Labor Relations Update

NLRB: Employer Did Not Unlawfully Discontinue Christmas Bonus

Summer is winding down but the NLRB continues to be a source of vigorous activity.  The Board recently issued a sweeping decision regarding the lawfulness of arbitration agreements.  Also, the Board announced its intention to change the so-called ambush election rules.  Of course, the Board continues to issue decisions on a regular basis.  Discussion of some of the Board’s recent decisions can be found, here, here and here.  September 30 is the final day of the Board’s fiscal year and so one can expect an uptick in the issuance of decisions in the coming weeks.

Earlier this summer the Board issued a decision related to a union’s challenge to an employer’s discontinuance of a Christmas bonus.  The Christmas bonus case is such a staple of labor law that most practitioners will encounter a similar issue in the course of their careers.  The basic premise is simple:  In a unionized environment, the employer has in the past offered some kind of bonus for the holidays, it could be cash or it also could be in the form of a free turkey or ham.  When this bonus is not offered one year, the union files a charge alleging a unilateral change of a term or condition of employment.  We have covered this type of case in a prior post.

In Bob’s Tire Co., Inc. 368 NLRB No. 33 (July 31, 2019), the Board was faced with  a situation where in the context of other more serious unfair labor practices, the employer did not pay a Christmas bonus.  The evidence in the record consisted of the testimony of a former employee who testified that he had received a cash Christmas bonus in amounts varying between $20 and $100 every year from 2008 to 2014.  In 2015 the employer did not pay any bonus.  The failure to pay the bonus was alleged to be a violation of Section 8(a)(5) because the employer did not notify the union of the discontinuance of the bonus or offer to bargain.

The Administrative Law Judge found a violation of the Act, stating the “bonus was paid with sufficient regularity that employees that employees would have been justified in expecting to receive such a bonus as part of their wages.”

On appeal, a unanimous panel of the Board (Chairman Ring and Members McFerran and Kaplan) reversed this finding.  The Board noted that the analysis of whether such a bonus is actually a term or condition of employment that must be bargained over before it can be changed relies on two factors.  First, the regularity of the bonus.  Second, whether the “bonus was tied in any way to employment -related factors.”  This would include measurable metrics.  The Board held that while there was evidence of regularity, there was no proof that the amount of the bonus was tied to any particular factor or factors.  The Board concluded that under the circumstances no violation occurred.

While hardly a major decision, it does provide another illustration that the current Board continues to  look very carefully at the quality of proof provided to support a claim, and will require specific evidence to support particular allegations.

NLRB Issues “Epic” Decision Concerning the Intersection of Mandatory Arbitration Agreements and NLRA Section 7 Rights

On August 14, 2019, the NLRB issued its first decision addressing employer conduct related to mandatory arbitration agreements and Section 7 activity since the Supreme Court decided Epic Systems Corp v. Lewis, 584 U.S. __, 138 S.Ct. 1612 (2018).  In Epic Systems (discussed more fully here), the Supreme Court held that agreements between employers and employees which include mandatory arbitration clauses and waivers of class and collective action rights do not violate the NLRA, and are enforceable as written under the Federal Arbitration Act.

In Cordúa Restaurants, Inc., 362 NLRB No. 43 (2019), the Board (Chairman Ring and Members Kaplan and Emanuel joining the majority; Member McFerran joining in part and dissenting in part) answered important questions of first impression regarding mandatory arbitration decisions in the wake of Epic Systems, including:

  • whether employers are permitted to promulgate mandatory arbitration agreements in response to Section 7 activity;
  • whether employers are permitted to inform employees they may be discharged if they refuse to sign such an agreement; and
  • whether employers violate the Act by discharging an employee for filing a class or collective action pertaining to wages, hours, or other terms and conditions of employment.

Factual Background

Prior to January 2015, employer Cordúa Restaurants, Inc. maintained mandatory arbitration agreements for all of its employees that prohibited commencing or joining Rule 23 class action lawsuits, but did not explicitly prohibit opting into collective actions under the Fair Labor Standards Act (“FLSA”).  Consequently, in January 2015, a group of employees initiated and opted-in to a collective action alleging wage violations under the FLSA and the Texas Minimum Wage Act.  In response, Cordúa issued a new, modified arbitration agreement, which stated in pertinent part:

I agree that I am waiving my right to file, participate or proceed in class or collective actions (including a Fair Labor Standards Act (“FLSA” collective action in any civil court or arbitration proceeding) . . . Therefore, I agree that I cannot file or opt-in to a collective action under this Agreement, unless agreed upon by me and the Company in writing.

Cordúa required all employees to sign the new agreement.  In December 2015, Assistant Manager Alex Nyuyen informed employees they would be removed from the schedule and terminated if they did not sign the agreement.

Around this time, Cordúa terminated three employees who had opted-in to the collective action, asserting that Steve Ramirez was terminated for dishonesty; Rogelio Morales due to customer complaints; and Searone Lewis due to inappropriate conduct.  The NLRB General Counsel argued the employer’s proffered motivations were pretextual, and they were terminated due to their involvement in the FLSA collective action, which the GC argued was protected activity under the NLRA.

The Administrative Law Judge’s Decision

The Administrative Law Judge issued her decision on December 9, 2016, before Epic Systems was decided.  As such, the ALJ found that the arbitration agreement was an unlawful interference on employees’ Section 7 rights pursuant to Board precedent, and did not reach the issue of whether or not the promulgation of the new agreement in response to the FLSA collective action was unlawful.  The ALJ further found that Assistant Manager Nguyen’s statements to employees regarding signing the new arbitration agreement were coercive and unlawful.

With respect to the allegedly unlawful employee discharges of Ramirez and Lewis, the ALJ found that the General Counsel established a prima facie case under Wright Line, 251 NLRB 1083 (1980), which Cordúa failed to adequately rebut by demonstrating it would have terminated the employees for legitimate business reasons notwithstanding their protected activity.

Regarding the discharge of Morales, however, the ALJ upheld the termination, finding that although Morales was engaged in protected activities due to his involvement in the collective action, Cordúa legitimately terminated him due to a customer complaint, not his protected activities.

The Board’s Review

Promulgation of the New Mandatory Arbitration Agreement

Based on the Supreme Court’s landmark holding in Epic Systems, the Board first found that Cordúa’s maintenance of a mandatory arbitration agreement that contained class and collective action waivers was lawful under the Act, reversing the ALJ’s finding based on pre-Epic precedent.

The Board then held that because Epic established that mandatory arbitration agreements with class and collective action waivers do not restrict Section 7 rights in any way, and because opting into a collective action is “merely a procedural step” to participating in a FLSA collective action, “it follows that an arbitration agreement that prohibits employees from opting in to a collective action does not restrict the exercise of Section 7 rights and, accordingly does not violate the Act.”

Although the Board acknowledged it has held in other cases that an employer may violate the Act by promulgating an otherwise lawful rule in response to protected activity (citing cases involving no-solicitation rules, rules prohibiting employees from making secret audio recordings, among others), the Board distinguished those cases because they involved the promulgation of rules that did restrict the exercise of Section 7 rights.  Here, by contrast, the Board found, the promulgation of the revised arbitration agreement “had no such effect” on Section 7 rights given the Supreme Court’s holding in Epic Systems.

