Labor Relations Counsel - Legal Insight into Labor Relations Developments

The National Mediation Board (NMB) has issued its final rule (pdf) implementing the changes to NMB procedures regarding run-off elections, “showing of interest” thresholds for representation elections, and the agency’s rulemaking authority that were included in the FAA Modernization and Reform Act of 2012 (FAA Act), signed into law on February 14, 2012. Notably, the FAA Act amended the Railway Labor Act (RLA) by: (a) specifying that the NMB must provide an opportunity for public hearing regarding any significant rules; (b) requiring that in any runoff election for which there are three or more options (including the option of “no union”) on the ballot and none receives a majority of the valid votes cast, a second election would be held between the two options receiving the most votes; (c) raising the showing of interest threshold for elections to not less than 50% (up from 35%) of the employees in the craft or class; and (d) imposing certain review and auditing requirements on the NMB’s programs and expenditures. Continue reading this entry at Littler's DC Employment Law Update.

The National Mediation Board (NMB) has issued a proposed rule that would implement the changes to existing representation dispute and election procedures in the railway and airline industries made by the Federal Aviation Administration Modernization and Reform Act of 2012 (FAA Act). Signed into law on February 14, 2012, the FAA Act included significant restrictions over airline and railway union organizing. Specifically, the Act amended the Railway Labor Act (RLA) by: (a) specifying that the NMB must provide an opportunity for public hearing regarding any significant rules; (b) requiring that in any runoff election for which there are three or more options (including the option of “no union”) on the ballot and none receives a majority of the valid votes cast, a second election would be held between the two options receiving the most votes; (c) raising the showing of interest threshold for elections to not less than 50% (up from 35%) of the employees in the craft or class; and (d) imposing certain review and auditing requirements on the NMB’s programs and expenditures. To this end, the proposed rule published in the May 15, 2012 edition of the Federal Register would make changes to existing NMB rules regarding run-off elections, showing of interest for representation elections, and the NMB’s rulemaking proceedings to conform to the FAA Act provisions.

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A measure designed to prevent the National Labor Relations Board’s new election rule from taking effect next Monday was defeated in the Senate. On Tuesday the Senate voted 45-54 in favor of a motion to proceed to a vote on S. J. Res. 36, a resolution disapproving of the Board’s rule that expedites and makes other dramatic changes to the representation election process. At least 60 votes were needed to allow the resolution to proceed to a vote. The vote was largely along party lines, with no Democrats supporting the resolution and Senator Lisa Murkowski (R-AK) the only Republican to vote against the measure. Continue reading this entry at Littler's Washington DC Employment Law Update.

By John Cerilli

Controversial National Labor Relations Board regulations that will dramatically change union representation election procedures are slated to take effect on April 30, 2012. In anticipation of this event, Board regional offices have been stepping up their internal training efforts and preparing outreach programs to explain the new regulations to the public.

About two weeks prior to the rule’s effective date, the Board’s General Counsel (GC) is expected to post on the NLRB’s website a GC Memorandum, PowerPoint presentation, and video explaining the new regulations. The GC memorandum is expected to explain in more detail which contested issues will result in an evidentiary hearing on the record and which issues will be deferred until after an election. Generally, it is anticipated that issues pertaining to the scope and composition of the proposed bargaining unit generally will result in a hearing, while those pertaining to eligibility that do not affect a significant percentage of the bargaining unit will not. In the latter instances, the hearing officers will defer these issues until after the election. As it stands, which issues will warrant an evidentiary hearing and which will not remain somewhat unclear.

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In keeping with information published as part of the National Labor Relations Board’s unified agenda for the coming year, Board Chairman Mark Gaston Pearce told the Associated Press that he intends to push for additional sweeping changes to the union representation election process that would make it easier for unions to organize.

In December 2011, the National Labor Relations Board issued a final rule that will radically change representation election procedures. Among other changes, the rule will:

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Anticipating the loss of a quorum next week, the National Labor Relations Board has issued a final rule (pdf) revising its representation case certification process. Specifically, the Board is amending its rule requiring the automatic impoundment of representation election ballots when a party files a request for review.

