Employer Labor Relations Blog

NLRB Affirms Its Previous Decision Requiring Employer to Continue Providing Annual Wage Increases Beyond Contract Expiration

Posted in Collective Bargaining, NLRB, Unfair Labor Practices

By: Ashley K. Laken, Esq.

We previously blogged about the NLRB’s relatively shocking September 2012 decision in Finley Hospital (359 NLRB No. 9), in which the Board held that an employer was required to continue providing wage increases after the expiration of an applicable collective bargaining agreement. On June 3, 2015, after the employer filed a petition for review and the case had been remanded to the Board due to the Supreme Court’s decision in Noel Canning, the Board affirmed its previous decision (362 NLRB No. 102).

Procedural Background

After the Board issued its decision in September 2012, the employer filed a petition for review with the United States Court of Appeals for the District of Columbia Circuit. While the petition was pending, the Supreme Court handed down its decision in NLRB v. Noel Canning, 134 S. Ct. 2550 (2014), which held that President Obama’s recess appointments to the NLRB were unconstitutional. Because at the time of the Board’s decision in Finley Hospital the Board included two persons whose appointments were found unconstitutional, the D.C. Circuit vacated the Board’s decision and order and remanded the case to the Board for further proceedings consistent with the Supreme Court’s decision.

The Board’s Reasoning

The Board in Finley Hospital II agreed with the Board’s rationale in Finley Hospital I and held that the employer violated the Act by unilaterally discontinuing the annual 3-percent pay raises provided for in the parties’ CBA after the CBA had expired and while the parties were negotiating for a successor CBA. As part of the remedy, the Board ordered the employer to make the employees whole for any losses sustained as a result of the unlawful change, plus interest compounded on a daily basis.

In finding a violation, the Board reasoned that the CBA’s language, which stated “[f]or the duration of this Agreement, the Hospital will adjust the pay of Nurses on his/her anniversary date” in the amount of three percent, did not establish a “clear and unmistakable waiver of the Union’s statutory right to bargain over the posttermination cessation of pay raises.” The Board noted that there is a distinction between an employer’s contractual obligation to maintain a particular term and condition of employment post-contract expiration and the employer’s statutory obligation to do so, and that even when a contractual right does not survive the expiration of an agreement, the statutory right typically does. The Board also noted that language in a collective bargaining agreement can intentionally preclude a provision from having any contractual force after the expiration of the agreement, but given the employer’s statutory duty to maintain the status quo post-contract expiration, such language will not permit a unilateral change of a term established by the same agreement unless it amounts to a clear and unmistakable waiver of the union’s separate statutory right to maintenance of the status quo.

The Board found that the inclusion of the language “for the duration of this Agreement” was not enough, reasoning that the contract provision at issue did not address any post-expiration conduct of the employer. Thus, to have constituted a clear and unmistakable waiver, the provision should have included language along the following lines: “upon expiration of the collective bargaining agreement, the employer’s obligation to provide pay increases shall terminate.”

Member Johnson’s Dissent

In his dissent, Member Johnson observed that by effectively deleting the time constraint that was an inherent part of the wage increase obligation contained in the CBA, the Board made a time-bound obligation (“during the term of this Agreement”) into a perpetual one. Member Johnson lamented that it was incongruous for the Board to believe that the employer’s 1-year commitment in the parties’ initial CBA to give each nurse a single wage increase had morphed into a statutory obligation to maintain a “status quo” of change.

Concluding Thoughts

In light of this pair of decisions, in order to avoid having to continue wage increases beyond the expiration of a CBA, employers must be extremely careful to include language in the CBA that will be sufficient to constitute a clear and unmistakable waiver of the statutory obligation to maintain the status quo with respect to wage increases. In other words, as Member Johnson noted in his dissent, “employers must now bargain with unions for what they can only hope will be ironclad language expressly providing that no increases will be paid beyond a contract term.”

In a World Where Talking to Yourself May Now Qualify as “Concerted” Activity . . .

Posted in Concerted Activity, NLRB, Protected Concerted Activity, Unfair Labor Practices

By:  Alison Loomis, Esq.

