Labor Relations Counsel - Legal Insight into Labor Relations Developments

By Maury Baskin and Gregory Brown

The U.S Court of Appeals for the D.C. Circuit recently struck down the National Labor Relations Board’s August 2011 Notice Posting Rule, which would have required employers to conspicuously display a notice informing employees of their rights under the National Labor Relations Act (the “Act”). In National Association of Manufacturers, et al. v. NLRB, the court invalidated the rule because it found all three of the rule’s enforcement mechanisms unlawful. A majority of the court also found that the rule exceeded the Board’s rulemaking authority as delegated by Congress.

The Board’s challenged rule would have forced six million employers throughout the country to post the Board’s mandatory notice of employee rights to organize unions (and related topics), under threat of an unfair labor practice finding by the agency. Moreover, failure to post the required notice would have permitted the Board to extend the usual six-month statute of limitations period in unfair labor practice cases. The rule also permitted the Board to consider an employer’s refusal to post the notice as evidence of unlawful motive in unfair labor practice cases.

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By Denise Barton Ward 

The National Labor Relations Board, Office of the General Counsel, recently issued an Advice Memorandum, finding an employer’s “Code of Conduct” policy did not violate Section 8(a)(1) of the National Labor Relations Act. On the surface, this appeared to be a brief respite in the Board’s trend of finding a myriad of statements, policies, and other handbook provisions unlawful. But closer inspection does not offer as many practical solutions as employers may hope. The Code of Conduct is a 43-page Ethical Business Conduct Guidelines manual. The bulk of the manual sets forth the employer’s business ethics policies and additional business compliance issues, with examples. In addition, the employer presents, distributes, and discusses the material at a mandatory, day-long training and orientation where both employees and union representatives are present. The company provides further online resources, which include a Frequently Asked Questions section, dedicated to clarifying the policy. It is in the online FAQs that the employer defines the scope of the policy by saying it does not apply to employees’ “constitutional, statutory, or other protected rights.” These monumental facts, as well as others, led to the recommendation that the Region dismiss the charge alleging the policy violated Section 8(a)(1) by restricting employees’ Section 7 activities. 

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By Jeff Place

The Board’s recent decision in DirectTV, 359 NLRB No. 54, represents another example of its ongoing effort to ensure the relevancy of the National Labor Relations Act in the 21st century by applying its protections to a broad range of personnel policies common among non-unionized employers. Many employers have issued policies intended to protect legitimate company interests, such as safeguarding the company’s confidential information or ensuring that only official company spokespersons make public statements on behalf of the company. Under the current Board, however, such common employer policies may be deemed to chill employee exercise of activity protected under the Act. Thus, for example, the Board has long held that employees have a protected right under Section 7 to discuss their wages, hours, and terms and conditions of employment with each other, with representatives of labor unions, with members of the media, and with the public in general. This includes a right to air disputes between employees and the company publicly. If the Board concludes that a generally applicable company policy is either overly broad or sufficiently ambiguous that it could reasonably be expected to deter an employee from engaging in protected communications, it will order the employer to rescind the policy.

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By William Balke 

Michigan became the 24th “Right to Work” state when Governor Rick Snyder signed into law on December 11, 2012, Public Act No. 348. This right to work law, which is titled the Workplace Equity and Fairness Act, is an amendment to Michigan 1939 PA 176, and applies to private sector employees, employers, and labor organizations. Governor Snyder also signed into law a right to work law for the public sector. That law is known as Public Act No. 349 and amends Michigan 1947 PA 336. Both statutes are to take effect on the 91st day after final adjournment of the 96th Legislature’s 2012 Regular Session, or approximately March 28, 2013. However, the effect of the laws will not be immediate for everyone, as current collective bargaining agreements are “grandfathered” and the new right to work provisions will take effect upon the expiration of those agreements.

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Last week the House Committee on Oversight and Government Reform released a staff report highlighting rulemaking, decisions, and other actions taken in recent years by the National Labor Relations Board (NLRB or “Board”) that the Committee contends are indicative of the agency’s pro-union bias. Rep. Darrell Issa (R-CA) chairs the Committee. The report – President Obama’s Pro-Union Board: The NLRB’s Metamorphosis from Independent Regulator to Dysfunctional Union Advocate (pdf) – claims that these legislative, regulatory, and internal missteps “compromise the perceived fairness of the NLRB that Congress deemed necessary for its successful operation,” and have created a “rogue agency plagued by systemic problems.” The 33-page report touched on a number of perceived faults with the Board’s operation and decision-making process, including the following:

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By Chip McWilliams 

The National Labor Relations Board’s Division of Advice has sanctioned another employer’s social media policy and actions taken against an employee for the policy’s violation. In an advice memorandum issued on October 19, 2012, Barry J. Kearney, Associate General Counsel for the NLRB’s Division of Advice, recommended the dismissal of unfair labor practice (ULP) charges lodged against Cox Communications on the grounds that neither its social media policy nor the termination of an employee for violating this policy interfered with employees’ Section 7 activities under the National Labor Relations Act (NLRA). 

The complaining employee in this case was a customer service representative responsible for responding to customer concerns and complaints about the employer’s services. After a confrontational exchange with an irate customer, the employee used his cellphone to make disparaging remarks about the customer on his Google+ account. Specifically, the employee posted the following comment: “Just because you are having problems with your tv service does not mean you should call me a fa--ot! F--K YOU!” A coworker responded with a comment mocking the employee and the situation.

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On October 2, 2012, a three-judge panel of the U.S. Court of Appeals for the Eleventh Circuit reversed the National Labor Relations Board's decision that licensed practical nurses (LPNs) employed at a long-term health care facility were not supervisors under the National Labor Relations Act. Indeed, the court emphasized that, "while we are mindful of the limited nature of our review in this appeal, this is not a case in which we merely disagree with the board's conclusions. Our review of the record as a whole reveals that the board meticulously excluded or disregarded record evidence, which, when taken into account, compels a different result." This decision will be a strong weapon for long-term healthcare employers seeking to ward off unionization of nurses at their facilities. To learn more about the decision, please continue reading Littler's ASAP, Eleventh Circuit Rules Licensed Professional Nurses Are Supervisors, Providing Strong Ammunition to Long-Term Healthcare Facilities, by Todd Nierman, Gregory Richters, and Christine Tenley.

On Friday the U.S. District Court for the District of Columbia denied the National Labor Relations Board’s motion to reconsider the court’s May 14 finding that that the Board’s expedited representation election rule was invalid due to lack of a statutorily-mandated quorum when the Board approved the rule in December 2011. A year earlier, the U.S. Supreme Court held in New Process Steel that the Board must act with at least three sitting members to exercise its full authority. In the case at hand, the D.C. federal court agreed with arguments made by the U.S. Chamber of Commerce and Coalition for a Democratic Workplace that the agency did not have the authority to adopt the election rule, as only two members – Chairman Mark Gaston Pearce and former member Craig Becker – actually cast votes in the rule’s favor. Member Brian Hayes had voted against an earlier version of the rule and declined to participate in the December vote.

In its efforts to persuade the district court to revisit its decision, the Board presented new evidence to support its position that Member Hayes was present in the electronic voting room the day of the election rule vote, and in fact cast his vote on other matters. The court’s memorandum opinion (pdf) issued by Judge James Boasberg, however, states that this information was “offered too little too late.” In denying the NLRB’s motion, Judge Boasberg emphasized that “the Board has neither adequately explained why it could not have presented this evidence at the summary-judgment stage nor established that the Court’s contrary finding was ‘clear error.’” Even if this information had been offered earlier, the judge claims that “it likely would not have changed the outcome even then, and it certainly does not establish ‘clear error’ or ‘manifest injustice now.’”

The Board already suspended the election rule’s implementation and withdrew related guidance. It is expected that the Board will appeal the July 27th decision, and the matter will ultimately be resolved by the appellate courts.

