Decisions of the NLRB addressing unfair labor practice charges can be appealed to the U.S. Court of Appeals. These days, with the NLRB being so heavily tilted against employers and seemingly making unprecedented and drastic changes in the law every day, some employers may be tempted to think, “Yes, but the court of appeals will be there to fix it in the end.” The recent decision by the U.S. Court of Appeals in Montague v. NLRB, 2012 U.S. App. LEXIS 18017 (6th Cir. August 23, 2012), is a reminder that the courts of appeals often defer to the NLRB, whether they agree with the NLRB’s conclusion or not. So employers shouldn’t expect the courts to bail them out.
Montague involved a “card-check/neutrality” agreement between the UAW and Dana Companies (an automotive parts manufacturer). The company agreed to be neutral in the face of a UAW organizing campaign and to give the union certain access to and information about employees it wanted to organize. It also agreed to recognize the union based on a private card-check (overseen by a neutral third-party) rather than a secret ballot election overseen by the NLRB. The UAW, in turn, agreed to certain rules governing bargaining if it obtained recognition by card-check, as well as certain broad principles about the contents of any collective bargaining agreement to be negotiated after such recognition (e.g., “healthcare costs that reflect the competitive reality of the supplier industry and product(s) involved” and “mandatory overtime when necessary (after qualified volunteers) to support the customer”). Dana and the UAW also agreed that if they did not reach an agreement within six months after recognition, unresolved issues would be submitted to third-party arbitration.
Two employees, represented by the National Right To Work Foundation, challenged this agreement as unlawful company support for the UAW, as well as unlawful coercion by the union. The employees cited longstanding case law holding that an employer may not recognize a union before it has demonstrated majority support and therefore cannot negotiate a contract with a union that is merely contingent upon a subsequent showing of majority support. In a 2-1 decision, the NLRB determined that this is not the type of thing the law was designed to prevent, that the law does not create a rule that any negotiation with a union over substantive terms of employment is per se unlawful, that the agreement between Dana and the UAW was not a “complete collective bargaining agreement” simply waiting to be applied after a supposedly inevitable recognition of the union (the union never did come to represent the employees who challenged the card-check/neutrality agreement), and that ultimately there was nothing wrong with the actions of Dana and the UAW.
Although one could argue that it is difficult if not impossible to draw a legally meaningful distinction between negotiation of the card-check/neutrality agreement in Montague and the pre-recognition negotiations in Majestic Weaving (a case from the 1960s in which the union and the employer negotiated an agreement in advance of recognition), the two-member NLRB majority purported to find one. The lone dissenter (Member Hayes) argued that the majority had, in fact, overruled Majestic Weaving without admitting it, and there is certainly some merit to that view. So the two employees turned to the court of appeals, which described both the majority and dissenting opinions of the NLRB Members as “thoughtful” and then proceeded to reject the employees’ appeal, “not because we find one position more persuasive than the other,” but because the court felt constrained to defer to the NLRB’s view as the primary authority on matters of industrial policy.
Whether you agree with this particular decision or not – and employers with reasonable viewpoints can be found on both sides of the issue – the case is yet another reminder that (courts of appeals notwithstanding) it is almost always the NLRB’s view that counts in matters of industrial labor relations law. And most of the time, these days, that is not a view that is compatible with employer interests.