By: Bryan R. Bienias, Esq.

Seyfarth Synopsis: On Friday, December 1, 2017, newly appointed NLRB General Counsel Peter Robb issued a memorandum containing a broad overview of his initial agenda as General Counsel. It previews many anticipated developments during the Trump Administration. Our blog is exploring a different aspect of the memo each day during the first three weeks of December.  Click here, here, here, here, here, here, here, here, here, here, here, here & here to find prior posts.

While the weather outside may be frightful (for some), the agenda recently set forth by NLRB General Counsel Robb in GC 18-02 is sure to make some employers delightful this holiday season. In this installment, we will focus on the GC’s targeting of the Obama Board’s controversial decisions imposing the duty to bargain over discipline of newly unionized employees, as well as the GC’s preservation of longstanding Board doctrines governing employer campaign communications and withdrawing recognition of unpopular unions.

Out with the Old: The End of Alan Ritchey?

As we discussed here, the Board in Total Security Management, 364 NLRB No. 106 (Aug. 26, 2016) not only reaffirmed the Board’s employer-maligned Alan Ritchey decision, which required employers to bargain over discretionary discipline issued to newly organized employees prior to execution of a first contract, but also mandated prospective make-whole relief including reinstatement and back pay for future violations.

Total Security Management went even further and held that such make-whole relief would be subject to an employer’s “for cause” affirmative defense, placing the ultimate burden of persuasion on the employer to show at the compliance phase that (1) the employee engaged in misconduct; (2) the misconduct was the reason for the suspension or discharge; and (3) that the employee would have received the same discipline regardless of any disparate treatment or reasons for leniency shown by the charging party.

With GC 18-02’s listing of Total Security Management as one Board decision that “might support issuance of complaint, but where we also might want to provide the Board with an alternative analysis,” GC Robb sends a gift-wrapped message to employers that, much like 2017, Alan Ritchey’s and Total Security Management’s days may be numbered.  However, employers should continue treading carefully when considering discipline for newly unionized employees. While the Board’s reversal of these precedents are on the agenda, they remain the law of the land.

In with the . . . Old?: Preserving the Levitz Furniture and Tri-Cast Doctrines

GC Robb’s memo also expressly rescinds former General Counsel Peter Griffin’s GC 16-03, which implored the Board to overturn the framework set forth in Levitz Furniture, 333 NLRB 717, 717 (2001), which allows employers to unilaterally withdraw recognition from a union based on objective evidence that the union has lost majority support (i.e., employee signatures).  Griffin advocated for a new rule requiring a Board-sanctioned election before an employer could lawfully withdraw recognition.  With Robb’s rescinding of GC 16-03, employers can sleep somewhat easier in the year(s) ahead knowing that the Levitz framework will remain intact and that the option for employees to quickly rid themselves of an unpopular union will not be impeded through a long and costly election process.

In addition, GC 18-02 announces Robb’s abandonment of GC Griffin’s initiative to overturn the Board’s Tri-cast doctrine regarding the legality of employer statements to employees during organizing campaigns.  In Tri-Cast, 274 NLRB 377 (1985), the Board held that an employer could lawfully inform employees during a union campaign that they will not be able to discuss matters directly with management if they vote for the union and that such statements could not reasonably be characterized as retaliatory threats.

While the Obama Board had indicated its willingness to eventually overturn Tri-Cast, GC 18-02 effectively ensures that the current Board will maintain the status quo in the new year.

Should you have any questions about GC 18-02 or any labor relations issue, please contact the author, your Seyfarth attorney, or any member of the Labor & Employee Relations Team.

 

 By: Bradford L. Livingston, Esq.

In yet another significant decision overturning a controversial Obama-era ruling, the NLRB has reverted to its prior standards in determining what will be an appropriate bargaining unit for union organizing and bargaining. PCC Structurals, Inc., 365 NLRB No. 160 (December 15, 2017).  Just a day before his term on the Board ended leaving a vacancy and 2-2 split among its members, Chairman Miscimarra along with the two newest Board members appointed by President Trump — over the sharp dissent of the Board’s two Democratic members — reversed the so-called “micro bargaining unit” test set out in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011). It’s now a Big(ger) Ba(rgaini)ng Theory, or as Sheldon Cooper might say: Bazinga!

By way of background, bargaining units are the identifiable groups of employees that unions can organize, represent, and bargain for at an employer’s facility or facilities. While the National Labor Relations Act for the most part does not define the specific requirements for who can be included in or excluded from any individual unit, it instead looks at whether the group shares enough common working conditions or “an appropriate community of interests.”  Those interests can include an almost limitless number of factors, ranging from the employer’s organizational, management and supervisory structure to which parking lots, break rooms or time clocks certain groups of employees use.  Sometimes a union may represent all employees except managers and supervisors who work at a single location.  Other times, they may represent just a particular craft (e.g., electricians), type of worker (e.g., clerical), or alternatively employees who work at multiple of the employer’s locations.  Likewise, at any individual facility, an employer may be required to deal and negotiate separate labor agreements with (and face the possibility of a strike from) multiple different unions and bargaining units.

The composition of a bargaining unit is significant for both organizing and bargaining. Under the NLRA, it does not need to be the “most” appropriate unit, merely “an” appropriate unit.  When a union files an organizing petition with the NLRB, it has invariably self-selected the group of employees where the union feels it has the best chance of winning a representation election. Often, this may be a smaller group within any facility. Under Specialty Healthcare, the NLRB had ruled that so long as any group that a union selected was minimally appropriate, it would not entertain an employer’s objections unless it could establish that other employees shared “an overwhelming” community of interest with the group the union wanted to represent. As cases under Specialty Healthcare found, working conditions need to “overlap almost completely” so that there was “no legitimate basis” for excluding others from the group the union sought to represent.  In effect, a union could often select a small group of employees within a much larger group, succeed in organizing them, and then it or other unions could try later to organize either other individual groups or the rest of the employees.  Divide and conquer.  Employers were faced with a greater likelihood of negotiating and administering different labor agreements with multiple individual bargaining units at the same facility.

