Tag Archives: National Labor Relations Board

So You Want Some of the Fed Money? The Potential Price for Mid-Sized Businesses: A Labor Union

Contributed by Beverly Alfon, March 27, 2020

The U.S. Senate unanimously passed the CARES Act, and it is up for vote TODAY before the U.S. House of Representatives, with a promise of swift passage. You need to pay attention. This is about more than emergency relief.

Look at page 524 of the bill, which would apply to any mid-sized business that takes a loan under this Act:

“Any eligible borrower applying for a direct loan under this program shall make a good-faith certification that— ….

(X) that the recipient will remain neutral in any union organizing effort for the term of the loan.”

This means that if you employ between 500 and 10,000 employees and you take a loan under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), you would be required to remain neutral when a union tries to organize your employees.  In other words, by taking this loan, you would agree to not communicate with your employees – at all – about your preference to stay non-union, any of the drawbacks of union representation, or even respond to any stretched truth that the union throws at your employees to sway them to support the union. Although there are still questions about what “remain neutral” means under the CARES Act and whether that could include card checks – at the very least – we know it would mean that employees who are being organized by a union will only hear one side of the story.

The expectation is that this language will lead to union pressure on employers to enter into neutrality agreements to memorialize certain terms, which often include “card check” provisions. When there is a card check, the union merely has to obtain signatures from a majority of employees in a company to become the exclusive bargaining representative for all workers. This is a significant concession to the labor unions because it takes away the employees’ existing right to vote for or against the union, by secret ballot election conducted by the National Labor Relations Board (NLRB). Rather, a card check amounts to open voting because a union representative simply gets to ask the employee for his/her signature.  Opponents of the card check process argue that this can lead to unlawful interference with the employee’s right to freely choose for or against union representation.

The inclusion of this neutrality language comes on the heels of a November 2019 decision from the General Counsel of the National Labor Relations Board (NLRB), in Embassy Suites by Hilton, Seattle Downtown Pioneer Square, 19-CA-227623, in which he shifted on the legality of neutrality agreements by finding that a neutrality agreement amounted to unlawful employer assistance to the union and unlawful acceptance of aid by the union. This was a significant departure from the current law which generally views these neutrality agreements as legal.  This was viewed by management-side attorneys as a good basis to resist pressure from unions to enter into such agreements. This CARES Act provision appears to be a direct shot at that. 

The bottom line is BEWARE. Read the fine print or this loan could get you.

As of publication, the CARES Act language is still subject to change. We will continue to monitor the bill’s progress through the House and will update as necessary.

NLRB Gives Gift To Employers: Modifies Obama Board’s “Quickie Election” Rule

Contributed by Jeffrey A. Risch, December 16, 2019

the word “union” in black and white

On December 13, 2019, the National Labor Relations Board (NLRB) issued notice of new regulations designed to materially change what is commonly referred to as the “Quickie Election” Rule. The new regulations, set to take effect on April 16, 2020, will materially help employers combat labor unions in the private sector by primarily providing more time to react to and educate the workforce on the “Good, Bad & Ugly” of what union representation actually means to workers.  

As a brief reminder… the “Quickie Election” Rule is a set of unprecedented regulations that the Obama NLRB published in 2014, and went into effect in 2015. The primary effect of the “Quickie Election” Rule limited the amount of time an employer had to respond to a petition filed by a labor union seeking to represent its workers, and oppose the union’s attempt to unionize the workforce. There were other significant pieces to the “Quickie Election” Rule, including, but not limited to: requiring employers (not unions) to submit a position statement on all issues the employer wanted or needed to raise as a result of the union’s proposed bargaining unit and the election in general – within 7 calendar days after receipt of the petition – and, any issues not timely raised are deemed waived; setting material limitations on issues to be considered in any pre-election hearing and pushing any review of objections related to the election to a post-election hearing (after votes are opened and counted); and eliminating any stay of certifying an election’s results in order to allow time for the NLRB to consider a request for review filed from a Regional Director’s Order directing an election to proceed in the first place.

