Labor Relations

US Department of Labor headquarters sign

The issue

Since President Trump took office, the Department of Labor and the National Labor Relations Board have rolled back pro-union policies adopted under former President Obama and have begun to return to their traditional roles as impartial arbiters of labor-management issues. DOL has reversed an expanded definition of “joint employer” that exposed companies to easier unionization and increased lawsuits over labor disputes, and has put Obama regulations that would have greatly increased the number of workers who must be paid overtime on hold. The NLRB has reversed a ruling that allowed the creation of “micro-unions,” has tried to reverse its own joint employer ruling, and is considering whether to also reverse regulations that allow “ambush” union elections.

NRF has welcomed the moves as a sign the Trump administration is “serious about restoring common sense to the rulings governing America’s workplaces.” But NRF has also called for passage of legislation that would address each of the issues on a permanent basis, saying they should not be subject to changes in political control that can come in Washington after each presidential election.

Why it matters to retailers

store employee stocking shelves

Faced with years of declining membership in traditional strongholds such as manufacturing, union leaders have targeted traditionally non-union industries. Among them is retail, where only about 5 percent of employees are union members. Both the micro-union ruling and the ambush election regulations made unionizing retail workers easier, the first by allowing unions to concentrate on smaller groups of workers and the second by giving retailers less time to respond. The micro-union ruling also had the potential to make it difficult for a 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.

warehouse working moving a pallet of merchandise

The latest example of the need for a long-term solution on labor issues has come in how the NLRB has handled the joint employer issue. In a 2015 Obama-era ruling, the board alarmed the business community by saying a company could be considered a joint employer even if it had only indirect control over a subcontractor or franchisee’s workers. Under Trump, the board reversed that ruling in 2017 and went back to the previous business-friendly standard that a company must have direct control to be declared a joint employer. But the board vacated that ruling in February 2018 after its inspector general’s office said one of the new board members nominated by Trump should have recused himself because of a conflict involving his former law firm. That left the 2015 ruling opposed by NRF and other business groups in effect. But in September 2018, the NLRB announced proposed new regulations it promised would “foster predictability and consistency” in determining joint employer status. This January, NRF filed comments with the NLRB saying the proposed rules "would provide a clear, understandable and stable standard for determining whether two businesses have established a joint employer relationship" but asking for the addition of several definitions to clarify the scope of the rules.

Separately, the Labor Department released its own new joint employer proposal in April, and the plan appears to be positive for businesses. In order to be considered a joint employer, a company would have to meet a four-point test including actually exercising the power to hire or fire the employee, supervise and control the employee’s work schedule or conditions of employment, determine the employee’s rate and method of payment, and maintain the employee’s employment records.

Last year, NRF said “only Congress can enact a permanent solution” in a letter asking lawmakers to approve legislation that would restore the original requirement for direct control in order to be considered a joint employer. NRF supports the Save Local Business Act, which passed the House in 2017 but did not see action in the Senate before the congressional session ended at the end of 2018.

NRF backed a federal lawsuit to block the NLRB’s 2011 micro-union ruling, which allowed unions to be formed in a single store of a retail chain or a single department of a store, but it was nonetheless upheld in court. While the ruling has now been overturned by the NLRB, NRF supports two bills – the Representation Fairness Restoration Act and the Workforce Democracy and Fairness Act – that would block micro-unions on a permanent basis. Each has been introduced every congressional session since 2011 but has yet to be passed.

NRF also went to court to block ambush election regulations adopted by the NLRB in 2014, which allow a union organizing election to be held in as little as two weeks after it is requested rather than the previous average of five weeks. That, too, was upheld by a federal judge but could now be reversed, either by the board or by two bills, the Workforce Democracy and Fairness Act mentioned above and the Employee Privacy Protection Act first introduced in 2014.