Micro Union Case Hits Federal Court Of Appeals

Posted by Mark Theodore on April 23, 2012

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. 

NLRB: When We Say It Must Be "Overwhelming" We Mean The Other Overwhelming

Posted by Mark Theodore on January 22, 2012

As 2011 came to a close, no one was certain whether the NLRB would continue to function into 2012 as Member Becker's recess appointment came to an end, leaving only two Members.  In those waning days, the NLRB issued a remarkable decision in DTG Operations, Inc., 357 NLRB No. 175 (December 30, 2011) applying its decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011) to find a small unit sought by the union appropriate.

In DTG Operations, the union petitioned for a unit of 31 rental service agents working at a rental car facility.  The employer contended that all hourly employees working at the facility should be included due to the functional integration of the classifications.  After a hearing, the Regional Director found that the "smallest appropriate unit is a wall-to-wall unit containing all 109 of the Employer's hourly employees."  In his decision, the Regional Director expressly concluded, "I find that the smallest appropriate unit must include all hourly employees employed at the Employer's .....airport location because they share an overwhelming community of interest based on the functional integration of the Employer's operations."  The NLRB reversed this decision and gave the union what it sought in its original petition.

Of course, the NLRB's finding that the petitioned-for unit is appropriate is hardly shocking news these days. As we previously reported, the new standard set forth in Specialty Healthcare, that an employer must demonstrate an "overwhelming community of interest" to change a petitioned for unit, is vague enough that virtually no unit changes would be sanctioned by this NLRB

In DTG Operations, though, the NLRB added two new twists to the process, both of which further illustrate the NLRB's myopia when it comes to deciding unit issues.

First, the NLRB in DTG Operations applied the new standard retroactively.  The Regional Director's decision issued January 28, 2011, some seven months before the issuance of Specialty Healthcare.  Thus, there is no way the parties could have anticipated that a new, higher standard would apply.  The parties presented evidence and otherwise made their record based on the law at the time, not the new standard.  Yet, the NLRB used that very record against the employer, noting for example, that evidence on employee interchange was lacking because "there is no evidence regarding how frequently [temporary interchange] has occurred."  It seems obvious that had the parties known they would be held to a higher standard they would have presented more evidence on this critical issue, yet apparently this opportunity for basic due process was not given to them.  Let's also point out that the NLRB, which spent the last year criticizing the representation case process as too lengthy itself waited almost one year to issue a decision in a high priority representation case.

Second, and perhaps more important, the NLRB reversed the Regional Director's finding that an "overwhelming community of interest" existed.  Of course, when the Regional Director found that the larger unit shared an overwhelming community of interest he presumably had no idea the NLRB would come up with a new standard that sounds exactly the same.  What does overwhelming mean, exactly?  One cannot tell anything except that what it does not mean.  We are still left with no guidance as to what must be proven in order to meet the new standard and alter a petitioned-for unit. 

Again, the result is not surprising. but it is more than a bit concerning that a case can be decided months after the fact using a standard that was not in existence at the time the parties tried their case.  

DTG Operations illustrates the NLRB trend in processing bargaining unit questions.  The bar for finding a unit other than that sought by the union is so high as to be virtually impossible to overcome.  This development, coupled with the new pending election regulations, means that employers pretty much will have to accept whatever unit the union seeks to represent regardless of how disruptive that might be to an operation. The term "functional integration" is now meaningless, and it is now possible that an employer such as DTG Operations with only 109 employees can have at least ten separate bargaining units based on the different number of employee classifications.  Ten separate bargaining units means potentially ten separate contracts, and ten separate negotiations.    

One can predict an onslaught of new petitions seeking the smallest unit possible.

The final word goes to Member Hayes, who dissented:

As long as a union does not make the mistake of petitioning for a unit that consists of only a part of a group of employees in a particular classification, department, or function, i.e., a so-called fractured unit, it will be impossible for a party to prove that an overwhelming community of interests exists with excluded employees.

NLRB Reveals More Details To Proposed Election Rule Changes

Posted by Mark Theodore on November 29, 2011

As we reported earlier, the NLRB announced it was ready to vote on some proposed amendments to the rules concerning representation elections. There was no indication in the original announcement of about the substance of the changes.

