Tag Archives: National Labor Relations Board

Too Little Too Late: NLRB Rejects Employer’s Attempt To Repudiate

Contributed by Beverly Alfon

In a 2-1 decision, the National Labor Relations Board (NLRB) issued a decision against an auto dealer, finding that the company violated the National Labor Relations Act (act) by implementing and maintaining: (1) a 2010 social media policy that required employees to identify themselves when posting comments about the company, its business, or a policy issue and prohibited employees from using the company’s logo in any manner; and (2)  a 2010 dress code policy that prohibited employees from wearing pins, insignia or other message clothing.  Boch Imports, Inc., 362 NLRB No. 83, 4/30/2015.  In light of the NLRB’s aimed campaign to attack what it characterizes as “overly broad” work rules, these findings are not all that surprising.  What makes this decision a brow-raiser is the fact that the NLRB rejected the company’s attempts to correct these policies – even though the company did so with the assistance and approval of the NLRB regional office that investigated the unfair labor practice charge.

Notice PostingIn 2013, the company replaced the 2010 policies with lawful language (except for the dress code provision) and distributed a new employee handbook to every employee.  The purpose was clearly to achieve compliance with Section 7 of the act.  Nonetheless, the board found violations by the company for its 2010 policies – regardless of the company’s rescission of those policies.  The board found the revised policies to be an inadequate remedy and ordered the company to post a notice to employees that enumerated the various overbroad policies and rules that were contained in the 2010 handbook.

This decision is troublesome for employers because although the board acknowledged that an employer may repudiate its unfair labor practices, it would have required the company to provide notice of the unfair labor practices to the employees, an admission of wrongdoing, even before an administrative law judge ruled on the merits of the charge.

Bottom line:  The region’s informal blessing of your attempts to correct the conduct at issue in an unfair labor practice charge, does not amount to an effective repudiation.  Before you decide to correct a policy or procedure that is the subject of an unfair labor practice charge, explore the possibility of a non-board settlement with the charging party – one that would not require a notice posting or admission of fault.

NLRB Weighs In On Dispute Over Kentucky County’s Right-To-Work Laws

Contributed by Julie Proscia and Steven Jados

Last week, the National Labor Relations Board (board) filed a legal brief in an ongoing federal lawsuit over the viability of a multi-part right-to-work law implemented through a county-wide ordinance in Hardin County, Kentucky.  Among other things, the ordinance at issue prohibits the use of union-security provisions in collective bargaining agreements, and also regulates hiring halls, dues check-off, anti-coercion and discrimination provisions, and the penalties for violations of Section 8 of the National Labor Relations Act.  The board’s central argument is that federal law preempts the county’s legislation on those issues.

This action by the board (which is not actually a party to the lawsuit at issue) in support of the plaintiff unions is indicative of the board’s unprecedented and aggressively pro-union agenda.  The underlying lawsuit was filed by the United Auto Workers and other unions in a Kentucky federal district court to challenge the legality of the county’s ordinances.  That said, the board’s brief indicates that this likely will not be a precursor to challenges to right-to-work laws that have been implemented on a state-wide level across the country.  In that regard, the board’s brief references the statutory basis for states’ right-to-work laws, but then argues that that statutory text should not be applied to local government entities for reasons that include the possibility that county-wide legislation could result in a “crazy-quilt” of varying regulations that could make it impossible to administer industry-wide labor agreements.

While the Kentucky district court’s jurisdiction is obviously limited, local governmental bodies around the country are certain to be watching the outcome of this decision, and an opinion favoring Hardin County is likely to spur more legislation of this sort on the local government level all across the country.

Sign of the Times 2014: NLRB and DOL Are Poised to Proceed With Pro-Labor Rules

Contributed by Beverly Alfon

Employers have been playing a game of wait-and-see for the past couple of years.  In 2011, the National Labor Relations Board (NLRB) and the Department of Labor (DOL) simultaneously introduced proposed rules that would have a severe impact on employers:  the NLRB “quickie” election rules and the DOL persuader activity reporting rule.  Although the NLRB adopted the ambush election rules in 2012, they were immediately sidetracked in litigation and have not been in effect.  Similarly, the DOL never issued a final rule on persuader activity reporting.  Now, with a complete five-member NLRB and a new Secretary of Labor, these two agencies have made clear that these pro-labor rules are a priority for 2014.

