Labor Relations Update

NLRB Pursues 10(j) Injunction and Bargaining Order Against Starbucks Based on Conduct In Union Organizing Campaign

On June 21, 2022, the National Labor Relations Board (“NLRB”) issued a press release indicating that the Regional Director of Region 3 requested injunctive relief from a United States District Court on behalf of seven former Starbucks employees in Buffalo, New York after the employees were allegedly fired for engaging in unionizing activities. This petition comes on the heels of an initiative issued by the General Counsel (“GC”) of the National Labor Relations Board (“NLRB”), Jennifer Abruzzo, in February of 2022, which we previously discussed here, to increase the use of injunctive relief under Section 10(j) of the National Labor Relations Act (“NLRA”) during organizing campaigns.

According to the Region 3 Regional Director, Starbucks engaged in an antiunion campaign after learning about organizing efforts among employees and allegedly terminated seven employees involved in the union’s campaign. The Regional Director argued that the 10(j) injunction would allow these employees to return to work while the parties resolved organization efforts. In addition to the 10(j) injunction, the Regional Director also requested a Gissel bargaining order for the Buffalo employees and a broad nationwide cease-and-desist order that would be applicable to all Starbucks facilities in the United States. A Gissel bargaining order would essentially force Starbucks to bargain with the union instead of conducting a rerun election. The Regional Director claimed that such order would be warranted since “traditional Board remedies will be unable to restore ‘laboratory conditions’ to enable the NLRB to conduct a free and fair rerun election.”

These extraordinary remedies sought by the Region 3 Regional Director are proof that GC Abruzzo’s initiatives and advice memorandums are being fully embraced by Regional Directors around the country. With union representation petitions up by 57% in the first half of fiscal year 2022 (as we previously discussed here), we can expect to see an increase of Regional Directors seeking 10(j) injunctions and bargaining orders based on the spike in new unionization efforts.

We will continue to monitor these developments and will keep you informed as to any new updates in this developing story.

NLRB Releases Spring Rulemaking Agenda Forecasting Changes To Joint Employer Standard and Representation Election Procedures

On June 21, 2022, the National Labor Relations Board (“NLRB”) released its rulemaking agenda for Spring 2022, indicating the Board is considering revisions to two significant and tumultuous topics pursuant to the rulemaking process:  (1) the joint-employer standard under the National Labor Relations Act (“NLRA”), and (2) representation procedures, including those relating to blocking charges, voluntary recognition and bargaining relationships in the construction industry.

Joint Employer Status under the NLRA

As foreshadowed by the Board when it announced its regulatory agenda in December 2021 (discussed here), the NLRB will engage in rulemaking on the “joint employer” standard under section 2(2) of the National Labor Relations Act, likely reverting to the standard that existed prior to the April 2020 rule.

As previously discussed (here, here, and here), the “joint employer” standard has fluctuated significantly over the past several years. This standard has important implications, often for contractors/subcontractor relationships, parents/subsidies, and the like, because joint employers have responsibilities to comply with the NLRA regarding another entity’s employees. For example, joint employers must participate in collective bargaining over their employees’ terms and conditions of employment, and may be jointly and severally liable for the other employer’s unfair labor practices.

The current standard for “joint-employer” status was established by the NLRB through its rulemaking authority in 2020, and is codified at 29 C.F.R. § 103.40.  Under the current standard, which has been in effect since April 27, 2020:

“An employer… may be considered a joint employer of a separate employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment. To establish that an entity shares or codetermines the essential terms and conditions of another employer’s employees, the entity must possess and exercise such substantial direct and immediate control over one or more essential terms or conditions of their employment as would warrant finding that the entity meaningfully affects matters relating to the employment relationship with those employees.” (Emphasis added).

Further, “essential terms and conditions of employment” is specifically defined to include “wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.” This standard varies from the previous standard, under which affiliated companies would be considered “joint employers” where a company possessed the authority to control those employees’ terms and conditions of employment, even if the company did not actually exercise such authority. A summary fact sheet on the 2020 final rule is available here.