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The National Labor Relations Board affirmed the 2011 administrative law judge decision dismissing the finding that the union waived its right to bargain with Virginia Mason Hospital over implementation of a policy requiring nurses to take a flu shot or wear a facemask. During the same week, the Board held an employer did not violate the National Labor Relations Act when it unilaterally implemented a new safety procedure that required employees to spend 5-10 minutes at the beginning of each shift reviewing and initialing a safety checklist. To learn more about the decisions and their potential implications for employers, please continue reading at Littler's Healthcare Employment Counsel blog.

By Denise Barton Ward

The yearly revisions to employers’ medical plans before open enrollment is a common practice that rarely generates thoughts beyond controlling costs. For the unionized employer with a non-union medical plan, the process is more nuanced. This is especially true when the collective bargaining agreement has expired and the parties have not reached a new agreement. In E.I. Du Pont de Nemours and Company v. NLRB, 2012 U.S. App. LEXIS 11604 (D.C. Cir. June 8, 2012), the employer was in just such a position and moved forward with changes to its medical plan post-contract expiration. In fact, the employer had made changes to its medical plan each year prior to open enrollment without bargaining and without objection from the union. The contract provided for unionized employees to participate in the plan “subject to the terms and conditions” of the plan. The plan itself contained a reservation of rights clause allowing for the changes in price or level of the plan coverage prior to annual enrollment.

As expected, the union filed an 8(a)(1) and 8(a)(5) charge, claiming the employer made a unilateral charge to the medical plan during ongoing negotiations with the union. Equally as expected, the National Labor Relations Board held the employer violated the Act. 

The D.C. Circuit, however, held the Board departed from its precedent of allowing changes in working conditions made after contract expiration when the changes were grounded in past practice. In its findings, the court rejected the Board’s argument that the past practice was only during the term of the contract and there was no past practice of changes post-contract expiration. The court also rejected the Board’s argument that the past practice arose pursuant to the management rights clause, explaining that the lawfulness of the change does not depend on the survival of a contractual waiver but on whether the change is grounded in a past practice. Quoting the Board’s own words in previous cases, the court found the “past practice is not dependent on the continued existence of the [expired] collective bargaining agreement.”   

While the court’s remand of the case back to the Board may be a victory for this employer, the Board is not bound by the court’s decision in any other cases. As a result, employers will continue to face questions regarding post-contract expiration changes to health and welfare plans and should anticipate the current Board’s analysis of such changes.

By Tom Dowd

A recently enacted Maryland law prevents employers from compelling union representatives from disclosing information or communications received from employees in confidence concerning workplace grievances. Signed into law on May 2, 2012 and effective October 1, 2012, Senate Bill 797 (pdf) specifically provides that, with limited exceptions:

a labor organization or an agent of a labor organization may not be compelled to disclose any communication or information the labor organization or agent received or acquired in confidence from an employee while the labor organization or agent was acting in a representative capacity concerning an employee grievance.

This protection would not apply to criminal proceedings, nor to information that would be necessary to prevent “certain death or substantial bodily harm.” In the latter instance, a union or its agent would in fact be compelled to disclose such information.

To be shielded by this new state law, the communication or information at issue must be relevant to a grievance and be subject to an investigation, grievance procedure, or other administrative or civil proceeding. This union/employee privilege would continue even after the employee’s termination or the labor representative’s relationship with the union.

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On April 26, 2012, Sen. Marco Rubio (R-FL) introduced legislation that would amend the National Labor Relations Act (NLRA) to permit employers whose workplaces are governed by collective bargaining agreements to award their employees with additional wages or other compensation for their job performance. A week earlier, Rep. Todd Rokita (R-IN) introduced the Rewarding Achievement and Incentivizing Successful Employees (RAISE) Act (H.R. 4385, S. 2371) in the House of Representatives. Continue reading this entry at Littler's Washington DC Employment Law Update.

Following a South Carolina federal court’s finding that the National Labor Relations Board lacked the authority to promulgate its notice posting rule, the U.S. Court of Appeals for the D.C. Circuit has granted an emergency motion enjoining the Board from enforcing the rule. Last month in a separate lawsuit brought by the National Association of Manufacturers (NAM) and the National Right to Work Legal Defense and Education Foundation (NRTW), the U.S. District Court for the District of Columbia upheld the Board’s authority to issue the rule, but struck down the rule’s enforcement provisions. The parties in the D.C. case promptly appealed the portion of the decision affirming the Board’s rule-making authority and moved to enjoin enforcement of the rule while the appeal was pending. The appellate court initially denied this motion for an injunction but reversed course in an order (pdf) issued on April 17, 2012.

The court states in the order:

We note that the Board postponed operation of the rule during the pendency of the district court proceedings in order to give the district court an opportunity to consider the legal merits before the rule took effect. That postponement is in some tension with the Board’s current argument that the rule should take effect during the pendency of this court’s proceedings before this court has an opportunity to similarly consider the legal merits. We note also that the district court’s severability analysis left the posting requirement in place but invalidated the primary enforcement mechanisms for violations of the requirement. The Board has indicated that it may cross-appeal that aspect of the district court’s decision. The uncertainty about enforcement counsels further in favor of temporarily preserving the status quo while this court resolves all of the issues on the merits.

The order schedules oral argument in this case for September 2012. A final decision on the merits in this matter, therefore, is not expected until the fall of 2012 at the earliest.

For the time-being, employers do not have to post the NLRB notice, and the April 30 deadline is no longer in effect for the posting. The existing posting requirement for federal contractors, however, remains in effect. That said, the cases are still subject to final disposition by the courts of appeals, and even possibly the U.S. Supreme Court, which will have the final word on whether the NLRB can make employers post a notice or not. We will continue to monitor this issue for developments.

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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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On February 16, 2012, Republican members of both the House and Senate introduced resolutions (H.J. Res. 103; S.J. Res. 36) formally disapproving of the National Labor Relations Board’s recent final rule that dramatically changes representation election procedures. Rep. Phil Gingrey (R-GA) introduced the resolution in the House with 64 co-sponsors. Sen. Mike Enzi (R-WY), ranking member of the Senate Help, Education, Labor and Pensions (HELP) Committee, introduced a companion resolution with identical language in the Senate with 43 co-sponsors. Continue reading this entry at Littler's Washington DC Employment Law Update.

Littler Shareholder Stefan Marculewicz was among the panelists testifying on Tuesday before the House Committee on Education and the Workforce about the legal and practical implications of the President’s decision to make recess appointments to the National Labor Relations Board (NLRB or Board) last month. On January 4, 2012, President Obama sat three new members to the NLRB, as well as a new director to lead the Consumer Financial Protection Bureau (CFPB), while the Senate was still holding periodic pro forma sessions. This move has provoked a pointed response from various sectors, inviting a lawsuit from a group of business advocacy groups, a resolution and bill condemning the appointments, and a series of congressional hearings to discuss the legitimacy of the President’s actions. Continue reading this entry at Littler's Washington DC Employment Law Update.

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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The President’s move to seat three new members to the National Labor Relations Board via recess appointment has its first official court challenge. On January 13, 2012, the National Right to Work Foundation (NRTW) along with other business advocacy groups filed a motion (pdf) in the U.S. District Court for the District of Columbia to contest the constitutionality of the President’s actions. The crux of the argument is that since the Senate was not technically in recess at the time of the appointments, the President lacked the authority to seat new Board members without the Senate’s advice and consent. When Obama made these appointments, the Senate was holding regular pro forma sessions in which the chamber convenes but conducts no substantive business.

This challenge to the three new recess appointments was added to an existing consolidated lawsuit opposing the NLRB’s notice posting rule filed by, among other entities, the NRTW, Coalition for a Democratic Workplace (CDW), and the National Federation of Independent Business (NFIB). This new rule mandates that as of April 30, 2012, 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. According to the NRTW’s motion and memorandum in support, (pdf) because the recess appointments are not Constitutionally legitimate, the NLRB lacks the quorum needed to implement and enforce the notice posting rule.

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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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The same day the National Labor Relations Board (NLRB) released its final rule that radically alters union representation election procedures, Senator Mike Enzi (R-WY), Ranking Member on the Senate Health, Education, Labor and Pensions (HELP) Committee, announced his intention to challenge the rule under the Congressional Review Act (CRA). Pursuant to this law, the House or Senate can introduce a joint resolution of disapproval to prevent an agency from enforcing a rule. Continue reading this entry at Littler's Washington DC Employment Law Update.