Assistant Manager Nguyen’s Statements

Because, under Epic Systems, employers are permitted to condition employment on employees signing mandatory arbitration agreements, the Board also found that Nguyen’s statements to employees did not constitute unlawful threats.  On the contrary, the Board found that “his statements amounted to an explanation of the lawful consequences of failing to sign the agreement and an expression of the view that it would be preferable not to be removed from the schedule.”

Discharges of Ramirez, Lewis, and Morales

With regard to the discharge of Ramirez, the Board adopted the ALJ’s finding that he was engaged in protected activity when he filed the FLSA collective action.  Further, although Epic Systems permitted Cordúa to distribute the lawful new agreement in response to Section 7 activity, the case did not govern discipline or discharge of employees engaging in the underlying protected activity—in this case, the filing or participation in the collective action.  The Board agreed that Cordúa’s stated reason for Ramirez’s discharge was pretextual, that his termination was motivated by his protected activity, and Cordúa failed to proffer a legitimate reason it would have discharged him notwithstanding his protected activity.  The Board held Ramirez’s termination thus violated the Act.

The Board also affirmed the ALJ’s findings and conclusion that Cordúa’s discharge of Morales was lawful.  However, as to the discharge of Lewis, the Board reversed the ALJ’s decision, finding that Cordúa adequately established it would have discharged her even absent her protected activity, thus successfully rebutting the General Counsel’s prima facie case under Wright Line.

Member McFerran’s Dissent

While Member McFerran agreed with the majority’s conclusions regarding, inter alia, the discharges of Ramirez, Lewis, and Morales, she dissented as to the findings regarding the arbitration agreement and Nguyen’s related statements.  Disagreeing with the majority’s assessment, Member McFerran argued that Board precedent holding an employer violates the Act by imposing a new rule in response to Section 7 activity, even if the rule is otherwise lawful, should apply and govern the outcome in the instant case.  McFerran argued that under such precedent, it is irrelevant to the analysis whether the rule restricts Section 7 rights or not. Under McFerran’s analysis, the distribution of Cordúa’s new arbitration agreement was therefore unlawful.

McFerran also argued that Nguyen’s statements to employees regarding the agreement constituted unlawful threats, regardless of whether the revised agreement was lawful.  To McFerran, a “reasonable employee would have understood this conversation as a threat” of removal or discharge “for raising concerns about” and opposing the terms and conditions of employment related to the agreement.  Because Section 7 protects employees’ rights to question and object to employer policies, and employees would have understood Nguyen’s statements as a threat intended to suppress that activity, McFerran concluded his statements violated the Act.

Takeaways

As we learned in Epic Systems, mandatory arbitration agreements that include class and collective action waivers are lawful under the Act.  However, the Board’s decision in Cordúa Restaurants adds important clarity as to the limits of lawful employer conduct surrounding such agreements.

  • Under Cordúa, employers are permitted to promulgate or revise mandatory arbitration agreements to employees, even if done in response to Section 7 activity, such as the filing of a class or collective action wage claim.
  • Moreover, employers are permitted to condition employment on the signing of such agreements, and may inform employees of the consequences of refusing to sign the agreement.
  • However, employers are prohibited from disciplining or discharging employees for filing, initiating, or taking part in a class or collective action based on terms and conditions of employment—and employers should be aware of prohibitions against retaliating against employees who exercise their statutory rights under the respective wage-and-hour laws.

The Board may have more to say on Epic Systems and mandatory arbitration agreements and class/collective action waivers, and we’ll be sure to update you if it does.

NLRB Announces Three Proposed Rulemaking Amendments Aimed at Overhauling Union Election Procedures – With More to Come!

The National Labor Relations Board published a Notice of Proposed Rulemaking (“NPRM”) on Monday, August 12, 2019, proposing three amendments to its current rules and regulations aimed at addressing representation election procedures – with potentially more to come.  The NLRB made sweeping changes to the election procedures through rulemaking in 2014, which have been criticized as shortening the time between the filing of a petition and the election and thus not allowing ample time for information about representation to be shared with employees.  The current NLRB made it known that it was likely to change these rules in 2017.  The NPRM issued this week represents a start to the intended changes to the rules.

The three proposed amendments include: (1) replacing the current blocking charge policy with a vote-and-impound procedure; (2) modifying the immediate voluntary recognition bar and reinstating the Dana notice and open-period procedures; and (3) in the construction industry, requiring the showing of positive evidence of majority employee support, rather than just contractual language, in order to transition an initial Section 8(f) bargaining relationship to a Section 9(a) bargaining relationship.

The Board’s 113-page Notice of Proposed Rulemaking states that the status quo “constitute[s] an overbroad and inappropriate limitation on the ability of employees to exercise their fundamental statutory right to the timely resolution of questions concerning representation through the preferred means of a Board-conducted secret ballot election.”

The Board argued that these policy changes were far better suited to informal notice-and-comment rulemaking, as opposed to adjudication, for a number of reasons.

  • First, the Board will be better able to make an informed judgment as to the impact of the policies after receiving public comment on the issues—whereas if the issue were raised in a case, then only the parties and amici could have their voices heard.
  • Second, the Board pointed out that rulemaking, unlike adjudication, cannot be mooted by developments in a specific pending case. On this point, the Board cited to Lowshaw Thermal Technology, LLC, Case 05-CA-158650, where the Board was unable to address what level of proof should be required to establish a Section 9(a) bargaining relationship in the construction industry after the union withdrew its charge.
  • Third, the Board argued that rulemaking removes the uncertainty that the legal regime may change “on a moment’s notice (and possibly retroactively) through the adjudication process.”

Chairman Ring and Members Kaplan and Emanuel issued the proposed amendments, and Member McFerran issued a stern dissented critiquing the amendments in every respect.

The public may submit comments on the three proposed amendments for 60 days following its publication in the Federal Register on August 12, 2019.

Replacing the Blocking Charge Policy with a Vote-and-Impound Procedure

As we recently previewed here, the Board first proposes to replace the existing (and much-criticized) blocking charge policy with a vote-and-impound procedure.

The blocking charge policy permits a party (typically a union) to block an election indefinitely by filing an unfair labor practice charge.  In practice, the policy allows an incumbent union to use an unfair labor practice charge to delay a decertification election.  The current blocking charge policy is not set forth in the NLRB’s rules and regulations.

In comparison, a vote-and-impound procedure would allow an election to be held regardless of whether an unfair labor practice charge was pending and a blocking request had been filed.  Then, if the charge has not been resolved before the election is held, the election would nevertheless be conducted and ballots would be impounded until the Board makes a final determination as to the merits of the charge.  The Board stated that by avoiding unnecessary and potentially lengthy delay, the vote-and-impound procedure would better protect employees’ free choice than the current blocking charge policy.

