Labor Relations Update

Second Circuit Adopts “Contract Coverage” Standard as Governing Standard for Unilateral Changes

The NLRB’s “contract coverage” standard for determining whether a collective bargaining agreement privileges an employer to unilaterally change terms and conditions of employment received support last week from a federal court of appeals, further solidifying the legitimacy of the relatively new standard at a time when the Board is undergoing a change in leadership and policy objectives. As announced last Thursday, the new General Counsel wants to revisit the Second Circuit-approved “contract coverage” standard, suggesting that this employer-favorable development may be fleeting when it comes to the NLRB. IBEW Local 43 v. NLRB, Case No. 20-1163 (2d Cir. Aug. 12, 2021).

Procedural History

The union filed an unfair labor practice charge against the employer, claiming the employer violated the Act by implementing a 6-day workweek without first giving it notice and an opportunity to bargain. While the administrative law judge (ALJ) concluded the employer did violate the Act, the Board reversed the ALJ’s decision and dismissed the complaint. Shortly before deciding this case, the Board abandoned its long-standing “clear and unmistakable waiver” standard for evaluating the lawfulness of employer’s unilateral changes to terms and conditions of employment and adopted the “contract coverage” test.

Applying the new “contract coverage” standard, the Board determined that the parties’ collective bargaining agreement permitted the employer to change employee schedules without first bargaining with the union. Reading the management rights provision, which granted the employer the exclusive right to “determine the reasonable amount and quality of work needed”, together with a provision providing for the payment of overtime wages for work performed “weekly in excess of forty (40) hours, or on scheduled days off,” the Board held that the CBA authorized the employer to determine the amount of work it needed employees to perform and to require employees to work in excess of 40 hours a week.

Legal Analysis

On review, the Court considered both the Board’s adoption of the new “contract coverage” standard and its application of this standard to the facts. In considering which interpretive method should be applied to determine whether a CBA grants an employer the right to act unilaterally, the Court found the Board’s reasoning for breaking with its precedent to be “thorough and carefully reasoned” and adopted the “contract coverage” test.

Agreeing with the Board’s assessment, the Court explained that the previous “clear and unmistakable waiver” standard tended to undermine contractual stability by denying the effect of contract provisions that failed to meet this “exacting” standard. Under the “clear and unmistakable waiver” analysis, the CBA had to “unequivocally and specifically” permit the employer’s action in order for the Board to find that the union waived its right to bargain over the action at issue. With respect to the “contract coverage” standard, which considers whether the employer’s action falls within the “compass or scope” of the CBA, the Court reasoned that the Board’s new test comports with ordinary principles of contract interpretation “while preserving meaningful limits on unilateral employer action”. As such, the Court adopted the Board’s “contract coverage” standard as the governing standard for unilateral changes.

Applying the “contract coverage” standard to the facts before it, however, the Court disagreed with the Board’s interpretation of the parties’ collective bargaining agreement. The Court found that the plain language of the CBA placed restrictions on employees’ hours and work schedules, providing that “[t]he workweek shall be forty (40) hours during any one workweek or eight (8) hours during any workday” and specifying that employees’ normal schedule will consist of either a 5-day workweek of 8-hour shifts or a 4-day workweek of 10-hour shifts. While the CBA stated that certain specified deviations from this normal work schedule were permissible, it required the employer to follow a two-step process before making the limited changes permitted by the CBA. Contrary to the Board, the Court did not interpret the contractual right to determine the “amount” of work needed and the requirement to pay overtime wages for work in access of 40 hours in a week as giving the employer the right to mandate overtime work. Therefore, the Court held that the CBA did not privilege the employer to unilaterally impose a 6-day workweek and vacated the Board’s dismissal of the complaint.

Takeaways

The Second Circuit’s approval of the Board’s “contract coverage” test may take on greater significance as the composition of the NLRB changes under the Biden Administration. As we discussed here, the newly sworn-in General Counsel of the NLRB, Jennifer Abruzzo, recently issued a memo outlining the Board’s enforcement priorities. Among other directives, the memo requires NLRB Regions to submit cases involving application of the “contract coverage” standard to the Office of the General Counsel for advice prior to any decision. The memo signals a likely change to the Board’s standard for employer unilateral changes, meaning the Board may return to its prior standard requiring a “clear and unmistakable” waiver of a union’s right to bargain before an employer may act unilaterally. However, favorable decisions from federal courts of appeal like this offer a glimmer of hope for employers where decisions by the Board can be appealed, and potentially vacated, by a federal appellate court on review. As always, we will continue to monitor and report on developments at the NLRB.