In essence, the official vote to “go union” or not, went from approximately 42 days to around 21 days from the filing of the union’s petition, under the “Quickie Election” Rule, while tying the hands of employers to mount a comprehensive defense strategy along the way. With the changes found in the new regulations set to go into effect on April 16, 2020, the process will return to the days when employers had greater rights and abilities to fight against labor unions aiming to organize and represent their workers. In short, the new regulations include the following material changes from the current rules:

·       The pre-election hearing must be held within 14 business days from the filing of a petition (up from the current within 8 calendar days requirement);

·       Legal statements of position that identify issues and problems with any petition must be filed within 8 business days after service of the notice of hearing (up from the current within 7 calendar days requirement), and the union must file a formal response to a statement of position filed by an employer at least 3 business days before a scheduled pre-election hearing;

·       The pre-election hearing can include, once again, the litigation of disputes involving voter eligibility as well as the size/scope of the bargaining unit (not just the issue of whether valid and lawful representation exists);

·       The employer and the union can, once again, file post-hearing briefs  to any pre-election or post-election hearing within 5 business days from the close of the hearing;

·      Employers will be allowed more time to educate their workforce on union representation and mount a more robust counter-organizing campaign of their own in light of a new rule that provides that absent the parties’ agreement, a Regional Director “normally” will not schedule an election less than 20 business days after the Regional Director directs an election;

·       Employers will be permitted, once again, to file a Request for Review by the NLRB of any Regional Director’s adverse Order directing an election, within 10 business days of such Order, and if the request is pending at the time of the election then the ballots cast would not be opened while the NLRB resolves the controversies raised in the Request for Review;

·       Regional Directors will be prohibited from certifying results of any election while a Request for Review is still pending or at any time prior to the time a post-election request for review can be filed; and

·       Employers will generally be provided more time to provide voter eligibility lists and information to the NLRB after the Regional Director issues a direction of election.

In issuing notice of the new regulations, NLRB Chairman John F. Ring (R) stated, “These are common sense changes to ensure expeditious elections that are fair and efficient. The new procedures will allow workers to be informed of their rights and will simplify the representation process to the benefit of all parties.” Sole Democratic Board Member Lauren McFerran (D) vehemently opposed the changes. There is no doubt these Trump-era NLRB election rules will be opposed greatly by any future Democratic controlled NLRB. However, for now (starting in April 2020) employers will be in a much stronger position to successfully dispose of or counter union petitions seeking to represent workers in the private sector. 

NLRB Makes ‘Unilateral’ Less of a Dirty Word

Contributed by Beverly Alfon, October 8, 2019

union workers

The National Labor Relations Act (NLRA) requires employers with a unionized workforce to bargain in good faith with the union over mandatory subjects of bargaining (e.g., wages, hours, and other terms and conditions of employment). The duty to bargain continues during the term of a collective bargaining agreement (CBA) with respect to mandatory subjects of bargaining that are not covered by the agreement.  An employer who makes unilateral changes to these terms without satisfying its bargaining obligations violates the Act, unless it can establish a valid defense.  Until now, the only available defense that was available to an employer who made such unilateral change was a union’s “clear and unmistakable” waiver of the right to bargain over the precise matter at issue – a standard which the D.C. Circuit has characterized as an “impossible to meet” burden for an employer.  

Overturning 37 years of precedent, however, the NLRB, in a recent 3-1 decision, changed the standard that the Board applies to determine whether a CBA grants the employer the right to take unilateral actions without violating the Act. In M.V. Transportation, Inc. (28-CA-173726; 368 NLRB No. 66), a local of the Amalgamated Transit Union (ATU) alleged that the employer, MV Transportation Inc., violated the Act by unilaterally adopting several policies, including ones related to safety and attendance, without bargaining with the union. The Board accepted the employer’s argument that the CBA contained language, including a broad management rights clause referring to adoption and enforcement of work rules, that allowed it to unilaterally adopt the policies. 

Under this new “contract coverage” standard, the Board will examine the plain language of the parties’ collective-bargaining agreement to determine whether or not the change made by the employer was within the scope of CBA language granting the employer discretion to act unilaterally. For example, if the CBA gives the employer the ability to implement and revise work rules, then it may now lawfully implement new safety rules or revise an existing attendance policy, without further bargaining. 