Since the current “joint-employer” standard was promulgated via rulemaking, it cannot be altered by a NLRB decision, but rather the Board must similarly revise the standard through rulemaking or simply rescind the April 2020 rule without replacement – in the latter scenario, the case law would immediately revert to the prior Browning-Ferris standard that prevailed prior to the April 2020 rule, and would once again, subject the joint-employer standard to potential alteration by some future Board decision or rule.

Representation Election Procedures

The Board will also consider revising the representation election procedures under 29 C.F.R. 103, with a “focus” on the April 1, 2020 amendments implemented by the Board. A helpful summary of the April 1 amendments is available in an NLRB-published Fact Sheet and we also reported on those amendments here.

The three major changes implemented by the April 1, 2020 amendments regarding union election and recognition procedures were as follows:

  1. Replacing the blocking charge policy to expedite the election by implementing vote-and-impound or vote-and-count. Per this rule, a party may not block an election from occurring merely by filing charges.  Despite a pending unfair labor practice charge, the election will proceed as scheduled, and the votes will either be impounded (i.e., not counted), or counted, depending on the nature of the alleged unfair labor practice.
  2. Reinstating Dana Corp., 351 NLRB 434 (2007), challenges to voluntary recognition, which provides that where an employer voluntarily recognizes a union pursuant to NLRA Section 9(a), it must post a notice to its employees reflecting the same, and employees may challenge such recognition if they petition for a secret-ballot election within 45 days thereafter. If no petition is filed during the 45-day notice period, the voluntary recognition bar would operate for a “reasonable period of time” thereafter.
  3. For construction industry employers, requiring evidence of majority-employee support for Section 9(a) recognition in addition to contractual language. Such evidence would be the same showing necessary for unions in non-construction industries to establish recognition.

It remains to be seen how the Board will revise these election procedures, including whether the April 1, 2020 amendments will be revised or rescinded altogether.

Next Steps:

To advance its agenda, the Board will likely issue a Notice of Proposed Rulemaking (“NPRM”), which opens the formal process for public comment on the proposed rules. The website for the Office of Information and Regulatory Affairs indicated that for each rule, the expected date for the NPRM is September 2022.  The Board may also elect to hold public hearings at that point.

NLRB Chairman McFerran commented that the Board “encourage[s] the public to take advantage of these opportunities to share their views, and [looks] forward to getting feedback on these important issues in the future.”

We will continue to monitor and report on developments with regard to these rulemaking priorities.

NLRB Alters Timing Requirements for Electronic Notice Posting in Workplaces Impacted by COVID-19

In a decision issued on June 2, the National Labor Relations Board modified the timing of its electronic notice-posting requirement in circumstances where an employer has not yet reopened its facility due to COVID-19, or where a substantial complement of employees has not yet returned to work on-site when the employer “may be communicating with its employees by ‘electronic means’” (e.g., internet, intranet, email, etc.).

Prior to this decision, the Board temporarily suspended its standard remedial requirement that an employer must post a notice to employees at the involved facility within 14 days after the employer is served with the decision of an unfair labor practice, notifying employees of the employer’s violation and advising employees of their rights under the Act.  For employers that were closed or where employees were not yet reporting to work, employers were not required to post physical notices or distribute electronic notices until 14 days after the involved facility reopened and “a substantial complement of employees ha[d] returned.”

Reasoning that “prompt posting of the notice by electronic means will best effectuate the purposes of the Act by providing employees with timely notice of the unfair labor practices and the steps the Respondent will take to remedy them” the Board has reverted to its previous standard requirement with respect to electronic notification.  Now, the employer should again electronically notify its employees “within 14 days after service [of the unfair labor practice decision] by the Region.”  In addition to electronic posting, the employer should also post physical notices within 14 days after the reopening and staffing of a “substantial complement of employees.”

As we discussed here, the Board has not further defined what constitutes “a substantial complement of employees” in this context.  That said, the substantial complement concept is frequently used by the NLRB as one of the factors determining whether a company is a “successor” employer under the Act.  Based on this standard, the Board likely will consider whether a majority of the job classifications are filled and the operation is engaged in substantially normal production.

Characterizing its decision as one that “simply removes an unnecessary delay” in communication with employees, the majority gave little deference to certain Board Members’ concerns that the combined notice-posting period will likely now extend beyond the current-standard 60 days for certain employers.  Notably, the Majority specifically stated its decision “makes notice posting for more than 60 days a standard remedy for a subset of employers, at least until the Board returns to its pre-pandemic notice-posting remedy.”