Where up is down and left means right, talking to yourself may now qualify as “concerted” activity under the current NLRB. In Berkeley Preparatory School, Inc. and Kathi Grau, a teacher at a private, non-profit, religious school yelled to herself “THIS PLACE SUCKS!” after being asked by another employee to provide proper documentation for reimbursement of expenses and third-party services.

In response to a Regional Director’s decision to issue a complaint in the case, the school filed a Motion for Summary Judgment arguing, among other things, that section 7 of the NLRA protects “concerted” activity; in other words, activity untaken by or on behalf of two or more employees, or by a single employee to initiate or prepare for group activity. Applying this reasoning, the school claimed that the teacher’s statement was made only on behalf of herself and to herself. As the statement was the result of the teacher’s own personal frustration at the school’s reimbursement policy, it was therefore not meant to initiate or prepare for group action. To support this, the school pointed to the facts that the teacher was alone, made the comment to herself, and no other faculty members had issues with the school’s reimbursement policy. Furthermore, the school noted that as a private, religious entity, it has the right to maintain certain standards on workplace civility with regard to vulgar outbursts.

In a shockingly brief order, the Board majority denied the school’s Motion for Summary Judgment, holding that the motion was insufficient to even warrant a substantive response from the NLRB regional office.

Although a decision on the merits of this case, including whether this teacher’s yelled statement to herself constitutes “concerted” activity won’t come for some time, employers should take note of the bounds that this Board is willing to stretch the definition of “concerted.”

For those religious-affiliated employers that consider themselves outside of the Board’s jurisdictional reach, consider that the school’s motion also made a comprehensive argument that the Board lacked jurisdiction over it because it is a religious educational institution, and thus, is exempt. Despite the level of detail and number of attachments in support of its argument, as with regard to the “concerted” argument, the Board majority held that the motion was insufficient to warrant a substantive response.

Bad Faith Bargainer Beware: D.C. Circuit Enforces Award of Negotiation Costs

Posted in Collective Bargaining, Unfair Labor Practices

By:  Ronald J. Kramer, Esq.

Last year the NLRB demonstrated an increased willingness to award negotiation costs as a remedy for bad faith bargaining in cases that are far less egregious than those where the remedy historically was given. Hospital of Barstow, Inc., 361 NLRB No. 34 (2014); Fallbrook Hospital, 360 NLRB No. 73 (2014). On May 8, 2015, the D.C. Circuit Court of Appeals upheld the award of negotiating expenses in Fallbrook Hospital, finding under a clear abuse of discretion standard that the Board’s decision was “amply supported by substantial evidence in the record and has a rational basis in the law.” Fallbrook Hospital Corp. v. NLRB, Case No. 14-1056 (D.C. Cir. May 8, 2015).

The Board has held that “[i]n cases of unusually aggravated misconduct . . . where it may fairly be said that a respondent’s substantial unfair labor practices have infected the core of a bargaining process to such an extent” that traditional remedies will not eliminate their effects, an award of negotiation expenses is warranted to “make the charging party whole for the resources that were wasted because of the unlawful conduct, and to restore the economic strength that is necessary to ensure a return to the status quo ante at the bargaining table.” Frontier Hotel & Casino, 318 NLRB 857, 859 (1995) (emphasis added), enf’d in rel. part sub nom., Unbelievable, Inc. v. NLRB, 118 F.3d 795 (D.C. Cir. 1997). For example, in Pacific Beach Hotel, 356 NLRB No. 182 (2011), negotiation expenses were awarded in light of: bad faith bargaining (including but not limited to insisting on recognition, management rights and grievance proposals that gave the union no role in representing employees), discriminatory discharges, unilateral changes to working conditions, overbroad rules, illegal polling, an improper withdrawal of recognition, and failures to provide information.

Fallbrook Hospital was not Pacific Beach Hotel. In Fallbrook Hospital, the employer engaged in bad faith bargaining by: (i) refusing for the first 8 bargaining sessions to submit proposals or counterproposals until the union submitted an entire contract proposal; (ii) leaving 2 of 11 bargaining sessions early (one without explanation, the other because it considered a promoted union bargaining team member to be a member of management and thus ineligible to participate); (iii) declaring impasse, refusing to bargain, and leaving another session after 15 minutes given the union continued to have employees use union-provided and implemented assignment-despite-objection (ADO) forms to document unsafe situations; (iv) refusing to respond to union requests for bargaining dates after declaring impasse; (v) refusing to bargain over employees who were terminated; and (vi) refusing to respond to 1 of 12 information requests regarding one of the discharges (a request for 3 years of nurse disciplinary history, thus seeking what was arguably non-bargaining unit data).

