Employer Labor Relations Blog

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.

NLRB Finds the Posting of an Employer Memo Referencing “Dignity and Respect” and Its Lawful Workplace Violence Policy to be an Unfair Labor Practice

Posted in Elections, NLRB, Unfair Labor Practices

By:  Kenneth R. Dolin

In continuing to apply strict scrutiny to workplace communications, the Board in a 2-1 panel decision recently held that an employer acted unlawfully by posting a memorandum shortly after a union election, urging employees to treat each other with “dignity and respect” and reiterating its workplace violence policy, even though the policy itself was lawful and the memorandum expressly acknowledged employees’ Section 7 rights. Care One at Madison Avenue, 361 NLRB No. 159 (Dec. 16, 2014).

The panel majority (Chairman Pearce and Member Schiffer) found the employer did not meet its burden of demonstrating a legitimate basis for issuing the memorandum because: (1) there was no evidence that the referenced threats actually occurred or that the employer attempted to investigate any alleged threats; (2) the memorandum referenced the union election three days earlier and the “differences that arose in the workplace during the union’s campaign”; and (3) the memorandum “suggested that the employer believed that employees did not treat each other with dignity and respect when they engaged in protected union activity.” In these circumstances, particularly since the memorandum was “posted on the heels of the union election and in the wake of several contemporaneous unfair labor practice charges,” the majority found that the employer “promulgated and posted the memorandum in response to the employees’ union activity” and employees would reasonably construe the memorandum to prohibit Section 7 activity. The acknowledgement in the memorandum of the employees’ right to support a union did not prevent a finding of illegality, according to the majority, because the memorandum “failed to make clear that employees also had the right to engage in protected activity in furtherance of those views.”

Member Johnson dissented from the majority’s findings on this issue, stating that the majority gave the memorandum a “manifestly unreasonable reading in light of its text and the language of the indisputably lawful workplace violence prevention policy,” and failed to recognize the legitimate need of employers to guard against workplace violence. Contrary to the majority, Johnson wrote there was “no promulgation in response to union activity”; instead the employer’s memorandum merely “reiterated, cited, attached and incorporated by reference the lawful preexisting workplace violence policy without modification.” Moreover, Johnson observed that the memo was promulgated in response to claimed reports of threats and not in response to union activity and that the references in the memorandum to “respect and dignity” did not broaden or otherwise amend the lawful workplace violence policy. He concluded that employees would not reasonably consider the memorandum in conjunction with the reiterated policy as restricting their Section 7 rights, particularly since the “memorandum acknowledged the employees’ Section 7 rights.”

With this decision, the Board signals that it will closely scrutinize any employer postings concerning prohibitions of “threats” or “harassment,” especially when coming on the heels of a union election campaign, and in the context of other unfair labor practices. Employers electing to post such communications should ensure there is sufficient evidence of harassment to justify the heavy practical burden this Board will place on it to provide evidence that it was motivated by legitimate workplace concerns, and not any union or other protected activity.  In this regard, employers should avoid references to recent union or other protected activity, as well as any inference that employees failed to treat other employees with “dignity and respect” merely by engaging in union, or other protected, activity. Finally, to maximize the protection of providing an acknowledgement of the employees’ right to support a union, such an acknowledgement should also make clear that employees have a right to engage in concerted activity in furtherance of those views.

NLRB Sets Its Sights on McDonald’s and Other Franchisors

Posted in Concerted Activity, Current Events, NLRB

By: Ronald J. Kramer, Esq.

On December 19, 2014, the NLRB General Counsel’s Office issued thirteen consolidated complaints against the purported unfair labor practices of numerous McDonald’s franchisees nationwide, with franchisor McDonald’s USA LLC being named as a co-defendant on a joint employer theory.  According to the NLRB’s press release, click here, the defendants allegedly violated the rights of employees by, among other things, making statements and taking actions against them for engaging in activities aimed at improving their wages and working conditions, including participating in nationwide fast food worker protests about their terms and conditions of employment during the past two years.