On November 29, 2011, NLRB Chairman Mark Pierce disclosed more information in the form of a Board Resolution. This proposed resolution will be formally introduced on November 30, at a public meeting of the NLRB where its approval will be subject to vote by Chairman Pierce, Member Becker and Member Hayes. There seems to be little doubt that the Chairman and Member Becker will vote to approve the resolution, while Member Hayes will very likely register a vote against it if he participates in the meeting.

The regulations were initially proposed on June 22, 2011 and have been the subject of vigorous debate ever since. More than 60 witnesses testified at a hearing before the Board on July 18-19, and over 65,000 written comments were filed later in the Summer. The process has resulted in an unheard of public fight between the Chairman of the NLRB and Member Hayes, each of whom alleges the other is engaging in improper conduct. The basic premise of reality television, where all is laid bare to be seen and analyzed by the public, has finally reached into a government agency.

The resolution that will be offered tomorrow can fairly be categorized as "not good, but not as bad as it could have been." While the NLRB has not dropped any of its plans to overhaul the entire representation election system, it is important to note, for example, that the NLRB will not be voting to adopt the actual "quickie" election timeframe of as little as ten days which was forecast under the original rules. Still, although not as sweeping as the NLRB initially proposed, the resolution to be voted on this week represents significant and fundamental changes to the way representation petitions are likely to be processed in 2012. The resolution proposes the following changes:

  • Allow the Hearing Officer (a Regional Office employee) to limit a pre-election hearing to those matters relevant to the question of whether an election should be held.
  • Authorize the Hearing Officer to decide whether or not to permit post-hearing briefs, depending on whether the case presents issues that would benefit from briefing.
  • Eliminate pre-election appeals to the NLRB and instead consolidate it with a single, post-election review proceeding.
  • End the practice of not scheduling an election for approximately 25 days after a decision and direction (which is the current practice to allow time for a pre-election request for review, now eliminated).
  • Limit the grounds upon which special permission to appeal to the Board may be granted to “extraordinary circumstances”.
  • Make the post-election appeal to the Board discretionary, instead of as a matter of right.

Any resolution approved on November 30 would still require the NLRB to draft and formally approve by separate vote the final regulations.

What we can tell from this new information, however, is that in the interests of “streamlining” an allegedly outdated, burdensome process, the NLRB’s proposed amendments will as a practical matter:

  • Give Hearing Officers and Regional Directors much more discretion to decide the scope of a representation hearing. This will automatically shift additional burden to employers to preview their case, including what proof they have, in order to persuade the Region to even hold a hearing. However, if the Hearing Officer or Regional Director is not convinced, then the issue may never be decided by the NLRB. Take, for example, a typical case. The union petitions for a unit of 50 employees. The employer asserts that the actual unit should be 55 employees (50 petitioned for and 5 additional), because of the interaction and community of interest of all the employees. If the Hearing Officer decides that the employer did not raise a significant enough issue to have a hearing, then the only way the employer would be able to have the issue decided is to ask the 5 additional employees to vote in the election. Those employees' ballots will then be challenged. If the five votes are determinative, meaning they could affect the outcome of the election, then a hearing would be held to discuss the eligibility. But...if the ballots are not determinative, then no hearing will be held and the employer's issue will not receive due consideration from the NLRB.
  • Most important, the proposed changes must be read in connection with the NLRB's recent decision in Specialty Healthcare about which we reported here. In that case, the NLRB imposed a new, but ill-defined standard for challenging the appropriateness of a petitioned-for bargaining unit. If the union petitions for “an” appropriate unit, i.e., one whose members share a community of interest, then that unit will be accepted by the NLRB unless the employer demonstrates the larger unit possesses an “overwhelming community of interest.” This new, higher standard combined with the front-end discretion to hold a hearing means fewer hearings will occur, and employers pressured to schedule an election at the earliest possible date.
  • Giving the Regional Director and Hearing Officer more discretion to determine if an issue is worthy of a hearing also will likely mean the Regional Directors will decline to hold hearings unless they can be persuaded by a strong, detailed offer of proof that the petitioned-for unit is inappropriate. In other words, the employer must spend time persuading the Region to even hold a hearing when it could be using the time to prepare its case, One can imagine that a) this will not be uniformly applied throughout the various Regions and b) that it now makes it incumbent on the employer to prove its case simply to justify having a hearing.
  • If a hearing is held, the Regional Director's ability to dispense with post-hearing briefs will automatically shorten the timeframe for making a decision. Currently, briefs are due one week after the hearing closes, and sometimes longer if there is an understanding due to parties' schedules (and yes, plenty of union counsel have asked for extensions to file briefs). Elimination of post-hearing briefs is another easy way for the NLRB to reduce the election timeframe.
  • If the proposed changes are made, an election would be held in a much shorter timeframe if the employer does not otherwise agree on the unit issues. Under the current process, if the parties do not agree on the bargaining unit and the Regional Director issues a decision on the unit issue, the election then must be scheduled between 25 to 30 days from the date of decision. The resolution proposes eliminating the 25 day period (ostensibly because the NLRB is eliminating the pre-election appeal period); presumably, the election could be scheduled as soon as practical by the Regional Director, which might mean ten days after decision.

