Seyfarth Synopsis: In a 3-1 decision, the National Labor Relations Board (“Board”) in Johnson Controls, Inc., 368 NLRB No. 20 (July 3, 2019), established a new standard for determining whether a union has reacquired majority status after an employer announces its anticipatory withdrawal of recognition based on evidence indicating that the union has lost majority support. The Board’s new framework requires a secret ballot election be conducted when both the employer and the union have evidence supporting their positions of majority status.
Johnson Controls addresses what happens under the following scenario – employees (free from improper influence or assistance from management) provide their employer with evidence that at least 50 percent of the bargaining unit no longer wishes to be represented by their union, the employer tells the union that it will withdraw recognition when the parties’ collective bargaining agreement (‘CBA”) expires based on this evidence, and the union subsequently claims that it has reacquired majority status before the employer actually withdraws recognition.
Prior to Johnson Controls, under this factual scenario, the Board would determine the union’s representative status and the legality of the employer’s action by applying a “last in time” rule, under which the union’s evidence would ultimately control the outcome because it postdates the employer’s evidence. Johnson Controls changes this.
In Johnson Controls, the employer and the union were parties to a CBA from May 7, 2012 through May 7, 2015. On April 21, the employer received a “Union Decertification Petition” signed by 83 of the 160 bargaining unit employees. That same day, the employer notified the union of the petition and informed the union that it would no longer recognize it as the employees’ bargaining representative when the CBA expired on May 7, 2015. The union objected to the employer’s position, demanded the employer bargain a successor CBA, and collected new signed authorization cards from the employees. Between April 27 and May 7, the union collected 69 signed authorization cards, 6 of which were signed by employees who had also signed the disaffection petition. On May 8, the employer withdrew recognition from the union and shortly thereafter instituted unilateral changes related to employees terms and condition of employment. The union filed an unfair labor practice charge.
Under Board precedent, an employer that receives evidence, within a reasonable period of time before its existing CBA expires, that the union representing its employees no longer enjoys majority support may give notice that it will withdraw recognition from the union when the CBA expires, and the employer may also suspend bargaining or refuse to bargain for a successor CBA. This is called an “anticipatory” withdrawal of recognition. Under Levitz Furniture Co., of the Pacific, 333 NLRB 717 (2001), however, once the CBA expires, an employer that has made a lawful anticipatory withdrawal of recognition still does so at its peril. If the union challenges the withdrawal of recognition in an unfair labor practice case, the employer will have violated Section 8(a)(5) if it fails to establish that the union lacked majority status at the time recognition was actually withdrawn.
Prior to Johnson Controls, the Board, in making this determination, used to rely on evidence that the union reacquired majority status in the interim between anticipatory and actual withdrawal, regardless of whether the employer knew that the union had reacquired majority status.
In an attempt to address this concern, the Board in Johnson Controls, discarded the “last in time” rule and instead formed a new legal framework in the anticipatory withdrawal context if an employer is presented with evidence that a majority of employees no longer which to be represented by the union upon CBA expiration and the union thereafter provides evidence of its reacquired majority status.
Under this factual scenario, the Board will now order a Board conducted secret ballot election. The Board concluded that this new framework is “fairer, promotes greater labor relations stability, and better protects Section 7 rights by creating a new opportunity to determine employees’ wishes concerning representation through the preferred means of a secret ballot election.”
In modifying the anticipatory of withdraw of recognition legal doctrine, the Board provided a two-step standard. First, the Board concluded that the “reasonable time” before CBA expiration within which anticipatory withdrawal may be effected is defined as no more than 90 days before the CBA expires. Second, the Board provided that if an incumbent union wishes to attempt to re-establish its majority status following an anticipatory withdrawal of recognition, it must file an election petition within 45 days from the date the employer announces its anticipatory withdrawal. The union has 45 days to file this petition regardless of whether the employer gives notice of anticipatory withdrawal more than or fewer than 45 days before the CBA expires. Any rival union may intervene in the incumbent’s representation case on a sufficient showing of interest.
Thereafter, the Board held that “If no post–anticipatory withdrawal election petition is timely filed, the employer, at contract expiration, may rely on the disaffection evidence upon which it relied to effect anticipatory withdrawal; that evidence—assuming it does, in fact, establish loss of majority status at the time of anticipatory withdrawal—will be dispositive of the union’s loss of majority status at the time of actual withdrawal at contract expiration; and the withdrawal of recognition will be lawful if no other grounds exist to render it unlawful.”
The new standard will apply retroactively. The new framework in Johnson Controls provides clarity and guidance for employers regarding how to respond to an employee decertification petition near the expiration of a CBA. Although the holding in Johnson Controls is narrow and limited to only anticipatory withdrawal of recognition cases, the holding advances employee free choice by mandating a Board conducted secret-ballot election. The ruling fits with the Board’s ongoing efforts to make it easier for dissatisfied employees to get rid out their union.