NLRB “Quickie” or “Ambush” Election Rules

On November 26, 2013, the NLRB issued its semiannual regulatory agenda.  It focused on the quickie election rules that were invalidated by a federal district court less than one month after issuance on the basis that they were adopted without a proper Board quorum.  Those rules were suspended pending appeal of the case and the U.S. Supreme Court’s consideration of Noel Canning (the case regarding the validity of President Obama’s recess appointments of NLRB members in January 2012).  However, on December 9, 2013, the NLRB voluntarily dismissed its appeal – removing the quickie election rules from the litigation track and repositioning it on the fast track toward agency adoption and implementation.

Among other things, the 2012 ambush election rules cut in half the time between a union’s filing of a representation petition and an election – the crucial period for an employer to counter a union’s organizing efforts – from a 42-45 day period to a 10-21 day period.  They also limited the scope of pre-election hearings and provided the agency with the discretion to review post-elections decisions, rather than automatically requiring such review.  It will be interesting to see if this time around, the NLRB will again propose more severe rules like the ones that it ultimately did not adopt in 2012 – including requiring the employer to produce a voter list with employees’ phone numbers and email addresses prior to the pre-election hearing (which would give a union direct employee access before any unit disputes are determined) and speeding up the timing of a pre-election hearing, further shortening the pre-election period.

DOL Persuader Rule

On November 26, 2013, the DOL also issued its semiannual regulatory agenda. It indicated that the final persuader rule will be issued in March 2014.   The proposed persuader rule interprets a part of the Labor Management Reporting and Disclosure Act of 1959 (“LMRDA”) that requires employers and their labor relations consultants to report any arrangement between them involving the consultants’ attempt to, directly or indirectly, persuade employees to exercise or not to exercise their rights to organize.

Historically, lawyers have been excluded from this reporting requirement provided that they limit their activity to providing the employer with advice or materials for use in persuading employees and avoid direct contact with the employees.  That interpretation has allowed employers to seek labor advice without fear of potential disclosure of attorney-client privileged information (e.g., the very fact that the company has hired an attorney to assist with counter-organizing campaign).  In contrast, the proposed rule would blanketly require attorneys and employers to report “all actions, conduct, or communications that have a direct or indirect object to persuade employees,” including among other things:

  • drafting, revising, or providing materials or communication of any sort to an employer for presentation, dissemination, or distribution to employees; and,
  • developing employer personnel policies or practices designed to persuade employees.

This is significant because it could require an employer who seeks any advice on a labor issue to disclose the relationship, including fees paid and the purpose of the arrangement, to the DOL.  Such sensitive information would be available to unions, customers, competitors, financial institutions, etc.  Many critics believe that the rule will dissuade employers from seeking professional counsel regarding any labor related matter – which will inevitably lead to gains for unions.

Bottom Line:  It is clear that the NLRB and DOL are quickly moving towards severely limiting an employer’s ability to counter union organizing efforts.  If union avoidance is your company’s goal – now is the time to evaluate your company’s efforts to reach or maintain that goal.

Federal Appeals Court Overrules NLRB: Employers Can Adopt Class Action Waivers Through Arbitration Agreements

Contributed by Jeffrey A. Risch

As previously reported, in January 2012 the National Labor Relations Board (NLRB) held that a nationwide home builder committed an unfair labor practice under the National Labor Relations Act (NLRA) by implementing a mandatory arbitration agreement that waived the rights of employees to participate in class or collective actions through court action.  See D.R. Horton Inc. and Michael Cuda, (357 NLRB 184).  In short, the NLRB held that employers may not compel employees to waive their right to collectively pursue litigation of employment related claims.  On December 3, 2013, the Fifth Circuit Court of Appeals rejected the NLRB’s finding and concluded that the NLRB “did not give proper weight to the Federal Arbitration Act (FAA).”

