Employer Labor Relations Blog

NLRB And Acting General Counsel Put “Ambush Election” Rule And Related Procedures On Hold

By Seyfarth Shaw on Posted in Current Events, Representation Cases

By Nicholas R. Clements

The National Labor Relations Board announced today that it has temporarily suspended the implementation of its final rule pertaining to new election procedures, i.e., the “Ambush Election” rule, effective immediately.  Acting General Counsel Lafe Solomon similarly announced that he has temporarily suspended his guidance memorandum concerning the new election procedures.  As our blog post “Federal Court Invalidates NLRB’s ‘Ambush Election’ Rule” discussed, a U.S. District Court invalidated the rule that had taken effect April 30 in a decision released yesterday.  (For additional information on the rule, see our blog post “NLRB ‘Ambush Election’ Rules Clear First Hurdle.”)

Election petitions filed when the rule was in effect will have the option to continue processing their cases under the suspended rule or to reinitiate their cases under the prior procedures.  NLRB Chairman Mark Pearce, for his part and in a press release today by the NLRB Office of Public Affairs, indicated the NLRB is still “determined to move forward” with the implementation of the rule in the future.

Federal Court Invalidates NLRB’s “Ambush Election” Rule

By Seyfarth Shaw on Posted in Current Events, Representation Cases

By Nicholas R. Clements

Earlier today, the United States District Court for the District of Columbia ruled that the so-called “Ambush Election” rule promulgated by the National Labor Relations Board (“NLRB”) is invalid.   (For reference, see our prior blog post on the “Ambush Election” rule here for additional detail on the rule.)

The Chamber of Commerce of the United States of America and the Coalition for a Democratic Workplace filed suit challenging the rule.  Among other things, the plaintiffs asked for a declaration that the rule was contrary to the National Labor Relations Act and the First and Fifth Amendments to the Constitution, and that it violated the Administrative Procedures Act and the Regulatory Flexibility Act.

The Court, however, did not get to the merits of plaintiffs’ charges.  Instead, it held that the NLRB lacked the authority to issue the rule because it was not, as required, adopted by a quorum of the NLRB Members.  At the time the rule was adopted, there were only three Members out of a possible five.  As specified in the National Labor Relations Act, “three members of the Board shall, at all times, constitute a quorum.”

Although two of the three NLRB Members at the time voted for the new rule via the NLRB’s electronic voting procedures, the third Member, Brian Hayes, did not vote, nor was his presence verified at the “meeting” at which the voting took place.  In fact, the Court notes, when no vote or other response was received from Member Hayes, “no one requested that he provide one, per the agency’s usual practice.” 

The NLRB was in reality not able to establish that Member Hayes even received notice of the vote.  The Court concluded that this was the equivalent of the third Member’s failure to attend a meeting, thereby depriving the NLRB of the required three-Member quorum.  Although all three Members “need not necessarily have voted,” they all had to have showed up.  According to the Court “two is simply not enough.”  Thus, the Court held that the resulting “Ambush Election” rule was not validly promulgated. 

The Court’s conclusion that the rule was not validly promulgated may not forestall the implementation of the rule at a later point, however.  The Court explicitly stated that it “expresses no opinion on plaintiffs’ other procedural and substantive challenges to the rule but it may well be that had a quorum participated in its promulgation, the final rule would have been found perfectly legal.”

The upshot for employers is that while the “Ambush Election” rule is not effective, “nothing appears to prevent a properly constituted quorum of the Board from voting to adopt the rule if it has the desire to do so.”

Sixth Circuit Upholds NLRB Decision That Union Salts Were Interested In Employment

By Seyfarth Shaw on Posted in Discrimination, Organizing

By K. Philip Tadlock

On May 4, 2012, the United States Court of Appeals for the Sixth Circuit released its opinion in NLRB v. Beacon Electric Co., No. 07-2554, and upheld the NLRB’s decision that an electrical contractor violated the NLRA by refusing to hire union salts who had applied for positions with the contractor in 1997. The Court found, despite protests from the employer, that the ALJ and Board had properly considered whether the employees were bona fide job applicants when applying for the positions at issue.

The path to the Court of Appeals was a long and winding one based on ever-evolving Board law and multiple remands to an ALJ. The case arose when union members applied for positions at Beacon in 1997. Beacon denied these individuals — who were acknowledged salters — employment, but hired non-union employees days later. The union then filed a charge against Beacon alleging discrimination in violation of Sections 8(a)(1) and 8(a)(3) of the NLRA. In response, Beacon claimed that it had an unwritten practice whereby it only hired employees solely based on referrals and this was the reason that the salters had not been hired, while others were.

