Employer Labor Relations Blog

Federal Court Halts Enforcement of DOL’s New “Persuader Rules”

Posted in Current Events, Organizing

By:  Christopher W. Kelleher

Seyfarth Synopsis: On June 27, 2016, a federal district court in Lubbock Texas issued a nationwide preliminary injunction preventing the Department of Labor’s new persuader regulations from taking effect this July 1, 2016.

The United States District Court for the Northern District of Texas dealt the Department of Labor (DOL) a major blow yesterday when it entered a nationwide injunction prohibiting the enforcement of DOL’s new “Persuader Rule.” (Decision) The Rule, which was set to take effect on July 1, requires certain public reporting by employers and their consultants (including attorneys).  The specific parameters of the reporting requirements are discussed in numerous prior blogs, including here and here and here.

The Court held that the Plaintiffs (including several states and business associations) would suffer irreparable harm absent injunctive relief.  Not only does the Rule reduce access to comprehensive legal advice and representation, but it also chills First Amendment rights, “including the right to express opinions on union organizing and to hire and consult with attorneys.”  Moreover, the regulation “conflicts with the promulgated rules of every State regarding an attorney’s ethical obligation to maintain client confidences.”

The Court determined that the DOL lacks the authority to promulgate and enforce such an arbitrary and capricious regulation.  The Court further concluded that the harm associated with depriving employers of access to legal counsel and burdening their constitutional rights outweighs any potential harm to the DOL.

While there is some uncertainty surrounding how the DOL will respond, several similar challenges are circulating through the courts, and one or more of these cases will eventually be heard by the federal courts of appeals.  For the time being, this decision is a significant victory for employers, as it preserves their right to obtain sound legal advice protected from disclosure by the attorney-client privilege.

The NLRB Guards “Mixed-Guard” Units Against Withdrawn Recognition

Posted in Bargaining Unit, Collective Bargaining, NLRB, Organizing, Representation Cases, Unfair Labor Practices

By: Samuel Sverdlov, Esq.  & Howard Wexler, Esq.

Seyfarth Synopsis: In Loomis Armored US, Inc., 364 NLRB No. 23 (2016), the NLRB abandoned its long-established precedent from Wells Fargo Corp., 270 NLRB 787 (1984), and held that employers may not refuse to bargain with a “mixed-guard” union whom the employer has voluntarily recognized.

These days, employers are having a harder time relying on well-established law from the NLRB. On June 9, 2016, the Board issued its decision in Loomis Armored US, Inc., abandoning the standard it adopted more than 30 years ago in Wells Fargo Corp., regarding the withdrawal of recognition of “mixed-guard” units.

Loomis Armored US, Inc. (“Loomis”) had voluntary bargaining relationships with 10 “mixed-guard” units, at least one of which dated back 47 years. In 2010, Loomis refused to bargain with the union and withdrew recognition from six of these mixed-guard units. Despite the clear precedent in Wells Fargo, the NLRB took the position that “once an employer has voluntarily recognized a mixed-guard union for a unit of guards, the employer’s bargaining obligation should continue until the union is shown to have lost the majority support in the unit.” Id. slip op. at 1-2.

The Board found that the employer had an obligation to bargain with the union. The Board noted that “Wells Fargo has been the object of continued criticism, including from the federal appellate courts.” Id. slip op. at 1.  The Board found that while the statutory language of Section 9(b)(3) of the National Labor Relations Act (“NLRA”) prohibits the Board from certifying a mixed-guard unit, the language neither limits an employer’s right to voluntarily recognize such a unit (and in-fact, the Board has repeatedly endorsed this employer-right), nor considers when an employer can withdraw recognition of a voluntarily recognized mixed-guard unit. The Board concluded that it would not be contrary to the NLRA for the Board to apply “otherwise universal rules of collective bargaining to a collective-bargaining relationship voluntarily entered into by the employer itself.” Id. slip op. at 5.  Accordingly, employers who voluntarily recognize mixed-guard units “remain[] bound by the collective-bargaining relationship into which it voluntarily entered unless and until the union is shown to have actually lost majority support among unit employees.”

The Board’s holding will not be applied retroactively.

Implications for Employers

The implications of Loomis for employers who have “mixed-guard” units cannot be understated.  Although employers have voluntarily recognized mixed-guard units based in part on the understanding that they can freely withdraw recognition at the end of the bargaining relationship, under Loomis, employers will no longer be able to withdraw recognition absent a showing that the union lost the majority support of the unit.  Thus, moving forward, employers considering a voluntary recognition of a mixed guard unit should be aware that ordinary rules of collective-bargaining will apply to them if they choose to withdraw recognition down the road.