Michael Cuda, a superintendent for Horton, claimed that he and other similar superintendents for the company were prevented from pursuing a wage and hour class action/collective action under the Fair Labor Standards Act (FLSA); alleging that they were misclassified as exempt employees.  Horton required Cuda and other employees to execute an arbitration agreement whereby they individually agreed to forego class action relief of all types relating to any employee dispute.

The NLRB found that the mandatory arbitration procedure violated Section 8(a)(1) of the NLRA because it interfered with the statutory right of employees to engage in “protected concerted activity for their mutual benefit.”  However, according to the Court, an otherwise valid arbitration agreement (including those in the employment context) must be enforced in accordance with its terms under the FAA.   Additionally, the Court held that absent specific statutory language in the NLRA to override arbitration, an arbitration agreement entered into between two parties should be enforced.  The Court also pointed out that other federal circuits have likewise upheld arbitration agreements containing class action waivers.  See Richards v. Ernst & Young LLP, (9th Cir. 2013); Sutherland v. Ernst & Young LLP, (2d Cir. 2013); and Owen v. Bristol Care Inc., (8th Cir. 2013).

The Court, however, did note that the underlying arbitration agreement could reasonably be understood by employees as precluding them from filing unfair labor practice charges at the NLRB.  It therefore enforced the NLRB’s order that Horton revise the document to allow employees the ability to file administrative charges.

As we have consistently advised clients, an employer may legally compel arbitration (including those that contain class action waivers) through a properly drafted arbitration agreement; but it may not prohibit its employees from filing a charge with the NLRB.  Employers looking to implement or revise employment arbitration agreements should consult with experienced labor and employment law counsel.

Class Waivers for Unfair Labor Practice Claims? — Maybe

Contributed by Suzanne Newcomb

In August, we wrote about Court decisions expanding the reach of the Supreme Court’s American Express v. Italian Colors decision to allow employers to force employees to arbitrate FLSA claims individually rather than collectively.  Earlier this month, an Administrative Law Judge ruled that the AmEx decision also means that the National Labor Relations Board can no longer prohibit class waivers.

Spurred by a single employee’s unfair labor practice charge, the Board challenged Chesapeake Energy’s policy mandating that all employees agree to binding individual arbitration for all employment related disputes, including unfair labor practice allegations arising under the National Labor Relations Act.  Relying on the Board’s 2012 D.R. Horton decision, General Counsel for the National Labor Relations Board pressed the Administrative Law Judge to strike down the program claiming the right to engage in collective legal action was itself “protected concerted activity” and therefore, any agreement to waive collective action was invalid on its face.  The Judge disagreed, concluding that the Board’s prohibition of class waivers could not be sustained in light of the AmEx decision.

Still, we urge caution.  How the full Board will address this issue is yet to be seen.  At least one other of the Board’s Administrative Law Judges reached the opposite conclusion in August despite the employer’s counsel urging that AmEx controlled.  Moreover, despite his conclusion that the NLRB could no longer prohibit class action waivers, the Judge did find Chesapeake guilty of an unfair labor practice.  He ruled the arbitration policy at issue invalid as written and ordered Chesapeake to rescind the policy or revise it to exclude unfair labor practice allegations.  He also ordered Chesapeake to specifically notify its employees that they have the right to file charges at the NLRB.  The distinction here is subtle, but important.  An employer may legally compel arbitration through a properly drafted and implemented arbitration agreement; it may not prohibit its employees from filing a charge with the NLRB.  Moreover, if an arbitration agreement tends to cause employees to conclude that they cannot file NLRB charges as the Judge concluded the Chesapeake agreement did, there is a very real risk it will be struck down.

Incidentally, the same reasoning applies to EEOC charges.  An employer may not prohibit its employees from filing EEOC charges, nor can it prevent the EEOC from bringing an enforcement action in Court based a charge filed by an employee who has signed a binding arbitration agreement.  A binding arbitration agreement will operate to force the employee to adjudicate claims through an arbitration proceeding, rather than a court action.  However, should the EEOC decide to file its own enforcement action, all bets are off.  The EEOC can maintain a Court action and can even seek individual remedies on behalf of an employee even if that employee signed a binding arbitration agreement.