The National Labor Relations Board has issued a new rule (pdf) outlining special procedures governing the filing of certain motions and appeals with the Board in the event it lacks a quorum and thus cannot exercise its full authority. It is anticipated that after Member Craig Becker’s term expires at the end of the year, the Board will be left with just two sitting members – Chairman Mark Gaston Pearce (D) and Brian Hayes (R) – unless the Senate confirms additional members and/or the President makes any recess appointments. House procedural maneuvers will likely prevent the latter from happening. 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 be fully operational. The consideration of cases and issuance of decisions falls under the category of Board activities that requires three sitting members. To that end, the new rule, effective Dec. 14, describes the procedural routes that certain motions and appeals should take until the Board achieves at least a 3-member quorum.

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As expected, the House of Representatives on Wednesday approved the Workforce Democracy and Fairness Act (H.R. 3094) by a vote of 235-188, largely along party lines. This bill would effectively undo the criteria used to determine an appropriate bargaining unit established by the National Labor Relations Board’s Specialty Healthcare decision, and prevent the National Labor Relations Board from proceeding with many of its proposed changes to representation election procedures. This measure was approved the same day the NLRB held a public meeting to consider and vote on a resolution approving a handful of proposed election rule changes. Continue reading this entry at Littler's Washington DC Employment Law Update.

The House of Representatives has set the stage for future debate and vote on the Workforce Democracy and Fairness Act (H.R. 3094), a bill that 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 serve as a preemptive strike against the National Labor Relations Board’s proposed changes to representation election procedures. On Friday, the House voted 239 - 167 in favor of a rule (pdf) that will, among other limitations, provide for one hour of general debate on the measure and consideration of four proffered amendments to the legislation. Continue reading this entry at Littler's Washington DC Employment Law Update.

On Thursday Sen. Johnny Isakson (R-GA) introduced the Representation Fairness Restoration Act (S. 1843), a bill that would effectively revoke the National Labor Relations Board’s recent decision in Specialty Healthcare, and establish criteria for determining an appropriate bargaining unit. In Specialty Healthcare, the Board determined a petitioned-for unit will be deemed appropriate so long as that unit consists of a clearly identifiable group of employees. If an employer contends that the unit should include additional employees, it is incumbent upon the employer to show that the employees in a larger unit share an "overwhelming" community of interest with those in the petitioned-for unit. Many have argued that this decision will result in much smaller “micro” bargaining units that are easier to organize and more difficult for employers to administratively manage. Continue reading this entry at Littler's Washington DC Employment Law Update.

The Fifth Circuit Court of Appeals recently ruled in an unpublished opinion that an investment manager and a Hawaiian resort owned and operated by a subsidiary of the investment manager were a “single employer” under the National Labor Relations Act and were jointly and severally liable for unfair labor practices stemming from their failure to allow union officials access to hotel workers and prohibiting the union from collecting dues at the resort. Oaktree Capital Mgmt. LP v. NLRB, 5th Cir., No. 10-60749, unpublished opinion 9/26/11.

The union included Oaktree Capital Management as a respondent in its charge. Oaktree was an investment partnership and an indirect owner (through another subsidiary) of a property management company (“TBR”) that leased the resort and contracted with another company, to operate the resort. TBR and the resort operator conceded that they jointly employed resort workers, and thus would be responsible for any unfair labor practices. Oaktree, however, contended vigorously that as an “investment manager,” its only role was to advise its investors, who ultimately owned but did not run the resort. The NLRB and Fifth Circuit disagreed.

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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 (pdf) adopting regulations that implement Executive Order (EO) 13496: Notification of Employee Rights Under Federal Labor Laws. (pdf) Among other requirements, this E.O. 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). Covered contractors are also required to include a similar provision in subcontracts that are necessary to the performance of the government contract and in an amount in excess of $10,000. This notification rule should not be confused with the National Labor Relations Board’s final rule – Notification of Employee Rights under the National Labor Relations Act – that requires private sector employers subject to the NLRA to post a notice informing employees of their rights under the NLRA. 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.

The same week the House passed legislation limiting the National Labor Relations Board’s enforcement authority, Rep. Trey Gowdy (R-SC) introduced a bill that would eliminate the Board entirely. The National Labor Relations Reorganization Act of 2011 (H.R. 2926) would disband the NLRB and transfer its enforcement authority to the Department of Justice (DOJ) and its oversight of representation elections to the Department of Labor’s Office of Labor-Management Standards (OLMS). Continue reading this entry at Littler's Washington DC Employment Law Update.

The National Labor Relations Board has made available for download a copy of the Employee Rights poster required under the Board’s new rule: Notification of Employee Rights under the National Labor Relations Act. This final rule, issued on August 25, 2011 and effective November 14, 2011, mandates that private sector employers subject to the 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. The agency has also posted to its website a list of Frequently Asked Questions regarding the notification requirement.

Meanwhile, the rule itself is facing both legislative and legal challenges. Two bills – the Employee Workplace Freedom Act (H.R. 2833) and the Employer Free Choice Act (H.R. 2854) – were introduced in the House of Representatives earlier this month. Both of these measures would rescind the posting rule as well as prohibit the NLRB from promulgating or enforcing “any rule that requires employers to post notices relating to” the NLRA.

In addition, last week the National Association of Manufacturers (NAM) filed a lawsuit in the U.S. District Court for the District of Columbia to nullify the rule, claiming the Board exceeded its authority in issuing it. In a press release, NAM President and CEO Jay Timmons said: “This rule is just another example of the Board’s aggressive overreach to insert itself into the day-to-day decisions of businesses – exerting powers it doesn’t have.”

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In a recent decision, the Board re-emphasized its commitment to proscribing employers’ efforts to discover the otherwise unknown identities of employees engaged in union activities. In Dilling Mechanical Contractors (357 NLRB No. 56), the Board affirmed an ALJ decision from over 8 years earlier and found that the employer violated Section 8(a)(1) of the NLRA. Specifically, the Board determined that the company’s discovery requests – which were made in the course of court-filed litigation – seeking the names of its employees who had joined the union, were unlawful.

The core facts involved the lead organizer of Local 166 of the Plumbers and Steamfitters Union. The union organizer removed several trash bags from the company’s dumpster in an effort to procure information for the union about how to contact the company’s employees to support its organizing efforts. As a result of this behavior, the employer filed a court action in Indiana state court alleging, among other things, criminal acts of theft, receiving stolen property, and acts of burglary. The trial court granted the company’s motion for summary judgment and ordered a separate damages hearing. As part of this separate damages hearing the employer sought the identity of “each and every Union member within Dilling” and “each and every documents [sic] which identifies any and all union members within Dilling.” The trial court granted the union’s request for a protective order precluding the disclosure of the employee names. As an aside, for any employer considering a theft-of-trash action against employees, it should be noted that, on appeal, the Indiana Court of Appeals reversed the trial court’s summary judgment decision, holding that the company had abandoned the trash at issue.

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While Hurricane Irene churned up the East Coast this weekend, quieter, albeit significant changes were taking place at the National Labor Relations Board. Long-time Board member and Chairman Wilma Liebman’s term expired on Saturday, August 27. Fellow Democratic member Mark Gaston Pearce has been designated as the new Board Chairman. The remaining members include Brian Hayes, a Republican, and Craig Becker, a Democrat, whose recess appointment expires at the end of this year and will not likely be confirmed for a full term. The vacancy left when Republican member Peter Schaumber left the Board after his second term expired in August 2010 has yet to be filled. In January 2011, President Obama nominated Terence F. Flynn – who currently works as Hayes’ Chief Counsel – to fill that vacancy. Senate action on Flynn’s nomination, however, is still pending. The probable result of these changes will be that the Board will be left with only two acting members come January 2012.

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In California Grocers Association v. City of Los Angeles, the California Supreme Court upheld a Los Angeles Ordinance that guarantees grocery workers jobs for 90 days following a sale of the grocery store. In doing so, the California Supreme Court rejected the argument that the ordinance was preempted by the NLRA.