This action unfortunately comes as no surprise:  General Counsel Richard F. Griffin, Jr. announced back in July that he had authorized the issuance of complaints against McDonald’s USA LLC as a joint employer.  Moreover, in the highly anticipated Browning-Ferris joint employer litigation, the General Counsel argued for the adoption of a broad interpretation of employment status.  There the General Counsel argued for a test that would include looking at the way in which the parties have structured their commercial relationship, and whether the putative joint employer wields sufficient influence over the working conditions of the other entity’s employees such that meaningful bargaining could not occur in its absence.  As the General Counsel asserted, his interpretation “would make no distinction between direct, indirect, and potential control over working conditions and would find joint employer status where ‘industrial realities’ make an entity essential for meaningful bargaining.”

The General Counsel’s position — and given the timing of the complaint right before the issuance of Browning-Ferris, likely a majority of the Obama Board’s position — would reverse over thirty years of precedent applying a common law agency test to determine employment status.  Under that test, joint employer status turns on the “direct and immediate” control over the particular employees at issue:  The extent to which the purported employer determines matters governing essential terms and conditions of employment, including the right to hire and fire, set work hours, determine start and end times of shifts, directions, compensation, day to day supervision, record keeping, and to approve the contractor’s employees assigned and devise rules under which those employees were to operate.  There is no possible way these complaints would have issued under the existing joint employer test.

Franchisor-franchisee relationships are ubiquitous throughout all sorts of businesses, from fast food and other restaurants, to hotels, convenience stores, gas stations, car dealers, movie theatres, hardware stores, professional sports teams, and even private schools.  As our colleague, former NLRB Member Marshall Babson, stated to Bloomberg’s Daily Labor Report: “Upending traditional franchise arrangements and finding employment relationships where none exist is a threat to commerce and contrary to the purposes of the NLRA.”  Should the Board find a joint employment relationship exists between franchisors and franchisees, this issue will be litigated through the courts for years to come.

NLRB RECEIVES AN “INCOMPLETE” IN SCHOOL CASE

Posted in Bargaining Unit, Current Events, Elections, NLRB, Organizing

By:  Jeffrey A. Berman, Esq.

On December 19, 2014, the Board released Pacific Lutheran University, 361 NLRB No. 157 (2014) (Pacific Lutheran Board Decision), a decision that will have significant impact on two key issues:  (i) when the Board can assert jurisdiction over religious schools; and (ii) the analysis to be applied in determining when faculty who participate in the governance of a private school are managerial employees and therefore may not unionize.  A majority of the Board adopted a new test for determining when to assert jurisdiction over religious colleges and universities, and also “refined” the analysis used to determine the managerial status of faculty. While a brief overview of the decision appears below, for a more in-depth analysis, click here to read the detailed management alert issued to our education sector clients.

 Pacific Lutheran University, affiliated with the Evangelical Lutheran Church of America, took the position in response to an adjunct faculty representation petition that the Board could not assert jurisdiction over it as the result of the Supreme Court’s decision in NLRB v. Catholic Bishop of Chicago, as subsequently applied by the D.C. Circuit in University of Great Falls v. NLRB and Carroll College v. NLRB.  In all three cases, efforts by the Board to assert jurisdiction over the religious schools were held improper.  The University also argued that, under the Supreme Court’s decision in NLRB v. Yeshiva University, several of its adjunct faculty were managerial employees and, as such, could not unionize.

 The Regional Director decided against the University and, after the University appealed, the Board invited amicus briefs on numerous issues.  Dozens of amicus briefs were filed, primarily by schools, associations of schools, and unions.

 New Faculty Function Test

 In its decision, the Board announced a new standard for determining jurisdiction over religious colleges and universities, specifically rejecting the test established by the D.C. Circuit in Great Falls and Carroll College.  Under the Great Falls test, the courts and the Board are to consider three factors:  (i) does the school hold itself out as providing a religious educational environment; (ii) is the school a nonprofit, and (iii) is it affiliated with, or owned, operated or controlled by a recognized religious organization or an entity, membership of which is determined, at least in part, with reference to religion.

 Under the new standard, the Board will only decline to assert jurisdiction over faculty members at a college or university that, in addition to claiming it “holds itself out as providing a religious educational environment,” can show that “it holds out the petitioned-for faculty members as performing a religious function.” 

 The first part of the new test—whether the college or university holds itself out as providing a religious education environment—is the same as the first prong of the Great Falls test.  The Board held that it would examine such things as handbooks, mission statement, corporate documents, course catalogs, documents published on the school’s website, press releases and other public statements. 