Key Takeaways:  Although this new standard relaxes an employer’s burden in defending against charges of a failure to bargain, it does not give an employer full license to take such unilateral actions.  The extent to which an employer can take unilateral action will depend on the scope and clarity of the language of the CBA.  If there is no CBA language that grants the employer the right to take unilateral action, the Board will consider whether or not the union “clearly and unmistakably” waived its right to bargain over the change.  Also, keep in mind that unions will still have the option of filing a grievance and proceed to arbitration on the matter. 

Now more than ever, given the Board’s approach in these matters to honor the parties’ agreement, CBA language must be carefully crafted.  Employers should review their rights in current CBAs and seek to strengthen rights in negotiations for the next contract.  At negotiations, employers should expect much scrutiny and pushback on management rights clauses and other CBA language that can be interpreted as granting the employer any level of discretion.  

Dust off Those Handbooks: NLRB Restores Sanity to Employment Policies

Contributed by JT Charron, December 27, 2017

Thirteen years ago the National Labor Relations Board issued its decision in Lutheran Heritage Village-Livonia, 343 NLRB 646, which held that facially neutral work rules violated the National Labor Relations Act if employees would “reasonably construe” the rule to restrict the employees’ rights to engage in protected concerted activity under Section 7 of the Act. Following that decision, the Board used the “reasonably construe” standard to invalidate even the most well intentioned work rules. See e.g., T-Mobile USA Inc., April 29, 2016 (finding that employer’s policy requiring employees to maintain a positive work environment violated the NLRA).

On December 14, in The Boeing Company, 365 NLRB 154, the Board overturned Lutheran Heritage and articulated a new test for evaluating the validity of facially neutral work rules. In place of the unworkable “reasonably construe” standard, the Board introduced a balancing test for analyzing facially neutral work rules. Under the new standard, the Board will “evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.” (emphasis in original).

Workplace investigation

Examining Documents

Utilizing this standard, the Board reversed the administrative law judge’s decision that Boeing’s no-camera rule violated the NLRA. Instead, it found that the employer’s legitimate business reasons for the policy — protecting proprietary information and national security interests — outweighed any potential Section 7 violation. The Board also articulated three broad categories of work rules that would result from the new balancing test:

  • “Category 1 will include rules that the Board designates as lawful to maintain, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule.”
  • “Category 2 will include rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.”
  • “Category 3 will include rules that the Board will designate as unlawful to maintain because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.”

Boeing is a big win for employers and represents a clear change in the Board’s attitude towards work rules. While only time — and additional Board decisions — will tell, the new standard should provide “far greater clarity and certainty” to employers in drafting workplace policies. Additionally, employers may want to consider taking a second look at policies previously removed and/or revised in the wake of Lutheran Heritage and its progeny. Finally, as we head into 2018, employers should evaluate all workplace policies in light of the Board’s new balancing test and be prepared with strong justifications for any policies that have the potential to infringe on an employee’s rights under the Act.

U.S. Supreme Court to Address Legality of Class Action Waivers in Arbitrations Agreements

Contributed by Suzanne Newcomb, January 17, 2017

16306823 - 3d illustration of scales of justice and gavel on orange background

16306823 – 3d illustration of scales of justice and gavel on orange background

The U.S. Supreme Court announced Friday, January 13, 2017 that it will hear a trio of cases concerning the right of employers to include class action waivers in employment-related arbitration agreements. Arbitration agreements are contracts through which an employee and an employer agree to resolve potential future disputes through binding arbitration rather than through the courts. Class action waivers are provisions in arbitration agreements that prohibit employees from joining together to arbitrate multiple related claims in a class or collective action. If such a waiver is enforced, employees are required instead to arbitrate each employee’s dispute separately.

The general counsel for the National Labor Relations Board (NLRB) has long argued, with varying degrees of success, that the right to engage in collective legal action is itself “concerted activity” protected by Section 7 of the National Labor Relations Act, and therefore, it is unlawful to ask employees to waive that right.

