Employer Labor Relations Blog

NLRB Forces Buyers To Become “Successors” Against Their Will

Posted in Collective Bargaining, Current Events, Representation Cases

By: Ronald J. Kramer

While all eyes were on the landmark Browning-Ferris decision issued Thursday, the Board issued yet another split decision that also may have far reaching consequences. In GVS Properties, LLC, 362 NLRB No. 194 (Aug. 27, 2015) (here), a case of first impression, the Board in a 2-1 decision held that a purchaser employer becomes a Burns successor with an obligation to recognize and bargain with the Union when, as required by a local worker retention law, it has to hire the predecessor employer’s employees for a “trial period.”

The purchaser employer, GVS, had acquired several real estate properties in New York City and decided to insource maintenance work that had been contracted out to a unionized contractor. The city’s Displaced Building Service Workers Protection Act (DBSWPA) required that GVS, as the successor, retain the maintenance employees for a 90-day transition employment period (or at least as many of those it needed to perform the work). GVS set initial terms and hired 8 of the 9 predecessor employees in accordance with the law. The union demanded recognition, but GVS refused on the grounds that it would not employ a substantial and representative complement of employees until after the expiration of the 90-day transition period when it would be free to decide whether to keep the predecessor’s employees. In this case, after the 90-day period GVS fired three of the old employees and brought on 4 new employees, meaning a majority of the post-transition period work force were not former union employees. GVS had no obligation to recognize the union under its theory.

The Board majority found that GVS became a successor under NLRB v. Burns International Security Services, Inc., 406 U.S. 272 (1972), at the point it assumed control of the predecessor’s business and hired, pursuant to the DBSWPA, a majority of its workforce from among the former employer’s employees for the transition period. The primary dispute between the parties was whether it was possible for an employer to become a successor under Burns during a period of time when it had no legal choice as to whether to retain the predecessor’s employees. GVS and dissenting Member Johnson argued that, based on the Supreme Court’s decision in Fall River Dyeing v. NLRB, 482 U.S. 27, 40-41 (1987), a buyer becomes a successor under Burns only if it does so voluntarily, i.e., if it makes a “conscious decision” to hire a majority of the predecessor’s employees, for in such a case it “intends” to take advantage of the predecessor’s workforce. When a worker retention statute mandates that a purchasing employer retain the predecessor’s workforce for a period of time, the employer does not retain the employees voluntarily and thus Burns is inapplicable. As such, GVS and Member Johnson argued the Burns test could only be applied upon the expiration of any state mandated employment period, after the employer could freely choose whether and how many of the predecessor employees to retain.

The Board majority disagreed, claiming that GVS made its “conscious” decision to have a majority of its workforce consist of predecessor employees when it purchased the buildings in a locale subject to the DBSWPA. The majority further analogized the situation to prior cases where the Board found succesorship to apply when buyers were required to retain the predecessor’s employees as part of the purchase agreement, or when employees were hired on a probationary basis. The majority believed that the NLRA’s aim to preserve industrial peace was best served by considering GVS to be a successor when the employees were hired as required by law as opposed to delaying employee bargaining rights until the end of the statutory transition period.

The dissent further argued that the Board’s decision likely would nullify all local worker retention statutes, for the courts would find them preempted by the NLRA given that states and local governments effectively could use such laws to force purchasing employers to recognize unions. Indeed, in Rhode Island Hospitality Ass’n v. City of Providence, 667 F.3d 17 (1st Cir. 2011), the court refused to find preempted a worker retention ordinance requiring a successor hospitality employer to retain the predecessor’s workforce for three months because the court relied in part on the assumption that, under Burns, a successor employer likely would not be forced to recognize the union during three month mandatory employment period. The court specifically acknowledged that, if it was wrong, and the NLRB decided otherwise, the issue would be open to relitigation. Member Johnson stated that if local governments can control successorship decisions that are supposed to be voluntary, then the notion of federal supremacy will be turned on its head. The majority recognized the possibility of preemption, but did not view it as a sufficient reason to rule differently.