The NLRB’S Recently Seated General Counsel Plots Entirely New Direction for the Board

Less than a month after being sworn in as the new General Counsel of the NLRB, Jennifer Abruzzo defined a bold new direction for the Board’s enforcement priorities in a memo issued on August 12, 2021.  The memo, Mandatory Submissions to Advice GC Memorandum 21-04 (August 12, 2021), lays out subject matters that NLRB Regions must submit to the Office of the General Counsel for Advice prior to any decision.  Abruzzo’s memo makes clear she seeks to depart sharply from the priorities outlined by her predecessor, Peter Robb, and specifically targets for review areas where the Trump Board overruled past legal precedent.

The GC identifies three broad categories of topics that must be submitted for advice: (1) subject matter areas where, in the last several years, the Board overruled legal precedent; (2) new initiatives that the General Counsel would like to carefully examine, and; (3) matters traditionally submitted to Advice.

The lists of topics are telling and indicate to employers quite clearly that the Board is going to plot a new course from the Trump Board.

Topics Overturned by the Trump Board

The General Counsel all but promised change in these subject matters, criticizing the Trump Board for “overruling many legal precedents which struck an appropriate balance between the rights of workers and the obligations of unions and employers.”  The memo identified the following topics for reassessment:

  • Employer handbook rules: in particular the new, more lenient, test for the legality of an employer’s handbook and policies articulated The Boeing Co., 365 NLRB No. 154 (2017).
  • Confidentiality provisions: a slate of decisions which found confidentiality provisions in settlement agreements, workplace investigation procedures and arbitration agreements lawful.
  • Protected concerted activity: a variety of decisions which narrowed what constitutes limitations on protected concerted activity (i.e., activity protected by the National Labor Relations Act), highlighting in particular a reassessment of decisions finding that limiting the use of email to only workplace communications lawful.
  • Test for Unlawful Union Animus: in particular, Tschiggfrie Properties, Ltd., 368 NLRB No. 120 (2019) and other cases heightening the animus requirement for showing unlawful union discrimination.
  • Remedies Available: decisions which lowered the likelihood that an employer must offer reinstatement and lowered the standard for Regions to accept settlement agreements;
  • Union Access: cases which limited certain employees and union representatives from the employer’s property;
  • Union Dues: cases which permitted employers to unilaterally cease remitting union dues after a collective bargaining agreement expires and imposed more duties on unions in relation to collecting dues;
  • Employee Status: cases involving a 2019 decision which made it more likely that an employee with entrepreneurial opportunity would be deemed an independent contractor;
  • Religious institutions: Bethany College, 369 NLRB No. 98 (2020), which articulated a new standard for assessing whether the Board has jurisdiction over a religious education institution;
  • Employer duty to recognize and bargain with a union: the GC identifies multiple key doctrines developed over the last four years regarding a union’s waiver of the right to bargain which provided employers with the right to promulgate policies without bargaining with a union, and decisions permitting employers to implement changes after a collective bargaining agreement expired;
  • Deferral: cases involving deferral of discharge and discipline cases to arbitration and the more permissive standard reinstated by the Trump Board.

Other New Initiatives

The memo identifies initiatives to review seven other subject matters as well:

  • Employee Status: cases involving misclassification of employees as independent contractors and the coverage of the Act to individuals with disabilities and applicants;
  • Weingarten: involving the applicability of a right to information in the pre-disciplinary interview context and whether the right to representation applies in non-unionized settings as well;
  • Jurisdiction of NLRB: assessing the jurisdictional contours between the NLRB and the National Mediation Board (jurisdiction over rail and airline industries);
  • Employer duty to recognize and bargain with a union: in addition to identifying issues related to surface bargaining and a refusal to furnish information related to a plant relocation, the GC particularly identified that the Board will consider overturning Shaw’s Supermarkets, Inc., 350 NLRB 585 (2007), which permits mid-term withdrawals of recognition after the third-year of a contract;
  • Employees’ rights to strike and/or picket: cases involving replacement of strikers, the broad definition of an intermittent strike, and strikes with an unlawful secondary object;
  • Remedies and compliance: issues involving make-whole remedies and a discriminatee’s duty to conduct an adequate search for interim employment;
  • Interference with employee’s rights: cases regarding statements that imply employees access to management will be limited if a union is voted in, involving an employer’s threat to close a plant where the threat was not disseminated, and the promulgation of mandatory arbitration agreement in response to employee protected activity.