D.C. Circuit: Transfer of Work Not an Unfair Labor Practice

Posted in Bargaining Unit, Collective Bargaining, NLRB, Unfair Labor Practices

NLRB (Logo)By: Kaitlyn F. Whiteside, Esq.

Seyfarth Synopsis: The D.C. Circuit partly denied enforcement of the NLRB’s decision in which the Board ruled that a transfer of work constituted a change in the scope of the bargaining unit and ordered the employer to return previously transferred employees back to their original unit.

In Aggregate Industries v. NLRB, No. 14-1252, 2016 WL 3213001 (D.C. Cir. June 10, 2016), the D.C. Circuit partly denied enforcement of the NLRB’s decision against Aggregate Industries.

The key question, according to the D.C. Circuit, was whether the Company’s decision to move the material hauling work from its construction side of the business to its ready-mix division constituted merely a transfer of work or whether it changed the scope of the bargaining unit itself.

If the relocation of driving responsibilities was a transfer of work, then the Union had a duty to meet with the Company and bargain over the issue.  Once impasse had been reached, the Company could unilaterally implement the change.

Alternatively, if the transfer was a change in the scope of the unit, the Union was not required to meet to bargain and a failure to do so would not provide the Company with a lawful basis to implement the change.

The Board characterized the decision as a change in the scope of the bargaining unit rather than a transfer of work, based in part on the fact that 60 drivers were relocated from a bargaining unit covered by the Company’s Construction Agreement to a unit governed by the Ready-Mix Agreement.  The drivers were transferred as part of an agreement between the Company and the Union, which took place after the union filed the unfair labor practice charge in the case and therefore, according to Judge Raymond A. Randolph, the fact that drivers were relocated was “a red-herring, and the Board was wrong to rely so heavily on it.”

Rather, the D.C. Circuit found that the operative action was the Company’s initial proposal to the Union in which the Company communicated its intent to transfer work from the construction side of the business to the ready-mix side. This proposal was separate and apart from the Company’s request to use the same drivers to perform the work.

As a result, transferring the work out of the unit did not change the scope of the unit because the unit was not defined by the work that employees performed, but rather by job classification. Job classifications governed by the Ready-Mix Agreement and the Construction Agreement both arguably included the work to be transferred.  Thus, the Company’s unilateral implementation of the work transfer was lawful as “the union had an opportunity to bargain over the transfer but declined to do so.”

The Board argued that the union had not been given a meaningful opportunity to bargain as the proposal to transfer the work was presented as something the Company intended to do, not as a proposal. But, according to Judge Randolph and the D.C. Circuit, employers do not need to present proposals couched in “what-ifs and maybes” in order to trigger a bargaining obligation as, “The National Labor Relations Act requires employers to bargain; it does not require them to be bad at it.”

Union Supporters’ Threatening “Jokes” During Campaign No Laughing Matter, D.C. Circuit Finds

Posted in Bargaining Unit, Discrimination, Elections, NLRB, Organizing, Unfair Labor Practices

NLRB    By: Bryan Bienias, Esq.

Seyfarth Synopsis: The U.S. Court of Appeals for the D.C. Circuit held that the National Labor Relations Board abused its discretion by ignoring its own precedent and downplaying threats made by pro-union employees during an election campaign where the union ultimately prevailed by a one-vote margin.

Should union supporters’ casual, half-hearted “threats” of violence during an election campaign warrant overturning the results in a closely contested election? Contrary to the NLRB, a three-judge panel of the D.C. Circuit Court of Appeals answered that, under the Board’s own precedent, “probably.”

The case, ManorCare of Kingston PA LLC v. National Labor Relations Board, 14-1166 (D.C. Cir. 2016) stems from a 2013 election among nurses’ aides at the employer’s Pennsylvania facility.  The union ultimately eked out a victory by a margin of 34-32.

The employer challenged the results, alleging that two bargaining unit nurses during the campaign threatened to “punch people in the face,” “beat people up and destroy their cars” and “slash their tires” if the union did not prevail. Although the nurses initially made these comments in a “somewhat joking manner,” the statements were disseminated to eight or nine other unit employees, some of whom believed the threats to be more serious, causing ManorCare to provide additional security for three days following the election.