The Grocery Worker Retention Ordinance imposes several restrictions on the purchaser of a grocery store larger than 15,000 square feet. First, the purchaser is required to continue the employment of all non-managerial employees who have been employed for at least six months, for a period of 90 days. During that 90-day period, employees may only be discharged for cause. At the end of the 90-day period, the purchaser must prepare a written evaluation of each employee’s performance. Second, while there is no requirement to continue to offer employment, the purchaser must “consider” doing so.

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A trio of advice memoranda issued by the National Labor Relations Board’s Office of the General Counsel has offered employers a glimpse of what showing must be made to render an employee’s social media use protected by the National Labor Relation Act. The Acting General Counsel’s recent trend targeting employers’ disciplinary actions based on employees’ inappropriate use of Facebook, Twitter, and other forms of social media, has left employers on unsteady ground.

In each of the three cases discussed in the advice memoranda released this week, the Division of Advice’s Associate General Counsel, Barry Kearney, recommends dismissal of the claims that the employers violated the NLRA by unlawfully terminating or reprimanding employees based on their inappropriate Facebook activity, as there existed insufficient evidence that the employees were engaged in concerted activity.

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By Fred Miner

The National Labor Relations Board's recent expansive view of employee rights is not news. What is news is the current Board majority's willingness to hold employers liable for conduct that, on its face, does not infringe any rights protected by federal labor law. Some recent cases have raised the question whether an employer's lawful conduct can nevertheless establish that an unfair labor practice has occurred.

In one such case, the U.S. Court of Appeals for the D.C. Circuit recently answered "no." In Jackson Hospital Corp. v. NLRB, (pdf) a hospital indefinitely suspended a nurse because of her refusal to participate in a meeting with her supervisors without the presence of a union representative. The Board found that the nurse had no legal right to a union representative at the meeting. To the contrary, because it was being held solely to present discipline that her supervisor already decided to impose, the right to request union representation under NLRB v. J. Weingarten, Inc., 420 U.S. 251 (1975) did not apply.  Continue reading this entry at Littler's Healthcare Employment Counsel. 

During a web chat run by the Office of Labor Management Standards (OLMS) to discuss the agency’s regulatory agenda, OLMS Director John Lund fielded several questions – but provided few concrete answers – regarding the OLMS’s proposal to narrow the scope of the “advice” exemption under the Labor-Management Reporting and Disclosure Act (LMRDA). This proposal would also expand what constitutes reportable “persuader activities” under the LMRDA, and subject employers and their advisors – including their attorneys – to new reporting requirements. Currently, employers are required to report information regarding persuader agreements with consultants on the Form LM-10, while consultants are required to report related information on the Form LM-20. Narrowing the “advice” exemption and expanding the definition of “persuader activities” would necessarily expand the reporting required on these forms.

Many of the participants expressed concern that determinations regarding whether attorney conduct constitutes “advice” or “persuader activity” necessarily involve an inquiry that infringes on the attorney-client privilege. In response, Lund clarified that “employers and consultants would not have to file reports concerning agreements whereby the consultants are engaged exclusively in providing advice or legal representation,” nor would they be required to disclose privileged information. Not satisfied with this answer, another questioner asked whether the OLMS has considered how it would be able to conduct an investigation into a union’s allegation that a company’s attorney has engaged in persuader activity and that the advice exemption does not apply while making sure not to overstep the bounds of attorney-client privilege. Lund did not explicitly answer this question, but instead made the broad claim that “investigators work closely with the Department’s lawyers to ensure that the privileges are protected.”

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The U.S. Supreme Court has agreed to resolve (pdf) two constitutional challenges stemming from a public sector union’s temporary imposition of increased dues and fees to fund political activity. In Knox v. Service Employees International Union Local 1000, the SEIU imposed a union fee increase after it issued its annual notice – known as a Hudson notice – informing non-members as to what percentage of their dues and fees is allocated to functions associated with union representation and how much is unrelated to the union’s representational function. After receiving the information set forth in the Hudson notice, non-members may opt out of paying amounts associated with the latter category. In Knox, the SEIU imposed the increased fee without issuing a second Hudson notice and charged non-members who objected to the increase in fee 56.35% of the total increase, the percentage set forth in the initial Hudson notice as the amount associated with union representation. In a class action lawsuit brought by nonunion state employees challenging this practice, the Ninth Circuit ultimately decided (pdf) that a second notice was not required. The class appealed, and the Supreme Court agreed to examine the following questions:

May a State, consistent with the First and Fourteenth Amendments, condition employment on the payment of a special union assessment intended solely for political and ideological expenditures without first providing a Hudson notice that includes information about that assessment and provides an opportunity to object to its exaction? And

May a State, consistent with the First and Fourteenth Amendments, condition continued public employment on the payment of union agency fees for purposes of financing political expenditures for ballot measures?

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By Jeffrey C. Kauffman

DOL estimates new interpretative standards will triple the number of LM-10 Employer Reports filed annually and predicts a twelve-fold increase in LM-20 Reports required from firms engaged in “persuader activities” as newly defined.

If the DOL proposals take effect, employers (and their advisors, including legal counsel) will have to treat activities that have not been reportable for the past 50 years as now subject to reporting requirements. The ambiguity of the new regulatory standards, coupled with potential criminal sanctions for willful non-reporting, potentially could result in substantial interference with an employer’s attorney-client relationship, disrupt an employer’s ability to obtain legal advice when confronted by union campaigns, and have a chilling effect on employer free speech during such campaigns.

On Monday, June 20, 2011, the DOL revealed details about its proposed changes for employer and consultant “persuader activity” reporting under the Labor Management Reporting and Disclosure Act (LMRDA). The DOL proposes to broaden the scope of reportable activities by substantially narrowing its interpretation of the “advice exemption” in Section 203(c) of the LMRDA.

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Two months after the U.S. Supreme Court upheld the enforceability of an arbitration agreement that included a class action waiver clause, the National Labor Relations Board has issued a Notice and Invitation to File Briefs (pdf) on the issue of whether such an agreement constitutes an unfair labor practice, related to a Board case, D. R. Horton, Inc. v. Michael Cuda. The Supreme Court in AT&T Mobility v. Concepcion (pdf) held that the Federal Arbitration Act (FAA) preempted a California state supreme court decision that conditioned the enforceability of a consumer arbitration agreement on the availability of class-wide arbitration. The arbitration agreement that included the class waiver in that case, therefore, was deemed valid.

The administrative law judge in D.R. Horton similarly found that this practice did not violate the NLRA. The Board’s Acting General Counsel took exceptions to the ALJ’s decision. Following briefing by the parties in the case, the NLRB now seeks input from the public and has invited amicus submissions on the following question:

Did the Respondent violate Section 8(a)(1) of the Act by maintaining and enforcing its Mutual Arbitration Agreement, under which employees are required, as a condition of employment, to agree to submit all employment disputes to individual arbitration, waiving all rights to a judicial forum, where the arbitration agreement further provides that arbitrators will have no authority to consolidate claims or to fashion a proceeding as a class or collective action?

Many consider this challenge to be an attempt by the Board to make an end run around the Court’s finding in Concepcion. Those interested in filing briefs on this issue may do so on or before July 20, 2011. Briefs must not exceed 25 pages and must be filed electronically through the NLRB’s website.

Most employers with union bargaining obligations are familiar with the duty to furnish information. Unions submit information requests in a wide variety of settings, from grievance processing and arbitration, to “effects” bargaining over business reorganizations and requests made in connection with contract negotiations. The most common features of these requests are that they are time consuming and frustrating for employers.

On May 17, 2011, NLRB Acting General Counsel Lafe Solomon issued a “Guideline Memorandum” (pdf) to the agency’s Regional Offices concerning the duty to provide information in connection with bargaining. The twelve-page memorandum provides both an overview of general principles and cases applicable to “information request” cases and a glimpse into probable NLRB investigation and enforcement strategies. Of particular interest to employers will be the section discussing the duty to furnish specific information in response to claims made at the bargaining table.