As always, we will keep you up to date on the latest developments in the post-COVID return to work landscape.

 

General Counsel Abruzzo Looks to Overturn Board Precedent Again: This Time, Seeking to Broaden Union Access to Public Spaces

In an Advice Memorandum released on May 25, 2022, NLRB General Counsel Jennifer Abruzzo laid out a blueprint for changes she’d like made to Board precedent concerning union representatives’ access to employer property.  At issue is a pair of 2019 rulings by the NLRB in UPMC, 368 NLRB No. 2 (2019) and Kroger Ltd. P’ship, 368 NLRB No. 64 (2019), which together provided employers with greater latitude to bar union representatives from accessing public spaces within the employer’s facilities and grounds.

While an Advice Memorandum does not constitute a change in the law, it certainly gives a clear indication of how the current General Counsel will advise the Regions in deciding whether and how to prosecute future cases.  This most recent GC memo makes good on initiatives she articulated last year (previously discussed here).  The issue of union access to employer facilities was specifically foreshadowed as a topic for reassessment in the General Counsel’s “Mandatory Submissions to Advice GC Memorandum 21-04,” released on August 12, 2021.

Background – LT Transportation, Case 05-CA-281089

This Advice Memorandum is the result of an issue raised in a recent case before the Board, LAZ Parking Mid Atlantic, LLC, d/b/a LT Transporation, Case 05-CA-281089.

There, the conduct at issue was that the company wrote a letter to the union that was trying to organize the company’s drivers, prohibiting the union’s representatives from going to stops along the shuttle bus routes to talk to the drivers.  The union argued that barring non-employee union agents from boarding the employer’s publicly-used shuttles violated Sections 8(a)(1) and (3) of the NLRA.

The union ultimately withdrew the charges after winning the election to represent the company’s shuttle bus drivers.  However, the closing of the case allowed GC Abruzzo to issue the Advice Memorandum and opine on the legality of the prohibition of the union’s access to public facilities.

The History of Non-Employee Union Access Cases Pre-2019

In 1956, the Supreme Court issued NLRB v. Babcock & Wilcox Co., 351 U.S. 105 (1956), which held that employers could exclude non-employee union representatives from an employer’s property unless one of two conditions are present:

  • Employees are otherwise inaccessible to the union; or
  • The employer has discriminated against the union by prohibiting it from using the employer’s facilities, but provides access to non-union groups.

After Babcock, the Board was faced with a number of fact-specific scenarios confronting the discrimination questions, including situations involving “public spaces” – i.e., spaces either contained within, or adjacent to yet part of, an employer’s private property, but which were open to the public.  The Board addressed whether an employer, by virtue of allowing the public to utilize a particular portion of its otherwise private property effectively discriminates when it excludes the union access to said property for purposes of engaging in otherwise protected, concerted activity.

Since Babcock, the Board held on numerous occasions that unions could access such public spaces, as long as organizers used them consistently with the public property’s intended use and were not disruptive to the employer.  Cases over the years involved public sidewalks adjacent to a store, public restaurants located in a portion of the employer’s department store, public cafeterias, and casinos’ bars and restaurants.

The Board’s 2019 Decisions in UPMC and Kroger

In UPMC, 368 NLRB No. 2 (2019), the Board held that the “public spaces” exception referenced above was inconsistent with Babcock.  In overruling the prior cases that outlined a “public spaces” exception, the Board announced that employers could eject union organizers or representatives from such “public spaces,” unless one of the two exceptions from Babcock were demonstrated:  a showing of inaccessibility or discrimination based on the use by non-union groups.

The Board also took the opportunity to further define discrimination under the Babcock standard. The Board stated that discrimination in union access cases exists where “by rule or practice a property owner permits similar activity in similar relevant circumstances.”  The focus, according to the Board, should be on the conduct of the non-employee organizers, rather than their identities.

