and making operative the decisions of the employer. Similarly, the Supreme Court has held that an employee who takes or recommends actions that effectively control or implement employer policy is a managerial employee.

The NLRA defines a supervisor as any individual “having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.” The NLRB has clarified that the phrases “exercise independent judgment,” “to responsibly direct” and “to assign” the work of others mean:

Exercise independent judgment: The Board has held that exercise of independent judgment applies regardless of whether the judgment is exercised using professional or technical expertise if it includes exercise of supervisory functions. To “exercise independent judgment” means to make decisions not dictated or controlled by detailed instructions contained in company policies or rules, the verbal instructions of a senior manager or the provisions of the collective bargaining agreement.
To responsibly direct: The Board has held that the person directing and performing supervisory duties must be accountable for the performance of tasks by their subordinates such that an adverse consequence may befall the supervisor if the tasks performed by the subordinate are not performed properly. The supervisor must have been delegated the authority to direct the work, to take corrective action as needed and be held accountable for the results while carrying out the interests of management.
To assign: The Board has defined this as the active designating of an employee to a place, appointing an employee to a time or giving significant overall duties to a subordinate employee.

Potential Issues: Several recent NLRB decisions seemingly make it more difficult for an employer to successfully argue that certain employees are supervisors, and thus do not have the right to unionize. In G4S Regulated Security Solutions, the Board held that non-unit lieutenants were not supervisors, despite testimony that they had the authority to administer discipline independently, and documentary evidence of eight disciplinary actions authorized by other lieutenants. The Board reasoned that the testimony was too “generalized” to establish supervisory status, and, as a result, since the lieutenants were not supervisors, they were entitled to the protections of the Act, and their termination may have violated the Act because they engaged in protected, concerted activity.

In another case, Brusco Tug and Barge, the employer in argued that certain tugboat mates were supervisors based on their authority to “assign” and “responsibly to direct” other employees. However, the Board held that the employer failed to meet the burden “of establishing supervisory status on the basis of assignment and responsible direction.” The Board reasoned that the tugboat mates’ assignments to deckhands were “ad hoc instruction[s]” that “did not rise to the level of supervision.” With respect to the issue of “responsible direction,” the Board stated that the employer offered only vague and non-factual assertions “of the mates’ accountability for the deckhands’ work.” As a result, the Board held that the tugboat mates were employees, entitled to the protections of the Act.

Jurisdictional Standards: The NLRB exercises its discretion to limit its cases to those involving enterprises whose effect on commerce is substantial. The Board’s requirements for exercising its power or jurisdiction are called “jurisdictional standards,” and are based on the annual amount of business done by the enterprise or on the annual amount of its sales or of its purchases. The Board does not exercise jurisdiction over racetracks; owners, breeders and trainers of racehorses; or real estate brokers.The Board’s current jurisdictional standards are:

Non-retail business: Direct sales of goods to consumers in other states or indirect sales through others (called outflow) of at least $50,000 a year; direct purchases of goods from suppliers in other states; or indirect purchases through others (called inflow) of at least $50,000 a year.
Office buildings: Total annual revenue of $100,000, of which $25,000 or more is derived from organizations that meet any of the standards except the indirect outflow and indirect inflow standards established for non-retail enterprises. Shopping centers are treated the same as office buildings.
Retail enterprises: At least $500,000 total annual volume of business.
Restaurants: The $500,000 annual gross volume standard, applicable to retail enterprises in general, also covers restaurants.
Public utilities: At least $250,000 total annual volume of business, or $50,000 direct or indirect outflow or inflow.
Newspapers: At least $200,000 total annual volume of business.
Radio, telegraph, television and telephone enterprises: At least $100,000 total annual volume of business.
Hotels, motels and residential apartment houses: At least $500,000 total annual volume of business.
Privately operated health care institutions: At least $250,000 total annual volume of business for hospitals; at least $100,000 for nursing homes, visiting nurses associations and related facilities; and at least $250,000 for all other types of private health care institutions defined in the 1974 amendments to the NLRA. The statutory definition includes any hospital, convalescent hospital, health maintenance organization, health clinic, nursing home, extended-care facility or other institution devoted to the care of the sick, infirm or aged person. Public hospitals are excluded from NLRB jurisdiction by section 2(2) of the NLRA.
Transportation enterprise, links and channels of interstate commerce: At least $50,000 total annual income from furnishing interstate passenger and freight transportation services; also performing services valued at $50,000 or more for businesses which meet any of the jurisdictional standards except the indirect outflow and indirect inflow of standards established for nonretail enterprises.
Transit systems: At least $250,000 total annual volume of business.
Taxicab companies: At least $500,000 total annual volume of business.
Associations: These are regarded as a single employer, and the annual business of all association members is totaled to determine whether any of the standards apply.
National defense: Jurisdiction is asserted over all enterprises affecting commerce when their operations have a substantial impact on national defense, regardless of whether the enterprises satisfy any other standard.
Private universities and colleges: At least $1 million gross annual revenue from all sources (excluding contributions not available for operating expenses because of limitations imposed by the grantor).
Symphony orchestras: At least $1 million gross annual revenue from all sources (excluding contributions not available for operating expenses because of limitations imposed by the grantor).
Law firms and legal assistance programs: At least $250,000 gross annual revenues.
Employers that provide social services: At least $250,000 gross annual revenues.
United States Postal Service
Gambling casinos: When these enterprises are legally operated, and their total annual revenue from gambling is at least $500,000.