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Just last year the Board handed down a stinging decision to unions in Machinists Local Lodge 2777, 355 NLRB No. 174 (2010), wherein it found a rule requiring Beck objectors to renew their objections annually violated the duty of fair representation, because of the burden on objectors and insufficient rationale for the burden provided by the union.  Taking another look at the issue, the Board used the same analysis, but this time found the requirement to renew annually is lawful.  In International Union, United Automobile, Aerospace & Agricultural Implement Workers of America Local Union # 376 (Colt’s Manufacturing Company, Inc. et al.), 356 NLRB No. 164 (2011), the Board found an annual requirement to renew Beck objections was not burdensome because the potential objectors received at least four notices of the requirement over the course of a year, an additional notice should the objector fail to renew on time, and, in a notable difference from the 2010 Machinists case, were not subject to a fixed window period for objections.  Therefore, an objector under the policy in Colt’s Manufacturing would only be required to pay one month’s dues while he or she renewed the objection, which was in stark contrast to the system in Machinists in which an objector who failed to renew a objection during the window period was required to pay full dues for an additional eleven months.  Having found the burden of annual renewal was de minimis, the Board in Colt’s Manufacturing did not reach the issue of the union’s justification for the requirement.

The National Labor Relations Board is considering whether to change the current standard governing union information requests when an employer decides to relocate its business. In a memorandum (pdf) sent to all NLRB regional offices, Associate General Counsel Richard A. Siegel explains that in light of Chair Wilma Liebman’s recommendations made in her concurring opinion to the recent case Embarq Corporation and International Brotherhood of Electrical Workers Local Union No. 396, the General Counsel’s office is determining whether to modify the existing framework for assessing whether an employer must accede to a union’s demand for information prior to relocation.

In Embarq, the Board, applying the standard outlined in the 1991 case Dubuque Packing Co. for determining whether a relocation decision is a mandatory subject of bargaining, found that a company’s relocation was not a mandatory subject of bargaining because the employer had sufficiently demonstrated that the union could not have offered labor-cost concessions sufficient to change its decision to relocate. The Board further explained that because the decision to move was not a mandatory subject of bargaining, the employer was not required to provide the union with information related to the decision to relocate. In her concurring decision, Liebman noted that “current law does not compel the production of information at the time when it is sought – or, indeed, ever – if the Board, in hindsight, determines that concessions would have made no difference, even where . . . no bargaining ever occurred and the union had no opportunity to explore or influence the employer’s decision.”

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In keeping with NLRB Acting General Counsel Lafe Solomon’s recent announcement, the NLRB has formally filed a complaint (pdf) against the state of Arizona regarding its constitutional amendment that seeks to preserve the right to secret ballot elections.

In November 2010, voters in Arizona approved a provision to the state constitution that reads: “[t]he right to vote by secret ballot for employee representation is fundamental and shall be guaranteed where local, state or federal law permits or requires elections, designations or authorizations for employee representation.” Similar measures were approved in Utah, South Dakota, and South Carolina.

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The NLRB’s Office of the General Counsel has issued a new memorandum (pdf) outlining the categories of cases that must be submitted to the agency’s Division of Advice.

Acting General Counsel (GC) Lafe Solomon has indicated that the current list, which was last updated in 2007, needs to be revised on account of the new agency and court decisions, as well as policy issues that have emerged in recent years.

The revised list provides some insight into the nature of cases the GC considers to be of particular importance from a policy standpoint. It also reflects current areas of the law where the GC may be seeking to overturn existing precedent or decisions issued by the Board during the previous presidential administration. The GC Memorandum also includes many of the other types of cases to be submitted to the Division of Advice that were listed in the 2007 version of this document.

Of particular interest is the fact that the GC Memorandum lists a number of cases that are to be submitted to the Division of Advice because they “involve identified policy priorities.” Several of these cases may be of particular interest to those following the policy directions of the Board under the current administration, and they include the following:

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On Friday the House of Representatives approved by a 223-196 margin the Federal Aviation Administration (FAA) Reauthorization and Reform Act of 2011 (H.R. 658) without adopting a number of controversial union-related amendments to the measure. As expected, the chamber narrowly rejected by a vote of 206-220 a bipartisan amendment (pdf) offered by Reps. Steven LaTourette (R-OH) and Jerry Costello (D-IL) that would have stricken from the bill a provision that repeals the contentious new National Mediation Board (NMB) election rule.  Continue reading this entry at Littler's Washington DC Employment Law Update. 

The NLRB’s Office of General Counsel issued memorandums last week addressing backpay award mitigation in ULP cases involving unlawful terminations and procedures for calculating backpay that include daily compounded interest, search-for-work and interim work-related expenses, and reimbursement for excesses taxes owed, among other factors. According to an NLRB news release, these policy changes “are part of an ongoing initiative to ensure that unfair labor practices are more fairly and effectively remedied.”

In the Guideline Memorandum Regarding Backpay Mitigation, (pdf) the NLRB Acting General Counsel (GC) Lafe Solomon asks the Board to overturn two recent decisions regarding backpay mitigation law and instructs Regions to consider an individual’s eligibility for unemployment compensation as evidence that he or she has sufficiently searched for work for backpay mitigation purposes. The two cases at issue – Grosvenor Resort and St. George Warehouse – were decided during the Bush Administration and address the mitigation of backpay awards for individuals deemed unlawfully fired in violation of the NLRA. Generally, as established by the Supreme Court in Phelps Dodge Corp. v. NLRB, the purpose of backpay awards in NLRB cases is to remedy “only actual losses.” Backpay deductions should be made “not only for actual earnings,” but also for “willfully incurred” losses. As a result, a failure to mitigate earnings losses can reduce an individual’s backpay award. Applying this concept, the NLRB in Grosvenor Resort imposed a two-week deadline for those discriminated against to begin their job search. According to the GC, this rule is “inconsistent with mainstream mitigation doctrine and conflicts with the traditional ‘totality of the circumstances’ approach to mitigation.”

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The Board recently expanded its protections for union bannering by concluding that a union display of stationary banners was not a violation of the NLRA’s prohibition against secondary boycotts even where the “primary” and “secondary” employers shared a common job site. The union in Southwest Regional Council of Carpenters (New Star General Contractors) (pdf) placed a large banner at the secondary employer’s worksite to publicize the union’s dispute with the primary employer. The union’s goal was to pressure the secondary employer by publicly “shaming” it for doing business with the primary employer during an ongoing union dispute. In this case, the Board ruled that the union’s bannering at a common worksite (a “common situs”) was not an unfair labor practice and did not “threaten, coerce or restrain” the secondary employer’s workers.

The Board’s recent decision is significant because it permitted a union to publicize its dispute with the primary employer at a “common situs” shared job site where several other companies were also working. In reaching its decision, the Board majority (Chairman Liebman and Members Becker and Pearce) cited its recent 2010 decisions, finding that a union’s stationary banners near a secondary employer’s jobsite did not amount to illegal picketing of the secondary employer because it did not “induce or encourage” employees to stop working and did not otherwise signal to employees to engage in a work stoppage. Member Hayes dissented, restating his position from the previous cases that the stationary bannering displays were unlawful as coercive conduct. Member Hayes went further in New Star General Contractors, viewing the union’s banner both as unlawful picketing and as intending to communicate a message for the secondary employer’s workers to engage in a work stoppage at the common worksite.

The significance of this decision likely will be seen on a wider scale where unions engage in continued bannering efforts directed at neutral secondary employers where the primary employer’s workers are on the “common situs” shared job site. The Board’s reasoning permits unions to publicize disputes with primary employers without well-defined limitations requiring unions to avoid disruption or unlawful appeals to the workers of secondary employers. The Board has now established a pattern of decisions condoning union tactics of placing banners at any entrance to a common worksite, regardless of where the primary employer’s workers enter and exit the jobsite. It is unlikely that the Board’s current view of the union bannering strategy will be limited unless reversed by a federal appellate court.