In Kroger Ltd. P’ship, 368 NLRB No. 64 (2019), the Board found discrimination against non-employee organizers only where it can be found that other non-employees engage in “similar activity in similar relevant circumstances.”  According to the Board, this standard encompasses both the literal activity engaged in, but also the purpose of the activity, which could result in an employer lawfully banning union organizers from distributing union literation, while allowing non-employee access for other charitable, civic and commercial activities.

General Counsel Abruzzo’s May 25th Advice Memo

General Counsel Abruzzo’s Advice Memorandum makes three principal points:

  • The Employer’s conduct in LT Transportation violated the NLRA, even based on the current standard. According to GC Abruzzo, the Employer’s prohibition was unlawful because it focused not on the union organizers’ conduct, but on their identity, as she believed the organizers did not engage in any activity – e., discussing working conditions with the drivers – in which the general public did not engage.
  • UPMC was incorrectly decided and should be overruled. According to GC Abruzzo, UPMC is inconsistent with Supreme Court precedent from Babcock and its progeny, which the Board was not privileged to alter.  The Board, in UPMC, incorrectly likened the union organizers’ activities to sales people surreptitiously entering the employer’s property, which according to GC Abruzzo, “disregards Section 1 and Section 7 of the Act.”
  • Kroger should also be overruled. The “similar in nature” standard illustrated by the Board in Kroger, according to GC Abruzzo, permits “[s]ingling out union activity for negative treatment,” and, therefore, is inconsistent with the NLRA.

Takeaways

Although the precedent in UPMC and Kroger remain good law for the moment, this Advice Memorandum clearly signals the General Counsel’s intention to encourage Regions to issue a complaint in similar subsequent cases, with the goal of getting the Board to ultimately overrule those decisions.

As a result, given the current composition of the Board for the foreseeable future, it seems all but inevitable that UPMC and Kroger will be overturned, and the “public spaces” exception under Babcock that existed prior to 2019 will go back into effect.  If that occurs, then unions will (once again) be permitted to access public spaces on or adjacent to employer’s private property, as long as the union representatives use the spaces consistently with the public property’s intended use and were not disruptive to the employer.

 

Appellate Court Reverses NLRB, Holding Tweet About “Salt Mines” Not an Unfair Labor Practice

Last week, the Third Circuit reversed a National Labor Relations Board (“NLRB”) decision finding that FDRLST Media, publisher of online news magazine The Federalist, unlawfully threatened its employees when its Executive Officer tweeted about sending employees “to the salt mine” if they tried to form a union.  In FDRLST Media, LLC v. NLRB, the Third Circuit found that a reasonable employee would not view the tweet as threatening or otherwise interfering with employees exercising their rights under the National Labor Relations Act (“NLRA”).

The Executive Officer posted the tweet in question from his personal Twitter account in response to news that staffers at a different media company had walked off the job during union contract negotiations: “FYI @fdrlst first one of you tries to unionize I swear I’ll send you back to the salt mine.”  Both an ALJ and the NLRB found the tweet to be an objective threat against the employer’s employees in violation of Section 8(a)(1) of the NLRA.

On appeal, the Third Circuit reversed, finding the tweet—which was obviously intended to be a joke—to be harmless.  The court found these circumstances important context, since the tweet regarded matters—specifically, labor relations news—that The Federalist reports about on a regular basis.  Additionally, the fact that there was no evidence of labor strife at The Federalist at the time of the tweet further indicated that employees likely would not read the tweet as an imminent threat.  Under longstanding NLRB precedent, the determination of a statement’s threatening nature is an objective test.  Despite this, the court found that the lack of evidence that any Federalist employee actually felt threatened by the tweet also weighed against the NLRB’s ruling.

The court also noted that the nature of Twitter makes it even less likely that a reasonable employee would be threatened by a tweet.  By its structure (limiting tweets to 280 characters), Twitter inherently engenders jokey, exaggerated, or otherwise un-nuanced statements that are unlikely to be taken literally by a reasonable person.  The court did, however, reject FDRLST Media’s argument that the officer’s personal Twitter account should not be attributed to FDRLST Media, noting that the officer not only is FDRLST Media’s executive officer but also occasionally used his personal account for company business.

