As many labor attorneys predicted, 2023 was a huge year for labor organizations in the U.S. We saw a continued uptick in union organizing campaigns and high profile strikes in the health care, auto, and film industries.

In 2023, we saw several remarkable wins at the bargaining table for unions, and significant legal decisions favoring organized labor from the National Labor Relations Board (NLRB).

Strikes and Organizing Campaigns

Health care organizations have not been immune to the rise of the labor movement.

In October, 75,000 health care workers at Kaiser Permanente went on strike after demanding higher wages to combat staffing shortages, retain workers, and account for rising inflation.¹ The strike at Kaiser Permanente was the largest recorded health care strike in U.S. history.

Not getting the same attention but possibly as important, is the rise in union organizing with physician groups. In October, roughly 550 primary and urgent care physicians, nurse practitioners, and physician assistants at Allina Health in Minnesota voted to be represented by the Doctors Council SEIU union.²Modern Healthcare reported on Dec. 1, 2023, that nearly 1,300 resident physicians and fellows at Northwestern University in Chicago planned to unionize.³

Many commentators speculate that the rise in unionization among physicians has been partially caused because physicians feel they have been asked to do more with less, which has increased physician burnout and concern of putting patients at risk. A broader theory is that consolidation of physician-owned private practices into health care systems has left physicians feeling as though they do not have the same voice in their practices.

2023 NLRB Decisions that Favor Unions

In addition, the NLRB continued to make headlines with a number of precedent-changing decisions in favor of pro-union agenda in 2023. Legal practitioners in the health care industry would be well served to review each of these decisions in detail to ensure compliance with the new legal standards.

Here are brief summaries of the most notable 2023 NLRB decisions that may impact health care organizations.

Quick election rules. On Aug. 24, 2023, the NLRB issued a final rule for union elections that accelerated the scheduling of elections after the petition is filed.⁴ The rule, Representation-Case Procedures, states that elections must be scheduled at “the earliest date practicable,” and the election will no longer observe the waiting period of 20 business days before an election may be held.

The NLRB’s stated goal is to conduct an election within eight calendar days after the petition is filed. The rule provides that disputes concerning individuals’ eligibility to vote in the election do not need to be litigated or resolved prior to the election.

Unions won roughly 80 percent of the elections conducted in 2023. It is expected that the unions’ win percentage will increase due to the reduction in time employers have to mount a campaign.

Progressive health care organizations should attempt to understand and address employee needs immediately before a representation petition is filed. Failure to do so will severely limit an employer’s ability to effectively respond to a union organizing campaign under the new quick election rules.

A new standard for recognition of union with majority support. In Cemex Construction Materials Pacific,⁵ the NLRB adopted a new standard for union recognition that requires an employer to recognize a union without the benefit of an election.

The NLRB decided that an employer must recognize a union that demonstrates majority status unless the employer challenges the union’s support by filing an RM petition with the NLRB. The RM petition must be filed with the NLRB within 14 days of the union’s claim of majority support. The NLRB did not require the union to produce authorization cards to support its claim of majority status – the union must only claim to have obtained majority support of the employees.

Additionally, the NLRB found that employers who commit even a single unfair labor practice following a union’s demand for recognition may be ordered to bargain with the union. In the Cemex case, the employer prevailed in an election, but was found to have committed a number of unfair labor practices. As a result, the NLRB invalidated the election results and ordered the employer to bargain with the union.

You can’t say that in the workplace! Maybe you can. On May 1, 2023, the NLRB issued a decision involving offensive or abusive conduct by employees in the context of exercising their rights to engage in concerted activity.

In Lion Elastomers, LLC II,⁶ the NLRB reversed its 2020 ruling in General Motors LLC.⁷ In doing so, the NLRB changed the standards relating to discipline or discharge of workers who cross the line with offensive or abusive conduct while engaging in protected activity under the National Labor Relations Act (NLRA).

In General Motors, the NLRB analyzed the employer’s motive in issuing discipline for abusive or offensive conduct, and was willing to uphold discipline where the employer would have imposed the same discipline regardless of the protected concerted activity. The Lion Elastomers II case overturned the General Motors standard and established that employers must give employees some leeway for otherwise inappropriate behavior while engaging in protected concerted activity, in order to safeguard the employees’ statutory rights.

The NLRB decided that even abusive or offensive speech requires an examination of the specific setting, and allows the employee to legally engage in abusive or inappropriate conduct while engaging in the otherwise protected activity unless the conduct is extreme. The NLRB will weigh the following factors to determine whether inappropriate or abusive speech remains protected under the NLRA:

• place of the discussion or conduct;

• subject matter of discussion;

• nature of employee’s outburst; and

• whether the outburst was provoked in any way by the employer’s unfair labor practice.

It is notable that the NLRB views these factors as a high standard. According to the NLRB, “the relevant question is whether the conduct is so egregious as to take it outside the protection of the Act, or of such a character as to render the employee unfit for further service.”⁸

This decision adds an element of legal complexity to situations where employee outbursts occur. Employers may face a situation where failure to protect one group of employees from abusive or offensive conduct may give rise to a claim for workplace discrimination or harassment for tolerating a hostile work environment. Employers will need to carefully evaluate these situations and proceed cautiously in light of this decision.