No one bought this argument. In 1998, an ALJ sustained the complaint against Beacon, finding that the Company had discriminated against the salters. A final decision was not reached by the Board, however, until 2007 because the Board twice remanded the case to the ALJ to consider additional evidence in light of ever-changing Board law. Ultimately, the Board upheld the ALJ’s decision and found that a violation of the NLRA had occurred.

Beacon then appealed the case to the Sixth Circuit. Curiously, Beacon did not directly challenge the Board’s decision not to apply it’s recent ruling in Toering Elec. Co., 351 NLRB 238 (2007), to the case. In Toering, the Board found that the general counsel has a burden of establishing that an applicant had a genuine interest in seeking employment. Rather, Beacon presented a more roundabout argument that the Board failed to consider whether the salters were bona fide applicants and thus the Board had failed to apply the correct legal standard to the matter.

The Sixth Circuit found that the Board had used the correct legal standard in reaching its decision. Moreover, and contrary to Beacon’s arguments, the Circuit found that the ALJ had allowed the parties to present evidence regarding whether the salters were bona fide applicants and the ALJ made findings that they were. Thus, the Circuit upheld the Board’s decision.

The Circuit’s decision presents an interesting analysis of the Board’s evolving treatment of salters.

Flynn Investigation: Shake-up at the NLRB?

By Seyfarth Shaw on Posted in Current Events

By Alison Rath

National Labor Relations Board Member Terence F. Flynn (R), who was recess-appointed to the Board by President Obama in January, has been called to resign in the wake of  recent reports of ethical transgression.  The Board’s Inspector General, David P. Berry, recently issued two reports alleging that when  Mr. Flynn was chief counsel for the agency, he leaked confidential information outside of the Board, notably to Peter Schaumber, a former NLRB member and ex-campaign adviser to Republican presidential candidate Mitt Romney.

The initial report, dated March 19th, concluded that that Mr. Flynn distributed case lists and information on pending cases in violation of ethical rules.  Subsequent to Mr. Flynn’s response to the investigation, which according to Mr. Berry “caused us concern,” the investigation continued, and a supplemental report was produced on April 30th.  This report detailed that Mr. Flynn sent emails to Mr. Schaumber attaching information such as the draft of a Board decision, several dissenting opinions, and an internal memorandum and other messages.  Mr. Berry wrote that the Standards of Ethical Conduct for Employees of the Executive Branch, 5 C.F.R. § 2635.703(a), prohibits disclosure of “[n]onpublic information” that a federal employee “knows or reasonably should know had not been made available to the general public.”

The supplemental report further noted that Mr. Flynn received and edited drafts of Mr. Schaumber’s writings at the time Mr. Flynn’s nomination to the Board was pending.  Mr. Berry stated that the timing “gives rise to the appearance that Mr. Mr. Flynn’s disclosure of deliberative information and assistance to Mr. Schaumber was in return for Mr. Schaumber’s lobbying on behalf of Mr. Flynn’s nomination.”

These reports have led for calls of resignation, including by Rep. George Miller (D-Ca.), who forwarded the IG’s report to Attorney General Eric Holder, claiming that the allegations “threaten the integrity of the Board’s most vital operations.”  Rep. Miller further wrote to Mr. Flynn that “your continued presence at the Board compromises the Board’s ability to function efficiently and effectively.”  Furthermore, Sen. Tom Harkin (D-Iowa), has threatened to hold a congressional hearing, after Mr. Flynn’s apparent failure to cooperate with the investigation. 

Member Mr. Flynn has denied any wrongdoing, and his attorney Barry Coburn has stated his objection to the investigation and the report’s findings.  Coburn further attacked the impartiality of the investigation, stating that “the entire course and conduct of this investigation” . . . “raises serious questions as to its objectivity, impartiality, independence, and intended purpose.”

On May 2nd, NLRB Chairman Mark Gaston Pearce (D) released a statement that the reports “raise questions of ethics and trust that go to the heart of the values shared by all of us at the NLRB,” and that the agency is currently considering the necessary response.

NLRB “Ambush Election” Rules Clear their First Hurdle

By Seyfarth Shaw LLP on Posted in Current Events, Representation Cases

By:  Jack Toner,  Esq.