Although the Administrative Law Judge hearing the case considered it a close call, she declined to award negotiation costs because the conduct was not as egregious as that warranting costs in prior cases. The Board, over Member Johnson’s disagreement, reversed, finding in 5 short paragraphs that the conduct had so infected the core of the bargaining process such that its effects could not be eliminated solely by the application of an affirmative bargaining order.

In enforcing the decision, the D.C. Circuit stated that it has no business second-guessing the Board’s judgment regarding remedies, and that its choice of remedies was entitled to a high degree of deference. The Court noted that there must be so gross an abuse of power as to be arbitrary before it would reverse a Board-ordered remedy. Here, the Court found no such abuse.

The Court nevertheless took 19 pages to explain how it was that the award was supported by the record and had a rational basis in law. The Court focused specifically on the characterizations made by the ALJ and the Board as to the employer’s actions, such that it was clear the employer had no intent to bargain, that it acted in an “obstinate and pugnacious manner,” that it put up “a series of roadblocks” to delay the bargaining, and that its attempts to challenge the Board’s certification (presumably by raising as an affirmative defense the propriety of the certification) made it clear it did not welcome the union. The Court made a point of noting that the “entire record” of the employer’s unfair labor practices was “quite extensive,” and that given this “litany of misconduct” showed the employer’s “deliberate attempts” to prevent any actual bargaining, the award of negotiation costs was supported by substantial evidence in the record.

Critically, the Court rejected claims that the decision was contrary to the law in that the employer’s conduct was not as egregious as that in prior decisions. The Court found that the Board did not set a particular bar for the award of negotiation expenses in prior decisions, but that its approach in each case is to weigh the facts to determine whether the remedy is appropriate to make the charging party whole for the resources wasted because of the unlawful conduct and to restore the economic strength necessary to return to the status quo ante at the bargaining table. In short, the Court noted that there are no per se rules regarding when reimbursement of negotiation expenses will be ordered.

The Court’s enforcement and, indeed, justification of the Board’s award gives the NLRB pretty much carte blanche to award costs in cases far less egregious than in the past. Employers need to take greater care to avoid missteps at the bargaining table or else face a potentially expensive remedial surprise.

How low will the Board lower the bar? Is there a point at which the courts will cry foul? Will unions be subject to the same loosened standards for their bad faith actions? Stay tuned.

Pepsi Beverage Co. Bargaining Unit Clarified To Exclude Home-Based Delivery and Install Employees

Posted in Bargaining Unit, Current Events, NLRB, Representation Cases

By:  Kenneth R. Dolin, Esq.

The Board recently reversed a Regional Director and found that four disputed home-based delivery and install employees did not belong in the contractual unit at the employer’s Grand Rapids, Michigan facility.  It reasoned that the four disputed employees did not work at the Grand Rapids facility, were not covered by the recognition language contained in the CBA, and did not share an overwhelming community of interest with the Grand Rapids Service Technicians who were in the bargaining unit, even though they were assigned to pick up loads at the Grand Rapids facility where the unit employees worked.  Thus, the Board clarified the unit to exclude these home-based delivery and install employees.

Unit clarification is the appropriate method for resolving ambiguity concerning the unit placement of employees who come within newly established classifications.  A valid accretion exists only where the additional employees have little or no separate group identity and they cannot be considered to be a separate appropriate unit and when the additional employees share an overwhelming community of interest with the pre-existing unit to which they were accreted.  See Safeway Stores, Inc., 256 NLRB 918 (1981).  However, once it is established that a new classification is performing the same basic functions as a unit classification historically had performed, the new classification is properly viewed as “already belonging in the unit” rather than “being added to the unit” by accretion.  Developmental Disabilities Institute, Inc., 334 NLRB 1166, 1168 (2001).  See also Premcor, 333 NLRB 1365 (2001).