The memo concludes with a recitation of other casehandling matters that traditionally have been submitted to Advice.

More to Come and Takeaways

The memo, a dense ten pages, is a signal that the Board will be plotting a new course for at least the next four years.  This combined with the recent confirmation of two new Board members (one already seated, and the other who will be seated later this month) makes clear that the ideology and leaning of the NLRB is rapidly changing.  The GC’s memo should be a clear signal to all that significant changes to labor law precedent are on the horizon. As always, we will keep you informed of any new developments.

Scabby the Rat Has Been Legitimized by the NLRB

A split Board concluded this week that a union did not engage in unlawful secondary activity under the NLRA when it stationed a 12-foot-tall inflatable rat—known all too well by employers as “Scabby the Rat”—and two 8-foot banners on the worksite of a neutral employer for the purpose of forcing the neutral employer to cease doing business with the primary employer with whom the union had a labor dispute. International Union of Operating Engineers, Local Union No. 150 (Lippert Components, Inc.), 371 NLRB No. 8 (July 21, 2021).

The Board’s decision lays to rest former General Counsel Peter Robb’s attempt to bring renewed scrutiny to the use of the inflatable rat and other forms of “bannering” against neutral employers as a form of secondary activity that Congress intended to prohibit under Section 8(b)(4) of the Act.

ALJ’s Finding of No Unlawful Secondary Activity

As we previously reported here, the underlying unfair labor practice charge was heard by an Administrative Law Judge (ALJ) in 2019. At issue in the unfair labor practice complaint was whether the union violated the Act when it set up an inflatable rat and two 8-foot banners, manned by two union representatives, at the entrance of a trade show that targeted a neutral employer that did business with the primary employer with whom the union had an ongoing labor dispute.

The ALJ applied Board precedent, developed just a decade earlier, in Eliason & Knuth of Arizona and Brandon Regional Medical Center, which found, respectively, that the use of stationary banners or an inflatable rat at the site of a neutral employer without more did not “threaten, coerce, or restrain” the neutral employer in violation of Section 8(b)(4) of the Act. Constrained by this precedent, the ALJ dismissed the complaint, finding that the union’s stationary display did not amount to unlawful picketing or coercive non-picketing conduct under the NLRA.

Request for Board Review and Legal Analysis

Following the ALJ’s decision, the Office of the General Counsel of the NLRB requested, in October 2020, that the Board overrule its prior decisions on such conduct, arguing that Board precedent unnecessarily narrowed the definition of picketing and coercive conduct falling within the scope of Section 8(b)(4)’s prohibition. The Board subsequently invited the parties and interested amici to submit briefs on the question of whether the Board should overrule Eliason & Knuth and Brandon Regional Medical Center and, thereby, reverse its position on the use of inflatable rats and stationary banners.

After reviewing the ALJ’s decision and the 30 briefs submitted in the case by the parties and by amici, a majority of the Board affirmed the ALJ’s decision and dismissed the Section 8(b)(4) complaint. The majority opinions agreed that the doctrine of constitutional avoidance required dismissal of the complaint. Thus, even where the Act could be interpreted such that banners and inflatable rats constitute the type of coercive secondary conduct prohibited by the Act, the question is whether the Act must be read in this way when it raises serious First Amendment issues.

The majority concluded that where the conduct at issue was clearly expressive activity intended to persuade the neutral employer’s customers, the possible infringement on the union’s First Amendment rights precluded the Board from finding that the banners and inflatable rat violated the Act. Moreover, the Board held that neither the union’s display nor the large, imposing presence of Scabby the Rat mandated a finding of intimidation or coercion within the meaning of Section 8(b)(4).

Takeaways

For the foreseeable future, the Board’s decision has blessed unions’ use of Scabby and banners as a lawful application of secondary pressure on neutral employers. In his dissent, Member Emanuel warned that unions would exploit the “gaping secondary hole” left by the majority’s failure to recognize the wide range of coercive union secondary conduct. Whether this ominous warning will bear out remains to be seen. With the upcoming changes to the composition of the NLRB—President Biden’s two Board appointees are well into the confirmation process and could give Democrats control of the Board by the end of August—it is likely that unions will resort to using Scabby more often.