In her dissent, Member McFerran condemned the majority for proposing to eliminate an “80-year old doctrine” and replacing it with a new policy that would “require regional directors to run – and employees, unions, and employers to participate in – elections conducted under coercive conditions that interfere with employee free choice.”

Modifying the Immediate Voluntary Recognition Bar and Reinstating Dana Rule

The second proposed amendment would modify the immediate voluntary recognition bar established in Lamons Gasket, Co., 357 NLRB 739 (2011) and return to the rule outlined in Dana Corp., 351 NLRB 434 (2007).

In Dana Corp., the Board held that employees who become represented by a union pursuant to a voluntary recognition agreement have a period of 45 days, after receiving notice, where they may reject that representation through a secret ballot election.  As with the blocking charge policy, the voluntary recognition bar is not currently set forth in the NLRB’s rules and regulations.

The ruling in Dana Corp. was previously overturned by the Obama-Board in Lamons Gasket.  In Lamons Gasket, the Board reinstated the immediate voluntary recognition election bar, which requires “a reasonable period” of time to pass before representation may be challenged.  The Board defined “a reasonable period” of time as no less than six months, but no more than one year.

In the Notice of Proposed Rulemaking, the Board stated that “[t]his modification does not diminish the role that voluntary recognition plays in the creation of bargaining relationships but ensures that employee free choice has not been impaired by a process that is less reliable than Board elections.”

In contrast, Member McFerran argued in her dissent that the proposed amendment will discourage “the establishment of stable collective bargaining relationships by creating unnecessary procedural hurdles undermining a union that has already lawfully secured recognition.”

Requiring Positive Evidence of Majority Employee Support for Section 9(a) Recognition in the Construction Industry

Finally, the third proposed amendment would require positive evidence of majority employee support in order to convert an initial bargaining relationship under Section 8(f) to a Section 9(a) bargaining relationship in the construction industry.  Thus, the proposed amendment would overturn the ruling in Staunton Fuel, 335 NLRB 717 (2001).

In Staunton Fuel, the Board held that a construction industry union could prove Section 9(a) recognition by merely executing a collective bargaining agreement with the employer.  There was no requirement to provide positive evidence of majority support amongst employees beyond the language in the contract.

In the Notice of Proposed Rulemaking, the Board stated that requiring positive evidence “that a union unequivocally demanded recognition as the Section 9(a) exclusive bargaining representatives in an appropriate bargaining unit, and that the employer unequivocally accepted it as such, based on a contemporaneous showing of support from a majority of employees in an appropriate unit” will restore protections of employee free choice in the construction industry.

Member McFerran disagreed and argued in her dissent that the proposed amendment runs counter to “well-established Board law in unfair labor practice cases” and purports to solve a “non-existent problem.”

More Potential Rulemaking in the Future

It appears this is just a start.  The three proposed amendments addressing union election procedures are part of a series of regulations that were announced by the Board on May 22, 2019.  Other potential topics for rulemaking include the Board’s current representation-case procedures, the standard for determining whether students who perform services at private colleges or universities in connection with their studies are “employees” within the meaning of Section 2(3), and the standards for access to an employer’s private property.  Stay tuned!

NLRB Finds Employer Lawfully Terminated “Known” Union Supporter Despite Finding Its Justification Was Pretextual

In a 2-1 decision issued on August 2, 2019, the National Labor Relations Board (the “Board”) in Electrolux Home Products, Inc., 368 NLRB No. 34 (2019) reversed an Administrative Law Judge’s (“ALJ”) decision, and held that Electrolux’s discharge of a “known” union supporter employee did not violate the National Labor Relations Act (“NLRA” or “Act”), notwithstanding the Board finding that Electrolux’s stated justification for the discharge was pretextual.

Background

The discharged employee at issue in the case, J’Vada Mason, was first hired by Electrolux in 2013 and was part of an assembly line team at a Memphis, Tennessee facility.  As a result of her open assistance to the International Brotherhood of Electrical Workers, Local 474 (the “Union”) in both its 2015 organizing drive (which was unsuccessful), and its second, successful organizing drive in 2016, Mason was a known union supporter.  She was seen distributing union cards, handing out union flyers, and wearing pro-union t-shirts.  Moreover, during a meeting held by Electrolux in September 2016 during the organizing drive, Mason was told by two managers to “shut up” and “that she didn’t know what she was talking about” when she challenged a manager during a speech about the union.

Thereafter, on May 5, 2017, Mason was discharged by Electrolux for insubordination as a result of her failure to follow her supervisor’s directive to complete a routine task.

The ALJ Finds Mason’s Discharge Violated the Act

In applying Wright Line, 251 NLRB 1083 (1980), the ALJ found that Mason publicly and openly engaged in union activity, and as a result, Electrolux was aware of her engaging in union activity.  The ALJ also found that Electrolux harbored anti-union animus towards Mason based on the fact that she was told to “shut up” by managers at the September 2016 meeting and that further anti-union animus could be inferred from Electrolux’s failure to provide any explanation as to why Mason was terminated for insubordination, where other employees in the past received lesser discipline for the same offense.

Accordingly, the ALJ found that: (1) the General Counsel established a prima facie case under Wright Line regarding the discharge; (2) that the burden of proof then shifted to Electrolux to show it would have taken the same action notwithstanding the union activity; and (3) that it failed to carry such burden.  Thus, the ALJ held that Mason’s termination violated the Act.

The Board Reverses, Upholds the Discharge

Despite agreeing with the ALJ that Electrolux’s “proffered justification for discharging Mason instead of imposing lesser discipline was pretextual,” the Board held that the General Counsel “failed to satisfy his burden of proving that Mason’s union activity was a motivating factor in her discharge.”

Importantly, the Board declined to infer animus based on Mason’s confrontation with two managers during the September 2016 meeting for two reasons.  First, because Electrolux was lawfully permitted to conduct such a meeting; and that while telling Mason to “shut up” may have been “rude,” it was not sufficient evidence to establish that Electrolux harbored anti-union animus.  Second, the Board noted that the September 2016 meeting lacked a sufficient temporal nexus to Mason’s May 2017 discharge (8 months later) to serve as a basis upon which to infer unlawful motivation by Electrolux.

Though the Board acknowledged that there is “some precedential support for the proposition that pretext alone may satisfy the General Counsel’s burden of proof . . . We need not resolve this inconsistency here,” finding such precedent distinguishable from the instant case on the facts.

Thus, in reversing the ALJ, the Board found that the General Counsel failed to meet its Wright Line burden of proof, because it “failed to establish by a preponderance of the evidence that [Electrolux] was unlawfully motivated in discharging Mason.”

Member McFerran’s Dissent

In her dissent, Member McFerran argued that the Board’s decision “evinces a fundamental misinterpretation of the import of pretext within the Wright Line framework” which to her “seems to open the door for employers to lie to the Board and get away with it.”  McFerran argued that longstanding Board precedent “would logically preclude any conclusion that [Electrolux] acted lawfully in discharging Mason,” because “[o]nce [Electrolux] decided to present only a false reason for its action, it forfeited its chance to establish that it acted for a lawful reason under the Act.”

