Will the NLRB Reshape Labor Law?

Do you recall our report on the recent Supreme Court decision in Epic Systems Corp. v. Lewis (2018)? Epic Systems has so far been known primarily as the “case that allowed class action waivers.” However, it also heralded other potential changes to the state of labor law in the United States.

On August 15, 2018, the National Labor Relations Board (NLRB), of its own initiative, vacated its own decision in the case of Cordua Restaurants, Inc. (April 26, 2018), also known as Cordua I. The decision to “reconsider” the case is known as Cordua II. In this line of cases, an employer was found to have terminated an employee after he filed a class action lawsuit against the company. The employer argued that the employee had, in fact, been terminated for stealing payroll information, but the NLRB found that the termination was due to protected activity as defined under Section 7 of the National Labor Relations Act (NLRA). As rationale, the NLRB stated only that it wishes to “reconsider the entire proceeding.”

Given changes to the membership of the NLRB and the recent decision in Epic Systems, there is rampant speculation that the NLRB wishes to reconsider whether filing a class action suit is considered “protected activity” under the so-called “catchall” provision of Section 7. The “catchall” provision protects “other concerted activities” for “mutual aid or protection,” i.e., other than unionization or collective bargaining, and has been liberally construed to cover employees who are not unionized or who are not engaging in collective bargaining.

The “catchall” provision is how Epic Systems came to be, i.e., it all began with an NLRB decision in 2012 that lumped class action waivers into prohibited status under the “catchall” provision of Section 7 of the NLRA. Now that the catchall provision has seemingly been weakened, experts speculate that the prohibition on terminations for class action lawsuits may also fall out of favor with the NLRB.

Combined with the sudden and unexplained reversal of course in Cordua I and Cordua II, and given the primary issue (i.e., filing of a class action suit as protected activity) in those cases and relatively simplistic fact patterns, there is a possibility that the NLRB will soon issue another groundbreaking decision that could have long-lasting implications for labor law in the United States. Or it could not – only time will tell.

Employers Council will continue to monitor and report on the status of these cases.