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.

Handbook Rules Alone May Overturn Decertification Election: NLRB

Posted by Mark Theodore on April 04, 2011

The NLRB continues its march to expand the influence of unions in the workplace, this time revisiting an issue that has been the subject of much litigation over the years.  In a recent decision in Jurys Boston Hotel, 356 NLRB No. 114 (March 28, 2011).pdf the NLRB ruled (2-1, no surprise Member Hayes dissented) that the employer's handbook rules were sufficient, standing alone, to overturn a decertification election in favor of ending union representation.

The facts of the case underscore the breadth of the ruling:  The employer operates a hotel which opened in July 2004.  Before the hotel even opened, the employer entered into a neutrality and card-check arrangement with the union where it ultimately agreed to accept the union on the basis of authorization cards without an election. The parties then entered into a collective bargaining agreement.  When the agreement expired, an employee filed a petition to decertify the union.  The employer had in place since opening a 63 page handbook. Employees were asked, "though not required, to sign a receipt for the handbook at the time they received it, stating they 'will' read it."

The employer, bound by the neutrality agreement, directed supervision to act in a "neutral if not positive" fashion regarding union representation during the decertification campaign.  So, this could not have been a hotly contested campaign. 

The union never said a word about the handbook, that is, until the employees decided they wanted the opportunity to actually vote in a secret ballot elecion on whether to continue representation.  Specifically, after the petition was filed the union filed an unfair labor practice charge alleging, among other things,  the handbook's rules regarding solicitation, loitering on premises, and the wearing of buttons were unlawfully overbroad. There is no evidence the employer ever enforced any of the rules in question, either before or after the filing of the petition. 

The employees elected by a vote of 47 to 46 to end union representation.  The union challenged the result, filing objections asserting, among other things, that the same handbook rules interfered with employee free choice.  The hearing officer overruled all of the objections, citing Safeway, Inc., 338 NLRB 535 (2002).pdf, a case where the NLRB refused to overrule a decertification election based on a confidentiality policy that arguably was overbroad, noting

There is no indication that the confidentiality rule has ever been enforced, or that it has ever placed any impediment on the ability of employees to discuss terms and conditions of employment with the Union, or with other employees.  To the extent that any employee was confused about their statutory right to do so, the Union was ideally placed to advise the employees of their rights to do so.  There is no evidence that the Union was ever called on to do so, or that, prior to decertification, the Union viewed this rule as in any way infringing on employees' Section 7 rights.

Despite this precedent, the NLRB in Jurys Boston found Safeway, Inc. distinguishable because, incredibly,

First, unlike the incumbent union in Safeway, the Union here did not fail to challenge the unlawful rules 'prior to its decertification.'  Rather, it filed an unfair labor practice charge based on the rules 9 weeks before the election.  After a challenge to the Union's bargaining status was raised for the first time, the impact of the employee's rules on employees' right to campagin acquired new significance.

This reasoning is remarkable.  The employees in the case were never required to even acknowledge receipt of the rules.  Although it is not stated in the decision, that result is likely because the union insisted during bargaining, as often is the case, that employees cannot be required to sign handbook acknowledgements.  In other words, the union likely took the position that the handbook was something subordinate to the collective bargaining agreement, which probably contained its own work rules.  Unlike most places of employment, there is not even an acknowledgement that says the employees received or were otherwise aware of these rules.

The fact the union challenged the handbook rules in this case as a distinguishing factor also rings somewhat hollow.  Absent any evidence the rules were ever important to employees who were not required to read them likely means the rules gained "new signifiicance" because the union challenged them, not because employees were thinking about them.  The union, the representative of the employees could have taken a public position that the rules in question were not enforceable; it did not.  The union hedged its bets by lodging an unfair labor practice.  Had the union actually believed the rules were playing a part in the decertification campaign, it was within its control to block the election until the legal issues were sorted out; it did not exercise this option.  Instead, the union waited to learn the outcome of the election, and then complained that the rules somehow played a part in the result. The decision makes it more likely an incumbent union will scour an existing handbook for potentially overbroad policies and then file a charge.

It still is good policy for employers to maintain handbooks.  Written policies are needed to make sure the entire workforce, management and supervision, understand the rules of the workplace.  This decision underscores the need, however, to routinely review such handbooks to make sure there are no legal landmines that could be tripped later on when it is convenient. Such a review and re-issuance, if necessary, can save a lot of time and resources.  Jurys Boston is especially noteworthy because it took place in a decertification setting.  The NLRB has held that overbroad handbook rules can serve as the basis to overturn a representation (as opposed to decertification) election.  See  Freund Baking Co., 336 NLRB 847 (2001).pdf