The tragedy in all of this is, of course, that the NLRB has embarked on a course of fixing a problem that doesn't exist. One problem with fixing something that is not broken is that it has unintended consequences. Moreover, the "fixes" proposed by these rules also appear to have one very clear intended consequence: tilting the playing field in favor of unions and sharply limiting debate on one of the most important issues facing employees and their employers.

We will keep you posted on these important developments as they occur.

NLRB To "Vote" On Quickie Election Rules November 30

Posted by Mark Theodore on November 18, 2011

The NLRB announced today that it was going to hold a vote on its proposed regulations to upend the well established and longstanding representation case procedures.  According to the NLRB's announcement today, the vote is over "whether to adopt a small number of amendments" proposed earlier this year. This may well be the understatement of the year as very few people, if any, believe that the NLRB will do anything short of adopting all of the proposed changes, not just a few unidentified amendments.

In fact, Member Hayes, in a scathing letter to Congress, also dated today, asserts his two colleagues are determined to issue a final rule before the expiration of Member Becker's term at the end of the year. In this letter, Member Hayes levels pointed criticism of the agency's rulemaking process as contrary to precedent and practice:

In my dissent to the Notice of Proposed Rulemaking, I criticized the majority's use of 'a rulemaking process that is opaque, exclusionary, and adversarial,' in contravention with the Administrative Procedure Act, the Government in Sunshine Act, and President Obama's January 21, 2009, Memorandum of Transparency and Open Government, and in sharp contrast to the Board's procedural practice during the 1987-1989 rulemaking for appropriate bargaining units in the healthcare industry.  That criticism apparently made no impression on my colleagues, who have continued this process in the same manner, and without my participation; and who now have made it unequivocally clear that they intend to publish a final rule before the expiration of Member Becker's without regard to Board tradition or rule.

One wonders what the environment must be on the 11th floor of the NLRB where all the Members have their offices.  

Of course, this latest news, while hardly surprising, makes one wonder the thought process of the NLRB. As noted earlier here, the NLRB postponed the requirement that all employers under its jurisdiction post rights notices after a public firestorm, accompanied by several lawsuits challenging the rule.  That outcry was over a notice posting; what will the public's response be to this seemingly predetermined outcome?   Litigation is certain to be filed.  The NLRB's own public divisions are unlikely to calm the debate.

The NLRB's vote will be made at a public meeting and streamed live on the internet.  More to come. . .

Blizzard part 2: NLRB Reverses Dana and MV Transportation

Posted by Mark Theodore on August 30, 2011

The scope of the blizzard is becoming more defined as the NLRB rolls out decisions it reached in the waning days of Chairman Liebman's term. 

As previously reported on this blog, the NLRB was considering reversing Dana Corp, 351 NLRB 434 (2007) where it held that employees who become represented by a union pursuant to a voluntary recognition agreement must be given an opportunity, after notice, to reject that representation through a government supervised secret ballot election.

Concluding that "Dana represented a major change in Board law" that was "unwarranted," a sharply divided Board in Lamons Gasket Company, 357 NLRB No. 72 (August 26, 2011).pdf did as predicted and reversed Dana.  In the process it dismissed a timely petition filed by an employee, Michael Lopez, who obviously disagreed with his employer's voluntary recognition of a union.  Note that the petition was filed December 9, 2009 and a decision to hold an election was not rendered until July 21, 2010.  The actual election was held on August 26, 2010, more than eight months after the filing of the petition.  (It is typical in decertification elections for there to be delays such as occurred in this case, something you don't often hear about when discussing how difficult it is for employees' voices to be heard by secret ballot).  Unfortunately for Mr. Lopez, the ballots were impounded and now will never be counted. 

