Labor Relations Update

One of the NLRB's most sweeping decisions in decades, Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83 (August 26, 2011).pdf, has reached a federal appeals court, as the employer seeks to have the decision overturned.  As we have previously discussed, the Board in this case established the micro union standard, where the bargaining unit sought by a union will be given special deference if the employee grouping selected shares a community of interest.  The significance of this rule is that an employer now may be faced with multiple bargaining units (e,g,, by department or job classificatiion or title) when the standard for 77 years has been to look at the industry involved and the functional integration of the employees.  Now, if an employer seeks to include additonal employees in the bargaining unit, it must demonstrate the larger grouping shares an "overwhelming"community of interest.  In the rule's short tenure, it has become apparent that the undefined new standard is (almost) impossible to reach. 

The case is being heard by the Sixth Circuit Court of Appeals in Cincinnati, Ohio.  As of April 23, 2012, the principal parties and friends of the court have filed their briefs.  Just as with the underlying case, it is anticipated that the court will receive numerous briefs from interested parties. The next step will be for the court to hold oral argument.  A decision is not expected for several months.

We were privileged to file amicus briefs separately on behalf of two distinguished organizations, the Retail Industry Leaders Association ("RILA") and the Coalition for a Democratic Workplace ("CDW").  As the briefs demonstrate, the Board's rule in Specialty Healthcare imposed an entirely new legal framework without proper notice and discussion, as well as violated key provisions of the NLRA.  Those briefs are attached here RILA Amicus Brief (Apr 23 2012).pdf and here Coaliton For A Democratic Workplace Amicus Brief (April 23, 2012).pdf

As always, we will be watching this case very closely and will report significant developments as they occur. 

As previously discussed, the impending departure of Chairman Liebman, as well as the coming of the end of the NLRB's fiscal year, made it highly likely we would see some significant decisions issued by the agency.  Chairman Liebman departed after fourteen years on Saturday, but not before having one last word about her critics.  The New York Times' Steven Greenhouse captured perfectly a major issue with labor relations today: that both sides often seem to be talking about different things. 

Also before her departure, Chairman Liebman was able to get to a few of the more hotly debated issues.  The NLRB issued today a truly remarkable decision which likely will have an impact on all industries, not just in non-acute healthcare where the decision began.

In Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83 (August 26, 2011).pdf the Board introduced a sweeping change to unit determinations.  This is the case we discussed in the past where the Board gave strong indications it was going to adopt a presumptive standard if the petitioned for unit is based on "readily identifiable" groupings like all employees carrying the same job title or classification.  Unions often focus on just one set of employees holding a certain title or classification, with little or no regard to how the employees fit in a particular workplace.

Given the questions asked by the Board in its solicitation of briefs, it was believed any rule issued would apply only to the non-acute healthcare industry.  The Board, however, decided to go much farther and issue a new rule applicable to all industries. 

In its decision the Board made sweeping changes to current law.  First, it overruled Park Manor Care Center, 305 NLRB 872 (1991) which set forth the standard to be applied for determining the unit in non-acute healthcare facilities, such as nursing homes. 

Second, the Board articulated a new standard (even though it asserts it is not new) for deciding cases where the employer asserts that the smallest appropriate unit should be larger than the unit petitioned for by the union:

in cases in which a party contends that a petitioned-for unit containing employees readily identifiable as a group who share a community of interest is nevertheless inappropriate because it does not contain additional employees, the burden is on the party so contending to demonstrate that the excluded employees share an overwhelming commuinty of interest with the included employees.

This rule does indeed represent a major change in the law of determining representation units. 

This standard gives presumptive weight to the petitioned-for unit.   Section 9(c)(5) of the Act states that the "extent of organizing" may not be given controlling weight by the Board, yet this appears to be exactly what happened.  The "readily identifiable" language clearly refers to a job title or a classification, which in many cases will mean that the petitioned for unit is going to be assumed to be correct.  This is exactly what Member Becker (who not surprisingly joined in the majority) said should be the rule in his dissent in Wheeling Island Gaming, Inc., 355 NLRB No. 127 (April 27, 2010).pdf where he stated, "The petitioned-for unit contains all the employees who do the same job at the same location.  From the perspective of employees, this is one of the most logical and appropriate units within which to organize for the purpose of engaging in collective bargaining."  It appears Member Becker had his wish granted to give additional weight to the union's desires in unit determinations.

It is now much more likely for an employer to have multiple bargaining units, which can be disruptive to the business.  For instance, if an employer has employees working under twelve different job titles in a workplace there is a possiblity of twelve different bargaining units being formed.  Imagine twelve sets of bargaining and twelve points of contact for employee representation.

Unless, of course, the employer rebuts this presumption.  The Board also addressed the proof in this standard.  This new standard heightens the burden on the employer to demonstrate that the petitioned-for unit is inappropriate by demonstrating an "overwhelming community of interest."  This is undeniably a higher standard of proof, and unfortunately the Board does not give us any guidance as to what constitutes "overwhelming." 

Member Hayes, of course, dissented:

Make no mistake.  Today's decision fundamentally changes the standard for determining whether a petitioned-for unit is appropriate in any industry subject to the Board's jurisdiction.  My colleagues' opinion stunningly sweeps far more broadly even than suggested by the questions posed in the notice and invitation to file briefs to which I previously dissented.

