Labor Relations Counsel - Legal Insight into Labor Relations Developments

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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NLRB Acting General Counsel Lafe Solomon has announced his intent to file lawsuits in Arizona and South Dakota to nullify those states’ constitutional amendments that preserve secret ballot elections. According to Solomon, the state measures are preempted by the National Labor Relations Act (NLRA) and the U.S. Constitution’s Supremacy Clause, and are therefore invalid.

The NLRB’s dispute over the constitutional measures began in November of 2010, when four states – Arizona, South Dakota, Utah and South Carolina – approved constitutional amendments containing language upholding the “fundamental” right to the secret ballot. These efforts were widely viewed as preemptive strikes against the possible reintroduction of the beleaguered Employee Free Choice Act (EFCA) and other efforts to bypass secret ballot elections. In response to these constitutional amendments, Acting General Counsel Solomon informed the attorneys general of those states that it was the Board’s position that the amendments were unconstitutional and that any attempt to enforce or enact those provisions would result in litigation.

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On January 27, Sen. Jim DeMint (R-SC) reintroduced the Secret Ballot Protection Act (SBPA) (S. 217), legislation that would amend the National Labor Relations Act to guarantee the right to secret ballot union representation elections. Essentially, this measure would make it an unfair labor practice under the NLRA for an employer to recognize a union that has not been selected via secret ballot. In addition, this bill would make it unlawful for a union that has not been chosen as the employees’ exclusive representative in a secret ballot election conducted by the NLRB to cause or attempt to cause an employer to recognize or bargain with it. DeMint had introduced this bill in February 2009 as a pre-emptive move against the anticipated introduction of the Employee Free Choice Act (EFCA). In a statement, DeMint said: “Last Congress, union bosses and their Democrat allies tried their best to deny workers their basic American right to a guaranteed secret ballot election,” adding, “Secret ballot voting is a basic American value that we must protect. This bill ensures every American worker gets to cast a secret ballot vote without pressure and fear of retribution from union organizers and coworkers looking over their shoulder.”

The introduction of the SBPA coincides with a letter four state attorney generals sent to the NLRB in defense of their state constitutional amendments that similarly seek to preserve the right to secret ballot elections. Last month, the NLRB’s Acting General Counsel put the Arizona, South Carolina, South Dakota, and Utah attorney generals on notice that it was the agency’s position that the amendments were in violation of the NLRA, and that the Board would file lawsuits against each state if the amendments were not rescinded. In their joint January 27, 2011 letter, the attorney generals reject the NLRB’s demand to “stipulate to the unconstitutionality” of the amendments, and affirm that they “will vigorously defend any legal attack upon them.” The attorney generals explain that the NLRB premises its proposed lawsuit:

on the erroneous conclusion that our constitutional provisions require elections when federal law does not. We do not believe that is true. Our amendments support the current federal law that guarantees an election with secret ballots if the voluntary recognition option is not chosen. . . . Accordingly, your letter fails to establish that our State constitutional protections have disrupted the federal regulatory scheme in any way. Both the State amendments and the NLRA support secret ballot elections in selecting union representatives.

The letter concludes by urging the NLRB to reconsider its decision.

Photo credit:  ericsphotography

Continuing the trend that we have blogged about previously, the NLRB has recently issued two decisions that implement another concept contained in the failed Employee Free Choice Act – enhanced penalties for labor law violations.  These decisions also follow a movement throughout the Obama Administration to enhance penalties against employers for legal transgressions.

In one case, Kentucky River Medical Center, 356 NLRB No. 8 (Oct. 22, 2010) (pdf), the NLRB announced a change in the long-standing practice of awarding simple back pay awards calculated on a quarterly basis.  In Kentucky River, the NLRB announced that all back pay awards would be subject to a daily compound interest penalty.  This is a change that has been contemplated by the NLRB on and off for the last twenty years, but has not been adopted until now.  Significantly, this change is retroactive for all pending cases as well as for all cases going forward.  What this change means in real terms is that the penalty to an employer who is found to have wrongfully discharged or otherwise financially harmed a complainant is greater than before this decision was issued.  Practically, given the long period of time it typically takes to contest an adverse NLRB determination, employers may feel pressure to settle the case rather than continue to defend themselves due to the cost of daily compounding interest on the back pay amount.  Other employers may be leery of taking justified actions that could trigger a NLRB investigation due to the potential of an enhanced penalty.

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Many have speculated that the National Labor Relations Board may seek to implement through the Board’s processes certain aspects of the Employee Free Choice Act in lieu of legislative action. To wit, in a move that partially implements EFCA’s “enhanced enforcement” provisions, the NLRB Office of the General Counsel (GC) has put into place a program designed to streamline and expedite the process of seeking preliminary injunctions from federal courts in cases involving employee discharges during union organizing campaigns.

Section 10(j) of the National Labor Relations Act (NLRA) allows the Board to seek a federal court injunction to prevent unions and employers from committing unfair labor practices and to maintain the status quo while a matter is pending before the Board. Unions have long complained that this power was underutilized by the Board and that employer termination of union supporters was a primary impediment to unions’ ability to successfully organize. To address this complaint, as drafted, EFCA called for enhanced penalties for violations during an organizing campaign such as the termination of an employee supporting the union’s organizing effort. Now, even without the passage of EFCA, under the new program, in all cases where an employee termination during an organizing campaign is the subject of an unfair labor practice (ULP) charge and the charge is found to have merit, the GC’s office will consider obtaining a court order compelling reinstatement of the employee while the underlying ULP claim is still pending. According to the GC’s letter to NLRB regional directors, the NLRB’s Section 10(j) program is to be considered a “top priority.”

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