In last year’s New Process Steel opinion, the Supreme Court held that the National Labor Relations Act requires that the Board operate with at least three members in order to exercise its full authority. When Member Craig Becker’s term expires this week, the Board will be left with Chairman Mark Gaston Pearce (D) and Member Brian Hayes (R), assuming the Senate does not confirm additional members and the President is unable to make any recess appointments by that time.

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During oral argument in a lawsuit challenging the National Labor Relations Board’s notice posting rule, presiding judge Amy Berman Jackson of the U.S. District Court for the D.C. Circuit suggested that the agency postpone the rule’s January 31, 2012 implementation date. The rule at issue – Notification of Employee Rights under the National Labor Relations Act – mandates that private sector employers subject to the National Labor Relations Act (NLRA) post a notice informing employees of their rights under the NLRA in a "conspicuous place" readily seen by employees and penalizes employers for non-compliance. This new obligation applies to virtually all private sector employers, regardless of whether or not their workforces are unionized and regardless of whether they are federal contractors. Notably, the rule permits the NLRB to toll the six-month statute of limitations period for filing a ULP complaint if the employer fails to post the required notice. Moreover, the rule allows the NLRB to deem the failure to post the notice evidence of anti-union animus in a case where such an allegation is raised.

The consolidated lawsuit brought by the National Association of Manufacturers (NAM) and the National Right to Work Legal Defense and Education Fund Inc. (NRTW) alleges that the agency overstepped its statutory authority and ignored congressional intent in promulgating the rule. In a press release, NAM reports that at the December 19 hearing Judge Berman Jackson “acknowledged the complexities of the issues presented in the case and again encouraged the Board attorneys to discuss delaying implementation of the rule until the court has reached an opinion.” A similar lawsuit contesting the NLRB rule has been filed by the U.S. Chamber of Commerce and the South Carolina Chamber of Commerce.

Several bills also have been introduced to rescind this posting rule, although to date, none have advanced.

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By David Kadela

In an unprecedented development, and by a 2-1 vote, the National Labor Relations Board on November 30, 2011, approved a resolution to prepare a final rule adopting a subset of the controversial election rule amendments the Board published for comment in June 2011. The two-member majority was made up of Chairman Mark Pearce and Member Craig Becker, both of whom come from union backgrounds. The Board's lone Republican, Member Brian Hayes, voted against the resolution, criticizing the proposed amendments and the process by which they had been vetted as fundamentally flawed.

What makes this development unprecedented, and radical in the eyes of many, is that it defies a decades-old practice of the Board, regardless of the political party in the majority.  Continue reading about this development here.

The National Labor Relations Board has issued a new order temporarily delegating administrative authority over certain agency matters to the General Counsel (GC) and Board Chairman in the event the Board is left with fewer than three sitting members. In last year’s New Process Steel opinion, the Supreme Court held that the National Labor Relations Act requires that the Board operate with at least three members in order to exercise its full authority. When Member Craig Becker’s term expires at the end of the year, the Board will be left with Chairman Pearce (D) and Member Brian Hayes (R), assuming the Senate does not confirm additional members and the President is unable to make any recess appointments by that time. There also has been speculation that Member Hayes might resign to prevent the remaining members from finalizing contentious Board rules.

In the event the Board is left operating with less than a three-member quorum, the Order grants the GC authority over appointments and other personnel decisions with respect to Regional and Subregional Directors and officers and over the establishment of Regional and Subregional offices. In addition, the Order grants the Chairman and the GC the joint authority to make decisions concerning the apportionment and allocation of funds and the establishment of personnel ceilings within the Agency and delegates to the Chief Administrative Law Judge authority over appointments and other personnel decisions concerning any Administrative Law Judge. The Order makes each delegation of authority subject to the right of any sitting Board Member to request full-Board consideration of any particular decision.