Despite the Board’s current composition and recent slant, it remains advisable for employers to consider continued use of a reserved gate system when facing union bannering efforts. The established practice of reserved gates for primary employers facing unions publicizing labor disputes permits separation of secondary employers’ workers at the “common situs” job site and may help minimize the opportunities for unlawful work stoppages or slowdowns.

This entry was written by Arturo Ross and Micah Heilbrun.

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The NLRB’s February 11 decision in O.G.S. Technologies, Inc., 356 NLRB No. 92 (2011), seemingly sets forth a broad requirement that employers bargain over subcontracting decisions, even where new technologies and decisions about major capital investments are involved.  If followed in future cases, the decision will result in a substantial narrowing of the scope of the “core entrepreneurial decisions” that are excluded from an employer’s duty to bargain under the U.S. Supreme Court’s decision in First National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981).

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On January 31, 2011, the National Labor Relations Board adopted a finding that Fresh & Easy Neighborhood Market violated the NLRA by maintaining an overbroad no-solicitation rule, interrogating employees, and creating an impression of surveillance. The Board also dismissed two claims that employees were unlawfully discharged for engaging in protected activity. Fresh & Easy Market operates convenience stores in Nevada, Arizona and California. The case involved one of the company’s convenience stores in Las Vegas, Nevada, which had been targeted for organizing by the United Food and Commercial Workers (UFCW) during 2009.

As part of the UFCW’s campaign, union organizers made unannounced visits to the homes of Fresh & Easy Market’s Las Vegas employees, which prompted several employee complaints. Managers informed the employees that they could send written complaints to the local UFCW office and to the company’s legal department, and several employees chose to do so. In following up on reports of unwelcome and confrontational home visits by the UFCW’s organizers, the Las Vegas store manager asked two employees whether they had sent complaint letters or had “spoken to the Union.” The NLRB General Counsel challenged this single conversation as unlawful interrogation that gave the employees the impression that their actions were under surveillance.

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The House Subcommittee on Health, Employment, Labor and Pensions held a hearing on Friday to discuss emerging trends at the National Labor Relations Board. Panelists examined several recent Board decisions and General Counsel initiatives that have sparked controversy in recent months and offered differing opinions as to whether the agency has acted within the scope of its authority. In his opening statement, Subcommittee Chairman David P. Roe (R-TN) set the tone of the hearing, claiming that “the board abandoned its traditional sense of fairness and neutrality and instead embraced a far-more activist approach.”

One witness at the hearing criticized (pdf) the role that organized labor has been playing in recent years, claiming that the bargaining model of the National Labor Relations Act, where each side’s leverage stems from economic damage it may inflict on the other, “places unions and companies in a relay race, and all too often in the United States, the union’s incentive is to use the baton to injure or maim the employer, instead of running the race against international competitors.”

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Less than a month after NLRB acting General Counsel Lafe Solomon threatened to sue four states that recently adopted constitutional amendments protecting secret ballot elections, the agency appears to have softened its stance. In a letter (pdf) sent to the attorney generals of South Carolina, Arizona, South Dakota and Utah, Solomon praises them for their “prompt reply” and “commendable desire to resolve this matter without unnecessary expenditure of taxpayer money.” Solomon had claimed that the state amendments were in violation of the National Labor Relations Act and were thus preempted. Solomon had warned that if the states did not revoke or refuse to implement the amendments within two weeks, the agency would bring lawsuits to achieve that end.

In their defense, the state attorney generals informed Solomon that they disagreed with his argument that the amendments were unconstitutional, and were therefore willing to “vigorously defend any legal attack upon them.” The attorney generals claimed that the amendments at issue “support the current federal law that guarantees an election with secret ballots if the voluntary recognition option is not chosen.”

Taking this argument into consideration, Solomon responded:

As you have unanimously expressed the opinion that the State Amendments can all be construed in a manner consistent with federal law, I believe your letter may provide a basis upon which this matter can be resolved without the necessity of costly litigation. My staff will shortly be in contact with the staff members you have designated to explore this issue further.

While this back-and-forth was occurring, the Senate reintroduced a bill last week that would similarly preserve secret ballot union elections. That measure – the Secret Ballot Protection Act (SBPA) (S. 217)) – has been referred to committee.

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.

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According to the NLRB’s Summary of Operations for FY 2010, regional NLRB offices conducted more representation elections, processed more unfair labor process (ULP) charges, received more certification and decertification petitions, and recovered more than $9 million more in backpay and fees, dues and fines in FY 2010 than it did during the prior year. Among other things, the summary provides a general overview of the operations and enforcement undertaken by the NLRB during 2010. Highlights of the summary include the following:

• According to the NLRB, the agency exceeded all three of its target goals for 2010. Specifically, the NLRB closed 86.3% of all representation cases within 100 days, 73.3% of all ULP cases within 120 days, and 84.6% of all meritorious ULP cases within one year.
• In FY 2010, the agency recovered $86,557,684 in backpay and reimbursement of fees, dues and fines, up from $77,611,322 collected the previous year.
• There was a 10.1% increase in certification and decertification petitions filed (2,969) in 2010, up from 2,696 in 2009.
• Total case intake was 28,585, up from 25,413 in 2009. Of these cases, the most (23,381) were ULP cases; 3,204 were representation cases, amounting to a 10% increase.
• With respect to representation cases, the NLRB regions conducted 1,790 initial representation elections in FY 2010. According to the summary, 92.1% of these elections were held pursuant to agreement of the parties.
• As a result of the Board’s decision in Dana Corp., 351 NLRB No. 28 (2007), in which it held that an employer’s voluntary recognition of a labor organization does not bar a decertification or rival union petition that is filed within 45 days of the voluntary recognition notice, the agency received 254 requests for Dana notices in 2010.

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Union membership in the United States continued to decline in 2010, according to a recently-released report issued by the Bureau of Labor Statistics (BLS). The data contained in the report was obtained from the Current Population Survey (CPS), which conducts monthly assessments of basic information on the labor force, employment, and unemployment. The annual report on union membership finds that the number of wage and salary workers who belong to a union declined by 612,000 to 14.7 million in 2010 (7.1 million workers in the private sector; 7.6 million in the public sector). An additional 1.6 million workers (783,000 of whom are government employees) held jobs that were covered by a union contract, but reported no union affiliation. Overall, the union membership rate fell to 11.9 percent, down from 12.3 percent the prior year. In contrast, the union membership rate in 1983 – the first year comparable data was available – was 20.1 percent, representing 17.7 million workers. Other notable findings include the following:

• A substantially higher percentage of public sector workers, 36.2 percent, were unionized, compared to 6.9 percent for the private sector.
• Private sector industries with the highest union participation rates include transportation and utilities (21.8 percent), telecommunications (15.8 percent), and construction (13.1 percent).
• Private sector industries with the lowest union participation rates include agriculture and related industries (1.6 percent) and financial activities (2.0 percent).
• Broken down by occupational groups, education, training, and library occupations (37.1 percent) and protective service occupations (34.1 percent) had the highest unionization rates; sales and related occupations (3.2 percent) and farming, fishing, and forestry occupations (3.4 percent) had the lowest unionization rates.
• New York had the highest union membership rate (24.2 percent), while North Carolina had the lowest rate (3.2 percent). About half of the 14.7 million union members in the U.S. lived in just six states (California, 2.4 million; New York, 2.0 million; Illinois, 0.8 million; Pennsylvania, 0.8 million; Ohio, 0.7 million; and New Jersey, 0.6 million). Overall, union membership rates declined in 2010 in 33 states and the District of Columbia, and rose in 17 states.
• With respect to union member demographics, membership rates tended to be greater among men (12.6 percent) than women (11.1 percent). African American workers had the highest participation rate (13.4 percent), with Asian men having the lowest rate (9.4 percent). Union membership was also highest among workers ages 55-64 (15.7 percent).

A pdf copy of the BLS report can be found here.