At this point, however, the Board majority has not gone the extra step of declaring a purchaser in such a situation to be “perfectly clear” successor required to adopt the predecessor’s contract. “We do not, as the dissent suggests, imply–much less hold–that all new employers subject to worker retention statutes are ‘perfectly clear’ successors, and we are not ‘obliterat[ing]’ the Burns right of successor employers to set their employees’ initial terms.” Employers subject to worker retention statutes can avoid “perfectly clear” successor status by announcing new terms and conditions of employment prior to or simultaneously with the expression of intent to retain their predecessors’ employees.

This decision, unless overturned, will have far reaching impacts. Many localities have local worker retention statutes, meaning prospective purchasers will have no choice but to recognize the predecessor employees’ union if requested even if, ultimately, only a minority of the workforce post-retention period consists of predecessor employees.  For example, California just passed a far reaching law that applies to all  grocery store purchasers and requires the purchaser to retain the prior owner’s employees for a period of ninety (90) days.  See California AB 359 (signed into law August 17, 2015).   Moreover, courts can no longer sidestep the preemption question on worker retention statutes by assuming the successorship determination would not be made until after the expiration of the mandatory retention period. Last but certainly not least, even though the majority appeared to recognize that a purchasing employer in a worker retention state that set initial terms would not be a “perfectly clear” successor, that issue was not technically before the Board and thus, the majority’s comments are simply dicta. Member Johnson fears such an employer could be found to be a perfectly clear successor.

Stay tuned. This will not be the last we hear of this issue

NLRB Vastly Expands the Definition of Joint Employer

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

By: Richard L. Alfred, Marshall B. Babson, Joshua L. Ditelberg, Bradford L. Livingston, Stuart Newman, and Karla E. Sanchez

In a ruling that will affect most business relationships and extends far beyond either labor law or the concept of employment generally, the National Labor Relations Board issued a much awaited decision today, Browning-Ferris Industries of California (“Browning-Ferris”), 362 NLRB No. 186 (August 27, 2015), found here, that expansively broadened the definition of who is a joint employer — an otherwise unrelated entity that does not hire, fire, supervise or determine the wages and benefits of another employer’s employees but that nevertheless bears responsibilities to those employees under the National Labor Relations Act (“NLRA” or the “Act”).

To view our full discussion of the case, please click on the link below:


Giving Unions Their Dues: “The More Things Change, the More They Stay the Same.”

Posted in Collective Bargaining, NLRB, Unfair Labor Practices

By: Bradford L. Livingston

Depending on your point of view, it’s the same old (and new) song. Whether the famous 19th Century line by French writer Jean-Baptiste Alphonse Karr, the lyrics from the 2010 Bon Jovi song, or decisions of the current National Labor Relations Board (“NLRB” or “Board”), it’s apparently true that the more things change, the more they stay the same.  Thus and yet again, the NLRB has determined that employers normally will be obligated to continue deducting union dues even after a collective bargaining agreement expires.  Today in Lincoln Lutheran of Racine, 362 NLRB No. 188 the NLRB reaffirmed that it is overturning a 50 year-old precedent allowing employers to discontinue union dues deductions after a collective bargaining agreement expires.

Employers normally must maintain the “status quo” or most existing terms and conditions of employment following the expiration of a collective bargaining agreement.  Unless there is a lawful impasse in negotiations, an employer may not change wages, job assignments, vacation scheduling procedures, overtime assignment rules, health and welfare contributions, or many other terms or conditions of employment during the hiatus between a contract’s expiration and the beginning of a new labor agreement.

Several key exceptions to this rule exist, however.  In Bethlehem Steel, 136 NLRB 1500 (1962), the NLRB ruled that an employer’s dues-checkoff obligations were tied to a contractual union security clause which, like a management rights or no strike clause, expires with the labor agreement.  And so for 50 years, the Board held that when a labor agreement expires, both the union security clause and any obligation to deduct and remit employees’ union dues terminates.