Since 2007, the employer had centralized all delivery and install functions in the Market Equipment Operation Center (MEOC) operation located first in Lansing and then in Flint, removing it from the Grand Rapids facility as well as 16 other locations.  The Grand Rapids field service technicians had performed delivery and install functions, but had not done so since 1997.  In November 2009, when the MEOC moved to Flint, it established the Grand Rapids drop and hook operation, and assigned the four disputed MEOC delivery and install employees to operate out of the Grand Rapids parking lot.

The disputed employees remained part of the MEOC operations; they kept the same supervisor, seniority opportunities, and wages and benefits, and continued to receive their assignments through the MEOC (not the call center which routed the field service technician assignments); performed their functions in a larger geographic service area; and attended meetings as needed in the Flint operation.  The work of delivery and install employees had been completely separate from that of the Grand Rapids field service technicians since 1997, unlike the pre-1997 period when the field service technicians also performed delivery and install functions.  Indeed, the Grand Rapids drop and hook delivery and install employees had remained part of the MEOC operations and the only change that had occurred was that the four disputed employees began picking up their loads in the Grand Rapids parking lot instead of at Flint.

The Regional Director had found traditional accretion analysis was unwarranted in these circumstances because the case did not involve “the placement of employees at the new facility who perform work that was never performed by employees in the existing bargaining unit.”  Instead, he found (1) the delivery and install employees performed the same basic delivery and install functions that historically had been performed by unit employees at the Grand Rapids facility, in that employees at the Grand Rapids facility previously delivered and installed equipment as part of the unit work, and (2) the unit description in the CBA covering the facility had never been altered and continued to encompass the work assigned to the delivery and install employees, (3) this work had not changed such that it should be severed from the unit, and (4) the delivery and install employees shared a sufficient community of interest with the field service technicians who worked at the Grand Rapids facility to warrant inclusion.  He concluded that the delivery and install work was not eliminated from the Grand Rapids operation, but was merely relocated from Grand Rapids to Lansing, and then returned to the Grand Rapids location and that the Board is reticent to overturn long-existing historical units.

Contrary to the Regional Director, however, the Board (Pearce, Hirozawa and Johnson) did not find the delivery and install employees belonged in the contractual unit because: (1) for the past 12 years, the delivery and install employees had been part of an operation based in a different location and not the Grand Rapids facility where the bargaining unit employees worked; (2) the delivery and install employees at issue had been historically excluded from the CBA for this 12-year period; and (3) the evidence failed to establish that the delivery and install employees had little or no separate identity from, or that they shared an overwhelming community of interest with, the Grand Rapids field service technicians in the bargaining unit.

The Board found significant the evidence that the delivery and install functions were removed from the Grand Rapids field service technician duties for 12 years.  If the bargaining unit field service technicians had continued to perform delivery and install functions as part of the unit work for the past 12 years, it is possible, if not likely, that the Board would have applied Developmental Disabilities Institute to find the new classification as “already belonging in the unit,” as opposed to “being added to the unit” by accretion, irrespective of the “traditional” accretion standard.

This case is a good example of how employers confronted with an accretion issue must first determine whether the new classification “already belongs in the bargaining unit” because employees in that job classification are performing the same basic function that a unit classification has historically performed (Developmental Disabilities Institute, supra); and whether the unit description in the CBA encompasses the work at issue.  If the answer to both of these threshold questions is no, then the employer should apply “traditional” accretion analysis and determine whether the additional employees should be added to the unit by accretion because they have little or no separate group identity and can be considered a separate appropriate unit or whether they share an overwhelming community of interest with the pre-existing unit to which they can be accreted.  Significantly, however, this third question, i.e., the traditional accretion test, is irrelevant if the case involves the placement of employees at a new facility who perform work that was performed by employees in the existing bargaining unit.

Wisconsin Poised to Become 25th “Right to Work” State

Posted in Collective Bargaining, Current Events, Elections, Organizing, State Law

By:  Michael J. Rybicki, Esq.