As we reported here, the Federal Court of Appeals for the Fifth Circuit (Louisiana, Mississippi and Texas) rejected the general counsel’s argument back in 2013 and upheld an employer’s right to include a class action waiver in an employment arbitration agreement. Other circuits agreed. However, the NLRB continued to challenge these provisions, and as a result, many employers remained wary.

In May 2016, the Federal Court of Appeals for the Seventh Circuit (Illinois, Indiana, and Wisconsin) sided with the NLRB’s general counsel. The seventh circuit struck down a class action waiver concluding it was an impermissible restraint of employees’ right to engage in “protected concerted activities.” Later in the year the ninth circuit followed suit. This split between the circuits further clouded the issue, leaving employers with no clear answer.

It is this difference of opinion between the federal courts of appeal that prompted the Supreme Court to agree to hear the issue. While a definitive ruling is not guaranteed, the fact that the Supreme Court granted certiorari (i.e. agreed to hear) three cases on the issue (consolidating them for purposes of oral argument) suggests the Court intends to issue a definitive ruling. Resolution on this issue will provide employers with welcome clarity and certainty regardless of how the Court ultimately rules on the legality of class action waivers in employment arbitration agreements.

For now, employers should stay the course. We will continue to monitor the issue and report on significant developments as they arise.

Save the Date! February 16th Webinar – The New Administration: Impact on the Workplace Examined

How do your company’s policies and procedures comply with the views of our new administration? Please join us as we discuss how you can best prepare for any likely impacts on your business.

Join us for the next installment of our quarterly labor and employment series on Thursday, February 16 at 12:00PM CT to learn about what workplace changes you can expect under the new administration.

Topics to be discussed include:

  • The Affordable Care Act
  • Minimum Wage
  • National Labor Relations Board developments
  • Department of Labor changes
  • Executive Orders
  • Supreme Court and other judicial vacancies

This program is available via webinar. You can register here.

This Rocky Road Is Not Chocolate: NLRB Wins Again On Micro-Units

Contributed by Beverly Alfon, May 2, 2016

On April 26, the 4th Circuit of the U.S. Court of Appeals joined other federal circuits that have upheld NLRB approval of “micro-units.” See, Nestle Dreyer’s Ice Cream Co. v. NLRB, No. 14-2222 (4th Cir. Apr. 26, 2016). This is another boost for unions because micro-units ease their path into industries and business that have been difficult for them to organize in the past.

How do micro-units help unions and hurt employers?  When a union files a petition with the NLRB to represent a group of employees, a larger unit is generally favorable for an employer because it is more difficult for the union to garner cohesive support and secure a win. Unions tend to favor smaller units because it is generally easier to gain majority support and win a representation election. Micro-units only further increase the union’s chances of success, leading to a “foot in the door” with the company and exposure to other employees. Meanwhile, more micro-units can cause instability, inconsistency and administrative mires for a company.

Union workersIn the good old days, when there was a dispute about the scope of a union’s petitioned-for unit, the NLRB would consider arguments regarding the “community-of-interest” between the employees. Depending on the interrelationship between the employees in the context of operations, an employer could push for a broader unit of employees. However, in Specialty Healthcare, 357 NLRB No. 83 (2011), the NLRB imposed a new standard requiring an employer who seeks to expand the petitioned-for unit to demonstrate that those employees excluded from the union’s petition have an “overwhelming community of interest” with those included in the union’s proposed unit. Arguably, this high standard gives unions carte blanche to define the unit in its favor.

Employers have continued to attack the new standard, but the NLRB has now prevailed in the 6th, 8th and 4th circuits. In Nestle Dreyer’s Ice Cream Co., an NLRB regional office approved a petitioned-for unit for 113 maintenance workers, while excluding 578 production workers. The union won the election, but the company refused to recognize the union or bargain with it. The regional director entered an order directing the company to bargain. The company appealed to the Board in Washington, D.C. (which affirmed the order) and further appealed to the 4th Circuit.  The company argued that the NLRB abused its discretion by imposing this new standard and contradicted 4th Circuit precedent by blindly deferring to a union’s proposed unit. Despite strong backing from national business associations, the appellate court unanimously rejected the company’s arguments, affirmed the Board’s approval of the unit and determined that the standard articulated in Specialty Healthcare was only a clarification of law – and therefore, not an abuse of discretion.