BREAKING: Jennifer Abruzzo is Sworn In as General Counsel of the NLRB

After being nominated by President Biden on February 17, 2021, Jennifer Abruzzo was sworn in as General Counsel of the NLRB yesterday by Chairman Lauren McFerran. Abruzzo will serve a four-year term as General Counsel, spearheading the agency’s investigation and prosecution of unfair labor practice cases and supervising the NLRB field offices in the processing of cases. As the NLRB noted in its official press release, this is the first time in the NLRB’s history that women have occupied both the Chairman and General Counsel positions.

Peter Sung Ohr, who has served as Acting General Counsel since President Biden terminated former General Counsel Robb in January 2021, will remain in the Office of the General Counsel, serving as a Deputy General Counsel.

Jennifer Abruzzo most recently served as Special Counsel for Strategic Initiatives for the Communications Workers of America (CWA). Prior to this role, Abruzzo spent over two decades working for the NLRB in various capacities, with her most recent position being Deputy General Counsel and then Acting General Counsel before former General Counsel Peter Robb was confirmed by the Senate. After her swearing in, Abruzzo said she was “thrilled to rejoin the Agency” and looks forward to working with her colleagues to “promote better enforcement of labor and employment laws.” General Counsel Abruzzo also took the opportunity to express her belief that “vigorous enforcement of the Act will help level the playing field for workers and their freely chosen representatives”.

General Counsel Abruzzo’s opening remarks likely signal what lies ahead for employers.  Viewing this development in conjunction with the pending nominations of two union side attorneys to fill vacant seats on the NLRB, one can certainly see that the winds of change at the NLRB are certainly blowing.  Stay tuned.

District Court Approves of President Biden’s Firing of Former NLRB General Counsel, But is This the Final Word?

As we reported here and here, there are several challenges to the authority of the Acting General Counsel of the National Labor Relations Board, Peter Sung Ohr, given President Biden’s unprecedented move of terminating the sitting General Counsel, Peter Robb, in January 2021.

One recent challenge to the Acting General Counsel’s authority was brought before the District Court of New Jersey in response to the Board’s petition for an injunction under Section 10(j) of the National Labor Relations Act in a pending unfair labor practice proceeding. Goonan v. Amerinox Processing, Inc., 21-CV-11773 (D.N.J. July 14, 2021).

While the court ruled that the President had the authority to terminate the General Counsel without cause and designate an Acting General Counsel in the interim, the decision is unlikely to be the proper vehicle for a final determination of the issue.

Background

The employer in Goonan was charged with a number of ULPs surrounding the union’s claim that the employer unlawfully terminated several employees because of their support for the union during an ongoing organizing campaign. The General Counsel issued a complaint alleging that the terminations violated the Act. The case went before an ALJ, and the ALJ found that the employer committed a number of unfair labor practices in violation of the Act.

While the complaint was pending before the ALJ, the Board, through its Regional Director, filed the instant petition for an injunction under Section 10(j) of the Act, seeking an order from the district court enjoining the employer from committing unfair labor practices. In its opposition to the 10(j) petition, the employer challenged the Board’s authority to seek an injunction, arguing the Acting General Counsel, who filed the petition on behalf of the Regional Director, did not have any legal authority to prosecute the underlying unfair labor practice charge. According to the employer, the President’s termination of former General Counsel Robb was not in accord with the NLRA and, further, the President’s designation of Peter Sung Ohr did not comply with the Appointments Clause of the U.S. Constitution and was therefore invalid.

Legal Analysis

The court only briefly addressed the employer’s argument that the petition was invalid because the Acting General Counsel lacked legal authority, finding overall that the validity of the Acting General Counsel did not impact whether the Board could petition the court for an injunction.

On the issue of the President’s ability to terminate the General Counsel without cause, the court concluded that the text of the Act as drafted by Congress provided the President with this power. Section 3 of the Act provides that persons appointed to the Board “may be removed by the President, upon notice and hearing, for neglect of duty or malfeasance in office, but for no other cause.” However, Congress did not include a similar restriction on the President’s ability to terminate the General Counsel. Therefore, the court determined that the plain language of the Act allows the President to “relieve the General Counsel of his or her duties without the process required for Board members.” The Act also explicitly permits the President to designate an Acting General Counsel when a vacancy occurs, without any limitation with respect to how that vacancy came into existence. As such, the court rejected the employer’s argument that the President’s failure to comply with the Appointments Clause invalidated the authority of the Acting General Counsel.