Today Wisconsin became the 25th state to pass right to work legislation applicable to private sector employers. Most private employers are covered by the National Labor Relations Act (“NLRA”), which originally permitted collective bargaining agreements to provide for the termination of any employee who failed to join or at least pay representational fees to the union. While these “union security clauses” remain lawful in now half of the states, the 1947 Taft-Hartley amendments to the NLRA gave states the ability to enact laws giving workers the “right to work” without becoming a union member or paying union dues, which is what the Wisconsin bill does. The bill would also make it a crime punishable by up to nine months in jail to require private sector workers who are not union members to pay dues after the bill becomes effective.

The Wisconsin bill will be effective after the Governor has signed it – most likely March 11, 2015. It does not make union security clauses presently in effect unlawful or otherwise render them null and void because the Act only applies to the “renewal, modification, or extension” of a collective bargaining agreement occurring on or after its effective date. Although some unions may attempt to negotiate contract extensions prior to the law’s effective date they have relatively little time to do so (unlike the case with the Michigan law).

The Wisconsin bill was narrowly approved in the Senate by a 17-15 vote on Wednesday, February 25, 2015. It was referred to the Republican-controlled Assembly where it passed on party lines on Friday, March 6, 2015. Wisconsin Governor Scott Walker has said he will sign the bill on Monday (March 9, 2015).

Once largely confined to southern or western states, right to work laws have now come to the “rust belt,” historically a union stronghold. In 2012, Indiana and Michigan passed right to work laws, and why unions hate them is evident from the Michigan experience. In 2013, the first full year under the state’s right to work law, Michigan saw one of the sharpest dips in year-to-year union membership, declining from 16.3% to 14.5%.

Advocates of right to work legislation argue that it is unfair to force workers who do not want to join a union to pay dues, which are frequently used for political purposes they personally oppose. Advocates further argue that right to work laws promote economic growth and figures from the Department of Labor and the Bureau of Economic Analysis appear to support this contention.

Unions and their supporters counter that such legislation is nothing more than part of a “race to the bottom” that undermines the middle class. They also argue that because so-called “free riders” – workers who do not pay union dues – share the benefits of collectively bargained contracts, they should have to pay their “fair share” to the union.

Right to work legislation unquestionably has a heightened political dimension in today’s polarized environment. The Democratic Party, of course, relies heavily on Big Labor to raise money and turn out the vote at election time. The Wisconsin right to work bill is part of an continuing epic battle between that state’s Republican and Democratic constituencies, which up to now the Republicans have been winning. Its passage also occurs against the backdrop of Republican Governor Walker’s presidential bid. Democratic Representative Cory Mason, of Racine, denounced the bill saying, “It is the workers in this state that are suffering through the politics of our governor’s ambitions.”

It is likely that a legal challenge to the Wisconsin legislation will be mounted by the bill’s opponents. Legal challenges to right to work laws in Indiana and Michigan, however, failed.

The majority of right to work provisions (either by law or constitutional provision) were passed in the 1940’s or early 1950’s. Prior to the recent passage of right to work laws by what is now a trio of rust belt states, the only other right to work provision passed in this century was in 2001, when voters approved a constitutional amendment in Oklahoma. Right to work proponents will continue to press their case in other states and there may come a day when union security clauses are permitted in only a minority of states, a situation once considered preposterous.

Senate Takes Next Step in Fighting Off Controversial “Ambush Election” Rules

Posted in Current Events, Elections, NLRB

By: Howard M. Wexler, Esq.

Hoping that the third time is the charm, the National Labor Relations Board (“Board” or “NLRB”) has once again adopted its expedited election rules (aka “Ambush Election Rules”). We previously discussed the current version of the Ambush Election Rules here. The Ambush Election Rules have been proposed twice before by the Board and approved in part once, only to be ruled invalid by the United States District Court for the District of Columbia on procedural grounds).

The new Ambush Election Rules, which are scheduled to go into effect on April 14, 2015, would significantly change existing representation case procedures, including: shorter times for pre-election hearings and elections to be held ; additional Excelsior List requirements (e.g. providing employees’ email addresses and available telephone numbers (home and cell)); and no right to NLRB review of post-election disputes.