The Board, purporting to apply its six-factor Westwood Hotel test for evaluating third-party threats during a campaign, and found the threats not sufficiently serious to overturn the election.  Without applying its test to the facts, the Board emphasized the “casual and joking nature” of the original comments and dismissed the remarks as “no more than bravado and bluster.”  Given that the statements were disseminated to other employees out of context, the Board claimed that a “game of telephone” should never be the basis for overturning an election.

The D.C. Circuit disagreed, finding that the Board abused its discretion by only cursorily acknowledging its own precedent and failing to discuss how the facts aligned with Board law. The Court noted that the Board has drawn a “firm line” that an election cannot stand where threats create a “general atmosphere of fear and reprisal” that render a free election impossible. The Court noted that the objective standard required by the Board’s precedent “requires assessing the threats according to what they reasonably conveyed, not what the speakers intended to convey.”  Thus, the Court found irrelevant that that the comments might have originated as jokes, noting that “[t]he remarks were threatening, and seriously so.”

The Court also found that the dissemination of the threats to eight or nine voters weighed against upholding the election results, especially since “only a single voter could have changed the outcome,” a fact the Board failed to acknowledge. The fact that the threats actually instilled fear in co-workers and were made in part by an employee who displayed visible injuries from a recent knife fight only underscored the objectively serious nature of the threats.

Despite the D.C. Circuit handing a victory to the company, employers can expect to see this case cited by unions and the Board when addressing similar “joking” statements by pro-company employees. As always, employers should strive to maintain an atmosphere free of physical threats and intimidation during an election campaign — among managers and staff alike — or run the risk of having a hard fought election victory overturned.

NLRB Expedited Election Rules Survive Fifth Circuit Appeal

Posted in Current Events, Elections, Representation Cases

By:  Kyllan B.Kershaw, Esq.

Seyfarth Synopsis: The Fifth Circuit upheld the NLRB’s expedited union election rules on Friday, rejecting an appeal from construction-industry employers and small businesses

The U.S. Court of Appeals for the Fifth Circuit upheld the National Labor Relations Board’s expedited election rules, rejecting an appeal by the Associated Builders and Contractors of Texas (“ABC”) and the Texas arm of the National Federation of Independent Business. The appeal followed a lower court decision in June 2015 declaring the rule valid.

The election rules at issue took effect in April 2015 and are designed to expedite the union election process and delay employer challenges to voter eligibility issues until after an election.  The expedited election rules also expand requirements for disclosure of employee contact information to unions.

In its appeal to the Fifth Circuit, ABC and others argued that the election rules exceed the Board’s statutory authority and subject employees to increased risks of identity theft and privacy violations.  Upholding the rules, a three-judge panel rejected these arguments, finding that the rules did not violate the National Labor Relations Act or the Administrative Procedure Act and noting that the challengers did not substantiate claims that disclosure of an email address and cellphone number threatened greater harm to employees than the disclosure of a home address.  The Fifth Circuit panel further commented that ABC and others failed to identify any federal law restricting the disclosure of employee information to unions by employers.

While this is not the first time a federal court has rejected a challenge to the Board’s expedited election rules, the Fifth Circuit’s decision is significant given its reputation as a relatively conservative court and forecasts that future challenges to these rules are also unlikely to succeed.

A Costly Lesson for Employers on Replacement Workers

Posted in Collective Bargaining, Concerted Activity, Piedmont Gardens, Unfair Labor Practices

By: Howard M. Wexler, Samuel Sverdlov & Kyllan B. Kershaw

Seyfarth Synopsis: Board panel found that long-term care facility acted for an “independent unlawful purpose” when it permanently replaced striking workers allegedly in order to teach the union and strikers a lesson and to avoid future strikes.

Ever since the Board’s decision in Hot Shoppes, Inc., 146 NLRB 802 (1964), employers have been permitted to hire permanent replacement workers for economic strikers almost at will, unless the union can put forth evidence that the employer was motivated by an “independent unlawful purpose.”  An “independent unlawful purpose” was understood to exist when an employer’s hiring of replacement workers was “unrelated or extraneous to the strike itself.”  Last week, the Board’s decision in American Baptist Homes d/b/a Piedmont Gardens, 364 NLRB No. 13 (2016) extended the Hot Shoppes’ “independent unlawful purpose” standard to apply to situations where the alleged unlawful purpose was allegedly related to a desire to avoid future strikes.