This is an unusual case with less than far-reaching implications.  Still, it is an interesting analysis of the issues of standing, jurisdiction, and coercive statements under the NLRA.  The Charging Party was not an employee of The Federalist and had no direct or indirect ties to the employer.  Under the NLRA, anyone can bring an unfair labor practice charge and does not need to have “standing” like in virtually every other legal forum.  The outcome undoubtedly would have been different if an employee had filed the charge.  The case is instructive, however, because the court does an excellent job of articulating the factors used by the NLRB for determining whether a statement uttered by an employer is unlawful.  The NLRB has not indicated whether it will appeal the Third Circuit’s opinion.

NLRB General Counsel Looks to Partner with the Federal Mediation and Conciliation Service (FMCS) to Support Voluntary Recognition and Collective Bargaining

On April 27, 2022, NLRB General Counsel Jennifer Abruzzo released a memorandum to all NLRB field offices detailing and encouraging an extensive partnership with the Federal Mediation and Conciliation Service (“FMCS”).

The FMCS is an independent agency created to “preserve and promote labor-management peace and cooperation.” In doing so, FMCS provides services to assist with collective bargaining, including trainings on collaborative contract negotiation, conflict resolution, and partnership building between management and unions. Additionally, FMCS provides mediation services and, as of April 26, 2022, offers assistance in card counts if an employer has agreed to voluntarily recognize a union where majority support for the union can be demonstrated via signed employee cards. FMCS services are free of charge at the time of certification, for first contract bargaining and if charges are filed alleging bad faith bargaining.

General Counsel Abruzzo stated that this partnership takes a “whole-of-government approach” and “builds on the strengths, expertise, and resources of each Agency to advance national policy.” Regions are encouraged to both remind parties of FMCS offerings and engage FMCS mediators when instituting remedies in 8(a)(5) and 8(b)(3) bad faith bargaining cases to facilitate good faith bargaining between parties. Additionally, General Counsel Abruzzo noted that Regions should integrate FMCS services “more directly” by attaching documents detailing FMCS services when sending notices or letters to parties pertaining to certification or unfair labor practices. The attachments note the offerings of FMCS and provide contact information for FMCS personnel so that parties can talk to the agency directly.

This partnership will likely have an interesting effect on NLRB resolutions going forward. Regions will likely try to incorporate FMCS services where possible and parties may find themselves before FMCS mediators, or involved in FMCS trainings, more so than before.

We will keep you updated on any new developments pertaining to this new partnership.

BREAKING: NLRB General Counsel Seeks to Scrap 50 Years of Precedent and Require Card Check Recognition

With Congress failing to make the organizing process easier for unions, the NLRB General Counsel Jennifer Abruzzo is now asking the Board to require employers to recognize unions without a secret ballot election.

As foreshadowed by her August 2021 memo on Mandatory Submissions to Advice, in a brief filed in Cemex Construction Materials Pacific LLC, the Office of the NLRB General Counsel argued that the Board should reinstate an antiquated Board standard that was rejected more than 50 years (since 1969)—the Joy Silk doctrine—that would require employers to recognize and bargain with a union if it is presented with signed authorization cards from a majority of workers.

Under this old standard, the burden of proof rests with the employer to demonstrate that it has a “good faith doubt” as to the union’s majority status where the union presents evidence of a card majority and the employer refuses to recognize the union. If the employer was unable to satisfy this “good faith doubt” test, the Board would order the employer to recognize and bargain with the union without a secret ballot election. According to the General Counsel, the rationale for reverting to the Joy Silk doctrine is that the “Board’s current remedial scheme has failed to deter unfair labor practices during union organizing drives and provide for free and fair elections.” While the Board may issue bargaining orders against employers whose unfair labor practices are so severe and pervasive as to make a fair election unlikely or impossible (known as a Gissel bargaining order), this is an extraordinary remedy that is only granted in the rarest of circumstances.

As such, the General Counsel is requesting the Board return to its “good faith doubt” test under Joy Silk, without requiring a showing of “substantial unfair labor practices” to demonstrate the employer’s lack of good faith in questioning a union’s card majority. Under the General Counsel’s proposed paradigm, an employer may still ask a union to respond to its good faith concerns about the authenticity of card signatures or the appropriate scope of the bargaining unit. However, an employer “may not simply refuse to respond or object to authorization cards as a method of demonstrating majority status.”