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The Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) have issued a final rule implementing Executive Order (EO) 13494, Economy in Government Contracting, which precludes government contractors from being reimbursed for expenses incurred to influence employees regarding their decisions to form unions or engage in collective bargaining. Issued on January 30, 2009, EO 13494 considers as un-reimbursable any activities that are undertaken to persuade employees to exercise or not exercise such rights, such as preparing and distributing materials, hiring or consulting legal counsel or consultants, holding meetings (including paying the salaries of the attendees at meetings held for this purpose) and planning or conducting activities by managers, supervisors or union representatives during working hours. Such expenditures are deemed “unallowable” under any federal government contract by the order. Although federal contractors cannot use federal funds for these purposes, they may use federal dollars to “maintain satisfactory relations” between the contractor and its employees. As stated in the order, such expenditures could include the cost of labor-management committees, employee publications (provided they do not attempt to persuade employees regarding unionization), and other related activities.

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On Wednesday, the House Committee on Education and the Workforce voted 23-16 along party lines to send the Workforce Democracy and Fairness Act (H.R. 3094) (pdf) to the House floor. The vote followed a lengthy markup session of the legislation that would, among other changes, effectively undo the criteria used to determine an appropriate bargaining unit established by the National Labor Relations Board’s recent Specialty Healthcare decision, and prevent the National Labor Relations Board from pursuing its proposed changes to representation election procedures. According to the Committee’s media advisory, this bill “restores successful labor practices and reaffirms protections workers and employers have received for decades” and “ensures employers have access to a fair election hearing and employees are able to make a fully informed decision about union representation.” Earlier this month, the Committee held a more formal hearing with invited panelists to debate the bill’s merits. Continue reading this entry at Littler’s Washington DC Employment Law Update.

Legislation introduced by House Committee on Education and the Workforce Chairman John Kline (R-MN) would effectively undo the criteria used to determine an appropriate bargaining unit established by the National Labor Relations Board’s recent Specialty Healthcare decision, and prevent the Board from pursuing its proposed changes to representation election procedures. Specifically, the Workforce Democracy and Fairness Act (H.R. 3094) seeks to return to the long-standing approach in assessing which employees belong in a proposed bargaining unit, and would establish a timeline and process for holding a hearing regarding any pre-election disputes and deciding the appropriate bargaining unit. Continue reading this entry at Littler's Washington DC Employment Law Update.

By Jeffrey C. Kauffman

The comment period closed on September 21, 2011 regarding the proposed rulemaking to narrow the advice exemption from persuader activity reporting under section 203 of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). The notice of rulemaking published June 21, 2011, by the U.S. Department of Labor, proposes to eliminate the current interpretative rules in place since 1962 as developed by the DOL during the Kennedy Administration. Approximately 6000 comments were submitted.

Littler Mendelson filed comments opposing the proposed changes in a letter (pdf) submitted by Marko Mrkonich, Managing Director, on behalf of the Firm. The key points were as follows: (1) there was no reliable showing for the need to change or for assuming the current rules could not fix any perceived problem; (2) the proposed rules would conflict with the statute and Congressional intent, and thus exceed the DOL’s authority; (3) the changes would interfere with protected employer speech rights and access to legal counsel, and threaten attorney-client privilege and confidential information, even assuming the DOL had authority to make these changes; and (4) the true actual costs entailed by the proposed rules have not been taken into account as required.

The American Bar Association (pdf) and the U.S. Chamber of Commerce (pdf) also submitted comments opposing the proposed rules. The ABA comments were given to defend “the confidential client-lawyer relationship.” The ABA supports the current interpretation of the advice exemption and “opposes the Proposed Rule to the extent it would apply to lawyers representing employer clients.” The U.S. Chamber’s comments include an analysis of the costs imposed by the proposed rules, and estimate “that the initial year familiarization costs associated with the proposed rule will be between $549.6 million and $1.1 billion for potential Form 10 filers [employers] and between $74.6 million and $298.3 million for potential Form 20 filers [consultants].”

The DOL will now consider all comments as part of the rulemaking process. All comments are accessible here.  

Jeff Kauffman is Of Counsel in Littler Mendelson's Chicago office. If you would like further information, please contact your Littler attorney at 1.888.Littler, info@littler.com, or Mr. Kauffman at jkauffman@littler.com.