On December 21, 2011 the National Labor Relations Board (“NLRB” or “Board”) adopted rule changes that would expedite the processing of petitions for election filed by union with the NLRB.  These rules, the so called “quickie election” rules would also significantly limit an employer’s ability to legally challenge  a union petition. The rule changes take effect today- April 30.  It had been hoped that a law suit filed by the U.S. Chamber of Commerce, and others, (Chamber of Commerce, et al. v. NLRB, No. 1:11-cv-02262-JEB ) challenging the NLRB’s authority to make the changes would, at least,  postpone, if not derail,  the implementation of the rules.

Unfortunately for the employer community, the District Court Judge on Friday, April 27,  denied a motion to stay the implementation of the rules. The judge has not yet ruled on the merits of the lawsuit, but committed to issuing such a decision no later than May 15.  The new rules, if upheld, will:

1.  Provide an NLRB hearing officer with the ability to limit the evidence that can be introduced at a representation case hearing.

2.  Provide the hearing officer with the authority to deny a party the right to file a post-hearing brief.

3.  Eliminate a party’s right to have the NLRB review a decision by a regional director that directs an election.

4.  Eliminate current language that requires an election to be conducted within 25-30 days, thereby permitting elections to be held before the 25-day period.

5.  Eliminate a party’s right to have the NLRB review any decisions by a regional director or an administrative law judge regarding post-election disputes.

Needless to say until there is a final decision on the merits of the NLRB’s actions, there will be considerable confusion and tumult regarding any petitions for elections  filed in the next several weeks.

D.C. Circuit Enjoins NLRB from Enforcing Rule Requiring Employers to Post NLRA-Rights Poster

By Seyfarth Shaw on Posted in Current Events, Protected Concerted Activity

By:   Ronald J. Kramer

On Tuesday, April 17, 2012, the United States Court of Appeals for the District of Columbia Circuit stayed the implementation of the National Labor Relations Board’s rule requiring employers to post notices in the workplace regarding employees’ rights to unionize.  The stay will remain in effect until the D.C. Circuit Court resolves the pending appeal in NAM v NLRB, 2012 WL 691535 (D.D.C. Mar 2, 2012), wherein a D.C. District Court upheld the Board’s ability to require notices be posted.  This order comes just days after a United States District Court for the District of South Carolina struck down the Board’s posting rule in Chamber of Commerce of the United States v. NLRB, 2:11-cv-02516-DCN (D.S.C. Apr. 13, 2012).  That case no doubt also will be appealed.

Absent the stay, the posting rule had been scheduled to take effect April 30, 2012.  The NLRB, which had postponed the implementation of the posting rule during the NAM district court proceedings, opposed the emergency motion for the injunction pending appeal.  In granting the motion, the Circuit Court noted that the Board’s position was at odds with its prior postponement, and also that the uncertainty about the enforcement of the rule in light of the Chamber of Commerce decision counseled further in favor of preserving the status quo during the appeal.

The order resolves the uncertainty as to whether and where the Board’s posting rules would have been effective in light of conflicting district court decisions as to its legality.  The stay will likely remain in effect for most if not all of 2012, as oral argument in NAM is not to be scheduled until September. 

While employers need not post the notices for now, whether the appellate courts, if not ultimately the U.S. Supreme Court, will decide in the NLRB’s favor is still much in doubt.

Court Finds NLRA Rights Poster Invalid

By Seyfarth Shaw on Posted in Current Events, Protected Concerted Activity

By:  Joshua L. Ditelberg

In a blow to the NLRB’s efforts to require employers to post notices in the workplace regarding employees’ rights to unionize, the United States District Court for the District of South Carolina struck down the Board’s posting rule on Friday, April 13, 2011. (Chamber of Commerce of the United States v. NLRB, 2:11-cv-02516-DCN (D.S.C. Apr. 13, 2012). This decision conflicts with another ruling from the United States District Court for District of Columbia which found the rule valid, but limited the potential penalties under the NLRA for a failure to post (NAM v. NLRB, 2012 WL 691535 (D.D.C. Mar 2, 2012). The NLRB had ordered all employers (both union and non-union) to post these new notices by April 30, 2011.

In overturning the rule, the Court found significant the Board’s admission that the posting rule diverged from the NLRB’s traditional functions of issuing representation certifications and unfair labor practice orders. While the Board had asserted that it was “taking a modest step that is ‘necessary to carry out the provisions’ of the [NLRA] … [in filling] a statutory gap left by Congress,” the Court noted that for over 75 years the NLRB had not engaged in informational notice posting of employee rights.