 In order to satisfy the second part of its new standard, the college or university must show “that it holds out those faculty as performing a specific role in creating or maintaining the university’s religious educational environment.”  The Board stated that, although it would not examine the actual duties performed by faculty members, they need to be held out as performing a “specific religious function” and that generalized statements that faculty members are expected to, for example, support the goals or mission of the school are not alone sufficient.  This is because such statements do not indicate that faculty members are expected to incorporate religion into their teaching or research, that they will have any religious requirements imposed on them, or that the religious nature of the school will have any impact on their employment.  This is especially true when the school also asserts a commitment to diversity and academic freedom. 

 The analysis of whether faculty members were held out as performing a “specific religious function” will include a review of job descriptions, employment contracts, faculty handbooks, statements to accrediting bodies, and statements to prospective and current faculty and students.  The Board also will look to determine if faculty members are subject to employment-related decisions based on religious considerations, such as dismissal for teaching a doctrine at odds with the school’s religious faith or if faculty are required to accept ecclesiastical sources of dispute resolution.  Finally, the Board will determine if the school holds itself out as requiring its faculty to conform to its religious doctrine or to particular tenets or beliefs in a manner that is specifically linked to their duties.  The fact that the school does not require faculty members to attend religious services or be a member of a particular faith will not be required before the Board declines jurisdiction.

 Refined Managerial Status Standard

 In response to criticism as to the lack of guidance it has provided in determining managerial status under Yeshiva University, the Board purported to “refine” the standard by which it determines managerial status pursuant to Yeshiva.  Going forward, the Board will determine whether faculty “actually or effectively exercise control over decision making pertaining to central polices of the university such that they are aligned with management.”  Essentially, the Board will be analyzing the breadth and depth of the faculty’s decision-making authority. 

 In making this determination the Board will examine faculty participation in the following areas of decision-making: academic programs, enrollment management policies, finances, academic policies, and personnel policies and decisions, giving greater weight to the first three areas than the last two.  This examination will be done in the context of the school’s decision-making structure, administrative hierarchy, and the nature of the employment relationship of the faculty in issue.

 Applying its two new tests to Pacific Lutheran University, the Board concluded that it should take jurisdiction over the election petition, and that none of the adjunct faculty members were managerial employees.

 Members Miscimarra and Johnson dissented from the majority’s holding as to the jurisdictional issue, arguing in favor of the Great Falls test.  With regard to managerial status, Member Miscimarra concurred with the majority, and Member Johnson dissented.  An appeal is expected.

 While some religious schools may applaud the new jurisdiction test, others will not, and others will give the Board an “incomplete” as it specifically limited its holding to faculty employed by colleges and universities.  The decision leaves open the questions of whether the new jurisdiction test will be applied to K through 12, and whether it will be applied to non-faculty.

 On January 21, 2015, Seyfarth Shaw will be conducting a webinar for educational employers to further discuss the holdings in Pacific Lutheran University, what steps schools should take in response, and other labor issues such as the unionization of adjunct faculty, graduate students and student athletes.  Invitations will be sent out in early January.

Update on the Multiemployer Pension Reform Act of 2014

Posted in Current Events

On December 11th, over on our ERISA & Employee Benefits blog, Seyfarth labor partner Ron Kramer analyzed the proposed “Multiemployer Pension Reform Act of 2014” (“MPRA”).

We can now report that President Obama enacted this legislation on Tuesday, December 16th as part of the $1.1 trillion spending bill for 2015.

On January 14, 2015, Seyfarth ERISA litigation and benefits attorneys will provide an overview of the MPRA, and what it means for employers.

Click here to learn more and for a link to sign up for this important event. If you have any questions about the upcoming webinar, please contact events@seyfarth.com.

NLRB Makes Sweeping Changes to Arbitration Deferral Standards

Posted in Arbitration, Current Events, NLRB, Unfair Labor Practices

By: Bryan R. Bienias

On Monday of this week, the National Labor Relations Board (NLRB or Board) abandoned over 30 years of precedent and significantly modified the standards for the deferral of certain unfair labor practice charges to contractual arbitration procedures. This change likely will call into question the finality of arbitration awards in future cases involving allegations arising under Sections 8(a)(1) and (3) of the Act. (Notably, the Board did not address deferral in Section 8(a)(5) cases, since the General Counsel did not raise the issue.)