That tune changed in 2012. In WKYC-TV, Inc., 359 NLRB No. 30 (Dec. 12, 2012),  the Board announced that employers could no longer unilaterally stop deducting union dues after a collective bargaining agreement expires. [See our prior blog post .]  While labor agreements may be drafted to provide for the expiration of dues deductions, such a clause must be, in the NLRB’s view, “clear and unmistakable.”  Thus, after contract expiration, an employer could lawfully stop making dues deductions only if it was confident (and correct) that its dues-checkoff clause terminated with the labor agreement.  Absent that certainty, if a union engaged in a strike, employers were required to continue deducting dues from crossovers – bargaining unit employees who choose not to or abandon a strike – without necessarily knowing whether they resigned their union membership and dues-checkoff authorizations.

In its 2014 NLRB v. Noel Canning decision [as discussed here], however, the U.S. Supreme Court found that many NLRB decisions, including WKYC-TV, were decided by a Board that was not validly appointed.  So did the law revert then to Bethlehem Steel and the ability to cut off dues deductions after contract expiration? Not so fast, my friend, because, of course, the more things change the more they stay the same. Faced with yet another opportunity to consider the issue, today the NLRB today affirmed its ruling in WKYC-TV and found that, absent a clear and unmistakable waiver, employers need to continue giving unions their dues.   And as the dissent by Members Miscimarra and Johnson points out, the Board Majority’s rule will only impede labor negotiations by encouraging employers to reject dues checkoff clauses in bargaining first contracts, proposing to delete them in contract renewal negotiations, and – since the pressure from discontinuing dues deductions after contract expiration cannot occur – raising the stakes in negotiations by potentially locking out employees to exert economic leverage. Instead of Bon Jovi, the tune we’re hearing may be the labor anthem “Solidarity Forever.”

College Football Unions: The Refs Call Off the Game

Posted in Bargaining Unit, Collective Bargaining, Current Events, Organizing, Representation Cases

By:  Bradford L. Livingston, Esq.

On the eve of a new college football season, the referees at the National Labor Relations Board (NLRB) got it right on instant replay: they called off the game. In a ruling earlier today, the NLRB’s five Members unanimously declined to assert jurisdiction over Northwestern’s scholarship football athletes.  [Decision] There will be no union of college football players — at least for now.

In case you forgot the game being played during the 17 months since the NLRB Regional Director’s original decision that scholarship college football players are employees who may form a union under the National Labor Relations Act (NLRA), the facts are this: In early 2014 the College Athletes Players Association or CAPA, a union affiliated with The United Steelworkers, filed a petition seeking to represent Northwestern University’s scholarship football players. Following a hearing before Region 13 of the NLRB, on March 26, 2014, the Regional Director ordered a representation election, finding that it would “effectuate the purposes of the [National Labor Relations] Act to assert jurisdiction over scholarship athletes.” The NLRB conducted an election in April 2014 and impounded the ballots while Northwestern University appealed the Regional Director’s decision to the full NLRB. Following the filing of multiple briefs by both the parties and various amici curiae, the NLRB issued its ruling today.   In this case, all 5 current members of the NLRB joined in the decision by outgoing member Harry Johnson, whose term expires on August 27.

While fans often disagree with both the referees’ and replay booth’s calls, this time the referees got it right. In earlier posts on this blog [http://www.employerlaborrelations.com/2014/04/24/college-football-unions-nlrb-to-play-the-game/ and http://www.employerlaborrelations.com/2014/04/17/will-the-nlrb-tackle-the-ncaa/ and http://www.employerlaborrelations.com/2014/03/31/college-football-unions-what-game-is-being-played/ and http://www.employerlaborrelations.com/2014/03/27/college-football-unions-throw-the-flag-for-a-false-start/ ] and in my testimony at a Congressional hearing on the issue [http://edworkforce.house.gov/calendar/eventsingle.aspx?EventID=374849], I noted various problems with a finding that college football players could be considered employees under the NLRA.