After briefly discussing the President’s authority to terminate a sitting General Counsel, the court concluded that it ultimately had jurisdiction to hear and adjudicate the matter because a petition for an injunction under Section 10(j) is brought by the Board and not the General Counsel. The question before the court, therefore, was whether to grant the Board temporary relief.

Takeaways

The district court’s decision is the first of its kind to assess and rule on the legality of President Biden’s unprecedented decision to terminate the sitting General Counsel upon taking office. However, since the issue of the legitimacy of the Acting General Counsel was not squarely before the court, this decision is unlikely to become the vehicle for further review of Peter Robb’s removal and the subsequent appointment of Peter Sung Ohr as interim General Counsel. However, the court’s analysis may offer a preview of how other federal courts could come out on the issue. As always, we will keep you informed on any new developments.

Access Denied: Supreme Court Finds California Regulation Permitting Union Access to Employer Property Constitutes An Unconstitutional Taking

In a 6–3 decision, the U.S. Supreme Court held on June 23, 2021 that a California regulation granting labor organizers the “right to take access” to agricultural employers’ private property to solicit union support violated the Takings Clause of the U.S. Constitution. See Cedar Point Nursery et al. v. Hassid et al., USSC Case No. 20–107 (June 23, 2021).

Background

Decades ago, California’s Agricultural Labor Relations Board (“ALRB”) promulgated a regulation that requires agricultural employers to give labor organizers access to their private property for as much as three hours per day, 120 days per year for purposes of organizing. In 2016, two agricultural employers sued the ALRB in federal court in California, seeking to prohibit the agency from enforcing the regulation because the regulation constituted a physical appropriation of private property in violation of the Constitution’s Taking Clause, which precludes the government from taking private property “without just compensation.”

The district court, however, rejected this argument, holding that because the regulation did not “allow the public to access [the Employers’] property in a permanent and continuous manner for whatever reason,” it did not amount to an unconstitutional physical taking. On appeal, a split Ninth Circuit panel affirmed the district court’s decision, noting that the regulation neither allowed the public to “unpredictably traverse” the employers’ private property “24 hours a day, 365 days a year,” nor “completely deprive[d]” the employers of all economically beneficial use of their property. After the Ninth Circuit denied their petition for re-hearing en banc, the employers appealed to the Supreme Court, which granted certiorari.

Holding

The Supreme Court reversed the Ninth Circuit, reasoning that because the right to exclude third parties from private property “is ‘one of the most treasured’ rights of property ownership,” the California regulation requiring agricultural employers to allow union organizers private-property access constituted a clear physical appropriation. In such cases, because the physical appropriation of private property is so clear, the Court “use[s] a simple, per se rule: The government must pay for what it takes.” The Court then distinguished PruneYard Shopping Center v. Robins—a 1980 case in which the Court rejected the argument that state protection of leafletting in a privately owned shopping center represented an unconstitutional taking—explaining that, unlike the agricultural employers’ private property, the shopping center in Pruneyard “was open to the public, welcoming some 25,000 patrons a day.” See 447 U.S. 74. Notably, the Court also implied that the narrow exception enjoyed by unions under current federal labor law—which allows non-employee organizers a right of access to employers’ private property when employees are otherwise “beyond the reach of reasonable union efforts to communicate with them”—could similarly prove to be an unconstitutional taking, if challenged.

Potential Impact of the Decision

For the parties, the main question left open by the Supreme Court’s decision is, what is the appropriate remedy for the unconstitutional taking here?  In other words, should the property owners be granted injunctive relief, as they requested, and/or should the property owners be compensated for the access granted to organizers? And if so, how much?  The Court remanded the case to the federal district court to handle this question.

This case is interesting for management- and union-side labor lawyers alike because the regulation at issue provided for a union’s right to access employer property, directly impacting the traditional labor-management relationship. What is particularly unique about this case is that state and local labor laws are usually challenged on preemption grounds (i.e., the aggrieved party argues the state or local regulation is preempted because such conduct is arguably protected or prohibited by federal labor law). Here, however, the law did not face a preemption challenge—likely because agricultural employers fall outside the NLRA’s scope. Depending on the facts, the potential avenue for redress under the Takings Clause could encourage parties to challenge similar state or local regulations that grant third parties access to private property.