In Babcock & Wilcox Construction Co., 361 NLRB No. 132 (2014), the Board made sweeping changes to its longstanding post-arbitral deferral standards, through which it determines whether underlying unfair labor practice allegations have been addressed sufficiently by the arbitrator. If the Board determines that the arbitrator adequately addressed the unfair labor practice issues, the Board will defer to the arbitrator’s decision and not conduct an independent investigation.

Under the new standard, the burden of proof has shifted onto the party seeking deferral to show not only that that proceedings were “fair and regular” and the parties agreed to be bound, but also that (1) the arbitrator was explicitly authorized to decide the unfair labor practice issue, (2) the arbitrator was presented with and considered the “statutory issue” or was prevented from doing so by the party opposing deferral, and (3) Board law “reasonably permits” the award.

The standard enunciated by the Board likely will pose many issues for parties seeking to avoid duplicative litigation and who believe that contractual arbitration is an efficient means of resolving their disputes.

First, the party seeking deferral now must show that the arbitrator was explicitly authorized to decide the unfair labor practice issue—either through incorporation of this authority into a collective bargaining agreement or through a case-by-case authorization. Employers and unions with existing contracts either will need to renegotiate their contracts to give arbitrators the authority to determine these “statutory issues,” or agree to grant this arbitral authority in each individual case. Where one party refuses, the Board stated that it “is not [its] province to hold them to a choice they have not made.”

Second, the Board held that a party can establish the arbitrator was “presented with and considered the statutory issue” if it can show that the “arbitrator identified the issue and at least generally explained why he or she finds that the facts presented either do or do not support the unfair labor practice issue.” While the Board claims that it will not require the arbitrator to “engage in a detailed exegesis of Board law” nor does it seek to “turn arbitrators into administrative law judges,” it offers little guidance as to how thorough an arbitrator’s analysis must be. If an arbitrator simply fails to adequately address an unfair labor practice issue, the party seeking deferral may be out of luck. This is problematic, as the Board acknowledges that arbitrators “may not be attorneys trained in labor law.”

Finally, the Board now will review each arbitration award to assure that Board law “reasonably permits the award.” The Board claims that it will not require arbitrators to reach the same result the Board would reach, but will require the arbitrator’s decision to constitute a “reasonable application of the statutory principles” that the Board would follow. The Board notes that it “will not simply assume . . . merely from the fact that an arbitrator [for example] upheld a discharge under a ‘just cause’ analysis, that the arbitrator understood the statutory issue and had considered (but found unpersuasive) evidence tending to show unlawful motive.” In essence, a party seeking deferral must be prepared to show that not only does Board law “reasonably permit” the arbitrator’s award, but that the arbitrator “understood the statutory issue” and considered whatever evidence that the Board ultimately determines did or did not tend to show unlawful conduct.

In reaching its decision, the Board dismissed concerns that the new standard would encourage unions to withhold evidence concerning unfair labor practice issues in arbitration proceedings in order to defeat deferral, noting that either party can raise the statutory issue before the arbitrator.  The Board also rejected Member Phillip Miscimarra’s concerns that new standard performs unwarranted “surgery” on “two venerable institutions—final and binding grievance arbitration and the collectively bargained requirement of “cause,” in contravention of federal policies and the language of the Act itself.

In sum, besides requiring that parties either renegotiate their contractual grievance procedures or explicitly authorize the arbitration of unfair labor practice issues in each case, this standard likely will encourage parties to circumvent their grievance procedure by filing unfair labor practice charges whenever they believe they have a better chance of a favorable resolution before the Board. Moreover, arbitration proceedings themselves likely will become much more burdensome, as parties and arbitrators expend more time and energy addressing underlying unfair labor practice issues in an effort to avoid duplicative litigation.

Although the Board states that the new standards will avoid placing an undue burden on unions, employers, arbitrators or the arbitration system itself, it remains to be seen how this will play out in practice.  Stay posted.

NLRB AGAIN APPROVES EXPEDITED ELECTION RULES

Posted in Collective Bargaining, Current Events, Elections, NLRB, Representation Cases

By:  Kenneth R. Dolin, Esq. &  David L.  Streck, Esq.

