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. 

Court Strikes Down Portions Of NLRB Notice Posting Rules

Posted by Mark Theodore on March 02, 2012

A federal judge in the District of Columbia handed employers a significant partial victory in the ongoing skirmish over the NLRB's attempts to require all employers under its jurisdiction to post a notice of employee rights.  As we have noted previously, the NLRB postponed the original November 14, 2011 compliance date, only to postpone it again after facing stiff resistance in the form of lawsuits challenging the new requirement.  A compliance date of April 30, 2012, was set in order to allow the courts to render decisions on the viability of the NLRB's regulations.  There are two significant pieces of litigation over the NLRB's rule.  The ruling discussed here concerns the challenge brought by the National Association of Manufacturers ("NAM").  The U.S. Chamber of Commerce also has a separate suit pending.

On March 2, 2012, Federal Judge Amy Berman Jackson handed down the split decision in the case of National Association of Manufacturers v. NLRB (Civ. Action No. 11-1629).pdf.  NAM, a trade association, challenged the NLRB's authority to require the rights poster, as well as the agency's contention that failure to post the notice could constitute an unfair labor practice. 

In her 46 page decision, Judge Jackson upheld the right of the NLRB to require the notice posting, but struck down the rules making it an unfair labor practice for an employer's failure to post the notice.

There are two parts to the NLRB's regulations on the rights poster.  Subpart A is the requirement that employers post the notice, and Subpart B concerns the agency's intended enforcement for employers that fail to post the notice.. 

Subpart A - Judge Upholds NLRB Requirement That Employers Post Rights Notice

NAM challenged the NLRB's authority to require employers to post the rights notice.  The theory for this contention is that in every piece of federal employment legislation where a notice of some sort is required to be posted (e.g., FMLA, FLSA, OSHA, etc.), the statutes all expressly require the responsible agencies to develop a notice for posting.  The NLRA is silent on this issue, and so the argument goes, Congress did not authorize the NLRB to make such a notice posting a mandatory requirement. 

Judge Jackson seemed to have little problem disposing of this issue in favor of the NLRB.  After a lengthy discussion of the NLRB's rulemaking authority and relevant caselaw, the Judge ruled:

Therefore, the Court cannot find that in enacting the NLRA, Congress unambiguously intended to preclude the Board from promulgating a rule that requires employers to post a notice informing employees of their rights under the Act.  Neither the text of the statute nor any binding precedent supports plaintiffs' narrow reading of a broad, express grant of rulemaknig authority.

So, absent a stay of this ruling pursuant to an appeal, the notice poster will be required as of April 30, 2012.

Subpart B - Enforcement Consequences For Failing To Post The Notice

NAM also challenged the NLRB's enforcement aspects of the rules.  

NLRB Cannot Make Failure To Post The Notice An Unfair Labor Practice

The NLRB rule states the consequences of failing to post the notice: "Failure to post the employee notice may be found to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed by NLRA Section 7. . ."  This is the most controversial and troublesome aspect of the rulemaking from a legal and practical perspective.  Yes, employers dislike having to post the notice at all, particularly in a labor relations climate that is more contentious than it has been in 20 years.  In the age of social media and instanteous information sharing, why must an employer be required to inform employees of the rights when such information is available from myriad sources?

What the NLRB attempts to do by these regulations, however, is to go much farther than mere publication of information.  By making the failure to post an actual unfair labor practice, the potential consequences for employers are extremely serious.  First, the NLRB's designation of a failure to post information that has never been required in the 77 years of the NLRA as interference, restraint or coercion of employee choice is quite a stretch.  The agency appears to be suggesting that an employer's failure to, in the future, give this information to employees interferes with free choice, an assertion that requires several leaps of logic.

Second, and most important, if the failure to post this notice is an unfair labor practice, then it could be grounds to overturn an otherwise properly held secret ballot election.  Yes, that's right.  As we have previously pointed out, the mere existence of an unlawful handbook policy could overturn a representation election, even where there is no evidence the policy played any part in an employee's choice on the secret ballot.  Indeed, the NLRB has ruled that the mere existence of the policy can overturn the election, even when employees are already represented by a uniion and seek to end such representation.  