Only time will tell, but on balance, this decision’s potential effect on labor-management relations seems limited for at least four reasons:

  • First, while California agricultural employers are no longer required to grant labor organizers access to their private property (unless the state provides “just compensation”), this change applies only to employers in just one industry in just one state—nothing more.
  • Second, according to the Wall Street Journal, even though California has about 16,000 agricultural employers, union organizers have recently invoked their right to access in just a few dozen instances each year.
  • Third, if the State of California opts to keep mandating private-property access for union organizers by providing agricultural employers with “just compensation,” there is no guarantee a windfall will result for agricultural employers, particularly if “just compensation” is determined to be nominal.
  • Finally, even the Court’s suggestion that the “highly contingent” right-of-access current federal labor law affords non-employee union organizers (when employees are beyond “reasonable” communication efforts) could similarly represent an unconstitutional taking seems unlikely to prove consequential. Indeed, because this right of access is limited to extreme situations when employees live or work on highly remote, employer-owned properties (such as logging camps or fish canneries), fact patterns that could enable such a challenge, as a practical matter, would seem few and far between. And even if such a fact pattern did arise—ultimately enabling a successful challenge to the exception—because the exception is so limited, it would naturally impact very few workplaces.

Hands Off My Ballot: NLRB Finds that Solicitation of Mail-Ballots is Objectionable Conduct That May Warrant Setting Aside an Election

Since the onset of the COVID-19 pandemic, mail-ballot elections—rather than manual, in-person elections, have been mandatory for most NLRB representation elections. The NLRB’s recent ruling, on June 9, 2021, in Professional Transportation Inc., 370 NLRB 132 (2021), provided important guidance regarding when solicitation in the context of such elections constitutes objectionable conduct, such that it can set aside an election. Solicitation typically comes in the form of when the employer or union offers to collect a voter’s ballot and mail it to the Region.  In this case, the Board held that solicitation constitutes objectionable conduct, but importantly, such conduct is a basis for setting aside an election only where the evidence shows that the solicitation affected a determinative number of voters.

Background

In April 2020, the Union filed a representation petition. The election was conducted by mail, and ballots were mailed to employees. Following the election, the Employer objected on the grounds that Union representatives contacted eligible voters and offered to collect and mail their ballots.

Acknowledging that Board precedent does not resolve whether mail-ballot solicitation is objectionable conduct, the Regional Director held that the Employer’s offer of proof did not warrant a hearing as a matter of law and failed to establish a prima facie case of objectionable conduct.

The Employer requested review of the Regional Director’s decision, and the Board granted the request.

Analysis

The Board affirmed the Regional Director’s decision overruling the Employer’s objections, but found that solicitation of mail ballots does constitute objectionable conduct and may warrant setting aside an election in certain circumstances. The Board’s decision comes in the wake of Fessler & Bowman Inc., 341 NLRB 932 (2004), in which the Board unanimously held that it is objectionable conduct for a party to handle employees’ mail ballots. Citing  Fessler, the Board emphasized its obligation to protect the integrity and neutrality of elections and to ensure that elections are conducted under as close to “laboratory conditions” as possible.

Recognizing that mail-ballot elections may be “more vulnerable to the destruction of laboratory conditions than are manual elections,” the Board described the ways in which mail-ballot solicitation constitutes objectionable conduct.

First, the Board explained that a party’s offering to collect ballots contradicts voting instructions stating that parties other than the voter may not handle or collect ballots.

Second, the Board noted that ballot solicitation suggests to employees that a party other than the Board is involved in running the election, thus undermining the Board’s responsibility in controlling the election process. In light of these considerations, the Board concluded that even where ballot solicitation does not result in actual ballot tampering or loss of ballot secrecy, it nevertheless undermines the integrity of the election and constitutes objectionable conduct.

Significantly, however, the Board found that ballot solicitation does not necessarily require that an election be set aside. Rather, an election must be set aside only where the evidence shows that the ballot solicitation affected a determinative number of voters.

In determining whether solicitation warrants setting an election aside, the Board found it relevant to consider evidence of:

  • the number of unit employees whose ballots were solicited;
  • the number of unit employees who were aware of ballot solicitation; and
  • whether a party engaged in a pattern or practice of solicitation.