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In a new General Counsel (GC) memo – Revised Casehandling Instructions Regarding the Use of Default Language in Informal Settlement Agreements and Compliance Settlement Agreements – to all NLRB regional directors, officers-in-charge and resident officers, acting GC Lafe Solomon has instructed that all settlement agreements—including both informal and compliance settlements—should include the following default language:

The Charged Party/Respondent agrees that in case of non-compliance with any of the terms of this Settlement Agreement by the Charged Party/Respondent, and after 14 days notice from the Regional Director of the National Labor Relations Board of such non-compliance without remedy by the Charged Party/Respondent, the Regional Director will [issue/reissue] the [complaint/compliance specification] previously issued on [date] in the instant case(s). Thereafter, the General Counsel may file a motion for summary judgment with the Board on the allegations of the [complaint/compliance specification]. The Charged Party/Respondent understands and agrees that the allegations of the aforementioned [complaint/compliance specification] will be deemed admitted and its Answer to such [complaint/compliance specification] will be considered withdrawn. The only issue that may be raised before the Board is whether the Charged Party /Respondent defaulted on the terms of this Settlement Agreement. The Board may then, without necessity of trial or any other proceeding, find all allegations of the [complaint/compliance specification] to be true and make findings of fact and conclusions of law consistent with those allegations adverse to the Charged Party/Respondent, on all issues raised by the pleadings. The Board may then issue an order providing a full remedy for the violations found as is customary to remedy such violations. The parties further agree that the U.S. Court of Appeals Judgment may be entered enforcing the Board order ex parte.

The memo further instructs that if a complaint has not already been issued, regional directors should incorporate language stating a complaint will be filed and that by signing the agreement, the party waives any right to file an answer. If the compliance specification has not been issued in a compliance case, the memo states the default language should provide that the Regional Director will issue a compliance specification that lists all liquidated backpay or other remedial provisions and provides that signing the agreement constitutes a wavier of any right to file an answer.

According to Solomon, using default language in settlement agreements “is an effective and appropriate means to ensure that a charged party/respondent will comply with the affirmative provisions of the settlement agreement.” In practice, however, such language may put employers at a disadvantage in the event the union believes the employer is in violation of the settlement.

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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 NLRB has announced (pdf) that it is inviting interested parties to file briefs in a case revisiting an earlier decision that had addressed appropriate bargaining unit composition in long-term care facilities. The issue being appealed before the Board in Specialty Healthcare, 15-RC-8773, is whether a bargaining unit consisting of certified nursing assistants (CNAs) at a nursing home was appropriate, or whether, as the company contends, the unit should incorporate all nonprofessional service and maintenance staff. The Board outlined the factors to consider in determining the appropriate unit in non-acute care facilities in its 1991 decision Park Manor Care Center, 305 NLRB 872. In that case, the Board stated that it would “take a broader approach utilizing not only ‘community of interests’ factors but also background information gathered during rulemaking and prior precedent” in assessing the unit. This “pragmatic” or “empirical” community-of-interest test involves the consideration of information elicited in rulemaking proceedings, as well as Board precedent pertaining to the type of facility involved or the type of unit sought, in addition to traditional community of interest factors. The current Board, however, claims that the long-term care industry has “changed dramatically” since Park Manor was decided, and therefore warrants a fresh look. In reality – and as discussed in a lengthy dissent by Member Brian Hayes – this broad invitation for briefs is not only unnecessary to resolve a simple matter, but constitutes a preliminary step in revising a well-established test for determining bargaining unit composition in all industries.

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On December 22, 2010, the National Labor Relations Board published a proposed rule (pdf) that would require all private sector employers covered by the National Labor Relations Act to post a notice informing employees of their NLRA rights. This requirement would be imposed on all employers covered by the NLRA even if there is no union in place. The notice would be similar in form and content to the notice (pdf) the Department of Labor recently approved for use by federal contractors. As stated in a fact sheet, (pdf) the purpose of the proposed rule is “to increase knowledge of the NLRA among employees, to better enable the exercise of rights under the statute, and to promote statutory compliance by employers and unions.” Unlike the rule for federal contractors, this proposed rule would apply to the vast majority of private sector employers and would create significant compliance obligations, along with serious potential non-compliance liability, on most employers.

This proposed rule is consistent with the Obama Administration’s initiative to inform employees of rights, including in this case rights under the NLRA. Moreover, it is further evidence of the Administration’s overt efforts to promote private-sector unionization.

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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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Sen. Harry Reid (D-NV) this week reintroduced the Public Safety Employer-Employee Cooperation Act of 2010 (PSEECA) (S. 3991), legislation that would provide firefighters, police officers, and emergency medical personnel with collective bargaining rights in states and localities that do not currently provide them. Additionally, the measure would establish minimum standards for collective bargaining rights for public safety officers and give the Federal Labor Relations Authority (FLRA) the power to regulate and enforce these rights. Continue reading this entry at Littler's Washington DC Employment Law Update.

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A recent decision from the National Labor Relations Board (NLRB) points out yet again the importance of carefully reviewing the scope of no-solicitation polices and conducting thorough investigations of employee misconduct. 

In Satellite Services, Inc., 356 NLRB No. 17 (Slip op. October 29, 2010), the NLRB adopted the decision of the Administrative Law Judge (ALJ), who rejected the company’s claim that it had discharged an employee for three violations of company policy, and held that the real reason for discharge was the employee’s union activities.

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Speculation has increased in many quarters that components of the Employee Free Choice Act may be implemented administratively given organized labor’s failure to achieve legislative progress. The most recent warning signal came during a Boston labor law conference held on October 21, when National Labor Relations Board (NLRB) member Mark Gaston Pearce, a Democrat appointee, opined that the time period between the filing of an election petition and the election itself should be “as brief as possible.” Under EFCA, organized labor sought the elimination of any election period through its card check proposal in order to effectively silence employers attempting to educate employees with regard to unionization and the impact of any decision to unionize.

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In a significant defeat for plaintiffs’ class action firms bringing wage and hour class cases against unionized healthcare institutions, a Massachusetts federal judge dismissed a wage and hour class action against Caritas Christi Health Care System on the grounds that  the claims were preempted by the Labor Management Relations Act (LMRA).  This decision is particularly important as plaintiffs’ class action firms are increasingly filing state law wage and hour class actions, in addition to federal FLSA collective actions, in an effort to take advantage of potentially larger opt-out classes and additional damages.  Continue reading this entry on Littler's Healthcare Employment Counsel Blog.

On Thursday, the Senate, by a 43 to 56 vote, failed to approve the resolution (S. J. Res. 30) introduced by Sen. Johnny Isakson (R-GA) that sought to reverse the new National Mediation Board (NMB) election rule (pdf) that upended more than 75 years of established procedure. Such a resolution of disapproval, submitted under the Congressional Review Act, allows Congress to overturn rules issued by administrative agencies. Had the Senate approved the resolution, it would still have required the President’s signature or veto.

The NMB’s decision to change its election rule has been highly contentious. Under the NMB’s prior long-standing election approach, the outcome was determined by a majority of employees eligible to vote in representation elections. As a result, employees choosing not to participate are effectively viewed as “no union” votes. The NMB’s new rule, which took effect on July 1 despite an ongoing legal challenge, changes this policy by basing the voting outcome on the majority of those who actually vote, which is closer to the practice in non NMB-governed industries. Sen. Isakson pointed out during the debate on the resolution, however, that unlike similar situations governed by the National Labor Relations Act (NLRA), the NMB does not provide for union decertification.

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President Obama has announced that he plans to nominate Thomas M. Beck (R) to be a member of the National Mediation Board (NMB). The NMB is an independent federal agency tasked with facilitating labor-management relations in the airline and railroad industries. Specifically, the NMB manages the dispute resolution process involving collective bargaining disputes in this transportation sector. If confirmed, Beck is expected to replace fellow Republican Elizabeth Dougherty, whose term expired on June 30. Also serving on the three-member NMB is Chairman Harry Hoglander (D) and Member Linda Puchala (D).

According to the White House’s press release, Beck has served as a member of the Federal Labor Relations Authority (FLRA) since October 16, 2008, and is a past chairman. Prior to the FLRA, Beck worked in a private law practice, and has taught law courses at the George Mason University School of Law. Beck earned his undergraduate and law degrees from the University of Virginia.