Judge Jackson struck down this portion of the rule, stating "Plaintiffs maintain, and the Court agrees, that the agency lacked the authority to deem a failure to post to be an unfair labor practice under the Act."  In discussing the statutory framework and caselaw, the Judge concluded:

In other words, section [8(a)(1)](the provision of the NLRA making it an unfair labor practice to interfere with employee choice) prohibits employers from getting in the way - from doing something that impedes or hampers an employee's exercise of the rights guaranteed by [Section 7] of the statute.  It does not prohibit a mere failure to facilitate the exercise of those rights.

Judge Jackson went on to state that "nothing in this decision prevents the Board from finding that a failure to post constitutes an unfair labor practice...."  The Judge made clear, however, the Court's expectation of the agency if it was to assert that an emploiyer's failure to post is an unfair labor practice:

But the ruling does mean that the Board must make a specific finding based on the facts and circumstances in the individual case before it that the failure to post interfered with the employee's exercise of his or her rights.  The Court is not making an absolute statement that inaction can never be interference; rather this memorandum opinion simply holds that the Board cannot make a blanket advance determination that a failure to post will always constitute an unfair labor practice.

In other words, and it seems incredible we are having such a discussion, the NLRB actually must prove in an unfair labor hearing that the mere failure to provide information that is readily available from any number of sources, interfered with an employee's Section 7 rights.  This is exactly the kind of analysis that should take place when it is asserted an employer's handbook provision is unlawful, but doesn't; there should be a requirement that the existence of the so-called overbroad language actually interferes with an employee's rights. Unfortunately, what really happens in handbook cases is the NLRB merely says certain language in an of itself interferes with Section 7 rights without any proof that anyone read it, was aware of it or that the policy otherwise held any significance.

NLRB Cannot Toll Statute of Limitations By Rule

The Judge also ruled that the NLRB cannot use the failure to post the notice to toll the NLRA's six month statute of limitations.  Judge Jackson noted, "the NLRA does not authorize the Board to enact a rule which permits it to toll the statute of limitations in any future unfair labor practice action involving a job site where the notice was not posted."  In reaching this conclusion, the Judge noted there exists extensive legislative history on the six month statute of limitations contained in the NLRA, and that in certain circumstances it is appropriate to toll the statute.  Such tolling is not automatic and must be supported by proof.  The Judge's opinon notes, "The Final Rule strips away the case-specific nature of the equitable tolling doctrine by imposing it as the rule rather than the exception. The Court found it particularly troubling that the NLRB's conception for the rule stated that the employer must prove that the tolling did not apply:

This turns the burden of proof on its head.  The plaintiff [the NLRB in unfair labor practice cases] generally bears the burden of proving that equitable tolling should apply in the individual case, but the rule demands that the employer prove that across the board, unlimited extension should not apply. 

In other words, the NLRB cannot use an employer's failure to post a notice to automatically toll the statute of limitations for other unfair labor practices alleged at the workplace. 

Free Speech Callenge Rejected

NAM also challenged the rule on free speech grounds, that the NLRB was compelling employers to make certain speech.  The Court rejected this argument ruling that "the Board's notice posting requirement does not compel employers to say anything" and that the poster falls into the category of "government speech."

The Judge concluded Subpart A (the notice posting requirement) could be severed from Subpart B, meaning absent some court intervention, the posting requirement will go into effect as planned.

It seems likely both sides will appeal the ruling.   Also, it is highly likely another Court soon will rule on these issues in the U.S. Chamber's litigation. We will keep an eye out for further developments.

 

Employer Meetings, Election Site The Next Targets Of NLRB?

Posted by Mark Theodore on February 09, 2012

It's been a quiet few weeks for the NLRB.  Since January 1, the NLRB has issued only a small number of decisions, none of which appear to be noteworthy.  There are, of course, many developments that are in process.  For example, we still do not know the full effect of the NLRB's decision in Specialty Healthcare, where the NLRB adopted the micro union standard, and which has since been applied in an alarming way.   The NLRB also has pending its new election regulations, which although under challenge, could bring major changes to the way bargaining units are established.

The fact is the NLRB's micro union standard and election procedure regulations are probably only the tip of the proverbial iceberg.  These are the changes the NLRB could accomplish; remember, the NLRB's original proposed election regulations were much broader in scope, and were only scaled back after a wave of intense opposition.  So, the NLRB clearly is receptive to more sweeping change. 

A recent decision demonstrates just how receptive the agency could be in the coming months.  In the final hours of 2011, the NLRB issued 2 Sisters Food Group, Inc., 357 NLRB No. 168 (December 29, 2011).pdf, which to date has gone unnoticed.  This decision, however, provides us with substantial evidence of NLRB mission creep.