The Board further explained that the test regarding whether solicitation occurred is objective—that is, the inquiry is whether a party’s conduct could reasonably be interpreted as ballot solicitation. Importantly, the Board also noted that merely asking an employee if they have received their ballot, or offering an employee assistance with understanding the election process, is not ballot solicitation.

Dissenting in part, Member Emanuel favored establishing a bright-line rule that elections should be set aside whenever a party is shown to have solicited ballots, irrespective of the number of voters affected. Additionally, Chairman McFerran expressed concerns that parties could easily manipulate dissemination of information about solicitation in order to set aside an election; accordingly, she would only consider the number of employees who were made aware of solicitation by a solicited employee.

Application

As is typical, the Board held that its decision applies retroactively to the instant case and to all pending cases. In the instant case, the Board concluded that the Employer’s offer of proof was sufficient to show that the Union solicited employee ballots. However, it found that there was insufficient evidence to set aside the election because the misconduct was limited to at most two voters, which could not have affected the election’s outcome, given that the Union prevailed by at least ten votes.

Takeaways

As mail-ballot elections continue to become the norm  across the country, this case expands the opportunities for parties to raise challenges. Chairperson McFerran declined to endorse the view that mail-ballot elections are inherently more vulnerable than manual-ballot elections, and she opined that it is “time for the Board to reevaluate its historic preference for manual elections and to consider expanding and normalizing other ways to conduct elections on a permanent basis.”

Once the Board shifts with new appointees, there is a chance that mail, telephone, and even electronic voting may become more normalized. Such procedures may illuminate new vulnerabilities in the election process, and although it remains unclear what other behaviors may be objectionable conduct that warrants setting an aside an election, it is likely that the Board will continue to seek ways to safeguard the integrity of elections.

BREAKING: President Biden Nominates Union-Side Attorney Gwynne Wilcox to Fill NLRB Seat

On Wednesday, May 26, 2021, President Biden nominated Gwynne Wilcox to fill the last remaining vacancy on the National Labor Relations Board (“Board”).  If confirmed by the Senate, Wilcox would be the second Democrat on the Board, joining Board Chair Lauren McFerran (who had been a member of the Board since 2014, and was appointed chair on January 20, 2021).  Wilcox is a senior partner at the Union-side labor and employment firm of Levy Ratner PC and serves as associate general counsel for the largest Local of the Service Employees International Union (“SEIU”).  Wilcox is the first African-American woman ever appointed to the Board.

It is unclear how long the confirmation process will take.  Even if Wilcox is confirmed by the Senate, the Board will continue to have a majority of Republican members until William Emanuel’s term expires in August 2021.  President Biden is then expected to nominate another Democratic candidate to fill Member Emanuel’s vacancy, and if the nominee is confirmed, the Board will tilt to a 3-2 majority of Democrats.  As we have discussed previously, once that occurs, the Board is expected to reverse a number of decisions issued during the Trump Administration.

We will continue to follow Wilcox’s nomination and potential confirmation.  Stay tuned!

NLRB Majority: Employer May Continue “No Recording” Rule, Even After Unlawfully Applying it to Single Employee

In AT&T Mobility LLC , 370 NLRB No. 121 (2021), the NLRB majority (Members Ring and Emanuel) held that the Employer could lawfully maintain a workplace policy prohibiting its workers from recording conversations with their co-workers, managers or third-parties, even though its application in one particular circumstance was found unlawful.  Notwithstanding the fact that the rule had been applied unlawfully, the Board majority concluded that the policy itself was lawful under Boeing Co., 365 NLRB No. 154 (2017), and overruled in part its decision in Lutheran Heritage Village Livonia, 343 NLRB 646 (2004), finding that an instance of unlawful application of a facially neutral rule does not automatically warrant a finding that the rule can no longer be lawfully maintained.

Importantly, however, Chairman McFerran disagreed in her dissent, foreshadowing how a newly-constituted Board may decide the case differently and/or abandon the Boeing framework.

Background

An employee at a retail location, who was also a union shop steward, recorded a termination meeting between the Company’s representatives and a fellow bargaining unit-member, who had requested the employee’s presence at the meeting.  Upon learning that the shop steward recorded the meeting, his manager made him delete the recording on his work phone and threatened him with some unspecified adverse action.