Several business groups have already filed lawsuits – one in Texas and the other in Washington D.C. – to stop the implementation of the Ambush Election Rules.   In addition, 52 members of Congress sponsored a joint resolution on February 9, 2015  that would stop the implementation of the rule through the Congressional Review Act (“CRA”). Under the CRA, Congress can vote on a joint resolution of disapproval to halt a federal agency from implementing a rule or regulation without the express authorization of Congress

On March 4, 2015 the Senate passed the joint resolution by a vote of 53-45, which is the first step in the process of stopping the implementation of the Ambush Election Rules under the CRA.  (Copy here).  In support of the Senate’s passage of this joint resolution, Chairman of the Health Education Labor & Pensions Committee Lamar Alexander stating that, “The NLRB’s rule to shorten union elections to as little as 11 days allows a union to force an election before an employer has a chance to figure out what is going on… Senate passage of this joint resolution is an important first step in stopping the NLRB’s harmful rule and preserving every employer’s right to free speech and every employee’s right to privacy.”

It remains to be seen whether the pending lawsuits or legislation seeking to halt the Ambush Election Rules will succeed. However, given the implementation date is a little over one month away, we expect there to be a flurry of activity over the next few weeks. We will be sure to keep our readers informed as the battle over the Ambush Election Rules continues. Stay tuned!

Brown University’s Graduate Assistant Decision Under Challenge . . . Again

Posted in Current Events

By: Ronald J. Kramer, Esq.

While everyone knew it was only going to be a matter of time, two new challenges to have been raised to the NLRB’s graduate assistant decision in Brown University, 342 NLRB 483 (2004). On February 20, 2015, Graduate Workers of Columbia-GWC and Student Employees at The New School, both UAW affiliates, filed requests for review with the NLRB seeking the reversal of orders dismissing their petitions to represent graduate assistants and research assistants given Brown University. Columbia University, Case No. 02-RC-143012 (Feb. 6, 2015); The New School, Case No. 02-RC-143009 (Feb. 6, 2015).

In Brown University, the full NLRB overruled an earlier decision, New York University, 332 NLRB 1205 (2000), to determine that graduate assistants are students, not employees, and thus are not protected by the NLRA. The decision restored more than twenty-five years of prior precedent holding that graduate student assistants are primarily students and thus not statutory employees. The unions argue that under the common law definition of “employee” — any person who works for another in return for financial or other compensation — graduate assistants must be considered to be employees under the NLRA.

The current Board has been looking for cases in which to revisit Brown University. For example, in 2012 the Board granted review of UAW graduate student petitions involving New York University and the Polytechnic Institute of NYU, and solicited briefing from interested parties. In November 2013, before the Board could rule, however, the UAW and NYU reached an agreement to allow a vote, which the union won, and the petitions were withdrawn.

Technically, Columbia University and The New School are the second and third cases still pending before the Board in which Brown University is at issue. In Northwestern Univ., Case No. 13-RC-121359, the student athlete case, the Board invited briefing on whether Brown University was applicable to student athletes and whether it was still good law. Briefing has been completed, and a decision is pending.

Given it is possible that the Board could decide Northwestern without addressing the validity of Brown University as to graduate students, Columbia University and The New School provide the Board with the opportunity to revisit whether graduate assistant are employees covered by the NLRA. Whether the Board does so, and whether it invites yet another round of briefing from interested parties, remains to be seen. Stay tuned.

NLRB Administrative Law Judge Finds UFCW Local Illegally Coerced Employees By Requiring Them To Visit Union Office

Posted in Unfair Labor Practices

By:  Ashley K. Laken, Esq.

On February 19, an NLRB Administrative Law Judge ruled that a UFCW local union illegally restrained and coerced grocery store employees by requiring them to appear at the union office in person to file objections to paying full membership dues. See United Food & Commercial Workers Union Local 135, Case No. 21-CB-112391 (2/19/15). The ALJ reasoned that, through the requirement, the Union had implicitly threatened employees with discharge pursuant to a union-security clause in the applicable collective bargaining agreement for reasons other than failure to pay dues, thus coercing employees in the exercise of their Section 7 rights.

Background Facts

The Union and the employer were parties to a collective bargaining agreement running from March 2011 through March 2014 that contained a union-security clause. In July 2013, the Union sent a new hire at the grocery store a letter stating that the CBA between the Union and the employer requires that all employees shall, as a condition of employment, become members of the Union, and that “[a]ll new hires are required to come into one of our offices to affiliate in person with Local 135” (emphasis in original).

