For the last seven years, private clubs have been dealing with a very labor-friendly National Labor Relations Board (NLRB). This five-member government agency was created to adjudicate concerns between labor and management and run/certify labor union elections. However, the private club industry has been stymied by rulings handed down from the NLRB and regulations created by the agency have slanted to the labor side for almost a decade. Fortunately recent developments are creating a situation that could bring the board back in balance and foster a more club-friendly environment.
NLRB Recap
Traditionally, the NLRB is composed of three members from the president’s party and two from the opposition party. Currently, there are two Democrat members on the board and a Republican chairman. With just three active members, the NLRB could not deal with any major issues.
Last Tuesday, President Trump moved to appoint Marvin Kaplan to fill one of the vacancies. Kaplan currently serves as counsel to the Commissioner of the Occupational Safety and Health Review Commission. He has also worked on Capitol Hill as Workforce Policy Counsel for the House Education and the Workforce Committee. While he was on the Hill, NCA Vice President of Government Relations & General Counsel Brad Steele had the pleasure of working with him on some of our coalition business and he has been kind enough to spend time with NCA and our allies during National Golf Day. Kaplan will be a real asset to the NLRB and a real force in getting the NLRB back on track.
With one additional seat still vacant, it is expected that Trump will select his next nominee to the NLRB in the coming weeks. At that point, both will be confirmed by the Senate and the full NLRB can begin reviewing some of the more troubling rulings and regulations that have come down over the last few years.
NLRB Issues
NCA is optimistic that we will begin to see the removal of key NLRB decisions and rules that have inhibited private clubs’ success. Some of these issues are:
Ambush Election Rule
The Ambush Election Rule allows organizers to hold a union election within 14 days of filing the petition with the NLRB, and it forces clubs to provide employee personal telephone numbers and personal email addresses to union organizers. This hampers clubs’ ability to adequately prepare themselves and their employees for union elections. Should a club receive notice of a union organizing campaign, it should immediately hire labor counsel dealing with management issues to prepare its defense.
Micro-Union Decision
This decision allows unions to organize smaller subsets of employees in a business. For the private club industry, this means that a union could organize a “micro-union” of pool wait staff rather than the entire wait staff.
Since a union is formed when a majority of employees vote for it, it will be much easier for union organizers to get the 50 percent plus 1 they need if they can focus on a smaller number of employees. For example, 20 pool area servers is a much more interesting target than going after the entire group of 75 club servers. Once this group is unionized, the club will need to negotiate a contract with these 20 while dealing with the needs of the other servers separately.
Such a situation will increase administrative issues for the club and may push the other servers to look to unionize if they begin seeing differences in pay, benefits and/or treatment from the club’s leadership.
This ruling also places the burden on employers to prove that any excluded employees “share an overwhelming community of interest” with those in the proposed union group. So, a club’s general manager will now have to fight to include more employees into a proposed union group to help dilute the chance the union will succeed.
Joint Employer Ruling
The National Labor Relations Board (NLRB) issued a ruling in 2015 that dramatically expanded the definition of “joint employer.” The NLRB ruling determined that employers—including clubs—that hire independent contractors (ICs), may be considered a “joint employer” with the ICs’ contracting firm. Thus clubs could be liable for any labor violations committed by the IC. Clubs that hire ICs such as landscapers, cleaning service providers and others should take heed as this ruling dramatically broadens their potential liability.
In essence, this ruling makes it possible for clubs to be held responsible for employment and labor law violations that they have in no way committed. Under this ruling, if a contractor violates federal and state overtime and minimum wage regulations, a club may be held accountable for these violations and may be subject to litigation.
Understandably, knowing whether a contractor hired by a club is complying with employment laws is a very difficult endeavor, but clubs should still ensure that any IC agreements that they have are well-defined and help defray the costs should a “joint employer” situation arise. Club leaders are advised to discuss this matter with their local club counsel as soon as possible.
Positive Outlook
The appointment of Kaplan to the NLRB marks the beginning of the process to reverse some of the more problematic decisions the board made during the Obama Administration. While there is still some time before the NLRB will have a chance to revisit some of those rulings, the appointment provides a path to creating friendlier labor rules and regulations for clubs.