A week after the National Labor Relations Board issued its final rule requiring all private sector employers subject to the National Labor Relations Act (NLRA) to post a notice informing employees of their rights under the NLRA, Rep. Benjamin Quayle (R-AZ) introduced a bill to repeal it. The Employee Workplace Freedom Act (H.R. 2833) would rescind this rule as well as prohibit the NLRB from promulgating or enforcing “any rule that requires employers to post notices relating to” the NLRA. Continue reading this entry at Littler's Washington DC Employment Law Update.

As one of the final speakers concluding two days of public meetings to discuss the NLRB’s proposed changes to its election procedures, Littler attorney David Kadela stated that the proposed changes “would unduly and severely cut into the time that employers have to communicate with employees during election campaigns, and establish unnecessary procedural requirements that would stack the deck against and increase the burdens upon employers.” Kadela joined more than 60 other participants in the two-day event, many of whom articulated the same profound faults with the proposed expedited election procedures. Although a number of union supporters were on hand to speak in favor of the proposed rule, members of the business community and their representatives urged the Board to reconsider its proposal, which was even the subject of a recent Congressional hearing. The most vehement criticisms of the proposal are discussed below.

A Solution in Search of a Problem

Many testified that the vast majority of elections are held pursuant to a stipulated agreement, and that current procedures do not promote excessive and unnecessary delays. Several speakers claimed that any deviations from this rule should not result in a wholesale change to the entire election process. As Kadela noted during his testimony, the proposed changes would reportedly shorten the time from the filing of a petition to an election from a median of 38 days to between 10 and 21 days. Doing so dramatically diminishes the time and opportunity for an employer to educate employees on its position before an election.

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On Thursday, July 7, 2011, the House Committee on Education and the Workforce held a hearing – Rushing Union Elections: Protecting the Interests of Big Labor at the Expense of Workers’ Free Choice – during which the National Labor Relations Board’s proposed changes to pre- and post-representation election case procedures came under fire. Last month, the NLRB issued a proposal that would dramatically change long-standing election procedures. Among other things, the proposed rule would substantially shorten the time between the filing of an election petition and the election itself, limit issues that can be resolved during a pre-election hearing, and give employers as few as five business days to prepare a comprehensive position statement to present to the NLRB. As stated in a committee press release, “taken together, the NLRB’s proposed changes will restrict an employer’s ability to communicate with his or her employees and hinder a worker’s right to make a fully informed decision in a union election.” The Board announced that it would conduct limited public hearings on this issue later this month.

In his opening statement, committee Chairman John Kline (R-MN) claimed that the NLRB was involved with “crafting a solution to a problem that doesn’t exist.” As one witness pointed out, unions win approximately 65% of elections, which are typically held within 38 days. According to statistics provided by Kline, “last year 95 percent of all initial elections were conducted in less than 60 days. In 2009, the median time between notice of a pre-election hearing and the end of the same hearing was just 13 days.” Kline pointed out that Acting General Counsel Lafe Solomon praised this rate as “outstanding” and representative of “excellent case handling performance.” Under the NLRB’s proposal, a union election could occur in a few as 10 days.

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In a move decried by the business community and even National Labor Relations Board Member Brian Hayes, the NLRB has issued a proposed rule (pdf) that would dramatically change pre- and post-representation election case procedures. It is predicted that the results of this proposed rulemaking will substantially expedite the election process and thereby deny workers the ability to fully exercise their right to make an informed and well-reasoned decision whether to join or not to join a labor union. In the words of Member Hayes in his strongly-worded dissent, (pdf) the proposed rulemaking “substantially limit[s] the opportunity for full evidentiary hearing or Board review on contested issues involving, among other things, appropriate unit, voter eligibility, and election misconduct.” Summing up his criticisms of the proposed changes, Hayes claims:

Today, my colleagues undertake an expedited rulemaking process in order to implement an expedited representation election process. Neither process is appropriate or necessary. Both processes, however, share a common purpose: to stifle full debate on matters that demand it, in furtherance of a belief that employers should have little or no involvement in the resolution of questions concerning representation.

The process outlined in this proposed rule appears basically to be an administrative end-run around the legislative process that defeated the Employee Free Choice Act (EFCA).