Takeaways

Electrolux shows that the Board is divided on the appropriate amount of weight a finding that an employer’s justification for an adverse employment action is pretextual carries with regard to the General Counsel’s burden of proof under Wright Line.  While the facts of Electrolux are somewhat unique, in future cases it appears the General Counsel will need to do more than merely establish pretext to prove an employer’s adverse employment action was motivated by discriminatory animus.  Nevertheless, employers considering taking disciplinary action against a union member, especially one that is a known union supporter, should first consult with their labor lawyer.

Employer’s Discipline of Employees Engaging In “Intermittent Strikes” Lawful: NLRB Majority

This summer has been punctuated by walkouts.  We have seen walkouts in support of a $15 minimum wage and walkouts to protest the sale of goods to the government. Walking off the job is, of course, a staple of labor action, and generally speaking, employees are protected by the NLRA when the walkout is over wages, hours or other terms of employment.  The employer may not lawfully discipline or discharge an employee engaged in a protected walkout.

But, not all walkouts constitute protected activity.  One has to look at the purpose of course.  If the walkout doesn’t concern wages, hours or other terms and conditions of employment.  Thus, striking for a higher minimum wage is protected; striking to protest where the employer chooses to sell its goods is not.

Walkouts also have to conform to certain rules.

In a recent case, an NLRB majority concluded that a union’s intermittent strike scheme rendered the walkouts unprotected which meant it was lawful for an employer to discipline its employees for participation in the protests.

In Walmart Stores, Inc., 368 NLRB No. 24 (July 25, 2019), the employer was confronted with a longstanding campaign by a labor organization seeking to organize its employees.  During such campaigns labor groups often resort to high pressure tactics in an effort to cause as much disruption as possible with the goal of getting the employer to not resist unionization and agree to a neutrality agreement. Sometimes these tactics can lose protection under the Act.

The OUR Walmart Strike Campaign

In a twelve month period from October 2012 to November 2013, the labor group called for four separate work stoppages, inviting employees to leave work to participate in various protests.  In late-May of 2013, the third strike of the campaign involved 100 to 130 employees leaving work and protesting at the employer’s annual shareholders’ meeting.  As a result, the employer disciplined 54 of the participating employees for having violated the employer’s attendance policy.

The union filed charges alleging that the employer violated Section 8(a)(1) of the Act when it disciplined these employees because they were absent from work while on strike.

After a trial, the Administrative Law Judge concluded that the employer violated the Act as a result of this disciplinary action, deeming the protests to be protected activity.

Board Majority Reverses ALJ, Concludes Multiple Walkouts Constituted Unprotected Intermittent Strikes

Two Board members (Kaplan and Emanuel) reversed the ALJ’s decision and found that the work stoppage in question was part of a larger “intermittent strike” scheme that rendered the employees’ conduct unprotected – privileging the employer to discipline the employees who participated pursuant to its attendance policy.

The Board noted that for over 50 years it has considered intermittent strikes to be unprotected. An “intermittent strike” is considered unprotected because it creates instability at an employer’s workplace.  Walkouts that are short in duration, a day here or there, are very disruptive. The Board’s definition of an intermittent strike is simple: “a plan to strike, return to work, and strike again.” Farley Candy Co., 300 NLRB 849, 849 (1990).

In its analysis, the Board held that the ultimate inquiry in determining whether or not a strike is “intermittent” is “whether the work stoppage arose pursuant to a strategy to use a series of strikes in support of the same goal.”  If direct evidence exists of such a strategy, that is the end of the inquiry; the strike is unprotected.  In this case, there was no dispute that the labor organization had a plan to continue facilitating strikes of employees. Indeed, the labor organization stipulated to the plan as a fact during the litigation.

Applying this analysis to the case, the Board majority held that the ALJ had inappropriately considered circumstantial evidence surrounding the strike plan on equal footing with the direct evidence in the record.  The Board majority explained that the additional analysis of the surrounding circumstances engaged in by the ALJ is only warranted in the absence of direct evidence that the strike in question was planned pursuant to an overarching strategy to use a series of strikes to accomplish a common goal.

As the Board noted, it is rare for circumstances to arise in which there is clear direct evidence of a plan to strike, return to work, and then strike again – but such evidence existed in this case.

The Board also explained why intermittent strikes are unprotected: such conduct undermines the purpose of the Act – i.e., to promote overall labor peace – by allowing employees to leave work at times particularly harmful to the employer while still being able to return to work before losing their jobs to permanent replacements.  The Board determined that, unlike a genuine strike, such a tactic was never contemplated or condoned by Congress in crafting the Act and therefore does not warrant protected status.

The Board majority specifically concluded that it was the overall strategy and plan of the labor organization that should be the focus of the fact-finder’s inquiry, not the specific employees physically involved in the strikes.  In a footnote, the Board explained that the employees who struck for the first time in the late-May to early June 2013 strike were not entitled to separate protection.  The employer’s ability to lawfully discipline intermittent strikers turns on the consistent scheme of the strike’s organizers – a management right which cannot be overcome through a superficial rotation of employees serving as the strike force.

The Board majority stressed that nothing in its decision suggested that employees who go on strike are never permitted to strike again.  If changing circumstances provide a new basis for another strike then employees cannot be said to be engaging in a preconceived “plan to strike, return to work, and strike again,” in order to more significantly damage their employer while incurring less risk.

Dissent Sees Change In Law

Member McFerran disagreed with the majority’s analysis, seeing a removal of protection of the Act to a large swath of the American private sector:

Today’s decision….takes a legitimate protest by unrepresented workers, dissatisfied with the working conditions dictated by a giant in the retail industry, and classifies it as an unprotected ‘intermittent’ strike—even though it was buffered by months of strike inactivity, a tiny percentage of the work force participated, and no serious difficulties for store operations resulted.

Takeaways

Strategically timed short-term strikes have become an increasingly prevalent tactic by labor organizations seeking to put pressure on employers with publicity in order to secure representational rights from employers.  Walkouts appeal to labor organizations because they can be timed to maximize the negative impact on an employer while minimizing the risk of meaningful retaliatory discipline (or loss of pay that is attendant with a real work stoppage), –if they are protected..

This case is, of course, a sign of the times and such tactics would have been endorsed in years past (and may be resurrected in the future).  For now, the Board’s decision puts labor organizations on notice that harassing tactics such as intermittent strikes can result in lawful discipline for their putative members.

Relatives of unprotected intermittent strikes include multiple refusals to work overtime and partial walkouts (refusing to do tasks etc.).  A walkout has to be total and complete to be protected.

 

Recent ALJ Decision Provides Important Nuance Regarding Workplace No Recording Rules

In late 2017, the NLRB in Boeing Company, 365 NLRB No. 154 (2017), established a new three category system for classifying various employer policies. The new system was designed to balance a “work rule’s negative impact on employees’ ability to exercise their Section 7 rights and the rule’s connection to employers’ right to maintain discipline and productivity in their workplace.” This balancing analyzes each policy on a case-by-case basis.

