An NLRB Case To Watch by Ellen Dannin

On November 9, the NLRB will be holding oral arguments in a case that is likely to be overlooked but that raises critical issues. The case is New York New York Hotel, LLC, d/b/a New York New York Hotel and Casino.The key issue in the case comes down to who is an employee. That issue matters to the parties in the case, but the decision has the potential to limit or expand rights to organize. I personally considered the case important enough to file an amicus brief.You can find the orders in this case and the parties' briefs at this link. The amicus briefs, which had to be filed by October 2 should be posted soon. The Board puts the issues this way:
The issues presented in the case include whether Ark Las Vegas Restaurant Corporation’s employees, who are employed by Arkon the premises of the New York New York Hotel and Casino, have a statutory right to distribute handbills at various places on hotel property during the employees’ off-duty hours. The handbills were aimed at guests and customers and protested Ark’s nonunion status and wages.
If the Ark employees are found to have employee status, then they have a protected right to distribute handbills and to try to enlist guests and customers to support their union organizing campaign. If they do not have employee status, they can be forbidden to take any of these actions and fired if they do.The definition of who is an employee is of critical importance in all workplace laws. It defines who is protected by the law. The courts have particular trouble with the definition of employee under the National Labor Relations Act, because when Congress enacted the law it decided to overrule the common law definition. Under the common law, an employee is someone who is employed by an employer. Under the NLRA, an employee is someone who is an employee, regardless of who the employer is.
§ 2(3) of the NLRA states: “The term ‘employee’ shall include any employee, and shall not be limited to the employees of a particular employer, unless the Act explicitly states otherwise . . ..”Congress used this language so employees could ask other employees to help them organize. In other words, the actions of the Ark employees are exactly what Congress intended to happen and to be legal and protected.Despite this, the courts tend to interpret "employee" as if the NLRA had never been enacted. Courts and the NLRB are supposed to interpret the law with Congress intent in mind. They are supposed to interpret the law so it promotes the policies of the law. In the case of the NLRA, its stated policies are to promote the practice and procedure of collective bargaining, to protect freedom of association, to promote equality of bargaining power. You will rarely see the courts or the NLRB refer to these purposes. If they did, they could not hand down decisions that undermine these rights.I filed an amicus brief in the case to remind the Board and the courts of Congress' intent. I looked at the Legislative History of the NLRA, that is the debates, statements, testimony, and drafts of the legislation from the time the bill was introduced until the NLRA became law.While the brief was not long as briefs go, it is too long to reproduce here. I will, however include some of what I wrote.Excerpts from my brief:In 1941, the Supreme Court recognized the breadth of this definition [of employee] as necessary to [the NLRA's] operation. The Court said that a more limited definition would
confine the “policies of this Act” to the correction of private injuries. The Board was not devised for such a limited function. It is the agency of Congress for translating into concreteness the purpose of safeguarding and encouraging the right of self-organization. The Board, we have held very recently, does not exist for the "adjudication of private rights"; it "acts in a public capacity to give effect to the declared public policy of the Act to eliminate and prevent obstructions to interstate commerce by encouraging collective bargaining." Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 192-93 (1941).The Court continued, saying that the central purpose of the Act was directed “toward the achievement and maintenance of workers' self-organization.” Id. at 193. In 1947, the Board cited Phelps Dodge in its assertion that employee, as defined by the NLRA, “is broad enough to include members of the working class generally” and that to limit protection “only to employees of a particular employer, would permit employers to discriminate with impunity against other members of the working class, and would serve as a powerful deterrent against free recourse to Board processes.” Briggs Manufacturing Co., 75 N.L.R.B. 569, 570-71 (1947). This broad definition promotes the Act’s broad policy endorsement of freedom of association in § 1, as well as the inclusion of mutual aid or protection among the rights of employees listed in § 7. Furthermore, in § 2(9), Congress reiterated the position that the NLRA was to provide broad coverage to anyone in the class of employee, without consideration of who is the employer of that employee:
The term "labor dispute" includes any controversy concerning terms, tenure or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee. [emphasis added]. The Supreme Court in Phelps Dodge recognized Congress’ intent to define employee broadly and to link between §§ 2(3) and (9):
To circumscribe the general class, “employees,” we must find authority either in the policy of the Act or in some specific delimiting provision of it. . . . The problem of what workers were to be covered by legal remedies for assuring the right of self-organization was a familiar one when Congress formulated the Act. The policy which it expressed in defining "employee" both affirmatively and negatively, as it did in § 2 (3), had behind it important practical and judicial experience. “The term ‘employee’,” the section reads, “shall include any employee, and shall not be limited to the employees of a particular employer, unless the Act explicitly states otherwise. . . .” This was not fortuitous phrasing. It had reference to the controversies engendered by constructions placed upon the Clayton Act and kindred state legislation in relation to the functions of workers' organizations and the desire not to repeat those controversies. Cf. New Negro Alliance v. Grocery Co., 303 U.S. 552. The broad definition of "employee,” “unless the Act explicitly states otherwise,” as well as the definition of “labor dispute” in § 2 (9), expressed the conviction of Congress “that disputes may arise regardless of whether the disputants stand in the proximate relation of employer and employee, and that self-organization of employees may extend beyond a single plant or employer.” H. R. Rep. No. 1147, 74th Cong., 1st Sess., p. 9; see also S. Rep. No. 573, 74th Cong., 1st Sess., pp. 6, 7.313 U.S. at 192-93. Congress was concerned that if employees, broadly defined, could not make common cause with other employees regardless of employer, then the rights the NLRA was enacted to provide and the purposes the NLRA was to promote would be weakened and even destroyed. . . . The source of employees’ legitimate rights is the National Labor Relations Act. Later amendments have not changed the critical language in either § 2(3) or § 2(9).. . . There was strong opposition to language of this breadth:
Mr. Blanton: You will note that under the special heading in the bill, “Rights of employees”, it is provided that they may “engage in concerted activities for mutual aid”, and this is not restricted to an employer’s own employees, but labor agitators from anywhere may thrust themselves into a man’s business and interfere with his employees and try to get them dissatisfied and demand that they unionize against their will , because the bill, in defining “employee”, uses this language on page 5, to wit: “The term ‘employee’ shall include any employee, and shall not be limited to the employees of a particular employer.”Legislative History of the National Labor Relations Act, 1935, at 3157. Despite these and other objections, Congress concluded that in order to protect the rights created by the new law the definition of employee must embrace all employees and not be tied to an employment relationship. In its analysis of the bill, the Senate foresaw that situations were likely to arise that would bring employees into an economic relationship with employers who were not their direct employers and drafted language to give the government jurisdiction over those more complex relationships:
The term “employee” is not limited to the employees of a particular employers. The reasons for this are as follows: Under modern conditions employees at times organize along craft or industrial lines and form labor organizations that extend beyond the limits of a single employer unit. These organizations at times make agreements or bargain collectively with employers, or with an association of employers. Through such business dealings, employees are at times brought into an economic relationship with employers who are not their employers. In the course of this relationship, controversies involving unfair labor practice may arise. If this bill did not permit the Government to exercise complete jurisdiction over such controversies (arising from unfair labor practices), the Government would be rendered partially powerless, and could not act to promote peace in those very wide-spread controversies where the establishment of peace is most essential to the public welfare.. . .Sen Report No. 573 on S.1958, Legislative History of the National Labor Relations Act, 1935, at 2305. The House agreed:
These definitions are for the most part self-explanatory. The committee wishes to emphasize the need for the recognition as expressed in subsections 3 and 9, that disputes may arise regardless of whether the disputants stand in the proximate relation of employer and employee, and that self organization of employees may extend beyond a single plant or employers. This is so plain as to require no great elaboration.
. . .[quoting American Steel Foundries] To render this combination at all effective, employees must make their combination extend beyond one shop. It is helpful to have as many as may be in the same trade in the community united because in the competition between employers they are, bound to be affected by the standard of wages of their trade in the neighborhood. Therefore, they may use all lawful propaganda to enlarge their membership and especially among those whose labor at lower wages will injure their whole guild. This statement is a sufficient answer to those who, with questionable disinterestedness, proclaim that rugged individualism is the great boon of the American workman; or that there is something “unAmerican” in a movement by workers to pool their economic strength in a type of labor organization most effective in approximating the economic power of their employers, namely, in so-called “outside unions”, thereby establishing that ‘equality of position between the parties in which liberty of contract begins.” While the bill does not require organization along such lines, and indeed makes no distinction between such organizations and others limited by the free choice of the workers to the boundaries of a particular plant or employer, it is imperative that employees be permitted so to organize, and that unfair labor practices taking in workers and labor organizations beyond the scope of a single be regarded as within the purview of the bill.House Report (May 20, 1935 ), Legislative History of the National Labor Relations Act, 1935, at 2917-18; 3056-57; see also id. at 1296.. . . Congressman Boland on February 20, 1935, included the following explanation for the expansive definitions and included discussions of similar language in the NRA § 7(a):
The ideas underlying this section are very simple. The worker is treated as a free person. He is accorded the right to associate with fellow workers, to join or refrain from joining any labor organization. He is protected from acts of aggression of his employer. His helplessness as an individual in bargaining with his employer is recognized. This section seeks to equalize the bargaining power of employers and employees by permitting the latter to pool their strength, for theoretical freedom of contract can exist only between equals. The statute recognizes the evils resulting from the present inequalities of bargaining power and proposes as a legislative remedy a regime of collective bargaining. Having permitted industry to unite through merger and consolidation into powerful corporate units, and having encouraged business to form trade associations covering entire industries, Congress sought to effect an economic balance through collective bargaining and the free association of workers in labor organizations. Only in this way could workers achieve even a meager sense of security. . . . I am not taking the position that section 7(a) does not take us into new territory; my analysis will show the contrary. I am, however, seeking to show that section 7(a) was the orderly and logical culmination of the efforts on the part of the Federal Government to free the laboring man from the restrictions imposed by employers and to afford same the opportunity to associate freely with his fellow workers for the betterment of working conditions and the improvement of his status in our economic system.Legislative History of the National Labor Relations Act, 1935, at 2430-31 (discussing NRA § 7(a)).. . .Discussion In this case, the Board and Court of Appeals ask whether the definition of employee and thus the protections of the NLRA can apply to several common situations outside that of the common law relationship of employer-employee. Does the employee of a company’s subcontrator have the rights of an employee under the NLRA? Can employee include employees not on their work shift? When an employee asks bystanders and passers-by to support their struggle for better wages and for union representation, is the employee engaged in concerted activities that are protected by the act? In other words, are those bystanders and passers-by NLRA employees? The common law would likely say “No” to most of these questions. However, as discussed above, Congress decided that the answer must be: “Yes.”. . .Ellen Dannin is Professor of Law at Penn State - Dickinson School of Law and author of Taking Back the Workers' Law - How to Fight the Assault on Labor Rights (Cornell University Press 2006).