 Here we go again.  The National Labor Relations Board (“Board” or “NLRB”)  has adopted its expedited election rules that have been previously proposed twice 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 rule will be published in the Federal Register on December 15, 2014.  Absent another successful challenge, these rules will take effect on April 14, 2015 and will significantly shift the playing field and make it far easier for unions to organize employees.

The New Rules

The newly approved rules include the following changes to existing representation case procedures:

  • Shorter Time for Pre-Election Hearings.  Pre-election hearings will normally be set to open eight days from the date of service of the notice of hearing.
  • Employer Must Prepare and File a Position Statement to Identify Disputed Issues.  An employer will ordinarily be required to prepare and file a comprehensive “statement of position,” by noon on the business day preceding the date of the hearing.  In that position statement, the employer must identify any issues regarding the composition of the proposed bargaining unit, day, time and place of the election, and other election-related matters.  Any issues omitted by the employer from its statement are waived by the employer and may not be raised later.
  • Employer Must File a Preliminary List of Voters as Part of the Required Position Statement.  The employer must also provide a preliminary list of voters with names, work locations, shifts and job classifications in the proposed unit, but without contact information, to the petitioning union (and any other parties) and to the regional director.  If the employer contends that the proposed unit is inappropriate, the employer shall separately list the names, work locations, shifts and job classifications of all individuals, if any, that it contends must be added to or excluded from the proposed unit to make it an appropriate unit.
  • More Discretionary Authority to Regional Directors and Less Pre-Election Resolution of Disputes Concerning Unit Placement, Exclusions, and Eligibility.  The regional director will decide the issues to be litigated in each case.  The hearing officer may solicit offers of proof on any or all issues.  If the regional director determines that the evidence described in the offer of proof is insufficient to sustain the proponent’s position, the evidence shall not be received.
  • No Right to File a Post-Hearing Brief.  The regional director will have the authority to determine whether parties may file post-hearing briefs.
  • New Excelsior List Requirements.  Under the old rule, the union received an Excelsior list of eligible voters via the Board from the employer prior to the election containing the employees’ full names and residence addresses but not their email addresses and telephone numbers.  Under the new rules, an employer must file a preliminary list of voters as well as an Excelsior list.  The latter list must be sent directly to all parties, and must contain the employees’ available personal (non-business) email addresses and available telephone numbers (home and cell), work locations, shifts and job classifications.  The rules also require that the list be produced in electronic form unless the employer lacks the capacity to do so.
  • Earlier Submission of Excelsior List.  The Excelsior list will generally be required to be given to the petitioning union (and the other parties, if any) within two business days after the approval of an election agreement or the issuance of a Direction of Election rather than the seven calendar days previously allowed.
  • Earlier Elections.  Current language that requires an election normally be conducted between the 25th and 30th days after the direction of the election will be eliminated, and replaced by language requiring that elections be set “for the earliest date practicable,” thereby permitting elections to be held as early as only a few days after the Regional Director’s decision (assuming non-employer parties waive their right to have the Excelsior list at least 10 days before the date of the election).
  • No Right to NLRB Review of Post-Election Disputes.  A party’s right to have the NLRB review any decisions by a regional director or an administrative law judge regarding post-election disputes will be eliminated.  NLRB review of post-election disputes will become discretionary.
  • Electronic Filing of Petitions and Other Documents Permitted.  Petitions and other documents will be permitted to be filed electronically rather than by hand or regular mail.

While the Board did not dictate any time frame for the conduct of an election, during the first round of proposed rulemaking then Member Brian Hayes indicated that the expedited election process would result in elections taking place between 10 and 21 days after the filing of a petition as contrasted with the current 38 to 45 day time frame.

Next Steps/Potential Challenges

More legal challenges to the new rules are anticipated and it appears likely that the Chamber of Commerce and the Coalition for a Democratic Workplace, among others, will again file suit.  Such challenges will likely seek a declaration that the rule is contrary to the National Labor Relations Act and the First and Fifth Amendments to the Constitution. 

 Consequences for Employers

The new rules shorten the time from petition to election to three weeks or less, creating, in the words of dissenting Board members Philip Miscimarra and Harry Johnson, a “vote now, understand later” scheme and “advocat[ing] a ‘cure’ that is not rationally related to the disease.” 