Background

In the midst of collective bargaining negotiations, the union sent the employer two letters; the first letter notified the employer that the union would be commencing a strike on the following Monday, while the second letter indicated that the striking employees “unconditionally offer to return to work” the following Saturday.  In order to avoid any disruption in business, the employer engaged a staffing agency at a cost of $300,000 to hire temporary workers.  However, rather than waiting for the striking workers to return to work, the employer began offering permanent employment offers to the temporary workers.  According to the employer, the primary motivation for permanently replacing striking workers was that “replacements would come to work if there was another work stoppage.” On the other hand,  the employer’s attorney allegedly told the union’s attorney that the employer “wanted to teach the strikers and the Union a lesson.  [The employer] wanted to avoid any future strikes and this was the lesson they were going to be taught.”

The General Counsel alleged that the employer committed an 8(a)(3) and (1) violation by failing to reinstate striking employees, and that the employer was motivated to permanently replace striking workers by an “independent unlawful purpose.”  An ALJ initially held that the replacements were permissible, however, the General Counsel appealed that decision to the Board.

Decision

According to the Board, an employer is motivated by an “independent unlawful purpose” when they intend “to discriminate or to encourage or discourage union membership.”  As such, “it is axiomatic that an employer violates the Act when it retaliates against employees for engaging in union or other protected activity, and that the right to strike is fundamental.”  Thus, contrary to the ALJ’s interpretation, “the phrase ‘independent unlawful purpose’ does not require that the unlawful purpose be unrelated or extrinsic to the parties’ bargaining relationship.”

According to the Board, when the employer’s attorney told the union’s attorney that he wanted to “teach the strikers and the Union a lesson,” he revealed the employer’s intent to punish union employees in retaliation for participating in protected activity.  As a result, the Board ordered the employer to offer full reinstatement to striking workers and pay compensatory damages.

Dissenting, Member Miscimarra attacked the majority’s decision as rendering prior Board law on this issue a nullity and disrupting the balance of power between employers and unions with respect to the use of economic weapons.  Member Miscimarra noted that under the majority’s decision, if an employer hires permanent replacements, any stray comment made by an executive, manager, attorney, persuader, or supervisor indicating anti-strike animus could render unlawful the employer’s actions, resulting in potentially devastating back-pay liability.

Outlook for Employers

Following this decision, employers considering whether to replace workers permanently during an economic strike must proceed with caution to avoid the appearance of anti-union animus. As Member Miscimarra predicts in his dissent, this decision will likely result in many employers choosing to rely solely on temporary replacements during a work stoppage and significantly limit the effectiveness of permanent replacements as a legitimate economic weapon.  Employers should expect unions emboldened by this decision to adopt more aggressive positions at the bargaining table and be more willing to call a strike.

Uber Agrees to Form Non-Union Guild With New York City Drivers

Posted in Uncategorized

TaxiBy: Adam J. Smiley, Esq.

Seyfarth Synopsis: Uber has agreed to create the Independent Drivers Guild, a non-union organization that will provide New York City based Uber drivers with regular access to the Company and the ability to raise concerns regarding certain aspects of their working relationship.

On May 10, 2016, Uber reached an agreement with the International Association of Machinists and Aerospace Workers (“IAMAW”) to create an association called the Independent Drivers Guild.  The Guild’s membership is limited to only those Uber drivers based in New York City, estimated at 35,000.  This agreement represents a meaningful olive branch between the Company and its independent contractor workforce, especially in light of Uber’s recent $100 million settlement (which still requires court approval) of a California class action lawsuit challenging the independent contractor classification of drivers.  Indeed, after the settlement was reached the Teamsters said it intended to form a similar association for California Uber drivers, although that association has not yet been formally created.

Uber drivers are not employees and are not entitled to the protections of the National Labor Relations Act. Thus, the Independent Drivers Guild is not a union and will not collectively bargain on behalf of the drivers.  Rather, the Guild is an organization that will purportedly “gather all drivers together to have a unified voice and work for common interests.”  The Guild will hold monthly meetings with Uber executives to discuss drivers’ concerns, including the Company’s decision to deactivate the services of certain drivers.  Under the five-year agreement, Uber will pay the costs associated with the Guild and drivers may join for free.