The NLRB is Locked and Loaded – Ready to Go

Contributed by Karuna Brunk

The National Labor Relations Board now has five Senate-confirmed members and is “ready to go,” according to Chairman Mark Gaston Pearce.  This is the first time since 2003 that the NLRB has five sitting members.  The pro-union Board has been joined by AFL-CIO attorney Nancy Schiffer and union lawyer Kent Hirozawa.

The Board is particularly focused on facilitating and expediting union organizing.  First, and most notably, the Board is set to implement the ambush or “quickie” election rule, which would reduce the amount of time between when a union files a representation petition and when an election takes place from the average of 40 days to as few as 10 days.  This reduction in time would dramatically limit the issues employers could raise in the pre-election process.  We previously reported on our blog that the ambush rule was no longer in effect because the Board lacked the proper quorum of members when it enacted it.  Now that the Board has the requisite number of members, it can simply vote to re-enact the ambush rule or put in place some other rapid election process.

Second, the Board will probably revisit the notion of micro-unit organizing.  In an August 30, 2011 ruling, the NLRB ruled that a union could seek to organize a group of nursing assistants, despite requests by the employer to include other employees in the unit.  This decision created new standards for the bargaining unit; an employer would have to show that excluded employees should be included.  Needless to say, it is much easier for a union to organize smaller groups of people.

As we said before, the new Board is likely to be extremely active in its rule-making and is seeking to advance union organization and union backed causes.

Bottom line – Take Action Now!

In regards to both the above mentioned changes from the Board, the best course for employers is to be proactive.  Employers should think about how to handle and respond to union organizing now!  Put in place an action plan to diminish the risks with union organizing. This plan includes supervisor training on how to maintain a non-union workforce, and perhaps even certain persuader activity to educate employees on the facts behind “union card check” and other union tactics. To combat micro-unit organizing, examine your company structure and evaluate all classifications of employees.  Finally, even those employers currently with a union workforce will continue to feel the impact of overwhelmingly pro-labor decisions impacting their ability to effectively manage.  Feel free to reach out to qualified labor counsel for special guidance unique to your operations.

Government Shutdown Is In Its Second Week…What Does This Mean for the Labor and Employment World?

Contributed by Samantha Esmond

Unless you have been living under a rock, you have probably heard that the federal government has shut down all non-essential services for the first time in seventeen (17) years. As the shutdown is in its second week, the length of the shutdown is still highly unpredictable. Given the fact that the key players in Washington are still pointing fingers (and the blame), it seems more and more likely that the shutdown will be here to stay for days, possibly even weeks.

So, what does this mean for the labor and employment world? Not too much. Even with the shutdown of many key government agencies, employers must continue to comply with all statutory provisions, such as Title VII, ADA, FLSA, and the National Labor Relations Act. However, many “non-essential” government agencies have provided contingency plans explaining how they will operate during the shutdown. A sample of these key agency contingency plans can be accessed here:

  • Equal Employment Opportunity Commission (EEOC): Per its contingency plan, “only activities involving the safety of human life or the protection of property will continue.” For example, the EEOC will continue to docket and examine new charges to determine whether prompt judicial action is necessary to protect life or property. Nonetheless, the EEOC will cease the following activities during the shutdown:  (1) staff will not be available to answer questions from the public or to respond to correspondence from the public, (2) the EEOC will continue to accept charges that must be filed in order to preserve the rights of the claimant, such charges will not be investigated, (3) mediations will be cancelled, (4) federal sector hearings will be cancelled, (6) outreach and education events will be cancelled, and (7) FOIA requests will not be processed.
  • Department of Labor (DOL): The majority of employees working for the DOL will be furloughed. Accordingly, many of its programs and services, which are not “critical,” will be impacted. To view the DOL’s contingency plan, click here.
  • National Labor Relations Board (NLRB):  In essence, only such government activities necessary to prevent an imminent threat to the safety of human life or the protection of property may be undertaken. As such, the Office of Inspector General hotline will remain operational during the shutdown; however several services of the NLRB will not be available during the shutdown. The NLRB has updated its website with a link to its contingency plan, which is available here.
  • E-Verify:  E-Verify will NOT be available during the government shutdown and employers will not be able to access their accounts.