The facts in 2 Sisters are fairly basic.  The union lost a representation election by a vote of 66 to 87, with more than enough challenged ballots to alter the outcome.  The union then filed numerous objections, some of which were sustained, some of which are rejected.  The employer was found, for example, to have unlawfully terminated a union adherent during the election campaign.  Standing alone, an unlawful termination would be enough to warrant a rerun election (indeed, Chairman Pearce and Members Becker and Hayes all agreed to sustain the finding that the termination was unlawful, which means the election would be thrown out in any event). 

The truly remarkable aspect of the 2 Sisters decision is that the vast majority of it deals with issues that had no effect whatsoever on the election.  These issues show how unions will attempt to cash in on the NLRB's receptivity to change by bringing challenges asking the agency to overturn or alter existing law.  Here are a few examples-

Handbook violations.  As we have previously detailed, the NLRB has been finding that the mere existence of "overbroad" handbook violations may be enough to overturn an election even when there is no evidence the policy was enforced, let alone that employees were even aware of it.  In 2 Sisters, Chairman Pearce and Member Becker found that the employer's rule subjecting employees to discipline for "inability or unwillingness to work harmoniously with other employees," was an unfair labor practice (and, therefore, also grounds for an objection) because "it was sufficiently imprecise that it could encompass any disagreement or conflict among employees, including those related to discussions and interactions protected by Section 7, and that employees could reasonably construe the rule to prohibit such activity."  The NLRB also ruled the requirement that employees arbitrate all disputes violated the Act.

The problem with these kinds of violations is twofold.  First, there is no evidence that the rules were actually construed to prohibit protected union activity (or any other activity for that matter).  Indeed, the election seems to have been hotly contested, which is actually proof the "harmonious" and "arbitration" handbook policies had no effect on the election.  One can see how important the handbook rule might be if that was the only objection to an election:  the NLRB would be nullifying free choice based on a purely theoretical impact of a policy found in a multi-page handbook odds are the employees received, yet never actually read.  Second, and more important, this finding shows that since the NLRB is more receptive to such charges, employers can and should expect unions to raise more of these challenges.  The ruling creates an incentive for the union to scour the employer's handbook in search of some innocuous phrase, such as a requirement that employees work "harmoniously."   No proof other than the policy is required because the NLRB decides what the employee would "reasonably construe" a rule to mean.  So, the union will hold onto the issue until after the results of the election are known.  If the union loses, then it will simply file objections asking the results be overturned based on some obscure policy buried in the handbook.  While this is an area of law that changes, and will continue to change, each employer should review its handbook in an attempt to remove such hidden land mines.

Employer Meetings.  The union in 2 Sisters objected to the employer's holding of mandatory meetings during the campaign to discuss its views on the union.  Even though the union acknowledged that the employer's meetings were not objectionable under the law, it still asked for the rule to be changed.  Although the NLRB did not reach this issue, Member Becker, in a three page dissent, left a parting shot, which is sure to set the stage for the next few months.  

Since 1953, it has been the law that the employer may hold mandatory meetings in which it expresses its view on the union.  The employer is prohibited from holding such meetings during the twenty-four hour period prior to the election.  Member Becker made clear his view that such rule should be discarded. and employers should be prohibited from holding any mandatory meetings to discuss the union:

Board-supervised elections have been called the 'crown jewel of the Board's accomplishments' under the Act. . .By continuing to permit employers to require that employees attend campaign meetings as a condition of continued employment, the Board does not simply tarnish that jewel, it fractures it.  I would not continue down this long but fundamentally misguided path.

So, the rule of the last 59 years has been wrong, despite the make-up of the NLRB changing from pro-labor to pro-management numerous times.  Member Becker would have it that an employer may not call a meeting to discuss with its own employees a matter that concerns everyone at the workplace just because the topic is the union.  As extreme as the view may sound, we can expect the issue will be raised again in the coming months, and the NLRB likely will have some receptivity to it.

