As of July 31, the NLRB has a full complement of Board Members, for the first time in about ten years.  The fact the deal on appointments has been progressing for a few weeks did not prohibit the three member Board of questionable constitutional validity from continuing to render decisions.

The NLRB recently ruled that a union did not engage in objectionable conduct during a decertification election when it told employees it would waive dues for a six month period if the employees ratified the agreement it reached with the employer.  The case is Community Options NY, Inc., 359 NLRB No. 165 (July 16, 2013).

In Community Options, the employees had filed for decertification of their union representative.  While the petition was pending the union and employer reached a tentative collective bargaining agreement.  The agreement contained a union security clause requiring all employees to become and remain members of the union or be discharged.  The employer notified the employees of the tentative agreement, including the existence of the union security clause.  The employees were concerned about this requirement.  During the ratification meeting the union promised to waive the first six months of dues to “offset the negative impact of the limited wage increases that had been negotiated.”  The employees ratified the contract and a little over two weeks later voted to retain the union in the decertification election.

The employer filed objections, which were sustained by the Hearing Officer, who found that the union’s waiver of dues constituted a tangible benefit that likely had a coercive effect on the outcome of the election.  On appeal the Board reversed the Hearing Officer, concluding that no benefit was offered to employees.

Dues Waiver Was Not A Financial Benefit

The Board first concluded that the waiver of dues was not a financial benefit because:

A waiver of union dues will constitute an objectionable financial benefit, however, only if employees already have an enforceable legal obligation to pay the dues.  McAllister Towing & Transportation Co., 341 NLRB 394, 418 (2004).  In such circumstances, the waiver provides an immediate enhancement of employees’ economic position. . . .Conversely, forgiveness of an unenforceable debt provides employees no financial benefit, and is not objectionable.

Apparently, although it is by no means obvious, the Board concluded that since the employees did not have to pay the dues as of the date of the ratification, the fact that they chose to adopt the agreement waiving such dues for half a year did not constitute a tangible benefit.

Dues Waiver Not Objectionable

Despite finding that no tangible benefit had been conferred, the Board went on to decide that the waiver of dues was not objectionable, meaning it did not interfere with the election.  The Board noted that payments made during the pendency of a petition are treated as presumptively coercive (forgetting, of course, that the Board already ruled no financial benefit had been offered).  The union then has an opportunity to rebut the inference.  In finding the union had rebutted the inference the Board noted that the purpose of the waiver was to address the smaller than expected wage increase the union had negotiated.  The Board then went on to explain its reasoning:

In assessing how a reasonable employee would perceive the announcement of the dues waiver, we find it significant that the Union never initiated any discussion of the dues wavier in the context of the decertification campaign.  The employer injected the dues-waiver issue into the election campaign.  The Union discussed it only in response to the Employer’s campaign literature raising the total cost of union dues for employees.  This sequence of events took place after the union had announced the waiver and specifically linked it to the contract ratification and wage increase provided for in the contract.  The Union’s subsequent reference to the waiver in response to the Employer’s campaign assertions concerning dues was unlikely to create an impression among employees that the Union had granted the waiver for the purpose of influencing their votes int he decertification election.

This reasoning suggests that the union’s waiver of half a year’s union dues was justified solely on the union’s explanation of the payment, not the timing coming shortly before an election, not the amount of dues waived, no other factor normally considered when evaluating conduct occurring during a campaign.  This reasoning also suggests that a person offering a bribe would always announce the intent as a bribe.

The rationale is very hard, if not impossible, to square with Board pronouncements concerning the effects of certain employer policies on elections.  As we have noted before here, the Board has overturned an employer win in a decertification election based on the mere existence of a policy that it considered overbroad, even in circumstances where no evidence suggested the employees were even aware of the policy.   If we contrast that case with Community Options, it seems a publicized announcement to all employees that they would not have to pay dues for half a year is greater foundation for an objection than a policy no one can say for sure any employee ever read.

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Photo of Mark Theodore Mark Theodore

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice…

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice Group.

Some recent highlights of his career include:

  • Successfully defended client against allegations that it had terminated a union supporter and isolated another. T-Mobile USA, Inc., 365 NLRB No. 15 (2017).
  • Successfully appealed NLRB findings that certain of client’s written policies violated the National Labor Relations Actions Act.  T-Mobile USA, Inc., 363 NLRB No. 171 (2016), enf’d in part, rev’d in part 865 F.3d 265 (5th Cir. 2017).
  • Represented major utility in NLRB proceedings related to organizing of planners.  Secured utility-wide bargaining unit. Bargained on behalf of grocery chain.  After negotiations reached an impasse, guided the company through lawful implementation of five year collective bargaining agreement.
  • Coordinated employer response in numerous strike situations including a work stoppage across 14 western states of the client’s operations.

Mark has extensive experience representing employers in all matters before the NLRB, including representation petitions, jurisdictional disputes and the handling of unfair labor practice charges from the date they are filed through trial and appeal. Mark has acted as lead negotiator for dozens of major companies in a variety of industries, including national, multi-unit, multi-location, multi-employer and multi-union bargaining. Mark has handled lockout and strike situations, coordinating the clients efforts.

In addition, Mark has handled hundreds of arbitrations involving virtually every area of dispute, including contract interest arbitration, contract interpretation, just cause termination/discipline, benefits, pay rates, and hours of work.