Bottom line: Union organization of micro-units remains in tact. Whether you have a union-free work force or only a portion of your workforce is organized – now is the time to consider (or revisit) management training regarding union organization, analyze your operations/management structure and consult with labor counsel regarding best practices in light of these developments.

Unfair Competitive Advantage for Union Contractors Remains In Tact

Contributed by Beverly Alfon

Union job targeting programs, also known as “market recovery funds,” are used by unions to provide a bidding advantage to union contractors. As part of these programs, unions collect voluntary deductions from members’ wages, which are then used to subsidize union contractors’ bids on building projects. With the union subsidy, the union contractor is able to successfully bid on projects that may otherwise go to nonunion contractors. The subsidy further allows employees to be paid at union scale, rather than the lower wages set forth in the contractor’s bid. These programs are clearly aimed at ousting non-union contractors.

Union Block WordsJob targeting has been criticized as unfair competition, and has been found to violate the Davis-Bacon Act under some circumstances where funding  for the program has been derived, at least in part, from wages paid to union members under the Davis-Bacon Act. However, the National Labor Relations Board (NLRB) held in J.A. Croson Company, 359 NLRB No. 2 (Sept. 28, 2012) that, “union job targeting programs, including those funded in part by voluntary deductions from the wages of union members employed on State-funded public works projects, are clearly protected under Section 7 of the Act.”  The NLRB confirmed that the dues-checkoff provision, requiring employers to deduct and remit 1.75% of unit employee gross wages as “market recovery assessment,” was protected under the National Labor Relations Act (NLRA).Furthermore, the NLRB held that the company violated the Act by maintaining a state court lawsuit challenging the job targeting program because it interfered with the protected operation of the program.

Last week, the federal Court of Appeals for the Ninth Circuit further cemented organized labor’s continued ability to utilize job targeting programs. In Idaho Bldg. & Constr. Trades Council, AFL-CIO v. Wasden, 2015 BL 298844, 9th Cir., No. 11-35985 (Sept. 16, 2015), the Idaho Legislature passed a bill in 2011 to ban unions’ job targeting programs. The Idaho Fairness in Contracting Act placed misdemeanor penalties on unions and contractors that pay or receive job targeting subsidies. It included fines up to $100,000 per repeat offense. However, organized labor successfully obtained an injunction to stop the legislation from taking effect. Litigation over the validity of the bill continued and proceeded to the Ninth Circuit.

The Ninth Circuit determined that on projects that do not involve federal funds (Davis-Bacon Act), Idaho law is preempted by the NLRA regarding the use of union job targeting funds from members’ wages earned on such projects because, “no NLRB case has held collective action by employees to subsidize wages on non-Davis-Bacon jobs by distributing funds to the workers or employers on those jobs is not protected concerted activity under § 7 because of the source of those funds.” Based on this reasoning, the court held that the state’s Fairness in Contracting Act was facially invalid because it interferes with the NLRB’s interpretation and enforcement of the NLRA.

We will be watching closely regarding a possible appeal of the Ninth Circuit’s decision to the U.S. Supreme Court.

Decision Reminds Employers to Think Before Speaking to Employees About Union Issues

Contributed by Suzanne Newcomb

On September 4, a Federal Appeals Court upheld a National Labor Relations Board (NLRB) decision finding management comments to employees during the early stages of a union organizing campaign unlawful. Section 8(a)(1) of the National Labor Relations Act makes it unlawful “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7.” Section 7 rights include “the right to self-organization, to form, join, or assist labor organizations.” The NLRB and the Courts interpret this language broadly.

people shaking handsBack in 2011 rumors about a possible unionizing campaign prompted an in house attorney and regional HR director to meet with employees, one of whom secretly taped the meeting. Comments made during that meeting were found to unlawfully: (1) threaten by suggesting unionizing was futile; (2) imply a promise of pay increases if the employees did not vote for a union; (3) threaten that unionization would result in demotion for some employees; and (4) threaten blacklisting of union supporters.