The new standard may have the unintended consequence of prolonging representation hearings as employers will now want to make extra certain they can establish "overwhelming" community of interest, whatever that means. 

The mid-point of Summer has passed.  Although the NLRB has not issued a major decision in several weeks, the agency has not been slacking off this Summer.  In a typical year, August and September are the busiest months for the NLRB, because the federal government's fiscal year ends September 30.  During the final weeks of the fiscal year the NLRB attempts to push out as many decisions as it can.  The agency is largely statistically driven, and so more decisions means a greater justification for a renewed or increased budget.

This, of course, is not a typical year.  The current NLRB has a very active, if not activist, agenda.  There not only are a number of potentially far-reaching cases it has yet to decide, but the agency also has proposed rulemaking to drastically upend the current manner in which representation elections are held.  Add into the mix Chairman Liebman's appointment is set to expire on August 27, one can expect a storm of activity from the NLRB in the coming weeks.  Here is a snapshot of the important cases and the rulemaking initiatives currently pending: 

• Speciality Healthcare (NLRB Case No. 15-RC-8773).  In this case, the NLRB wondered aloud whether it could set a presumptive rule for the appropriateness of bargaining units in certain segments of the healthcare industry. The problem, of course, is that anyone who has worked in business environment knows that there is no uniformity to how an employer structures its business, even within industries.  A decision holding otherwise will make it much easier for unions to organize because it will remove Section 9(b) of the Act's requirement that the NLRB actually decide, on a case by case basis, the appropriateness of a unit.  We posted in detail on this important issue in March after we filed a brief on behalf of Retail Industry Leaders Association. 
•  Lamons Gasket Company (NLRB Case No. 16-RD-1597).  In this case the NLRB may revisit (read- overturn) the exception to the voluntary recognition bar set forth in Dana Corp Metaldyne, 351 NLRB 434 (2007).pdf.  In Dana, the NLRB set a rule where employees may challenge voluntary recognition of a union by their employer by filing a petition for an election within a certain period of time.  With all the discussion about the NLRB's processes, the NLRB in Dana pointed out something that sometimes gets lost in the debate.  "Finally, although critics of the Board election process claim that an employer opposed to union representation has a one-sided advantage to exert pressure on its employees throughout each workday of an election campaign, the fact remains that the Board will invalidate elections affected by improper electioneering tactics, and an employee's expression of choice is exercised by casting a ballot in private.  There are no comparable safeguards in the voluntary recognition process."  Id. at 439. 
• Hawaii Tribune Herald (NLRB Case No. 37-CA-7043 et al.).  This is another case where the NLRB invited interested parties to file briefs about whether it should it should change its 32 year rule that witness statements made to the emloyer need not be turned over to the union prior to an arbitration hearing. As noted in the previous post on this issue, the NLRB's rule is designed to protect the witnesses from intimidation.  A reversal of this decades old rule will change the way arbitration cases are handled.
• D.R. Horton (NLRB Case No. 12-CA-25764).  The NLRB invited briefs on the issue of whether an employer's requirement that each employee sign an arbitration agreement which expressly waives the right to class action relief violated Section 8(a)(1). We previously posted on this important issue. The issue in this case really comes down to whether "all" group activity, no matter what the nature, is also "protected, concerted" activity under Section 7 of the NLRA.  We filed a Brief for the Retail Industry Leaders Association -- Amicus Curiae.pdf on this issue.  While one can certainly see the similarities between Section 7 activity and employees who wish to bring a class action against their employer, there are also important distinguishing factors.  The entire NLRA concept of group activity is designed to have employees acting in concert toward a common goal; there is interaction and cohesiveness. Under the NLRA, the group must achieve majority status before it can act on behalf of the whole.   In many class actions, the opposite is often true.  The vast majority of employees are not even aware the lawsuit is pending.  In many cases the "class representatives," often a tiny fraction of an overall workforce, can settle the entire matter (for their own benefit, of course), and then notify the rest of the employees what happened.  There are great differences between the two types of activity.
• Rulemaking. Of course, the NLRB has moved forward with its efforts to force "quickie elections" on employers through rulemaking.  The NLRB held hearings on the matter on July 18-19.  The changes, if promulgated, would reduce the amount of time between the filing of a petition and the election from about 42 days now to far fewer days.  The need for such drastic change is mystifying.  The NLRB itself in its own  Performance and Accountability Report FY 2010.pdf stated that it met or exceeded its strategic goals for processing representation petitions, which raises serious questions of the necessity for such drastic changes.  The U.S. Chamber of Commerce has drafted a very good Fact Sheet On Quickie Elections.pdf detailing the proposed rules, and how they would change the current process.  Comments on the rulemaking are due August 22, 2011, so employers who wish to get involved should draft comments to the NLRB (there is a draft letter in the U.S. Chamber's materials).

As one can see, a storm of NLRB activity is headed this way.  We will certainly be monitoring it as its clouds continue to gather.  Employers need to prepare for the possibility that many areas of NLRB law and process, some decades old, will be changed in the coming weeks.  We will, of course keep you posted on all developments as they occur.