Thus, the so-called "recognition bar" has been restored to the rules in place prior to 2007, meaning "a reasonable period" of time must pass before such recogntion can be challenged.  The Board did seem to recognize the definition of "reasonable period" has been elusive and provided some clarity:

[W]e define a reasonable period of bargaining, during which the recognition bar will apply, to be no less than 6 months after the parties' first bargaining session and no more than 1 year.

The Board held it would apply the "multifactor analysis" for evaluating whether a reasonable period after six months had elapsed as set forth in Lee Lumber & Bulding Material Corp., 334 NLRB 399, 402 (2001) "which considers (1) whether the parties are bargaining for an initial contract; (2) the complexity of the issues being negotiated and of the parties' bargaining processes; (3) the amount of time elapsed since bargaining commenced and the number of bargaining sessions; (4) the amount of progress made in negotiations and how year the parties are to concluding an agreement; and (5) whether the parties are at impasse."  The burden would be on the General Counsel to prove that a reasonable period had not elapsed after the initial six months of bargaining.

The decision is hardly a surprise, but the majority did go to great lengths to discuss the history of voluntary recognition, and to assert its differences with the Dana majority.

The Board asserts Dana "compromises" its neutrality because it calls for employees to be informed via NLRB notice of their right to rid themselves of the union

In no other context does the Board require that employees be given notice of their right to change their minds about a recent exercise of statutory rights....

This is somewhat ironic given the NLRB's recent requirement that all employers post notice of the rights under the Act.

The Board majority also took aim at a major underpinning of Dana that voluntary recognition was somehow a lesser method for employees because of the potential for abuse in getting employees to get employees to sign recognition cards.  Here the Board majority cited some interesting statistics.  That "as of May 13, 2011" (four years after Dana became law) "the Board had received 1,333 requests for Dana notices."  Of those, 102 elections petitions were filed (7.6% of the cases), and 62 elections (55% of the petitions) were held, but that in only 17 cases did employees vote against representation.  The Board concluded, "Those statistics demonstrate that, contrary to the Dana majority's assumption, the proof of majority support that underlay the voluntary recognition during the past 4 years was a highly reliable measure of employee sentiment." 

It is unclear how these statistics are a highly reliable measure of employee sentiment.  The issue in these cases is what were the employees told when they signed an authorization card.  Were they told the truth? Were they promised anything?  Were they threatened?  Did the notices employees were given about their rights make any difference at all?  One simply cannot tell from these numbers.

The Board majority was clear on what it was not deciding:

While we overrule Dana, we have made no changes to established law regarding secret-ballot elections.  An election remains the only way for a union to obtain Board certification and its attendant benefits.

 The "attendant benefits," of course, are a 12-month bar for holding a decertification election.  The Board undoubtedly will leave the changes to "established law" for its pending rulemaking.

What would a Board decision these days be without a dissent?  Probably not a decision at all.  Member Hayes did his usual thorough job of providing the "other side" of this issue. Member Hayes takes issue with the use of statistics, stating:

As for the 1231 cases in which Dana notices were requested, but no petitions were filed, we know nothing about the reasons for this outcome.  To be more specific, we do not know anything about the reliability of the proof of the majority support that underlay voluntary recognition in each of these cases, nor do we know the reasons why no petition was filed.

As to the legal underpinnings of the pre-Dana recognition bar doctrine:

The majority also mischaracterizes statutory and judicial support for imposition of an election bar following voluntary recognition.  The Act itself does not impose such a bar in the wake of voluntary recognition.  It imposes an election bar only after there has been a valid Board election. . . .In other words, in the Taft-Hartley Act, Congress, undisputedly cognizant of the practice of voluntary recognition that the majority portrays as "fully woven into the very fabric of the Act" since its inception, chose not to give voluntary recogntion either election bar quality or the special protections of 9(a) certification status.

 

UGL-UNICCO Service Company

In UGL-UNICCO Service Company, 357 NLRB No. 76 (August 26, 2011).pdf, a case involving similar legal principles to Lamons Gasket, the Board reversed MV Transportation, 337 NLRB 770 (2002) which had thrown out the so-called "successor bar" whereby employees who become represented by a union through recognition as part of a merger can challenge that recognition. 