The following comments by management officials during the meeting were found to unlawfully imply that unionizing was futile and would not produce the benefits sought:

  • Be “very careful” when listening to the union’s “sales pitch.”
  • “In many cases, when you enter these negotiations, if you ever get there, employees tend to lose things.”
  • Negotiations are “a wide open game of uncertainty” in which “nothing is guaranteed” even if the union wins the election.
  • Answering “it’s possible” when asked if unionizing would cause wages to decrease adding, “we start from scratch…we don’t start with what you guys are making today.  Everything goes to zero.”
  • Employees at a unionized location have gone nearly three years without a bargaining session or contract. The bargaining process is “never automatic” and employees might never see the benefits they seek.

The finding of an unlawful implied promise to raise wages arose when, in response to an employee’s specific request, management agreed to review the current pay structure to ensure it was fair and competitive adding, “we want a chance to address … [your concerns] before you pay somebody else to address them.”

Management’s answer to questions about the apprentice and journeyman system was found to be an unlawful threat to demote certain employees if the workforce unionized. Finally, reference to union membership as a “scarlet letter,” and suggestions that other employers might be less inclined to hire job applicants who had worked in a union shop, were deemed unlawful threats to blacklist employees for union activity.

As the Court stated, “the underlying message…is that an employer…needs to take care in the rhetoric it uses when discussing union issues with its workers.” Employers must be very careful when discussing union related matters with their employees. Special and careful considerations must be paid to developing labor law. Detailed scripts, approved through seasoned labor counsel, should be in place to ensure appropriate language is being communicated.

“We Recommend Keeping This Confidential” Still Violates the Law According to the NLRB

Contributed by Jamie Kauther

Over the last few years the National Labor Relations Board (“NLRB”) has been cracking down on employee confidentiality mandates. An employer can legally require employees to keep trade secrets and legally protected information confidential, but according to the NLRB’s most recent ruling on August 27, 2015 an employer cannot even “recommend” that employees keep internal investigations confidential  (Boeing Co., 362 N.L.R.B. No. 195, 8/27/2015). The Board ruled that Boeing Company’s revised policy that “recommends” employees refrain from discussing HR investigations was unlawful as it violates employee’s rights to engage in concerted activity under Section 7 of the National Labor Relations Act (“NLRA”).

Confidential StampThe Board explained that although employers may “legitimately require confidentiality in appropriate circumstances” the impact of any confidentiality policy must be limited. Essentially, the Board created an individualized balancing approach that requires an employer to weigh its interests in confidentiality against employees’ Section 7 rights. Although it laid out examples of what situations would tip the scales, the Board did not set a clear standard. The examples provided include instances of likely witness intimidation or harassment, destruction of evidence or other misconduct that could jeopardize the investigation’s integrity. However, no specific examples were provided as to when these issues can occur. This standard imparts on employers a requirement to tailor-fit their confidentiality policies to be enforced on a case-by-case basis. As the Board explained, “generalized concern” about the integrity of all investigations is “insufficient to justify [a] sweeping policy,” including one that simply “recommends” confidentiality.

This new individualized balancing standard is a bit of a head scratcher. However, the Board did identify some bad practices that would not pass muster. It expressly pointed out Boeing’s requirement to have employees sign a policy notice without a Section 7 disclaimer in the policy or notice that the employee could disregard the confidentiality recommendation. The Board held that this clearly communicated Boeing’s improper desire for confidentiality.

So what is a best practice in light of this decision? Remove sweeping confidentiality policies pertaining to internal investigations and eliminate requirements that when employees sign notices they understand the confidentiality recommended. Instead, discuss with the employee during an investigation the desire for confidentiality based on the facts of the specific investigation. Remember this ruling only applies to what limits can be placed on employees with knowledge of the investigation. It has no bearing on a company’s approach or handling of an investigation – meaning the company can and should still clearly reiterate in its policies that it will handle all investigations with discretion and will preserve the confidentiality of all involved persons to the extent possible. Essentially, an employer can still control the information it relays, just not what other involved employees communicate.