In Boeing, the NLRB determined that the employer’s “no-camera” rule was lawful because Boeing had articulated sufficient justifications outweighing the “no-camera” rule’s potential impact on restricting Section 7 rights. These justifications included security protocols necessary to perform classified work for the U.S. government. This holding, could lead an unsuspecting employer to believe that all no recording policies in the workplace will be found lawful under the new Boeing standard, however, a recent ALJ decision highlights some of the contours of how such test is applied to other no recording policies.

In ADT, LLC and International Brotherhood of Electrical Workers, Locals 46 and 76,19-CA-216379, an ALJ decision issued on July 9, 2019 found that an employer violated the NLRA by terminating two employees who it claimed violated its workplace recording policy. There, the employer (“ADT”) terminated two employees for recording “captive audience meetings” held in the run-up to a decertification election at the employer’s facility. ADT scheduled two such meetings and divided the workforce into two groups for attendance purposes. In advance of the meetings, ADT emailed employees specifying which of the two meetings they were to attend.

Patrick Cuff (“Cuff”), a Union steward, suspected that ADT was intentionally scheduling pro-union employees to attend one meeting and anti-union employees to attend the other and that different content would be shared at the two meetings. Cuff’s request that he and the other shop steward be split up between the two meetings so that they would know what was said at both meetings was denied.  Instead, Cuff surreptitiously recorded the meeting he was assigned to on his cell phone. Meanwhile, Mohammed Mansour (“Mansour”), an employee who attended the other meeting, recorded his meeting without management approval. It is important to note that Mansour is dyslexic and speaks English as his second language. Moreover, this was Mansour’s first experience being in a union. Thus, he recorded the meeting in case he wanted to replay what was said so that he could better understand the content.

Several days later, Cuff obtained a copy of Mansour’s recording. Through comparing the two recordings, Cuff confirmed his suspicions about content of the two meetings being different. When ADT found out about the recordings they conducted an investigation, which led to both Cuff and Mansour being terminated.

ADT argued that these two employees were terminated for violating ADT’s workplace recording policy, which in relevant part states that: “Audio or video recording of coworkers or managers is prohibited where (1) such recording occurs without explicit permission from all parties involved in those states with laws prohibiting consensual recording…” The state of Washington, where the employer is located, is a two-party consent state, and the recordings were made without the consent of ADT. However, Washington’s two party consent law only protects private conversations. In considering the Washington statute, the ALJ determined that employer meetings about unionization are not private matters, and that the two employees’ activities were protected under the NLRA because Mansour recorded the meeting so he could learn more about the benefits of a union, and Cuff recorded the meeting in an attempt to counter ADT’s arguments made during the meetings.  The ALJ determined that the two employees neither violated ADT policy nor the Washington state statute, and thus, ADT’s termination of the two employees violated the NLRA.

While the Board in Boeing held that a no recording policy can comply with the NLRA under the new test set forth in that case, the ruling in ADT makes clear that employers must not be lulled into thinking that all no recording policies are lawful under the new Boeing standard; and that any discipline issued for putative violations of an unlawful policy may subject the employer to further liability under the Act. Moreover, the case makes clear that an employer may not necessarily be able to rely on a state’s one or two party consent statute as a defense. While ADT is not a decision from the NLRB, the ruling in ADT provides a helpful reminder to employers who have or are interested in having a no recording policy that such policies should be reviewed with labor counsel to determine whether they comply with the Act.

Independence Day Comes Early For Employees Seeking To Shed Union Representation

On the eve of Independence Day, the NLRB, in a 3-1 decision (Member McFerran dissented), clarified the law concerning withdrawal and enunciated a new framework for determining whether a union has retained majority support at the conclusion of a contract term.

In Johnson Controls, Inc., 368 NLRB No. 20 (2019), the Board significantly streamlined the process for employees seeking to claim their own independence from their collective bargaining representative at the conclusion of the contract’s term.  Now, if a majority of employees demonstrate that they do not want to be represented by a union within a reasonable time before contract expiration, and if the employer anticipatorily withdraws recognition, the union’s recourse to reestablish majority support is through a Board-conducted, secret-ballot election – not in adversarial unfair labor practice proceedings.

Employers no longer will be subject to unfair labor practice charges if they anticipatorily withdraw recognition and the union subsequently demonstrates majority support at the contract’s term. In sum, the employer’s anticipatory withdrawal will not be subject to an immediate competing claim of “majority” support for union representation within the several weeks of the end of the contract.

Prior Framework under Levitz

Under well-established precedent in Levitz v. Furniture Co. of the Pacific, 333 NLRB 717 (2001), if an employer receives evidence, within a reasonable period of time before its existing CBA expires, that the union representing its employees no longer enjoys majority support, it may withdraw recognition when the CBA expires and suspend bargaining over a successor contract – this is referred to as “anticipatory” withdrawal of recognition.  Yet under that framework, the employer would be susceptible to a successful 8(a)(5) charge for refusal to bargain if – at the time the employer actually withdraws – there is evidence that the union re-acquired majority support.  This framework has been criticized over the years because of the high degree of latitude the union is allowed to challenge the withdrawal in an unfair labor practice proceeding despite there being no evidence that the employer in any way interfered with the employee’s wishes.

The difficulty with such a framework, the Board in Johnson Controls explained, is that a union may defeat an employer’s withdrawal of recognition in an unfair labor practice proceeding with evidence that it reacquired majority status in the interim between anticipatory and actual withdrawal – regardless of whether the employer knew that the union regained majority support.  Thus employers were left acting at their own “peril” under these circumstances; if subsequent union support was shown, then a remedy the Board would impose could be an affirmative bargaining order, which would preclude any challenges to the incumbent union’s majority support from as little as 6 months to as much as 3 years depending on if the parties reach a successor collective bargaining agreement.

The Levitz doctrine also created a so-called “last in time” rule, meaning that employees’ last preferences of union support (or lack thereof) were deemed determinative by the Board in an unfair labor practice proceeding.  This created an incentive for both unions and employers to fail to disclose the identities of signers on their respective sides for fear of retaliation.

The Johnson Controls Board concluded that the Levitz framework failed to properly safeguard employee free choice by requiring employees to testify at unfair labor practice proceedings, and it also did not promote labor relations stability as employers would make unilateral changes that would have to be reversed.

A New Framework

In Johnson Controls, the Board established a new framework for these situations:

  • If, within a reasonable time before an existing CBA or contract expires, an employer receives evidence that the union has lost majority status, the employer may inform the union that it will withdraw recognition when the contract expires, and it may refuse to bargain or suspend bargaining for a successor contract.
  • The union then has several options:
    • It may file an unfair labor practice alleging the employer initiated the union-disaffection petition or unlawfully assisted it; that the petition fails to make the employees’ representational wishes sufficiently clear; that the petition is tainted by serious un-remedied unfair labor practices; or that the valid signatures fails to establish loss of majority support.
    • Significantly, however, the Board will no longer consider in such cases, whether a union has reacquired majority status as of the time recognition was actually withdrawn. Notably, the Board did not change the existing law that the employer is not obligated to provide the union with a copy of its disaffection evidence at the time it withdraws recognition anticipatorily.  The union may acquire such evidence from its stewards and other pro-union employees, and the employer will be required to provide such evidence to the Region in any investigation.
    • The biggest change is that if a union wishes to reestablish majority status, it must file an election petition, which the Board will process without regard to whether the parties’ contract is still in force at the time the petition is filed. The election will determine whether a majority of unit employees wish the union to continue to represent them after the contract expires.