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On Friday, John Lund, Director of the Office of Labor-Management Standards (OLMS), conducted an online chat to discuss the agency’s upcoming regulatory activities. Lund noted, for example, that by July 2011, the agency plans to issue a final rule on Form LM-30, the Labor Organization Officer and Employee Report required under the Labor-Management Reporting and Disclosure Act (LMRDA), “to identify potential conflicts of interest between the labor organization officials and their labor organizations.” A proposed rule to revise this disclosure form was published in August 2010.

By June of this year, Lund said the OLMS intends to publish a proposed rule to expand the scope of employer-consultant reporting required under Section 203 of the LMRDA. As Lund explained, under the LMRDA, an employer must report on Form LM-10 any agreement or arrangement with a third-party consultant to persuade employees regarding their collective bargaining rights, or to gather certain information about employee activities or a labor organization in connection with a labor dispute. The labor relations consultant must report on Form LM-20 information about such an agreement or arrangement. Currently, the LMRDA provides for an “advice” exemption from these reporting requirements. The proposed rule under consideration would narrow the scope of the advice exemption and expand persuader reporting.

Similarly, Lund said that the OLMS plans to issue a notice of proposed rulemaking to review the Form LM-21 Receipts and Disbursements Report required of consultants concerning persuader agreements with employers. Lund clarified during the chat that such a proposal would require electronic filing of Form LM-21, and would possibly revise its layout and instructions. In addition, the OLMS also may reconsider the detail that is required to be reported on Form LM-21, although he did not discuss any specific changes.

Lund also noted that the agency intends to publish this month a Request for Information regarding the use of electronic balloting in union officer elections.

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The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) will issue an interim rule (pdf) that adopts the Department of Labor’s final rule implementing Executive Order (EO) 13496: Notification of Employee Rights Under Federal Labor Laws. (pdf)  The DOL issued its final rule on this EO last May.  The EO at issue mandates that all government contracting departments and agencies include a provision in most government contracts stipulating that the contractor post a notice “in all places where notices to employees are customarily posted both physically and electronically,” informing them of their rights under the National Labor Relations Act (NLRA), and revokes a Bush-era EO that had required federal contractors to post a notice (commonly known as “Beck” notices) to their employees informing them that they were not required to join or maintain membership in a labor union, and that those who were not union members – but were nonetheless required to pay dues or fees pursuant to a union security agreement – could object to paying a portion of those dues or fees to support activities that are not related to collective bargaining, contract administration or grievance adjustment.

The Councils’ interim rule essentially amends the Federal Acquisition Regulation (FAR) to reflect the DOL’s notification requirements. These changes include a new FAR subpart 22.16 and clause 52.222-40, Notification of Employee Rights Under the National Labor Relations Act. The interim rule also revises FAR clauses at 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Items, and FAR 52.244-6, Subcontracts for Commercial Items, to include the requirements of the new FAR employee notification clause. These amendments to the FAR represent the formal notice to contracting officers to include the amended FAR clause in all solicitations and contracts, except those contracts that are under the simplified acquisition threshold (currently $150,000), subcontracts of $10,000 or less, or contracts/subcontracts that are for work performed exclusively outside of this country.

For more information on the requirements set forth in the DOL’s final rule, see Littler's ASAP: DOL Issues Final Rule on Notification by Federal Contractors of Employee Labor Law Rights by David Goldstein and Jay Sumner.

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The Federal Aviation Administration (FAA) has released its much-anticipated proposed regulations (pdf) governing rest rules for commercial airline pilots. Spurred by the February 2009 fatigue-related crash of Colgan Air 3407 in Buffalo, New York, these rules impose a number of new requirements on airlines to address flight operation and rest time. The rules are also in response to the recently-enacted Airline Safety and Federal Aviation Administration Extension Act of 2010, which directed the FAA to establish regulations to address pilot fatigue by August 1, 2011. In a statement, FAA Administrator Randy Babbitt said: “I know firsthand that fighting fatigue is a serious issue, and it is the joint responsibility of both the airline and the pilot,” adding, “After years of debate, the aviation community is moving forward to give pilots the tools they need to manage fatigue and fly safely.”  Continue reading this entry at Littler’s Washington DC Employment Law Update.

Photo credit:  Monika Wisniewska