The Court, therefore, concluded that the NLRA does not require employers to post general notices of employee rights under the Act. Applying Supreme Court precedent to the NLRB’s rulemaking, the Court found that Congress — in enacting the NLRA — had not delegated authority to the Board to regulate employees in this manner. The Court determined that neither the legislative history, plain language nor the structure of the NLRA authorized notice posting independent of the NLRB’s core functions of administering union representation elections or remedying unfair labor practices. While not discrediting the Board’s finding that the notice-posting rule is useful in educating employees as to their NLRA rights, the Court concluded that the NLRB simply does not possess the power to order postings of this type.  Notably, the Court indicated that if the NLRB did possess statutory authority to issue the notice-posting rule, the Board would have satisfied its legal requirement to provide a rational and satisfactory explanation of the rule — as the District of Columbia decision likewise found.

In the short term, the contradictory rulings appear to be limited in their applicability to their respective jurisdictions (South Carolina and the District of Columbia). With an appeal underway as to the District of Columbia case, and one likely regarding today’s decision, it could be years before there is finality on the issue — which may ultimately result in the Supreme Court weighing in. However, with the NLRB — at least for the moment — unable to enforce its rule on a consistent, national basis and an April 30 deadline for compliance, it is possible that the Board could decide to step back from enforcing the rule. We expect that the NLRB will announce soon how it intends to respond to today’s decision, and will update you on any further developments.

Beware the Ides of March: Indiana’s Right to Work Law Takes Effect

By Seyfarth Shaw LLP on Posted in Current Events

By:  Bradford L. Livingston

 March 15 – the Ides of March – was not only a day of reckoning for Julius Caesar, but may also be one for organized labor in Indiana:  it is when Indiana’s new right to work law took effect in 2012.  Most private employers are covered by the National Labor Relations Act (“NLRA”), which originally permitted collective bargaining agreements that required the termination of any employees who failed to join or at a minimum pay representation fees to the union.  While these “union security clauses” remain lawful in most states, the 1947 Taft-Hartley amendments added NLRA Section 14(b), which gave states the ability to enact laws providing employees the “right to work” without becoming a union member or paying dues.  On February 1, 2012, Indiana became the 23rd state – the first since Oklahoma in 2001 and the first in the former “rust belt” heart of unionization – to pass a right to work law. 

Indiana’s right to work law only applies to agreements “entered into, modified, renewed, or extended after March 14, 2012” and does not affect any written or oral contract or agreement that was already in effect on that date.  Although nothing in the law prohibits employees from voluntarily choosing to become a union member and pay dues, the law prohibits agreements requiring employees to become or remain a member of a union; pay dues, fees, or other charges to a union; or pay a charity or other third-party fees representing the charges that union members might otherwise pay. Thus, if it were entered into on or after March 15th, any collective bargaining agreement or practice between an employer and union that requires union membership or the payment of these fees would be unlawful and void. 

As might be expected, unions have raised legal challenges to the right to work law, including one based on an Indiana constitutional provision that prohibits “special laws” relating to fees or salaries.  A separate union request for a temporary restraining order was withdrawn after Indiana State officials clearly acknowledged that the law would not be applied retroactively to contracts in effect on or before March 14th.  It remains to be seen what will happen to the other challenges.

 

The new law raises several unanswered questions.  For example, nothing in the statute indicates what happens to collective bargaining agreements where a tentative agreement was reached on or before March 14th, but union ratification does not occur until March 15th or later.  Likewise, what happens if a “grandfathered” agreement, by its terms, is automatically renewed after March 15 because neither side provided the requisite notice to terminate the labor contract?  Some might argue that this results in an automatic “renewal” or extension as defined in the statute and that therefore the union security clause cannot be enforced, while others might argue that because the old agreement was never “formally” terminated, renewed, or extended, the union security clause continues to be a term of the “existing” pre-March 15, 2012 agreement. 

 It is also unclear what happens if, as often occurs, an employer and union negotiate and agree upon “side letters” or other oral or written understandings during the term of a pre-March 15 labor contract.  Are these side letters, oral agreements, or other changes to the labor agreement’s application in effect “modifying” the agreement so that the union security clause is unenforceable?  As is frequently the case, we may need to wait for the inevitable litigation to provide clear answers.  Perhaps equally important, however, it remains to be seen what will happen in Indiana once employees have the right to choose whether or not to join a union and pay dues.  Studies regarding the most recent experience in Oklahoma indicate that approximately 25% of dues paying union members ceased paying dues once Oklahoma’s right to work law went into effect. 