45-Day Window

The Board also refined what a “reasonable time” before contract expiration where an anticipatory withdrawal may be effected is – now, it is no more than 90 days before the contract expires.  In addition, a union must file an election petition within 45 days after the employer announces its anticipatory withdrawal – even if the employer gives notice within 45 days of contract expiration.  Consistent with existing precedent, a rival union may also file its own petition during the 30-day “open period” prior to contract expiration (i.e., 60- to 90-days before contract expiration).  Rival unions may also intervene if the incumbent union files an election petition.

The Board also stated that, to promote labor stability, employers are not required to withdraw recognition at contract expiration if the 45-day window for an election petition remains open or an election petition has been timely filed and an election remains pending.

Finally, when the incumbent union has filed an election petition within the 45-day window, employers who wish to continue recognizing that union are provided a “safe harbor” to continue doing so without unlawfully supporting a minority union under 8(a)(2).  The “safe harbor” does not apply, however, when a rival union has filed an election petition or has intervened in the upcoming representation case.  In that case, the employer must withdraw recognition.

 Dissent Would Eliminate Withdrawal as Option

Member McFerran dissented, and focused on the fact that an incumbent union is entitled to a continuing presumption of majority support that must be measured solely at the time the employer withdraws recognition – regardless of the status of such support at the time the employer anticipatorily withdrew recognition.  Member McFerran believed that the Levitz framework appropriately accounted for this important presumption.

Member McFerran also advocated for a rule that withdrawals of recognition should be unlawful absent an election; this position which was unanimously rejected by the Board in Levitz, most recently found support from then General Counsel Richard Griffin in 2016.  The Johnson Controls majority flatly rejected this concept again, noting that it would be anomalous to hold that an election is the only means for a union to lose majority support, where a union’s status under Section 9(a) may be gained through voluntary recognition.

Takeaways – Impact of New Standard on Unilateral Changes Post-Withdrawal

The new standard provides helpful guidance to employers when faced with a decertification petition, or other evidence of employee support to be rid of the union representative, near contract expiration.  It avoids the pitfalls attendant to the Levitz framework, when employers were required to take a leap of faith that the question as to the union’s continued majority support prior to contract expiration remained intact at the time of expiration despite clear evidence from the employees that they wished to be rid of the union.  Losing that bet – after the time and expense of a lengthy challenge at the Board in response to unfair labor practice charges – would be costly for the additional reason that the employer could be subject to an affirmative bargaining order and likely would have unilaterally implemented certain changes that would have to be reverted.

Johnson Controls also has a significant impact on an employer’s ability to take unilateral action following a lawful withdrawal of recognition.

  • Employers may make unilateral changes in terms and conditions of employment during the intervening period between the date the contract terminates and the date of an election; however, if an election petition has been filed, an employer should be wary of making unilateral changes, as any such changes during the pre-election “critical period” could risk tainting the election and would result in a second election if the union loses.
  • If the union loses the election and does not file election objections and/or challenge a potentially determinative number of ballots, then the employer may act unilaterally.
  • But if the union loses and files election objections and/or challenges a potentially determinative number of ballots, an employer is risking an 8(a)(5) charge if it acts unilaterally.
  • The same risks to acting unilaterally are associated with cases where the employer challenges a union election win. As above, if the employer acts unilaterally but the outcome of the challenges to the election is a union win or a second election is directed, then the employer’s unilateral changes could furnish grounds for the union to file subsequent objections if it loses.

Blocking Policy Next to be Addressed?

This is a fairly narrow ruling, covering only the situation where the employer is confronted with loss of union status prior to the expiration of the parties’ agreement.  The Board majority stressed it was not addressing the Board’s much criticized blocking policy, which allows a labor union to block a decertification petition, sometimes indefinitely, with little or no evidence of wrongdoing.  Obviously, the blocking policy is on the Board’s radar screen and likely will be addressed in the near future.

Employers No Longer Have To Allow Union Representatives Use of Public Areas, NLRB Majority Rules

Citing judicial criticism, as well as the original Supreme Court decisions on the issue, the NLRB swept away years of precedent permitting union representatives to access public areas of an employer’s premises.

In UPMC Presbyterian Shadyside, 368 NLRB No. 2 (June 14, 2019), the NLRB was confronted with the findings that an employer committed unfair labor practices when it ejected two union representatives from a cafeteria that was open to the public.

Common Occurrence – Presence of Union Representatives in Public Cafeteria

The case involved a fairly common occurrence.  The employer, a hospital, had a cafeteria on the 11th floor of the building, which was open to the public.

Two non-employee union representatives visited the cafeteria where they sat with employees an discussed organizational campaign matters.  Other employees stopped by to receive union literature and pins. A meeting was held by the union representatives which lasted for about an hour. An employee complained about the presence of the union representatives and a security officer was dispatched to the cafeteria.  The security officer confronted the representatives and told them they had to leave because the cafeteria was only for patients, their families and visitors, and employees.   During the encounter the security officer asked for the identification of employees sitting at the table with the union representatives.

A union representative pointed out that a woman sitting in the cafeteria was a friend of an employee who was waiting to have lunch and asked if that person would have to leave as well.  The security officer replied that the two union representatives would have to leave.

In the past, the employer had ejected two outside parties from soliciting in the cafeteria.  There was no evidence that the employer knowingly allowed any other third party to solicit in its cafeteria.

The union filed charges which alleged that the employer’s actions in the cafeteria violated Section 8(a)(1) by (1) the ejection of the union representatives, (2) unlawful surveillance of employees  and (3) by requiring employees to provide identification.

The Administrative Law Judge concluded that the employer committed an unfair labor practice as to all three of the allegations.

NLRB Majority Reviews Law and Concludes Employer Did Not Unlawfully Eject the Union Representatives or Unlawfully Surveil Employees

Three Board Members (Ring, Emanuel and Kaplan) reversed the ALJ as to the first two issues, concluding that the NLRB had departed from existing Supreme Court precedent in a manner that had been heavily criticized by circuit courts of appeal.  The NLRB reviewed the Supreme Court’s decision in NLRB v. Babcock and Wilcox Co., 351 U.S. 105, 112 (1956) which set forth the standard for nonemployee access to an employer’s property.  In that decision, the Supreme Court held:

It is our judgment . . .that an employer may validly post his property against nonemployee distribution of union literature if reasonable efforts by the union though other available channels of communication will enable it to reach the employees with its message and if the employer’s notice or order does not discriminate against the union by allowing other distribution.