Highlighting the magnitude of the General Counsel’s position, the brief explicitly explained its understanding of the Joy Silk card check doctrine whereby

[T]he Board may determine that a bargaining order should issue if the circumstances demonstrate a lack of good faith doubt even absent unfair labor practices, such as due to testimony or internal documentary evidence revealing the employer’s purpose at the time of its refusal to bargain, the legitimacy of the employer’s proffered reasons for refusing to bargain, or its failure to offer any explanation. This would include situations in which the employer’s reason for refusing to bargain is to gain time in order to persuade employees to change their minds, even using what would otherwise be lawful persuasion.

Takeaways

This is only the General Counsel seeking to change precedent.  However, if the Board agrees with the General Counsel’s position and that action was upheld in the courts (both doubtful at this time), employers would lose the right to insist on a secret ballot election to ensure its employees have an opportunity to exercise their statutory right to refrain from union representation if they so choose. This would greatly facilitate the ease with which unions assert representative status over employees and likely encourage unions to seek to organize more workplaces.

As always, we will keep you up to date on the latest in this developing story.

Union Representation Petitions Increase by Astonishing 57% in the First Half of FY 2022

On April 6, 2022, the National Labor Relations Board (“NLRB” or the “Board”) issued a press release recognizing the shockingly large surge in new union organizing. Specifically, during the first half of Fiscal Year 2022 (October 1, 2021 to March 31, 2022), the NLRB reported that union representation petitions increased by 57%.

Representation petitions are filed by employees and unions requesting that the NLRB conduct an election to determine whether employees wish to be represented by a union.

NLRB General Counsel Jennifer Abruzzo stated that “there is a surge in labor activity nationwide, with workers organizing and filing petitions for more union elections than they have in the last ten years.”

This rise in activity, however, is accompanied by “critical funding and staffing shortages” for the NLRB, which makes addressing the large amount of union petitions a difficult feat to conquer. Although the NLRB is set to receive a new Congressional funding appropriation in Fiscal Year 2023, the NLRB claims this may not fully address staffing needs since “more than three-quarters (77%) of the NLRB’s budget goes directly to staffing costs.”

General Counsel Abruzzo noted the dire situation, stating that while the NLRB remains committed to processing petitions and other matters that are presented to the Board, “the NLRB needs a significant increase of funds to fully effectuate the mission of the Agency.”

We will be sure to keep you updated with any new developments related to this increase in union activity.

NLRB GC Seeks Dramatic Change to Employer’s Right to Speak to Employees About Unionization at Work

For decades, employers had been free to gather employees to discuss – in a non-coercive manner – the employer’s views on unionization, and had been free to share with employees what employees’ rights were with respect to the same.  Earlier today, the NLRB General Counsel issued a memorandum declaring her intent to attempt to overturn this nearly 75 years of National Labor Relations Board precedent regarding an employer’s ability to speak to employees.  In GC Memorandum 22-04, issued on April 7, 2022, argues that mandatory “captive audience” meetings and even simple one-on-one conversations during work are unlawfully coercive.

The General Counsel’s initiative is the latest in a long line of new initiatives dating back to last August, previously discussed in this space – however, this particular change was not previously outlined by the GC in her most recent memo (in August 2021) outlining her enforcement priorities.

The General Counsel’s Theory

The General Counsel refers to the current legality of such meetings as an “anomaly” that is “contrary to the basic principles of labor law,” namely, in that such meetings are contrary to the NLRA’s protection of “employees’ right to listen as well as their right to refrain from listening to employer speech concerning the exercise of their Section 7 rights.”

The General Counsel suggests that such meetings are often held under the threat of discipline, express or implied, by virtue of an inherent pitting of employees’ reliance on employers for their livelihoods against these rights.  In other words, the General Counsel suggests that employees who skip such meetings may fear retribution from their employer.  Accordingly, under the General Counsel’s theory, such meetings fall outside the realm of constitutionally-protected free speech because of an alleged unlawful coercive effect.

Of course, Board law has been settled since 1948 on the legality of such meetings, starting with the Board’s decision in Babcock & Wilcox Co., 77 NLRB 577 (1948).  There, the Board held that an employers’ compelling attendance at such meetings does not violate the Act.