There can be no doubt that these new rules will significantly benefit unions and their organizers. Indeed, the shorter the election process (10-21 days vs. 38-45 days), the less time that an employer and employees will have to express or formulate their views about the pros and cons of unionization and to communicate facts regarding union representation.  For this reason, employers may wish to prepare certain draft communications in advance in the event a petition is ever filed.

The limited time to communicate with employees, however, is just one burden employers will face in opposing a union petition.  With the representation hearing normally opening within eight days from the service of the notice of hearing by the regional director, and a detailed position statement setting forth all of the employer’s positions as to the unit due no later than noon on the business day preceding the date of the hearing, an employer also will face difficulties in determining what position to take as to the appropriateness of a proposed unit as well as over which employee classifications should be included.  An employer that has not determined, in advance, what bargaining unit(s) it would consider appropriate at each of its locations and which employees should be included and excluded from those units likely will miss issues and arguments that can or should be raised at hearing.

An employer may also find that the persons best capable of relaying its message, front-line supervisors, are in limbo as to whether they are or are not excluded from the unit as statutory supervisors.  Such a situation could force an employer to operate during a campaign based on its best guess as to certain individuals’ supervisory status, a risky proposition.  For example, without the benefit of a stipulation or a finding on supervisory status, an employer that has purported supervisors assist in communicating the employer’s position in an election campaign runs the risk of election objections and unfair labor practice charges that will invalidate the election if the NLRB ultimately finds that the individuals are not statutory supervisors.  Likewise, an employer that fails to instruct employees, who are later found to be statutory supervisors, on the rules regarding lawful campaign communications and on the need to avoid attending union meetings runs the risk of election objections and unfair labor practice charges that will invalidate the election results. 

One particularly frustrating aspect of the new rules is that while the time period between a petition to an election has undoubtedly been shortened, the overall time frame for processing election cases to conclusion may not be significantly impacted.  The elimination of many of the pre-election procedures – particularly the opportunity to present evidence with respect to voter eligibility or inclusion – may ultimately result in more post-election litigation and adjudication.   

In light of the proposed rules, an employer is best advised — as always — to maintain positive employee relations to minimize the risk of a union organizing petition being filed.  Moreover, rather than wait until after a petition is filed, an employer may wish to prepare, well in advance, its position as to appropriate bargaining units and draft communications to employees on unionization.

NATIONAL LABOR RELATIONS BOARD NATIONALIZES EMPLOYER EMAIL SYSTEMS

Posted in Current Events, NLRB, Organizing

By:  Jeffrey A. Berman, Esq. & Nicholas R. Clements, Esq.

Until December 11, employers thought that they owned their email systems and so could limit their use to company business.  On that day, a divided National Labor Relations Board (“NLRB”)  ruled “not so.”  In Purple Communications, 361 NLRB No. 126 (Dec. 11, 2014), the NLRB ruled that employees who have access to an  employer’s email system as part of their job generally may, during non-working time, use the email system to communicate about wages, hours, working conditions and union issues.  The NLRB reached this conclusion notwithstanding the fact that Purple Communications has a rule providing that its email system was to be used for “business purposes only.”  It is expected that the NLRB’s ruling will be challenged in the federal courts.

Specifically, the NLRB ruled that employees with access to company email can use company email systems for union organization and Section 7 protected activities.  The ruling overturned the NLRB’s 2007 decision in Guard Publishing v. NLRB, (571 F.3d 53 (D.C. Cir. 2009)) (“Register Guard”) which held, in relevant part, that employees have no statutory rights to use their employer’s email systems for labor organization purposes or discussions about wages or other workplace issues.  The Purple Communications ruling is the result of a case brought by the Communications Workers of America union (“the Union”) after it failed in its attempt to organize employees of a company that provides interpreting services for the deaf and hard of hearing.   The Company, for its part, had an “Internet, Intranet, Voicemail, and Electronic Communication Policy” that allowed the use of company owned electronic equipment and systems, including its email system, for “business purposes only.”  The Company claimed that its “business purposes only” restrictions for company email use were aimed at reducing workplace distraction.  The Union argued, on the contrary, that the Company’s prohibition of its employees’ use of company email for non-business purposes and on behalf of organizations not associated with the company interfered with the Company’s employees’ Section 7 rights. 