The new hire contacted the Union by phone and asked what his reduced dues amount would be if he objected to union membership, and he was told he would need to come to the Union office in person to receive information regarding reduced dues. After much back and forth, the Union finally sent the new hire a letter with information about reduced dues, and eventually registered him as a dues objector under Communications Workers of America v. Beck, 487 U.S. 735 (1988), which holds that objectors can be required, as a condition of employment, to support only those union activities that are related to collective bargaining, contract administration, and grievance adjustment (representational activities). The new hire then filed an unfair labor practice charge against the Union, and the NLRB’s General Counsel issued a complaint.

The ALJ’s Decision

In addition to protecting an employee’s right to support a union, Section 7 of the NLRA protects an employee’s right to refrain from supporting a union. In this case, the ALJ found that by requiring employees to come to the Union office in person to affiliate (i.e., to become full members or Beck objectors), the Union had implicitly threatened employees with discharge pursuant to the union-security clause for reasons other than failure to pay dues (namely, for failure to appear at the Union office in person), and that this amounted to unlawful coercion of employees in the exercise of their Section 7 rights.

The ALJ noted that it was irrelevant that the new hire ultimately was not required to go to the Union office to process his affiliation. The ALJ also found that it was of no consequence that the Union never actually threatened that the new hire could lose his job if he did not come to the Union office. Rather, the ALJ found that “[l]ike an overly broad rule set forth by an employer,” the Union’s rule “would cause a reasonable person to infer” that if he did not affiliate in person with the Union, the Union could cause his discharge. The Union was ordered to cease and desist from requiring new hires to affiliate in person, to revise its communications to new hires, and to post a corresponding notice at its offices and electronically.

Concluding Thoughts

The ALJ’s decision highlights that unions are held to the same standard as employers when determining whether employees’ Section 7 rights have been interfered with. As the ALJ noted, “[t]he test for illegality is not whether employees were actually threatened or coerced, but whether the rule in issue may reasonably tend to coerce employees in the exercise of rights protected under the Act.” As we have previously blogged, this test often comes into play for employers with respect to employee handbooks and other work rules.

Review of the NLRB’s Specialty Healthcare Test for “Appropriate” Bargaining Units — Part II

Posted in Bargaining Unit, NLRB, Representation Cases

By: Kenneth R. Dolin

Nestle Dreyer’s Ice Cream Co. v. NLRB is a case pending in the U.S. Court of Appeals for the Fourth Circuit that very well may determine the viability of the Board’s Specialty Healthcare standard for ascertaining the appropriateness of bargaining units. The Sixth Circuit previously upheld the Specialty Healthcare standard in Kindred Nursing Centers East LLC v. NLRB, 727 F.3d 552 (2013), but without referencing a prior Fourth Circuit case, NLRB v. Lundy Packaging, 68 F.3d 1577 (1995), that at least arguably proscribed the Board from using the “overwhelming community-of-interest” standard in determining the appropriateness of a unit.

Section 9(b) of the National Labor Relations Act grants to the Board the power to determine “the unit appropriate for the purposes of collective bargaining.” While the Board therefore possesses broad discretion in determining the appropriate unit, Section 9(c)(5) of the NLRA limits that discretion by providing that “whether a unit is appropriate… the extent to which employees have organized shall not be controlling.” In Lundy Packaging, the Fourth Circuit rejected the Board’s attempt to implement an “overwhelming community-of-interest” test when determining whether a petitioned-for unit is appropriate. The court in Lundy Packaging reasoned that the Board’s attempt to favor the union’s petitioned-for unit violated the NLRA by giving controlling interest to the extent of union representation and represented a wholesale reversal of decades of Board precedent in the determination of appropriate units without reasoned explanation.

The issue in Nestle is whether the petitioned-for unit seeking to include only maintenance employees, and excluding production employees, is an appropriate unit. The Regional Director, in a decision adopted by the Board, found that the bargaining unit consisting of just the maintenance employees was an appropriate unit, while the employer contended that the petitioned-for unit of just maintenance employees was inappropriate and that an appropriate unit must include production as well as maintenance employees.