Going forward, the General Counsel suggests that employers must make clear that employees’ attendance is truly voluntary, similar to a Johnnie’s Poultry warning given to employees when an employer is investigating and preparing to defend against an unfair labor practice charge.

What Comes Next?

As we have noted before, a General Counsel Memorandum does not change the law in any respect.  However, it does signal that the General Counsel will be looking to bring a “test” case to the NLRB for a ruling in the near future.  Indeed, the General Counsel stated that she will ask the Board to consider its precedent in this area in “appropriate cases,” and also stated that “a brief will be submitted to the Board shortly” on the subject.  At that point, the Board will decide whether to overturn over seventy years of precedent, with appeals likely to follow.

Stay tuned.

Third Circuit Takes Supreme Court Cue and Rejects “Implied” Union Contracts

On March 30, 2022, three judge panel of the Third Circuit Court of Appeals unanimously overruled prior precedent allowing “implied” contracts to survive the expiration of a written agreement. The instant panel held, instead, that “implied” contract provisions that “have no durational limit of their own” are “governed by the general durational clauses of the CBAs.”  Pittsburgh Mailers Union Local 22, et al., v. PG Publishing Co. Inc., No. 21-1249 at *9 (3d Cir. 2022) overruling Luden’s Inc. v. Local Union No. 6 of the Bakery, Confectionery & Tobacco Workers International Union 28 F. 3d 347 (3d Cir. 1994). In upholding the District Court’s ruling granting summary judgment in favor of the Company, the panel refused to require the Pittsburgh Post-Gazette (“Post-Gazette”) to arbitrate a grievance with unions for its workers under their expired contract.

Factual and Procedural History

The Post-Gazette and the unions had a CBA which included an agreement to arbitrate disputes on a case-by-case basis. Two months before the contract expiration, the Company sent letters to the unions disavowing all contractual obligations at the CBAs expiration, other than established wages, hour and terms and condition of employment. While bargaining over a new contract, the Post-Gazette refused to cover a yearly increase in the unions’ health care costs, as it had under previous contracts. The unions claimed that the Post-Gazette violated the expired CBA by failing to provide these health benefits and sought to arbitrate the issue, citing Luden to support their claim that the Post-Gazette should still honor the arbitration clause in the expired contract.

After discovery, the unions and the Post-Gazette each moved for summary judgment. The District Court granted Post-Gazette’s motion for summary judgment, holding that the court could not compel the Company to arbitrate. The unions appealed.

The Third Circuit’s Analysis

In 1994, the Circuit held in Luden’s that “an arbitration clause may survive the expiration of termination of a CBA intact as a term of a new implied-in-fact CBA unless (i) both parties in fact intend the term not to survive, or (ii) under the totality of the circumstances either party to the lapsed CBA objectively manifests to the other a particularized intent [], to disavow or repudiate that term.” Luden’s, 28 F.3d at 364.

However, the Supreme Court issued two decisions in 2015 and 2018 undercutting Luden. In both rulings, the Supreme Court held that CBAs do not “infer” lifetime benefits unless the language explicitly says otherwise and that courts should interpret CBAs “according to ordinary principles of contract law.” M&G Polymers USA, LCC v. Tackett, 574 U.S. 427 (2015); CHN Industrial N.V. v. Reese, 138 S. Ct. 761 (2018).

In its decision to overrule Luden, Judge Roth explained that in keeping with these Supreme Court precedents, if a specific provision does not have its own durational clause, the general durational clause of the CBA applies. Further, the Panel reasoned that as a matter of contract law the arbitration provisions had no durational limit, and as such, the obligation to arbitrate expired with the CBA.

Takeaways

This decision—driven by clear rulings from the Supreme Court– is consistent with those in the Eighth, Ninth and Seventh Circuits, indicating that the Circuits are moving towards a general consensus regarding whether provisions in a CBA survive the expiration of the CBA. Employers with operations in other circuits should take note that certain provisions of the expired CBA – such as arbitration provisions – may survive expiration,–until such circuits rule on the issue in light of the Supreme Court precedent.

We will continue to monitor these developments and keep you informed as to any updates in other circuits.

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