Although the referees got it right, they did so only by avoiding the central issue in the case. Rather than deciding whether or not scholarship athletes are employees under the NLRA, the Board found an astute and politically correct way for its three-Democrat Member majority to avoid antagonizing their friends in organized labor. Contrary to its Regional Director, the NLRB found that it “would not effectuate the policies of the Act” and therefore — as suggested in our original blog post — declined to asset jurisdiction over Northwestern’s scholarship athlete. In reaching its conclusion, the Board noted that college and professional sports are played not alone but against other teams. And at the professional level, all the teams and their players are typically covered by a common labor agreement. A single team with its own labor agreement would lead to an un-level playing field. Likewise, the NLRB noted that it can only assert jurisdiction over private universities, which represent only 17 of the 125 colleges and universities in the FBS or top level of college football. The vast majority of teams are public colleges and universities beyond the reach of the NLRA and NLRB. Rather than promoting uniformity and stability, the Board recognized that an inherent asymmetry would be created when different teams play by different rules. Therefore, the NLRB decided that a “no call” was the best call. Hedging its bets, however, the NLRB noted that the result might be different if circumstances changed or if a different petition were filed.

Like other instant replay decisions in college football, this decision cannot be appealed any further. Just as the Big Ten or SEC Commissioner cannot overturn referees’ decision on the field or from the instant replay booth, there is no court to which CAPA can now turn. Decisions of the NLRB in representation cases like this are final; so we will never know how Northwestern’s scholarship athletes voted. And while other courts will decide when (and fans can debate) whether college football players should be paid for participating in their sports under other laws and legal theories, it is now clear that college football players cannot unionize and bargain under the National Labor Relations Act (for the foreseeable future). So as we begin a new season of college football, let’s get set to enjoy the game on the gridiron rather than before the NLRB.

NLRB Reversed for Ignoring “Common Sense”

Posted in NLRB, Protected Concerted Activity, Unfair Labor Practices

By: Brian Stolzenbach, Esq.

In Southern New England Telephone Company v. NLRB, the D.C. Circuit reversed an NLRB decision finding it unlawful to prohibit public-facing employees (including in-home service technicians) from wearing a particular t-shirt to work.  The t-shirt, promoted by the union representing the employees in question, said “Inmate” on the front and “Prisoner of AT$T” on the back.  We quote from the beginning of Judge Kavanaugh’s opinion:

Common sense sometimes matters in resolving legal disputes.  This case is a good example. . . .  No company, at least one that is interested in keeping its customers, presumably wants its employees walking into people’s homes wearing shirts that say “Inmate” and “Prisoner.”

While recognizing that the law “protects the right of employees to wear union apparel at work,” the court also observed a longstanding exception to that rule.  A company “may lawfully prohibit its employees from displaying messages on the job that the company reasonably believes may harm its relationship with its customers or its public image.”  Even though the court is generally deferential to the NLRB in these matters, the court found the NLRB’s decision to be unreasonable and held that the employer was well within its rights to ban the wearing of the t-shirt by employees who interact with the public.

Key point for employers:  Don’t focus too much on the outcome of this particular case.  Pay more attention to the general rule (and also to the fact that the employer here had to take its case all the way to the court of appeals to prevail).  Many employers reasonably believe they can ban the wearing of union apparel (shirts, buttons, hats, stickers) at work because it is inconsistent with the employer’s general dress code.  Alas, this is often not the case.  The question of whether a particular employee has a right to wear a particular piece of union paraphernalia is sometimes a difficult one, and there are numerous NLRB cases addressing the different “special circumstances” when an employer may prohibit such items (the Southern New England case addresses only one of them).  Before rushing to tell your employees to remove a union hat, button, shirt, etc., on pain of discipline, it is often a sensible use of your time to pause and consult your labor relations counsel about the risks and ramifications of doing so.

NLRB v. The Constitution: Constitution Wins

Posted in Concerted Activity, Organizing, Picketing, Protected Concerted Activity

By: Brian Stolzenbach, Esq.

In early 1999, the Venetian Casino Resort in Las Vegas asked police officers to remove union protesters from a temporary walkway in front of the Venetian — a walkway the Venetian built on its property in exchange for the public expansion of the Las Vegas Strip to accommodate increased vehicular traffic.