The Board held that while it was reversing MV Transportation, "we do not simply return to the" prior rule set forth in St. Elizabeth Manor, Inc., 329 NLRB 341 (1999).  The Board then proceeded to describe three situations and the rules associated with each:

Scenario 1:  Successor employer adopts existing terms and conditions of employment as starting place for negotiations

In this situation, the "reasonable period of  bargaining" will be "6 months measured from the date of the first bargaining meeting. . ."  The Board held this shorter insulated period was mandated because "the impact on the union and the employees it represents is significantly mitigated, because the new employer has accepted the collectively bargained status quo (if not the predecessor's contract, assuming one was in effect).

The Board described this as a "bright-line rule for such cases."  As such it was not necessary to apply the multi-factor test set forth in Lee Lumber.  And, it clearly rewards successor employers who agree to adopt existing terms and conditions of employment.  Of course, as anyone who has practiced in this area knows, it is virtually impossible for a successor to adopt all terms and conditions of employment of the predecessor.  There are always differences in health plans,  retirement benefits,  and company policies, which, try as one might, cannot be made exactly the same no matter the effort.  So, while the idea of a "bright-line" sounds good, it seems illusory and subject to attack in this case despite a successor's good faith efforts.

Scenario 2: Successor employer sets initial terms and conditions of employment

The Board also modified the prior successor bar rules to "address the situation where the successor employer recognizes the union, but unilaterally announces and establishes initial terms and conditions of employment."  Acknowledging that such a successor has acted "lawfully" the Board held "there is no reason to believe that the actual impact of these changes on the bargaining relationship and on employees is somehow lessened because they are legal."

The Board held:

In these cases, because the destablizing factors associated with successorship are at their height a longer insulated period is appropriate.  The period we have chosen corresponds to the period adopted in Lee Lumber . . .

So, six months is the minimum period and one year is the maximum.

Scenario No. 3:  Successor employer reaches agreement but no open period occurred

The Board made "one further modification" to the successor bar doctrine, holding that where: "(1) a first contract is reached by a successor employer and the incumbent union within a reasonable period of bargaining during which the successor bar applied, and (2) there was no open period permitting the filing of a petition during the final year of the predecessor employer's bargaining relationship with the union, the contract-bar period applicable to election petitions filed by employees or rival unions will be a maximum of 2 years, instead of 3."

This appears to be an effort to provide some clarity to a "what-if" situation described in MV Transportation. 

Member Hayes provided a spirited and entertaining dissent, which provides a detailed and clear discussion of the law of successorship, something that vexes even veteran practitioners.  Member Hayes flatly disputes the legal underpinnings and asserts the majority has a whiff of arbitrariness about it when setting its new rules:

Undeterred by this precedent, my colleagues reimpose their successor bar, giving it the additional twist of defining a reasonable bar period as dependent upon whether a successor has exercised its legal right under Burns to set initial terms and conditions of empoyment different from those that existed under the predecessor employer.  If the employer exercises this legal right, the irrebuttable presumption of the incumbent union's majority status could last for as much as a year, thus imposing by decisional fiat a bar of the same length that Congress stautorily provided for only following a free and fair secret ballot Board election.

The entire dissent is well worth the read.

Stay tuned.  This is only the start of th storm.  More is sure to be coming.

Blizzard begins: NLRB Adopts Micro Union Standard

Posted by Mark Theodore on August 30, 2011

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. 

 

NLRB Quickie Election Rules Closer To Reality As Comments Are Filed

Posted by Mark Theodore on August 23, 2011

The NLRB's initiative to upend the well-established, and by its own declarations "outstanding", representation election procedures took one step closer to reality yesterday when the initial period for filing comments on the proposed rules closed.  As I noted previously in this blog, the "quickie" or "ambush" elections contemplated by the NLRB's proposed rules represent an attempt to introduce sweeping change when there is no consensus that a problem in need of a solution even exists.  In this intial filing period the NLRB received over 21,000 comments, another indication of the contentiousness of the issue.

Former NLRB General Counsel and current Proskauer partner Ronald Meisburg acted as Of Counsel to the United States Chamber of Commerce in the preparation and filing of U.S. Chamber Comments On Proposed NLRB Rules.pdf.  These comments are a thorough review of the legal, policy and practical implications of the proposed regulations.  As the Chamber notes

The Board has stated that its rules are designed to reduce the time for the scheduling of an election to as little as 10 to 21 days....roughly cutting more than in half the median time of 38 days for holding elections under the current system.  This is grossly unfair and threatens to deny the due process and free speech rights of employers and employees.  Unions already win two-thirds of elections, and have months or even years of time to plan and organize the workforce before the employer may ever be aware of the campaign....