Employer Takeaway:  Generally, employers are still obligated to meet all statutory deadlines and continue to comply with all statutory and regulatory requirements during the shutdown. We will continue to monitor the happenings in Washington D.C. and provide updates as this situation develops.

Full House: The Newly Confirmed NLRB Is Not One to Bet On

Contributed by Beverly Alfon

The National Labor Relations Board (NLRB) now has three of a kind and a pair of another.  As a result of a bipartisan deal, on July 30, 2013, the U.S. Senate confirmed five nominees for appointment to the NLRB.  The three Democrat-backed confirmations include Kent Hirozawa, Nancy Jean Schiffer and Mark Gaston Pearce (current NLRB Chairman).  Two Republican-backed nominees, Philip Miscimarra and Harry Johnson III, were also confirmed. This is the first time in ten years that the NLRB has had a fully confirmed five-member Board. 

The normally long nomination and confirmation process advanced at quicker pace than usual, likely because NLRB Chairman Mark Gaston Pearce’s term was set to end this month – leaving the NLRB without the required quorum to conduct business.  NLRB Chairman Pearce, a former union attorney, will now be joined by pro-union Hirozawa and Schiffer – constituting a majority of the confirmed Board.

Hirozawa spent most of his career representing unions.  For the past three years, he has served as chief counsel to NLRB Chairman Pearce.  This is the same time period in which the NLRB attempted to implement its “ambush” election rules and notice posting requirements – both of which were invalidated.  It is also the time period during which Pearce took part in rendering numerous unfavorable decisions for employers. 

Schiffer’s propensities are also pro-labor.  For the past 12 years, she has been working as an associate general counsel for the AFL-CIO.  Prior to that, she worked for 18 years in the legal department of the United Auto Workers (UAW) Union.  In 2007, she testified before a House subcommittee in support of the Employee Free Choice Act.  That legislation would have enabled unions to be certified as the collective bargaining representative of a unit of employees simply by collecting signatures from a majority of those employees, instead of allowing the employer to demand a secret ballot election process as required under existing NLRB procedures.  When Senator Tim Scott, a South Carolina Republican, expressed concern about Schiffer’s ability to be unbiased in light of her testimony generalizing employers as bribing and threatening in face of union organization, Schiffer responded that she was speaking from “personal experiences.”  See, http://www.scott.senate.gov/press-release/senator-tim-scott-questions-nlrb-nominees. 

In short, employers should expect that for the foreseeable future, a pro-union agenda will continue at the NLRB.   Indeed, confirmation of the full Board ensures that its decisions going forward will not be subject to invalidity challenges based on a lack of quorum. 

What about the decisions of the “invalid” Board?  All eyes will be on the U.S. Supreme Court’s next term, which will begin on October 7, 2013.  The Court will be reviewing a decision that the U.S. Court of Appeals for the District of Columbia issued earlier this year, ruling that President Obama’s January 4, 2012 appointment of two Board members (Sharon Block and Richard Griffin) was invalid (Noel Canning Div. of Noel Corp., U.S., No. 12-1281, cert. granted 6/24/13).  If the Supreme Court agrees that the recess appointments were invalid, the ruling would call into question approximately 900 decisions that the Board issued between January 4, 2012 and July 30, 2013, including key decisions that overturned established precedent. 

Bottom line:  Employers should expect that the NLRB be very active in its policy and rule making efforts – including a renewed effort to promote the principles of the failed Employee Free Choice Act.  It is now more important than ever to read the cards with eyes wide open and remain on top of changes in federal labor law.