This agreement comes six months after Seattle’s City Council unanimously passed a law that would give Uber drivers the right to form labor unions. That law is already being challenged, however, as the U.S. Chamber of Commerce filed suit against Seattle on March 3, 2016 seeking declaratory and injunctive relief, arguing that the law violates federal anti-trust laws.  Seattle has filed a motion to dismiss the Chamber’s complaint.  If the Chamber’s lawsuit is successful, other cities will likely be deterred from passing similar laws.  Ultimately, Uber’s agreement to create the Independent Drivers Guild, a non-union association, may more accurately foreshadow the future relationship between Uber and its independent contractor workforce.

Unwanted Unions: May Be Harder To Shake than Your Ex

Posted in Collective Bargaining, Current Events, NLRB, Organizing

By: Alison Loomis, Esq.

Seyfarth Synopsis: The NLRB’s General Counsel seeks to impede an employer’s ability to extract a union that lacks the support of a majority of bargaining unit members by requiring in all cases a decertification election prior to withdrawal of recognition absent union agreement.

NLRB General Counsel Richard Griffin wants the Board to review its current rule of permitting employers unilaterally to withdraw recognition from a union based on objective evidence that it has lost majority support.  In a May 9, 2016 memorandum, Griffin argues that this current rule, referred to as the Levitz Furniture framework, frustrates the purpose of the NLRA by failing to promote bargaining relationships and employee free choice.  (Memorandum GC 16-03; Levitz Furniture Co. of the Pacific, 333 NLRB 717, 717 (2001)).

Griffin seeks for the Board to adopt a new rule that an employer may lawfully withdraw recognition from a union based only on the results of a Board-sanctioned election.  In other words, objective evidence of loss of union support would no longer be a sufficient basis.  The memorandum instructs Regional Directors on how to bring the issue to the Board procedurally and includes a model argument section for Regional Directors to include into their briefs to the Board.

Although Griffin claims that this proposed rule will benefit “employers, employees, and unions alike,” in reality, it would likely simply make it harder and more labor-intensive for employers to rid themselves of a union that no longer has the support of its employees.  Stay tuned for the influx of cases.

Another Day, Another Violation: Board Targets Hospital’s Work Rules Prohibiting Offensive Conduct

Posted in Concerted Activity, NLRB, Unfair Labor Practices

By: Kyllan B. Kershaw, Esq.

Ee HandbookSeyfarth Synopsis: Board panel finds hospital’s work rule prohibiting employees from engaging in offensive conduct to be unlawful.

In Valley Health System, LLC d/b/a Spring Valley Hosp. Med. Ctr., 363 NLRB No. 178 (May 5, 2016), a unanimous Board panel (Pearce, Hirozawa, McFerran) found that a hospital acted unlawfully by maintaining certain work rules, including a rule prohibiting employees from engaging in conduct that “brings discredit on the System or Facility” or that is “offensive…to fellow employees,” and a rule prohibiting employees from speaking negatively about a coworker or the hospital.  In reversing the Administrative Law Judge’s finding that prohibiting “offensive” conduct was not unlawful, the Board panel noted that protected Section 7 activity often involves “controversy, blunt criticisms, and disagreements that may well be deemed ‘offensive’ by management or fellow employees.”  The Board panel further stated that the rule was not accompanied by any descriptive language or a list of other forms of misconduct that would help employees understand what type of conduct the rule intended to prohibit.

The underlying unfair labor practice charges related to the hospital’s maintenance of a policy requiring arbitration of employee disputes and a rule requiring employees to speak and communicate only in English with other employees, staff, customers, and visitors in all work and patient-access areas. While not part of the Board panel’s discussion, the Administrative Law Judge’s order affirmed by the Board strikes down the hospital’s English-only rule. In the underlying decision, the Administrative Law Judge found that the work rule violated the Act because it would lead non-native English speaking employees to reasonably believe that they could not engage in concerted activity.  The Administrative Law Judge reached this conclusion even though the hospital’s “English Only” work rule complied with EEOC guidance.  The Administrative Law Judge’s decision indicates that an employer may be faced with a situation where maintaining an English-only rule that is lawful under EEOC guidance may nonetheless violate the National Labor Relations Act.

While Member Miscimarra was not involved in this case, it comes only weeks after his scathing dissent attacking the Board’s standard for evaluating workplace rules in a decision involving a Michigan hospital. Following the Board’s recent string of cases on employer work rules, employers should consider reviewing their current policies and work rules to ensure that they are narrowly tailored to prevent potential unfair labor practice charges and costly litigation.