Site of the election.  Having secured a rerun election, the union in 2 Sisters requested that the second election be held off-site away from the employer's premises.  The NLRB did not grant the request yet expended five pages of the decision noting that the Regional Director has the ultimate authority to direct an election to be held at a place other than an employer's premises.  The opinion sets out guidelines the Regional Director should consider in making his or her decision on the site of an election.  Why spend so much time talking about this issue?  Clearly, the NLRB is sending a signal.  There is enough language in these pages that indicates a new tactic may be for the union to request a location for an election other than an employer's workplace, and if its request is denied, create yet another issue to attack the results.  Thus, the NLRB seemed to be setting this issue up for the future:

While the existing empirical work on this subject is not definitive, it is persuasive and creates concern that holding representation elections on premises controlled by one party without the consent of all other parties is inconsistent with the Board's obligation to insure[] that no party gains last minute advantage over the other.

With the exception of mail ballot elections, the representation election is almost always held at the employer's premises.  This is not for any nefarious reason, but a more fundamental, logical one inherently tied to the NLRB's mission:  the employer's premises is where the employees are most likely to be located and where the NLRB can ensure the greatest turnout. 

Calling the majority's discussion of the election site "unwarranted" and "unprecedented," Member Hayes, summarized the issue succinctly in his dissent:

To some, myself included, it may seem surpassingly strange to premise a change in the requirements for resolving disputes about where to hold a Board election on the prospect that an employer might exercise its right to communicate with employees on a question concerning representation.  By now, however, we should be accustomed to my colleagues' concern that this should happen.  Time and time again, they have demonstrated a willingness, if not open zeal, for limiting employer communications. . .

 

Again, 2 Sisters issued in the final days of 2011 and has received no attention. The arguments made by the union in the case are telling, however, about some of the strategies employers are likely to see in the very near future as unions continue efforts to curtail employer communication.  Of course, the make-up of the NLRB has changed recently, so no one knows what will happen, but it is a safe guess the agency will at least be receptive to the change. 

 

 

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: All Employers Must Post Notice Informing Employees Of Rights Under NLRA

Posted by Mark Theodore on August 25, 2011

Concluding that "many employees protected by the NLRA are unaware of their rights under the statute," the NLRB today issued a Final Rule today on Notification of Employee Rights under the National Labor Relations Act.pdf.  As of November 14, 2011, all employers falling under NLRB jurisdiction will be required to post a notice the content and size of which has tentatively been decided to be the same as the notice currently required to be posted by federal contractors.pdf pursuant to Executive Order.  The NLRB says it will make the notice available at no cost to employers who will be able to get it from the NLRB offices or electronically through the NLRB's website.

There is no recordkeeping requirement; however, failure to post a notice would be considered an unfair labor practice.  Although the Board has indicated such a violation would be technical, in reality a failure to post could have serious implications.  As the Board noted in its FAQs on this issue:

The Board expects that, in most cases, employers who fail to post the notice are unaware of the rule and will comply when requested by a Board agent.  In such cases, the unfair labor practice cases will be closed without further action.  The Board may extend the 6-month statute of limitations for filing a charge involving other unfair labor practice allegations against the employer.  If an employer knowingly and willingly fails to post the notice, the failure may be considered evidence of unlawful motivation in an unfair labor practice case involving any other alleged violations of the NLRA.

Although unstated, the failure to post could have serious consequences in representation campaigns and elections as well.  As we previously noted, the NLRB has held that an overbroad handbook provision could result in the results of an representation election being overturned, even when there is no evidence the employees even were aware of it.  The same reasoning would apply here:  a violation of the law, even a technical and arguably inconsequential one, could be deemed enough to overturn an election.

Overall, the rulemaking itself is not terribly surprising.  The NLRB recevied 7,034 comments (some of which it acknowledges were counted twice because they were filed electronically and by mail), which, in today's labor relations climate, ran along the spectrum of "You should do more" to "You can't do it because it you don't have the authority."  Weighing in at 194 pages, the bulk of the final rule is made up of the NLRB discussing the comments it received.  For example:

The contention that the right to refrain from union activity is "buried" in the list of affirmative rights or that the Board is biased in favor of unionization because of the choice of placement is with out merit.  The list of rights in the proposed notice is patterned after the list of rights in Section 7 of the NLRA. . .

The takeaways for employers:

  • Unless successfully challenged, the notice must be posted as of November 14, 2011.
  • The notice must be posted where other notices for employees are customarily posted.  If the employer makes such notices available on an intranet, it must do so in this case as well.
  • There is no recordkeeping requirement, but failure to post is an unfair labor practice.
  • The failure to post could have implications on other unfair labor practice situations and representation elections.
  • The notice must be posted even in places where a union is already in place.
  • Post it.  It is not worth the hassle to not do so.

 

 

 

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.

 

 

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

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.