A Step Towards Clarity: NLRB Petitions U.S. Supreme Court for Review of Noel Canning Decision on Invalidity of President Obama’s Recess Appointments

Contributed by Beverly Alfon

On April 25, 2013, the National Labor Relations Board filed a petition asking the U.S. Supreme Court to review a decision that a federal appeals court issued earlier this year in Noel Canning Div. of Noel Corp. v. NLRB, 705 F.3d 490 (D.C. Cir. 2013).  In Noel Canning, the appeals court held that President Obama’s recess appointment of Sharon Block (D), Terrence Flynn (R) and Richard Griffin (D) to the NLRB was unconstitutional.  Without the valid appointment of those three members, the Board did not have a quorum and could not act lawfully.  The appeals court decision called into question the validity of every NLRB decision issued since January 4, 2012 (when President Obama appointed these members) — including controversial rulings that reversed long-standing precedent.   Nonetheless, as we discussed a few weeks ago, the NLRB has continued to conduct business as usual, leaving politicians clamoring for resolution and employers uncertain about the true effect of the D.C. Circuit’s decision.

The issues presented for review before the Supreme Court are “(1) whether the president’s recess-appointment power may be exercised during a recess that occurs within a session of the Senate, or is instead limited to recesses that occur between enumerated sessions of the Senate; and (2) whether the president’s recess-appointment power may be exercised to fill vacancies that exist during a recess, or is instead limited to vacancies that first arose during that recess.” In its petition, the NLRB argues that the president’s recess appointment authority is not limited to intersession recesses and that the president may fill a vacancy that exists during a Senate recess, even if the vacancy did not arise during that recess.

The NLRB also asserts that the D.C. Circuit’s decision would have “serious and far-reaching consequences,” including numerous presidential recess appointments made long before 2012, and therefore, any decisions rendered under such constitutionally flawed Boards.  The NLRB notes in its petition that there is no time limit on petition for review of Board rulings and further warns that the appeals court decision “also threatens a significant disruption of the federal government’s operations — including, most immediately, those of the National Labor Relations Board.”

Assuming that there are no extensions sought and granted, opposition to the certiorari petition is due May 28, 2013. Typically, a petition filed at this point in time would not be considered for review until after the Court’s summer recess, during the Court’s first conference in September 2013. However, it is possible that the response to the petition will be filed early and the Court may decide on whether or not to grant certiorari before summer recess.

House Approves Bill Prohibiting Further National Labor Relations Board Action

Contributed by Samantha Esmond

On April 12, 2013, the United States House of Representatives voted to approve a bill called “Preventing Greater Uncertainty in Labor-Management Relations Act” (H.R. 1120). The bill was sponsored by Representative Phil Roe (R-TN). According to Roe, “President Obama’s so-called recess appointments left the board in a state of legal chaos and my bill will ensure the NLRB cannot continue with business as usual until new members are confirmed and the nomination process returns to regular order.”

This bill would prevent the National Labor Relations Board (“NLRB”) from taking any actions that require a three-member quorum until the Board has at least three Senate-confirmed members or until the United States Supreme Court resolves the constitutionality of President Obama’s recess appointments. Moreover, this bill seeks to prohibit the NLRB from enforcing any action taken after January 4, 2012 that required a quorum.

On January 4, 2012, while the Senate was away during a 20-day holiday period, President Obama appointed three members to the five-member Board. As we previously blogged on January 25, 2013, President Obama’s recess appointments to the NLRB were held unconstitutional by the Court of Appeals for the District of Columbia.

While experts agree that the legislation is not anticipated to win approval in the Democratic-controlled Senate and the President’s senior advisors have implied that if the President is faced with legislation undermining the functions of the NLRB that they would recommend he use his veto power, this bill demonstrates the need for prompt clarification and/or a final determination on President Obama’s actions. If the Supreme Court rules that the President’s recess appointments were in fact unconstitutional, then hundreds of Board decisions dating back to January 4, 2012 will be invalidated.

Bottom Line:  What does this mean for employers? Until this appeals process is concluded, employers must remain alert of all NLRB decisions and remain vigilant in reviewing policies and practices to ensure compliance – just in case. That being said, for the time being it is still legally uncertain whether the President’s NLRB recess appointments and/or the Board’s subsequent decisions will be held valid. Stay tuned….