As anticipated, the NLRB sided 3-2 with the Union; the three Democratic appointees voting in favor of what many will view as an unprecedented taking of private, employer property. The two Republican appointees filed vigorous dissents.   The NLRB held that Section 7 statutorily protected communications (e.g., communications about labor organizations, wages or other workplace issues) between employees on nonworking time must be permitted by employers that have chosen to provide employees email accounts hosted on the employer’s email servers.  In the ruling, the NLRB stated that Register Guard initially got the issue wrong because it undervalued employees’ Section 7 rights and placed too much emphasis on employers’ property rights.  Additionally, the majority opined, Register Guard incorrectly analogized company email to company-related equipment (e.g., bulletin boards, copy machines, public address systems, etc.).  The NLRB previously determined in an unrelated case that employers could place restrictions on company-related equipment, given its physical size and content limitations.  But, for purposes of the current case, the NLRB concluded that this analogy “inexplicably failed to perceive the importance of email as a means by which employees engage in protected communications.”  Moreover, the majority noted that since Register Guard was decided seven years ago, the importance of email as a means for communication has only increased, further intensifying the error of the Register Guard decision. 

The Purple Communications ruling, of course, turns Register Guard, on its head.  However, the NLRB attempted to make its ruling seem more palatable by proffering several caveats in its general repudiation of Register Guard.  First, the Purple Communication ruling applies only to employees who already have been granted access to an employer’s email system in the course of their work.  Accordingly, the ruling does not require employers to provide employees access to the employer’s email system in the first place.  Second, employers can still ban all non-work-related use of email — including Section 7 email use on nonworking time — if the employers can demonstrate that special circumstances make the ban necessary to maintain “production or discipline.”  Additionally, absent justification for a total ban of non-work related email on non-working time, employers may still limit employees’ use of the employer’s email system as long as the limitations are applied uniformly and are necessary to maintain “production and discipline.”  Unfortunately, the NLRB stated that the circumstances in which a ban would be justifiable would be “rare.” 

In a further effort to attempt to placate the anticipated employer reaction to the decision, the majority also stated that its ruling did not apply to non-employees, and that employers could lawfully monitor employee email use as long as doing so fell within the ordinary scope of its email system monitoring polices. This effectively means that employers may not increase its monitoring during a labor “organizational campaign” or “focus its monitoring efforts on protected conduct or union activists” or otherwise enhance their monitoring efforts to stymie protected activity.  But, employers may continue to tell their employees that it monitors, or at least reserves the right to monitor, computer and email use for legitimate business reasons.  Further, the ruling does not change the general rule that employees have no expectation of privacy when they utilize their employer’s email systems.  Thus, even though employees’ use of their employer’s email systems for Section 7 purposes is now protected, employers can still monitor their employees’ use of the email system and also advise employees’ that they are doing just that. 

Finally, regardless of the far reaching impact of its decision, the NLRB did note that its Purple Communications decision would not prevent an employer from establishing uniform and consistently enforced restrictions.  These restrictions could include, for example, prohibitions on large attachments or audio/ video segments, if the employer could demonstrate that, left unregulated, the employee actions would interfere with the email system’s efficient functioning.

The upshot of the Purple Communications ruling is that employers should review their email system policies.  In some cases, employers may want to eliminate email system usage by employees whose jobs do not require the use of email.  Otherwise, employers need to ensure they apply their email system policies, including monitoring, uniformly and consistently.  Finally, it never hurts to very clearly remind employees that they have no expectation of privacy when they use company email systems — even if they are engaging in Section 7 protected activities.

While some employers may modify their rules that the email system is to be used for business purposes only to read that “With the exception of communications regarding wages, hours, working conditions and union, our email system may be used only for business purposes,” other employers may wait to see if the federal appellate courts embrace this departure from decades of NLRB and judicial precedent.

ALERT: COMPREHENSIVE MULTIEMPLOYER PENSION REFORM IN PLAY

Posted in Current Events

Over on our ERISA & Employee Benefits blog, Seyfarth labor partner Ron Kramer analyzes here the proposed “Multiemployer Pension Reform Act of 2014” (“MPRA”).   The MPRA could have a significant impact on multi-employer pension plans.