In Specialty Healthcare, 357 NLRB No. 83 (2011), enfd. sub. nom. Kindred Nursing Centers East LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013), the Board returned in large part to the standard announced by the Board (but rejected by the Fourth Circuit) in Lundy Packaging, and set forth the following test for determining whether a petitioned-for unit of employees is an appropriate unit when a party contends that a larger unit is the only appropriate unit:

*          *          *

[W]hen employees or a labor organization petition for an election in a unit of employees who are readily identifiable as a group (based on job classifications, departments, functions, work locations, skills or similar factors), and the Board finds that the employees in the group share a community of interest after considering traditional criteria, the Board will find the petitioned-for unit to be an appropriate unit, despite a contention that employees in the unit could be placed in a larger unit which would also be appropriate or even more appropriate, unless the party so contending demonstrates that employees in the larger unit share an overwhelming community of interest with those in the petitioned-for unit.

The Board in Nestle found that the maintenance employees were readily identifiable as a separate group because they were in their own department, and were in different job classifications, had different skills, and performed different functions from production employees.

The Board then found that the maintenance employees shared a sufficient community of interest among themselves for purposes of collective bargaining because they shared: (1) similar wages, (2) similar hours, (3) common supervision among themselves, reporting directly to their own maintenance supervisors, and (4) common functions and skills.

Finally, the Board found that the employer had not established the requisite “heightened showing” that maintenance employees shared an “overwhelming community” of interest with production employees because there was not: (1) a significant amount of temporary interchange between production and maintenance employees; and (2) common supervision between maintenance and production employees. Moreover, the Board found that the petition did not seek to represent only a fraction and arbitrary portion of the maintenance employees and the bargaining history of a production and maintenance employee bargaining unit consisting of only one contract and an invalidated certification of election was insufficient to establish that the maintenance employees shared an overwhelming community of interest with production employees.

Thus, the Board concluded that while factors might have shown that a unit containing both production and maintenance employees was “an” appropriate unit, these factors were insufficient to meet the “heightened showing” threshold of an “overwhelming community of interest” under Specialty Healthcare to render the petitioned-for unit inappropriate.

After the union won the election in the voting unit of maintenance employees, the employer refused to bargain in order to challenge the union’s certification in court. The Board ruled that the employer committed an unfair labor practice and on November 7, 2014 the employer petitioned the Fourth Circuit Court of Appeals for review of the Board’s order.

The employer has argued that the “overwhelming community-of-interest” test effectively makes the extent of union organization controlling, contrary to the NLRA and Lundy Packaging, that the “overwhelming” test is unsupported by prior Board precedent and this test is a departure from Board precedent without any reasoned analysis. Finally, the employer has argued that the employees excluded from the bargaining unit were functionally identical to employees that the Fourth Circuit in Lundy Packaging found should necessarily have been included in the voting unit.

It remains to be seen whether the Fourth Circuit will hold in Nestle Dreyer’s Ice Cream that the overwhelming community of interest test of Specialty Healthcare is improper.  We will closely monitor this case and related developments.

Seventh Circuit Denies Rehearing Regarding Indiana Right To Work Law

Posted in NLRB, Preemption, State Law

By: Marc R. Jacobs, Esq.

On January 13, 2015, the U.S. Court of Appeals for the Seventh Circuit rejected the International Union of Operating Engineers Local 150’s bid for the full circuit court to rehear the September 2, 2014 panel decision upholding the Indiana law.  Five of the ten active judges on the Seventh Circuit dissented from the decision not to rehear the case.  Under the court’s rules, because a majority of the active judges did not vote for rehearing, the panel’s decision stands. 

We discussed the panel’s decision and the issues that it raised in a September 4, 2014 post [here], in which the panel (despite a vigorous dissent from Judge Diane Wood) held that the Indiana law was not preempted by the National Labor Relations Act and did not violate the United States Constitution.  As we also reported in a November 7 post [here], the Indiana Supreme Court has upheld the Indiana Right to Work Law, ruling that the law did not violate the Indiana Constitution.  

In light of the January 13 ruling, the union’s sole remaining avenue of judicial redress is to the United States Supreme Court.  Although the union has not formally announced its plans, a petition to the Supreme Court is likely.