The NLRB noted that the two exceptions to circumstances where an employer can bar nonemployee organizers from the premises, inaccessibility and discrimination, were intended to be narrowly construed given the importance of private property rights.  The Board noted that over the years, despite applying the principles of Babcock and Wilcox, the Board “created an additional exception where nonemployee union organizers seek access to a portion of the employer’s property that is open to the public, such as a cafeteria or restaurant.”  In this regard, the Board noted that it has “consistently found that employers violate Section 8(a)(1) of the Act when the restrict public-cafeteria access for nonemployee organizers who engage in solicitation and other promotional activities but are not ‘disruptive.'”

The Board majority noted that this approach had been “soundly rejected” by a number of federal circuit courts of appeal and seemed inconsistent with the original analysis provided by the Supreme Court.  The Board then announced that it would reverse all cases supporting this third exception:

Therefore, to the extent that Board law created a “public space” exception that requires employers to permit nonemployees to engage in promotional or organizational activity in public cafeterias or restaurants absent evidence of inaccessibility or activity-based discrimination, we overrule those decisions.

The Board then announced the new rule for addressing nonemployees access to an employer’s area that is open to the public:

Accordingly, we find that an employer does not have a duty to allow the use of its facility by nonemployees for promotional or organization activity.  The fact that a cafeteria located on the employer’s private property is open to the public does not mean that an employee must allow any nonemployee access for any purpose.  Absent discrimination between nonemployee union representatives and other nonemployees –i.e., ‘disparate treatment where by rule or practice a property owner’ bars access by nonemployee union representatives seeing to engage in certain activity ‘while permit[ting] similar activity in similar relevant circumstances’ by other nonemployees–the employer may decide what types of activities, if any, it will allow by nonemployees on its property.

The Board then applied this new rule retroactively to all cases.

The Board’s application of the new rule to the case resulted in no violation of the law as to the ejection of the union organizers.  The Board first noted that the issue was not inaccessibility.  So, the issue was whether the employer acted discriminatorily by ejecting the union representatives. Here, the employer demonstrated that it had taken action in the past to prohibit solicitation by outside parties.  The Board did not see an inconsistency between the fact that there was a nonemployee friend waiting in the cafeteria because that person was not soliciting others.  The employer acted consistently with how it had treated outsiders engaged in solicitation and that was all that mattered.

The Board went out of its way to make clear that it was reversing any “precedent holding discrimination can be established merely by showing that the nonemployee union representatives were denied access to a public area within private property, without the Board considering the kind of ‘nondisruptive’ activity they were engaged in and whether the employer had permitted similar activity by other nonemployees.”

As to the second issue, whether the security guard engaged in unlawful surveillance, the Board concluded that the employer did not engage in surveillance because of longstanding precedent that recognizes that “management officials may observe public union activity, particularly where such activity occurs on company premises, without violating Section 8(a)(1) of the Act, unless such officials do something out of the ordinary.”

The Board did find a violation of the law for the security guard requesting identification from the employees present at the impromptu union meeting.  The Board held this action was chilling of protective rights.

Dissent Decries Overruling Precedent

Member McFerran dissented alleging, among other things, that the majority had misread the law.  The dissent’s opinion, weighing in at 10 pages, decried the overruling of precedent without proper notice, which has been a rallying cry of McFerran’s:

Today’s decision continues an unfortunate trend the Board.  Again, the majority mistakenly reverses precedent–narrowly statutory protections for employees and unions–without first providing notice to the public and inviting briefs, in a case that does not present a proper occasion for reconsidering the law.

Takeaways

Employers with cafeterias open to the public now have a bright line rule.  The employer now can bar any nonemployee from soliciting, including union organizers, so long as they bar all other nonemployees from similar activities.  A violation can no longer be established merely by the fact the employer barred a union representative from a public area.  The General Counsel must prove that the employer allowed similar conduct by other third parties before an allegation of disparate treatment can be established.

It is critical that the employer have a lawful non-distribution/non-solicitation policy in writing.  The employer must also, of course, uniformly enforce the policy across all third parties in order for this new case law to apply.

The true impact of this decision has yet to be seen as it is possible the new rule will just shift the focus of litigation to allegations of disparate treatment which can be hard to defend.  It is very important for employers to keep a written record of the instances in which they have enforced a valid non-solicitation/non-distribution so that they have evidence to defend claims of disparate treatment.

As to the notion that the Board is departing from some policy, written or otherwise, by not inviting briefs from the public, this criticism is hard to square with the practice of the agency in the last several years, if not decades.  While it may be ideal for the public to weigh in on significant changes to the law, the fact is the Board is not obligated to reach out to the public on every precedent change; certainly this has not been the agency’s practice.  In the last 10 years, prior Boards often overturned significant precedent with no notice to the public.  For sure, the prior Boards invited briefs on substantial issues, such as the joint employer standard, but there were many precedent changes the Board characterized as “significant” that were just announced without any prior notice and often without a quorum.

Employer’s Grant of Extra Holiday to All Employees Except Those Represented by Union Not Unlawful, NLRB Rules

Employers with union-represented employees also always have non-union employees, whether working in the office or at another worksite.  Invariably, there are differences between the wages, benefits, and terms and conditions of employment of the two groups, a natural consequence of the bargaining process.  A common situation arises when an employer makes changes in the workplace, whether it is a change to a payroll practice or offering new benefits.  The question is whether the change applies to the union-represented workforce.  Without any other circumstances, the answer generally is “no,” the change does not apply automatically to the represented group of employees for the simple reason that the change must be bargained.

The NLRB recently faced a situation where a group of unions claimed that a benefit granted to the non-union employees should apply to the bargaining unit employees, and that the employer’s failure to do so was unlawful.

In Merck, Sharp & Dohme Corp., 367 NLRB No. 122 (May 7, 2019), the employer has 23,000 employees in the United States, approximately 2700 of whom are represented by various unions in different plants.  At the time of the events of the case, none of the collective bargaining agreements were under negotiation.

Employer Grants New Holiday to Non-Union Employees Only

The employer’s business results exceeded its expectations and the employer wanted to celebrate and acknowledge the good news with its employees.  Ultimately, the employer settled on the grant of a new paid holiday, “Appreciation Day” which would be the Friday before Labor Day Weekend, converting a three day weekend into a four day weekend.  The employer announced this new holiday and stated that Appreciation Day “did not apply to those in US who are covered by [a] collective bargaining agreement.”

The  various unions representing the employees started to complain to the employer asking why Appreciation Day was not given to the bargaining unit employees.  Various employer officials responded with essentially two reasons:  First, the grant of such benefits cannot be made unilaterally “unless there is a provision” in the collective bargaining agreement.  Second, the employer had wanted to make changes to how it administers payroll and the 401K, changes it deemed to be “simple”, and the unions refused to discuss such changes telling the employer to “wait until contract negotiations.”

The unions filed unfair labor practice charges alleging that the employer was “retaliating” against the union in violation of Section 8(a)(3).