The NMB recently came under fire for issuing a final rule (pdf) that changed its long-established representation election procedure. The new rule bases union election voting outcomes on the majority of employees in the rail and air transportation industries who actually vote, instead of counting those who do not vote as “no” votes, as has been the practice for the past 75 years. Despite challenges to this rule, a federal judge in June ordered the election change to proceed as planned, although the Air Transport Association of America (ATA) has filed a notice of appeal.

In Hacienda Resort Hotel and Casino, the NLRB found itself in a 2-2 “deadlock” and opted to dismiss, rather than clarify, whether the Hacienda Resort Hotel and Casino lawfully ended the union dues checkoff after the parties’ contract had expired.  Dues checkoff is the automatic deduction of union dues from employees’ paychecks.  This case has a 15-year history  that  included two trips to the Ninth Circuit Court of Appeals where the NLRB was twice directed to address the key question of whether union dues checkoff is covered by the Supreme Court’s “unilateral-change” doctrine in NLRB v. Katz, 369 U.S. 736 (1962) and thereby a mandatory subject of collective bargaining.  The central issue in Hacienda is whether employers in “right-to-work” states – in which employees cannot be required to join or pay dues or fees to a union, with some exceptions – may unilaterally stop union dues checkoff after a contract expires or whether the decision is a mandatory subject of bargaining.  If the NLRB had determined that dues checkoff was a mandatory subject, then employers in right-to-work states could not unilaterally end dues checkoff.  But the NLRB’s decision on August 27, 2010 avoided the right-to-work question, simply noting existing precedent, and held that dues checkoff is a permissive subject of bargaining.

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As the NLRB regained its five-member status, it set to task at the back log of cases awaiting it. On August 27, 2010 it decided Independence Residences, Inc., 335 NLRB No. 153 (2010), a 2003 representation case that even Chairman Liebman noted has languished before the Board for “an unconscionably long time.” In 2003, the Union of Needletrades Industrial and Textile Employees (UNITE) began organizing at Independence Residences, Inc., a private nonprofit entity, and filed a representation petition with the Board. A majority of employees voted for the union in the subsequent election, and the employer filed objections seeking to set aside the election results, arguing that a New York state law barring the use of state funds for certain union campaign activities prevented a fair election. The heart of the issues in Independence Residences was whether New York State Labor Law Section 211-a interfered with the employer’s ability to communicate with employees during the election campaign, warranting the setting aside of the election results.

New York Labor Law Section 211-a provides:

no monies appropriated by the state for any purpose shall be used or made available to employers to: (a) train managers, supervisors or other administrative personnel regarding methods to encourage or discourage union organization, or to encourage or discourage an employee from participating in a union organizing drive; (b) hire or pay attorneys, consultants or other contractors to encourage or discourage union organization, or to encourage or discourage an employee from participating in a union organizing drive; or (c) hire employees or pay the salary and other compensation of employees whose principal job duties are to encourage or discourage union organization, or to encourage or discourage an employee from participating in a union organizing drive.

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After serving eight years on the National Labor Relations Board (NLRB or “Board”), Member Peter C. Schaumber (R) has left the agency now that his second term has expired. Notably, for 27 months Schaumber served as one of only two members of the Board, issuing rulings in approximately 600 unfair labor practice cases during that period. The U.S. Supreme Court in New Process Steal v. NLRB recently invalidated those decisions, holding that the Board must operate with at least three acting members. Of this decision, Schaumber stated: “While the Supreme Court ultimately determined that a three-member quorum is necessary to issue decisions, Chairman Liebman and I set a tone for collegiality and dedication to case processing that I hope will carry forward to future Boards.”

Schaumber was nominated to the Board in 2002 by former President George W. Bush, and served as the agency’s Chair from 2008 until January 20, 2009, when President Obama appointed Wilma Liebman to that position. According to a press release, (pdf) Schaumber intends to take some time off before “returning to work in traditional labor law, government affairs and the legislative arena.”

Remaining on the Board are Chair Wilma Liebman (D) and Members Craig Becker (D), Mark Pearce (D), and Brian Hayes (R). There is no time table for nominating a replacement for Schaumber – which will be a Republican – to maintain the Board’s traditional minority party representation.

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Ending a four-year schism, the Laborers’ International Union of North America (LIUNA) has decided to rejoin the AFL-CIO as of October 1, 2010. LIUNA, with more than half a million members in the construction industry, had withdrawn from the AFL-CIO in 2006 to affiliate with Change to Win, a competing labor movement comprised of the LIUNA, the International Brotherhood of Teamsters (IBT), the Service Employees International Union (SEIU), the United Farm Workers of America (UFW), and the United Food and Commercial Workers International Union (UFCW). The SEIU instigated this mass defection from the AFL-CIO to form Change to Win in 2005, purportedly due to internal disagreements about the direction of the organization. AFL-CIO president Richard Trumka has made it a mission to unify the labor movement.  Continue reading this entry at Littler's Washington DC Employment Law Update blog.

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The National Labor Relations Board (“NLRB” or “Board”) has announced (pdf) that it has ratified the General Counsel’s (GC) litigation authority and the Board’s administrative, personnel, and procurement actions taken during the 27-month period when the Board operated with only two acting members. The Board’s ratification does not extend to the unfair labor practice decisions and representation case rulings issued by members Wilma Liebman (D) and Peter Schaumber (R) during that time. It is estimated that from January 2008 through the beginning of April 2010, the two-member panel issued more than 600 Board opinions. In June, the Supreme Court held in New Process Steel that at least three members are needed to exercise the Board’s authority, thus calling into question the legitimacy of the cases decided and other actions taken during that period.

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On Friday, a federal court judge issued an order (pdf) that will effectively permit the National Mediation Board’s (NMB) final rule (pdf) changing its 75-year-old representation election policy to proceed as planned. On May 17, the Air Transport Association of America (ATA) filed a lawsuit in federal court seeking to prevent the NMB from implementing this change to the election process that will make it easier for unions to organize airline and railroad employees. Under the long-established approach, a majority of employees eligible to vote in representation elections determined the outcome of the election. As a result, employees who chose not to participate are effectively viewed as “no union” votes. The NMB’s new rule changes this policy by basing the voting outcome on the majority of those who actually vote, as is closer to the practice in non NMB-governed industries.

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The National Labor Relations Board’s (NLRB) general counsel (GC) has issued guidance (pdf) to the agency’s regional officers and directors on how to process unfair labor practice (ULP) charges involving employee class action waivers in mandatory arbitration agreements. The GC explained that questions have arisen “regarding the validity of mandatory arbitration agreements that prohibit arbitrators from hearing class action employment claims while at the same time requiring employees to waive their right to file any claims in a court of law, including class action claims.” In essence, the GC concluded that such class action waivers do not per se violate the National Labor Relations Act’s (NLRA) provisions allowing employees to engage in protected, concerted activity, but that certain principles must be followed.

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The Office of Federal Contract Compliance Programs (OFCCP) has issued a directive on its verification procedures under Executive Order (E.O.) 13496, Notification of Employee Rights under Federal Labor Laws. (pdf) This E.O. mandates that all government contracting departments and agencies include a provision in government contracts covered by the order stipulating that contractors and subcontractors 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). The Department of Labor’s Office of Labor Management Standards (OLMS) published a final rule (pdf) implementing this E.O. last month. The OFCCP is responsible for investigating complaints, performing compliance evaluations, conciliating compliance issues, and referring violations to the OLMS for enforcement. The directive published online this week outlines the processes and procedures it will use to perform these tasks.

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On June 9, 2010, the National Labor Relations Board (NLRB or “Board”) made a move wholly consistent with its anticipated commitment to implementing “significant change.” Specifically, the Board revealed that it is exploring the future use of electronic and internet voting in representation elections. Pursuant to longstanding secret ballot election standards, no such electronic or internet means for casting votes (remote or otherwise) in a Board-conducted election is recognized as permissible. As the controversial and newest Board Members Craig Becker and Mark Pearce start getting situated among their two sitting colleagues, the NLRB’s efforts to alter well-settled Board election standards seem to be in full swing.

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