Eventually, the Ninth Circuit determined that the walkway was a public forum, so the Venetian had no property right to exclude them.  In turn, the unions behind the protest filed an unfair labor practice charge challenging, among other things, the Venetian’s request that the police remove the protestors from the walkway (even though the police did not oblige).  The Venetian responded that its request was protected by the Petition Clause of the First Amendment to the U.S. Constitution (which protects “the right of the people . . . to petition the Government for a redress of grievances”) and therefore could not be a violation of the National Labor Relations Act (“Act”).  In 2011, the NLRB ruled that: (1) the request to the police was not protected by the First Amendment because it was not a “direct petition to the government” and (2) the request violated the Act.

On July 10, 2015, the D.C. Circuit reversed the NLRB, holding that the Venetian’s request to the police was a “direct petition to the government,” which is generally entitled to the protections of the Petition Clause of the First Amendment.  That said, the case still is not over because “sham petitions” — i.e., petitions that are “objectively baseless” and “brought with the specific intent to further wrongful conduct through the use of governmental process” — are not protected by the First Amendment.  The court remanded the case to the NLRB to determine whether the Venetian’s (16-year-old!) request to the police was a sham petition, in which case it still will be considered a violation of the Act.

Key point for employers:  Keep in mind that the Venetian did commit unfair labor practices by threatening to have the protestors arrested and by having its security officers place protestors under citizen’s arrest.  Neither of those actions could be protected by the First Amendment.  Many employers are quick to evict union protestors from “their property,” but the labor laws permit this only if the public truly has no right to be on the property.  In some cases, the public’s right in that regard is unknown to the employer, or at least unclear, until after the union challenges the eviction — as the Venetian found out in this case.  Further, while the D.C. Circuit’s opinion suggests that perhaps the safest thing to do is to call the police and let them sort it out, that option is often met with the practical reality that the police will not intervene (as in the Venetian’s situation).  To complicate matters further, when employees are involved in the protest, they may well have the right to be on the property, regardless of the employer’s property rights.  So what is an employer to do when faced with a workplace-related protest on or near its property?  First, know your property rights (as well as they can be known) beforehand.  Second, so long as things are peaceful and safe, take the time to think through your reaction very carefully.  Sometimes (though not always), the most successful reaction — and the one that can save you 16+ years of litigation — may be none at all.

NLRB to Re-Visit Unionization of Temps . . . Again

Posted in Bargaining Unit, Elections, NLRB, Organizing, Recognition, Representation Cases, Uncategorized

By: Marc R. Jacobs, Esq.

For decades prior to 2000, the National Labor Relations Board (Board) consistently found that a bargaining unit was inappropriate when the union sought a unit consisting of employees of one employer together with employees of a separate employer, unless all of the employers involved consented. For example, a proposed unit consisting of employees of (i) a host company and (ii) a staffing company which provided additional labor to the host company was inappropriate for collective bargaining, absent consent of both employers.

In 2000, the Board reversed its position and held that temporary employees provided by a staffing company could be included in a single bargaining unit with the contracting employer’s regular employees, even without consent of both employers. M.B. Sturgis, 331 NLRB 1298 (2000). The key issue for the Board to decide with such a petition was whether the regular employees and the temporary agency employees shared a sufficient community of interest.

The Board’s ruling in M.B. Sturgis was relatively short lived, however. In 2004, in Oakwood Care Center, 343 NLRB 659 (2004), the Board rejected the holding in M.B. Sturgis and disallowed inclusion of solely employed employees and jointly employed employees in the same bargaining unit, absent consent of the employers.

It looks like the Board is looking to change its position yet again. On July 5, the Board issued notice inviting the filing of briefs regarding the pending case of Miller & Anderson, Inc. (05-RC-079249) “to allow parties and interested amici an opportunity to address issues . . .including whether the Board should adhere to its decision in Oakwood Care Center . . . and if not, whether the Board should return to the holding of M.B. Sturgis, Inc. (331 NLRB 1298), which permits the inclusion of both solely and jointly employed employees in the same unit without the consent of the employers.” Briefs must be submitted by August 5, 2015.

Such requests from the Board usually portend a significant change in the law. Staffing companies and employers that use staffing companies to provide temporary employees need to keep a watchful eye on this issue. In addition, these companies need to begin now to prepare for the possibility of a petition for a bargaining unit of employees from both.

We will keep you informed of developments.

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.