 Perhaps, like Caesar, unions will be asking: “Et tu, Brute?”

Can the Last Supervisor Turn Off the Lights Please

By Seyfarth Shaw LLP on Posted in Current Events

By:  Bradford L. Livingston

In Labor Management Relations, there has always been a fairly clear divide between management and labor.  And in that division, supervisors have consistently been considered part of management.  They schedule employees, discipline employees, give them assignments and instruction on what to do, and generally act as the employer’s frontline contact with the employees who work for them.  As part of that basic understanding, Section 2(3) of the National Labor Relations Act (“NLRA”) specifically excludes supervisors from the bargaining units containing the employees they supervise.  In a rather transparent election year gift to organized labor, however, several Democratic senators are seeking to change those rules and include almost any current supervisor in the very same bargaining unit with the employees they lead.

OnMarch 7, 2012, Senators Tom Harkin (D-IA), Richard Blumenthal (D-CT), and Dick Durbin (D-IL) reintroduced in the Senate the Re-Empowerment of Skilled and Professional Employees and Construction Tradeworkers (RESPECT) Act to significantly modify who is a supervisor that would be excluded from a potential bargaining unit.  Currently, Section 2(11) of the NLRA defines a supervisor as “any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay-off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.”  The RESPECT Act would make two major changes to this definition.  First, it would eliminate the most common supervisory duties of “assigning” and “responsibly directing” other employees.  Second, the proposed Act would also require that supervisors spend a majority of their work time performing the remaining duties.  Since assigning and directing employees would no longer be supervisory responsibilities, a “supervisor” would need to spend a majority of his or her time performing what are essentially human resources functions: hiring, transferring, suspending, laying off, recalling, promoting, discharging or disciplining employees, or adjusting grievances.  Even in a large corporate human resources or labor relations department, we encounter few people who spend a majority of their time performing these limited tasks. 

Under the proposed definition, almost any current supervisor could be included in the same bargaining unit with the employees who report to them.  Unlike now where frontline supervisors are a key in communicating management’s messages and responding to employees’ questions during a union organizing drive, they will no longer be available to speak for the employer during those campaigns.  And since these newly “unionized” supervisors might still discipline the employees who work for them (which, like now, would be an occasional event and not the majority of their time), many bargaining units would contain both the individual imposing the discipline and the employee that received it.  It will be an interesting arbitration hearing where management must rely on a union-represented supervisor to provide the evidence sustaining his recommendation to discharge a union brother or sister.  It will also be interesting to see what happens when many workplaces (in fact, most retail stores, construction worksites, warehouses, and even manufacturing facilities) have no one who is exempt from union organizing.  Like where the fox is being asked to guard the henhouse, we suspect that many facilities will have no one present to represent the employer’s interests.  And when a workplace becomes unmanageable because there is no management left, perhaps the last supervisor under this new definition will be asked to turn off the lights (unless even that is determined to be bargaining unit work).

Court Refuses to Enjoin NLRB Notice Posting Requirement Pending Appeal

By Seyfarth Shaw LLP on Posted in Uncategorized

By:  Joshua M. Henderson

As previously reported below, earlier this month U.S. District Judge Amy Berman Jackson upheld in part the NLRB’s rule requiring employers to post a notice described employees’ rights under the National Labor Relations Act.  On March 7, 2012, Judge Jackson denied the employers’ request to enjoin the NLRB from enforcing the rule pending their appeal of the court’s order upholding the posting requirement.  In her order, Judge Jackson found, among other things, that the employers had not established that they would suffer irreparable harm if the posting requirement were allowed to take effect.  This was particularly the case, according to the judge, in light of her prior order invalidating the portion of the NLRB’s rule that made the mere failure to post the notice an unfair labor practice.  The judge was not persuaded that an “absence of injunctive relief will lead to uncertainty and confusion in the business community.”   On balance, the public interest also favored denying the employers’ requested injunction because the notice was intended to increase employees’ awareness of their rights, which the judge observed was “undoubtedly in the public interest.”

 Thus, barring any further developments in this case or in a separate federal lawsuit in South Carolina,  employers covered by the NLRA will need to post a required employee rights notice as of April 30, 2012