Of course, the people most likely to be impacted by a rush to hold an election are the employees themselves.  If employees only hear one side of the story their free and fair choice is diminished, notes the Chamber

The Board's proposal threatens to seriously undermine the rights of employers and employees -- recognized under §8(c) of the Act and by the Supreme Court--to engage in a free and open discussion on the issue of union representation and collective bargaining.

The comments are well worth reading in their entirety to give one a complete understanding of the vast nature of contemplated change.  Portions of proposed rules that are just as important as the proposed shortened election timeframe, but have received less attention in public discourse, are discussed at length

The requirement that the employer not only agree or disagree with a union's proposal, but to go further and make a proposal itself, amounts to a forced pleading and raises serious due process and free speech concerns.  It is the union that seeks to organize employees, not the employer, and it is the union's responsibility to propose a unit appropriate for collective bargaining.  Section 9(b) of the Act states that "[t]he Board shall decide in each case. . .the unit appropriate for purposes of collective bargaining. . ."  The rules should not attempt to absolve the Board of its responsibility, on a case by case basis, to make an appropriate unit finding in proceedings under Section 9(a) of the Act. 

Also, the discussion in the comments of the studies cited by the NLRB as justification for the proposed rules are a must read for anyone interested in gaining a greater understanding about how the passions attached to labor relations can sometimes take the place of objective facts.

There is a 14 day reply comment period, so one can expect another flurry of activity on this issue right after Labor Day.  The NLRB membership goes down to three as of Saturday August 27, when Chairman Liebman's term expires.

We will keep you posted of further developments.

 

 

The Lull Before The Storm: Blizzard Of NLRB Activity Coming

Posted by Mark Theodore on July 29, 2011

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.

 

Briefs filed in NLRB's Specialty Healthcare case

Posted by Mark Theodore on March 09, 2011

What a difference a few months can make.  Last December, in Specialty Healtcare and Rehabilitation of Mobile the NLRB invited interested parties to file briefs to consider a number of questions about whether it should consider adopting a new "one size fits all" rule for bargaining units in nursing homes (called "nonacute care" facilities).  The case is of critical importance to all employers falling under jurisdiction of the NLRA, however, because it could be a sign of a shift to ignore traditional "community of interest factors" in favor of rules which presume a unit is appropriate based solely on "employees performing a job" or a unit "proposed by the union."  For over 75 years, Section 9(b) of the NLRA has mandated that the NLRB "decide in each case whether, in order to assure employees the fullest freedom in exercising the rights guaranteed by this Act, the unit appropriate for collective bargaining shall be the employer unit, the craft unit, plant unit, or subdivision thereof. . ."  Section 9(c)(5) prohibits the NLRB from giving controlling weight to the extent to which employees have been organized.  For years these provisions meant the NLRB carefully considered whether a unit was "appropriate" for purposes of collective bargaining by, among other things, analyzing  how the employer has organized its business, how employees interact with one another and other factors to determine whether a unit is in fact appropriate.

The NLRB's consideration of a presumptive rule is based on Member Becker's failed attempt in Wheeling Island Gaming, 355 NLRB No. 127 (August 27, 2010).pdf to adopt as appropriate a unit of "poker dealers."  Member Becker stated in his dissent, "From the perspective of the employees, this is one of the most logical and appropriate units within which to organize. . ."

Not so fast.  It seems clear a rule based on "employees performing a job" or on a "proposed unit" (meaning the group sought by the union in its petition) violate the NLRB's mandate.  We filed our Brief of Amicus Curiae Retail Industry Leaders Association.pdf detailing the legislative history history and relevant case law demonstrating that such presumptive rules under consideration are contrary to the Act.  We think it is clear Congress intended the NLRB to consider how an employer has organized its business, and not allow bargaining based on a multitude of smaller units.  One can imagine that the rules under consideration could mean employers would be faced with dozens of potential bargaining units, each with conflicting interests and demands

Responsive briefs are due March 22.  After that, we will see what whether the NLRB will follow the Act's mandates or not.

We will, of course, keep you posted.