The Board’s Holding 

Applying the Boeing framework, and the cases discussed in Boeing and since, the majority reiterated that an Employer’s no-recording policy constitutes a lawful “Category 1(b)” rule, meaning that the “potential adverse impact on protected rights” was “outweighed” by the employer’s business justification.  As a result, such types of rules are always lawful under Boeing. 

However, the Board also found that Employer unlawfully applied the policy when it threatened the employee, who was engaged in protected activity at the time the recording was made, for violating the policy.  The Board then consulted its decision in Lutheran Heritage, 343 NLRB 646 (2004), wherein the Board applied a three-part framework for determining whether an employer violates Section 8(a)(1) of the Act by maintaining a neutral work rule if employees reasonably construe the rule to prohibit protected activity.  The Board held that a policy could be rendered unlawful, and subject to being rescinded as part of a remedy if the policy had been “applied to restrict the exercise of Section 7 rights.”  Instead of following Lutheran Heritage and ordering the Company to rescind the policy, the Board overruled Lutheran Heritage in part, and held that an employer could still maintain a workplace rule that was “applied to restrict” an employee’s rights.  In reaching its conclusion, the Board wrote: “A blanket prohibition on the continued maintenance of such rules, simply because of a single instance of unlawful application — even if that single instance is carried out by a misguided low- or mid-level supervisor whose action does not reflect corporate policy — fails to give proper weight” to the employer’s legitimate interests in maintaining the rule.  The Board also noted that in other instances, the Board has ruled that otherwise lawful rules could remain in place, even if they restricted the exercise of an employee’s rights in certain circumstances.  The Board declined to require the Employer to disavow its no-recording policy.

Member McFerran’s Dissent

The dissenting member of the panel, Board Chairman Lauren McFerran, took direct aim at the Board’s ruling in Boeing, arguing that it permitted employers to maintain rules that “reasonably tend to chill employees in the exercise of their rights under the Act, while failing to require that employers narrowly tailor their rules to serve demonstrated, legitimate interests.”   In McFerran’s view, Boeing’s “primary aim” is to “preserve employer prerogatives, not to protect employee rights.”  While McFerran agreed that the policy was “applied to restrict” the employee’s union activity in this case, she found that employer’s no-recording policy was overbroad and should have been struck down.

 Takeaways

The decision most certainly gives insight into some of the changes the Board may take in the coming months as its composition shifts.  Currently, the Board may be less likely to penalize employers who maintain workplace rules that are neutral on their face with respect to protected activity, but are unlawfully restrictive or overbroad, as applied to certain circumstances.  The Board continued to uphold the framework established in Boeing, and continued its evisceration of Lutheran Heritage, by finding that neutral policies should not be struck down when they have been applied to a single instance in an unlawful manner.  Chairman McFerran’s dissent provides a window into future rulings of the Board.  McFerran clearly targeted Boeing with her scathing commentary that the category-based framework for the evaluation of employer handbook rules and policies was designed to benefit employers, not employees.  Reading the tea leaves, Boeing may certainly find itself on the “chopping block” in the coming months.

Guidance: Can Employers of Unionized Workers Require the COVID Vaccine?

The Coronavirus pandemic has spawned a lot of questions—and a lot of headaches—for employers, who within the past year have needed to adapt to rapidly changing health, regulatory, and technological landscapes. With the long-awaited arrival of a vaccine comes even more questions for employers: Can I require my employees to get vaccinated? Can I require employees who don’t get the vaccine to follow other safety precautions? For employers with unionized employees, there are additional considerations under the NLRA. Employers have bargaining obligations to their unionized workforces, so whether employers can require employees to be vaccinated, where/when/how vaccines will be administered, and whether discipline can be imposed on those who refuse a vaccine will depend on the terms of the collective bargaining agreement and/or require additional bargaining with the employees’ union.

We have developed several materials to help employers navigate the potential bargaining obligations with respect to mandatory vaccination policies. Visit our website to view an infographic of the decision-making process employers should engage in when considering a mandatory vaccine policy for unionized employees. Our website also offers a list of frequently asked questions (“FAQ”), answering common questions from clients and employers based on the state of NLRB case law today.

As always, we will continue to monitor the latest updates and trends concerning Coronavirus and the workplace. Check back here, or sign up for the email newsletter, to stay up-to-date!

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