Time for Handbook Review

On Aug. 2, 2023, the NLRB revisited its standard for evaluating the legality of workplace rules under the NLRA. Employers in both unionized and nonunionized settings should review their employee handbooks and policies to ensure compliance with the new standard established in Stericycle, Inc.⁹

In Stericycle, the NLRB was critical of overly broad policies that could chill employees from exercising their rights under the NLRA. First, the board determined that a rule is presumptively unlawful if it could possibly be interpreted to limit employee rights. In the board’s view, a policy may be held unlawful even if a work rule had an alternate interpretation that was consistent with employees’ NLRA rights, and the employer interpreted the rule consistent with the employees’ NLRA rights. The board may nonetheless find a rule invalid based on potential interference with activities that were not considered by the employer when the handbook or policy was drafted.

Under the new standard, the General Counsel must show that a rule has a reasonable tendency to chill employees from exercising their rights. The NLRB clarified that it would interpret the rule from the perspective of an employee who is subject to the rule and economically dependent on the employer. The board found that ambiguous rules would be interpreted against the employer.

Stericycle represents a significant departure from the previous standard, and will likely result in an increased number of unfair labor practice allegations against employers. Policies will be under new and heightened scrutiny by the NLRB. As such, Employers should review their employee handbooks and policies to ensure compliance with the new Stericycle standard.

Noncompetes Under Attack

On May 30, 2023, General Counsel Jennifer Abruzzo issued Memorandum GC 23-08, indicating that overbroad noncompete agreements are unlawful because they “chill” or discourage employees from exercising rights under Section 7 of the NLRA.

In the memo, Abruzzo contends that noncompete agreements interfere with an employee’s Section 7 rights in the following ways:

• they chill employees from concertedly threatening to resign to demand better working conditions;

• they chill employees from carrying out concerted threats to resign or otherwise concertedly resigning to secure improved working conditions;

• they chill employees from concertedly seeking or accepting employment with a local competitor to obtain better working conditions;

• they chill employees from soliciting coworkers to go work for a local competitor as part of a broader course of protected concerted activity; and

• they chill employees from seeking employment, at least in part, to specifically engage in protected activity, including union organizing with other co-workers at an employer’s workplace.

Abruzzo concluded that:

the proffer, maintenance, and enforcement of a noncompete provision that reasonably tends to chill employees from engaging in Section 7 activity violates Section 8(a)(1) unless the provision is narrowly tailored to special circumstances justifying the infringement on employee rights. In this regard, a desire to avoid competition from a former employee is not a legitimate business interest that could support a special circumstances defense.¹⁰

While limited exceptions may be considered, the memo is short on specific scenarios where it may find the employer’s interest in maintaining the noncompete to be justified. She also asserted that it is more likely that a noncompete will be deemed to be a violation of labor laws where the noncompete provisions are imposed on low- or middle-wage workers.

The risk for employers is that an employee who has signed a noncompete agreement will file an unfair labor practice charge with the NLRB, claiming that they have lost out on higher paying work opportunities at a competitor. As the NLRB has expanded its view on “make whole” remedies, there is risk that not only will the NLRB hold that noncompetes are invalid, but it may also award damages to compensate the employee for the lost employment opportunity.

Continuing in 2024

As expected, there were a number of NLRB decisions and General Counsel memoranda impacting the relationship between employers and employees for both union and nonunion workforces.

In 2024, we expect continued growth in union organizing campaigns, litigation before the NLRB, and continued review and modification of existing precedent from the NLRB.

Health care organizations will continue to face headwinds in terms of staffing, employee burnout, and financial pressures in 2024. A good new year’s resolution for health care employers is to strive to improve their workplaces and grow their relationships with employees.

This article was originally published on the State Bar of Wisconsin’s Health Law Blog. Visit the State Bar sections or the Health Law Section webpages to learn more about the benefits of section membership.

Endnotes

¹ Mari Devereaux, “75,000 Kaiser Permanente Workers Go on Strike,” Modern Healthcare, Oct. 4, 2023.

² Mari Devereaux, “Allina Health Doctors Win Union Certification,” Modern Healthcare, Jan. 16, 2024.

³ Katherine Davis, “Northwestern Medical Residents Announce Plan to Unionize,” Modern Healthcare, Dec. 1, 2023.

⁴ Representation-Case Procedures, 88 Fed. Reg. 58,076 (Aug. 25, 2023) (to be codified at 29 C.F.R. pt. 102).

⁵ Cemex Construction Materials Pacific, 372 NLRB No. 130.

⁶ Lion Elastomers LLC II, 372 NLRB No 83 (2023).

⁷ General Motors LLC, 369 NLRB No. 127 (2020).

⁸ Lion Elastomers LLC II, 372 NLRB No 83, 2 (2023).

⁹ Stericycle Inc., 372 NLRB No. 113 (2023).

¹⁰ Memorandum of the NLRB, GC 23-08 Non-Compete Agreements that Violate the National Labor Relations Act, May 30, 2023.