On September 15, 2014, in CNN America, Inc., the panel (Board) heading the NLRB's judicial functions affirmed the findings of an administrative law judge (ALJ) that CNN unlawfully insourced technical work previously performed by employees of a unionized subcontractor. The Board found CNN to be both a joint employer of its subcontractor's employees and the successor to the subcontractor's collective bargaining obligations. The NLRB also found that the company violated the NLRA by attempting to undermine union activity, terminating the technical support services subcontract to bring the work in-house without necessary decision and effects bargaining and attempting to escape successor collective bargaining obligations by discriminating against the subcontractor's unionized employees when recruiting and hiring for the insourced technical positions. (361 N.L.R.B. slip op. 47 (Sept. 15, 2014).)

CNN, a 24-hour cable news channel, has news bureaus and affiliates in a number of cities, including bureaus in New York City (NYC) and Washington DC (DC). From 1980, CNN had technical support service contracts, Electronic News Gathering Service Agreements (ENGAs), with a series of companies. The agreements generally were cost-plus agreements, setting reimbursement rates for services provided. In 1982, the DC-based technicians for Mobile Video Services (MVS), CNN's technical support services subcontractor at the time, selected Local 31 of the National Association of Broadcast Employees and Technicians (NABET) as their representative for collective bargaining with MVS in an NLRB election. In 1985, NYC-based MVS technicians elected Local 11 of NABET for the same purposes. Since 1980, as CNN decided to end technical support service contracts in DC and NYC, the new companies that took on the work hired most of the previous company's technicians and assumed their predecessor's collective bargaining obligations with the NABET local unions. CNN was not a party to any:

In 1997 and 2001, Team Video Services (TVS) began servicing the DC ENGA and NYC ENGA, respectively. NYC and DC were the only bureaus where the technical staff was represented by unions.

In September 2003, as was the custom since 1980, CNN informed TVS that it was terminating the ENGAs at the NYC and DC bureaus without prior discussion with the subcontractor or any notice to the unions representing its employees. However, this time CNN decided to bring the NYC and DC technical work in-house, purportedly to allow it to take advantage of technological (computer-related) developments in the industry. In CNN's press releases and internal emails, company executives glowingly praised the work performed by TVS and its employees.

As these decisions became known to the public and the TVS employees, several CNN executives and managers made comments regarding the union's future with the company:

CNN considered existing technician job categories while devising new job titles and functions and setting a process for hiring over 200 skilled technicians in NYC and DC. CNN used a "behavioral interviewing" process to identify applicants with required skills but also those whose behavior suggested an ability to grow. Some non-TVS applicants were hired for new CNN positions even though they:

In its hiring process, CNN set aside an undetermined number of positions for "growth candidates," individuals who lacked the proper qualifications, but were deemed by CNN to have potential to grow. Some of CNN's hiring managers altered HR summary scores to raise the rankings of non-TVS applicant growth candidates and lower the rankings of TVS applicants. CNN hired all of the non-bargaining unit employees in DC and NYC that applied for jobs through its new Bureau Staffing Program. CNN also hired about 65 former TVS technicians in NYC and 50 former TVS technicians in DC. Accordingly, in both DC and NYC more than half of the new hires for in-house technical work were former bargaining unit employees at TVS. However, there was evidence suggesting that the company did not hire many of the applicants purportedly qualified bargaining unit employees, and did not hire any of TVS's most active union members.

Once the changeover occurred, the former TVS employees whom CNN hired received the same credentials, gear and equipment that they had previously used. The work and responsibilities were primarily the same. However, CNN's technician pay rates were lower than what TVS paid and CNN did not assign overtime work to its employees. Finally, CNN also did not offer premium pay for work on special days, such as holidays, like TVS had.

The unions filed ULP charges alleging that CNN had enacted a plan to undermine the union activity of the unit employees in the NYC and DC bureaus, which included:

The counsel for the NLRB's General Counsel issued a consolidated complaint incorporating those allegations and also alleged that:

The ALJ found that CNN and TVS to be joint employers. The ALJ also found that CNN violated the NLRA in the following ways:

CNN filed exceptions to the ALJ findings, to the Board.

The Board majority (Chairman Pearce and Member Hirozawa) found that:

The Board found that the ALJ was correct in finding that CNN and TVS were joint employers. In reaching this decision, the Board noted that:

The Board also noted that a joint employer situation seems to be dictated by a situation involving:

Other factors also made CNN appear to have joint-employer status with TVS:

Based on its finding of a joint employer relationship, the Board majority found that CNN had bargaining obligations and unlawfully:

The Board also noted that:

The Board (Chairman Pearce and Members Hirozawa and Miscimarra) determined that CNN was a successor from TVS. The test for determining successorship is:

(NLRB v. Burns Security Servs., 406 U.S. 272 (1972).)

The Board majority (Chairman Pearce and Member Hirozawa) noted that:

The Board majority affirmed the ALJ's findings that each of the following statements violated section 8(a)(1):

The Board majority ordered an extensive list of remedies for CNN's ULPs, including:

Member Miscimarra concurred with the majority on the following issues:

Member Miscimarra dissented from the following majority's conclusions that:

Miscimarra stated that technological advances diminished the need for certain technical employees and required CNN to alter its employment structure. He also noted that CNN had the right to end its contract with TVS because under long-standing precedent, an employer's decision to cease business with another employer because of the union activity of the second employer's employees, is not a violation of Section 8(a)(3). While concurring that CNN was successor to TVS, Miscimarra dissented from the majority's order requiring CNN to rescind all changes made at the time of the transition from TVS to CNN.

In CNN America Inc., the Board majority cited to precedent regarding its joint employer standard but relied on a few cherry-picked Laerco factors to find CNN was a joint employer of its subcontractor's employees. Without expressly stating it, the Board majority moved the Board's joint employer standard towards one where employers that only indirectly control another employer's decisions regarding setting or negotiating terms and conditions of employment for its employees are more likely to be deemed joint employers. The Board typically requires an employer to directly influence hiring, firing and disciplining decisions of another employer to be a joint employer. Here, the majority relied on the normal cost containment components of a cost-plus subcontracting agreement, which Board precedent holds are not enough to create a joint employer relationship, to find CNN to be a joint employer notwithstanding a 20 year history in which no one suggested it was.

Employers should expect that CNN will appeal this decision as it:

UPDATE: On August 4, 2017, the US Court of Appeals for the District of Columbia Circuit held that:

(NLRB v. CNN America, Inc., 865 F.3d 740 (D.C. Cir. Aug. 4, 2017).)