Administrative Law Judge Sees Animus

After trial, the Administrative Law Judge ruled that the employer violated the law because the employer’s rationale,–that it did not grant the holiday because the unions had refused to make other changes,– was retaliatory.  The Judge reasoned that the employer’s decision to exclude the union represented employees from Appreciation Day was motivated by union animus, finding “this motive represents straightforward punishment of union employees in retaliation for past protected activity under the Act.”  The Judge ordered the employer to make the union represented employees “whole” for the loss of the paid holiday.

The employer appealed.

NLRB Majority Reverses ALJ, Concludes Employer’s Reason Was Entirely Without Animus

A majority of the NLRB panel (Chairman Ring and Member Emanuel) reversed the ALJ’s ruling and dismissed the complaint.  The Board noted that it “has long recognized that an employer has a right to treat represented and unrepresented employees differently, so long as the different treatment is not discriminatorily motivated.”  The Board noted that in cases where the allegation is that the employer’s action is driven by an unlawful motivation, the General counsel bears an initial burden to show “(1) union or protected concerted activity, (2) employer knowledge of that activity, and (3) union animus on the part of the employer.”

Applying this framework the Board then analyzed the employer’s reason for not awarding Appreciation Day to represented employees. The Board noted employer was “not inclined” to approach the unions to bargain over this additional holiday because the unions “had, in the past, refused to agree to the [employer’s] midterm contract changes.”  The Board concluded that the Judge’s conclusion that this reason was “straightforward punishment” was incorrect because it “simply fails to take into consideration the everyday realities of the bargaining process.”  The Board expanded on the realities of the bargaining process:

‘Collective bargaining by its very nature is an ‘annealing process hammered out under the most severe and competing forces and counteracting pressures.'” . . .  The process, by its nature, may involve hard negotiation, posturing, brinkmanship, and horse trading over a long period of time.  Given this backdrop and the Board’s historical tolerance for such an ‘annealing process’ (so long as it does not cross the line into unlawful threats or bad faith), [the employer’s] articulation of [its] rationale was not an admission of unlawful retaliation  Consideration of prior bargaining positions and extant contractual benefits is not unusual in the course of a collective-bargaining relationship, nor is it evidence of an employer’s antiunion animus.

The Board found that the employer’s message was clear and lawful:  that if the unions were unwilling to discuss midterm changes to terms and conditions of employment, then they would have to “live with the limitations of their contractual benefits along with their advantages.”

Finally, the Board found that it was not animus for the employer to cite the fact that the law prohibited it from granting benefits unilaterally.

Dissent Sees Animus in Employer’s Actions

Member McFerran dissented, concluding that while “[n]othing in the Act required the Respondent to treat its union-represented and its unrepresented employees identically, but it was not free to treat them differently in order to punish represented employees for the statutorily protected actions of their Unions.”

Takeaways

This decision represents a very good articulation of the collective bargaining process, of how it rests on the relationship built by the parties and cannot be defined by a single event or action.  The Board majority viewed the context of the bargaining between the parties in its totality instead of focusing intently on one incident.  If the Dissent’s position were accepted then no party could every cite to the other party’s behavior without risking a finding of “animus.”  Labor relations is a complex business where actions cause reaction.  In this case, the unions steadfastly refused to bargain over changes during the term of the contract which was their right, of course, but that kind of inflexibility means the employer was less likely to approach the unions when the change was something positive.  Had the tables been turned, and the employer acted in an inflexible manner, the unions would likely have pointed to that behavior in refusing to agree to something in the future.  “Animus” is not defined by a party not liking the outcome.

Using a Cat to Chase the Inflatable Rat: NLRB General Counsel Urged Reconsideration of Board Precedent Regarding Banners and Signal Picketing of Neutral Employers

Continuing its efforts to overturn precedent, the NLRB General Counsel’s Division of Advice has issued a new advice memorandum looking to strike at the most recognizable sign of unionism in urban areas today – – the inflatable rat that is used to signal a labor dispute to the public.

It has been long held by the Supreme Court that while handbilling at a neutral employer’s business is lawful, picketing urging a boycott of the neutral employer is coercive and therefore unlawful.  Edward J. DeBartolo Corp. v. Florida Gulf Coast Building & Construction Trades Council (DeBartolo II), 485 U.S. 568, 579-80 (1988).

The issue presented with inflatable animals and large banners is whether objects and signs rise to the level of picketing conduct, and not simply free speech.  For years, the National Labor Relations Board has ruled that rats and large banners are elements of free speech that do not rise to the level of “picketing” conduct that would be evidence of unlawful secondary boycott conduct.  In its recent memo, the General Counsel sought to use a case out of Chicago — involving, ironically, a large inflatable cat — to go after this precedent.

In the Advice Memorandum (which was dated December 20, 2018, but was released on May 14, 2019), the General Counsel’s Office directed Region 13 to issue a Complaint against the International Brotherhood of Electrical Workers Local 134, finding that the union violated the “secondary boycott” provisions of the National Labor Relations Act by erecting a large, stationary banner proclaiming a labor dispute with the general contractor as well as a large, inflatable cat clutching a construction worker by the neck, near the entrance of the construction site.

The general contractor was “neutral” as it did not employ electricians directly.  Rather, the “primary” employer was a subcontractor on the job site.  It was undisputed that the union posted agents to hold the banner and used the inflatable cat at the entrance to the construction site, with the aim of forcing the neutral employer to cease using its electrical subcontractor.

The Region was directed to use the case as a vehicle to urge the Board to reconsider its decisions in a trio of decisions that were issued during the Obama administration, which found similar conduct protected and not unlawful “picketing” of a neutral employer under the Act:

  • A union’s posting of agents holding large, stationary banners proclaiming “labor dispute” and “shame on [the employer” in front of neutral businesses (Carpenters Local 1506 (Eliason & Knuth of Arizona), 355 NLRB 797 (2010));
  • A union’s use of a large, inflatable rat in front of a neutral employer was neither picketing nor otherwise coercive (Sheet Metal Workers Local 15 (Brandon Medical Center) (Brandon II), 356 NLRB 1290 (2011)); and
  • Erecting banners at 19 different neutral employers’ premises proclaiming “shame” on them (Carpenters Southwest Regional Councils Locals 184 & 1498 (New Star), 356 NLRB 613 (2011)).

After a lengthy review of the existing precedent, the Division of Advice concluded that the trio of cases struck the wrong balance between speech and picketing activity, and that the General Counsel believed the union’s “activity was tantamount to unlawful secondary picketing, and signal picketing that unlawfully induced or encouraged neutral employees to cease working.”  13-CC-225655 at 1, 14-17.  Alternatively, Advice urged the Region to argue that the conduct “at least constituted unlawfully coercive non-picketing conduct” in violation of the Act.  Id. at 1, 17-18.

Unfortunately, the cat will not actually catch the rat this time.  Since the Memorandum was initially distributed to the parties in late December, the parties settled the unfair labor practice charge.  As a result, this case will not serve as the test case to the Board the General Counsel is seeking.  However, this Memorandum clearly illustrates the General Counsel’s policy on this issue and how Regions likely will be required to interpret the Act and prosecute potential union conduct in similar circumstances.  Given the proliferation of inflatable rats, it may be only a matter of time until the Board gets its chance to review its position.

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