In PCC Structurals, the NLRB reverted to its historical way of assessing any group that a union may seek to represent, looking at both the commonalities and differences in the employment relationship that the group shares with other coworkers.  In that case, the union sought to represent roughly 100 of over 2500 employees working at three of the employer’s facilities in Oregon.  These 100 employees worked in different departments and had different supervisors, each of whom was responsible for supervising other employees that the union did not seek to represent. In rejecting the Specialty Healthcare test under which the smaller group was found appropriate, the Board emphasized that each case will need to be assessed individually and that a smaller unit will not necessarily be appropriate.  Bigger may be better. Bazinga!

By: Ashley Laken, Esq.

Seyfarth Synopsis: On Friday, December 1, 2017, newly appointed NLRB General Counsel Peter Robb issued a memo containing a broad overview of his initial agenda as General Counsel. It previews many anticipated developments during the Trump Administration. Our blog is exploring a different aspect of the memo each day during the first three weeks of December. Click here to find prior posts.

In GC Memo 18-02, the new General Counsel of the NLRB listed “Disparate treatment of represented employees during contract negotiations” as requiring submission to his Division of Advice for consideration before proceeding to issue a complaint in an unfair labor practice case, citing to the Obama Board’s decision in Arc Bridges, Inc., 362 NLRB No. 56 (2015). The new GC described Arc Bridges as “Finding unlawful the failure to give a company-wide wage increase to newly represented employees during initial bargaining, even where there was no regular, established annual increase and the employer was concerned that it would violate the Act if it unilaterally provided the increase to represented employees.” The GC Memo 18-02 suggests the GC may disagree with the Arc Bridges decision.

In Arc Bridges, while an employer was negotiating an initial collective bargaining agreement, it gave a 3% wage increase to all employees outside of the bargaining unit but did not provide any increase to bargaining unit employees. The Board found that the employer’s actions were unlawfully motivated and violated
Section 8(a)(3) of the NLRA. The Board observed that an employer can treat represented and unrepresented employees differently during the course of negotiations, so long as the disparate treatment is not unlawfully motivated.  The Board then proceeded to find that the employer’s decision to withhold the wage increase from union-represented employees was motivated by antiunion animus, and ordered the employer to retroactively pay each of the affected employees for the increase they would have received, plus interest compounded daily, plus compensation for any adverse tax consequences.

Then-Member Miscimarra vigorously dissented, reasoning that in his view, the evidence manifestly failed to support an inference of unlawful motivation. He also reasoned that even if the evidence showed otherwise, the employer had shown it would have withheld the increase for legitimate, nondiscriminatory reasons, which included preserving bargaining leverage and avoiding a Section 8(a)(5) charge.

Miscimarra observed that “Under the Board’s prevailing but mistaken view,” the General Counsel can show that protected conduct by employees was a motivating factor in an employer’s decision simply by showing generalized antiunion animus. Instead, Miscimarra observed, the General Counsel must establish a motivational link between the protected activity and the adverse employment action.

Miscimarra made these additional observations to support his view that the Board was mistaken:

  • It is important to recognize that it is not unlawful “antiunion motivation” when an employer desires to be more successful in union negotiations, and the Board has long held that employers can offer different benefits to represented and unrepresented groups of employees as part of its bargaining strategy.
  • Annual wage increases at the employer were not the status quo, and refraining from giving unit employees a wage increase while bargaining was ongoing was what the employer was supposed to do; otherwise, the employer would have violated Section 8(a)(5).
  • Especially in this context, the Board must require strong and convincing evidence sufficient to prove unlawful motivation; otherwise, employers would run the risk of violating the Act whenever they comply with their legal obligation to refrain from automatically giving represented employees whatever increases are granted to other employees.
  • The practical effect of the majority’s decision was to put the employer in a no-win situation, and the Board cannot reasonably adopt standards that cause parties to be in violation of the Act regardless of the actions they take.

In our view, Miscimarra’s approach makes more sense from both a practical and a legal standpoint. And GC Memo 18-02 suggests that the new NLRB General Counsel may agree, possibly giving employers something to look forward to in 2018.

  By:  Timothy M. Hoppe, Esq.

Seyfarth Synopsis: With the NBA season opener just over a month away, at least one team could be getting an unexpected influx of free agents. In Minnesota Timberwolves Basketball, LP, 365 NLRB No. 124 (2017), the Board recently held that the production crew responsible for operating the Timberwolves’ center court video display were employees under the National Labor Relations Act and could form a bargaining unit to negotiate the terms and conditions of their employment.

Facts

The Minnesota Timberwolves, like most professional sports teams, has a large video display in the center of its arena to broadcast live game footage, player statistics, replays, advertisements, and fan favorites like the kiss cam during games. Behind all of these visual effects are sixteen crewmembers who operate video cameras in the arena and direct what video gets displayed during the games.

The Timberwolves maintain a roster of about 51 crewmembers with the skills to operate the video display. The team circulates a game schedule at the beginning of each season and the individual crewmembers decide which, if any, games they will work. Most perform production work for other entities when not working for the Timberwolves. For each game, the team sets the crewmembers’ start time and pays a set fee, which varies based on the game and position crewmembers hold. The team also provides the crewmembers with a basic game plan prior to each game outlining the timing of some of the promotions it wants to broadcast. But the crew maintains significant control over what makes it onto the video display during the game.

In February of 2016 the crewmembers sought to enlist an agent, the International Alliance of Theatrical Stage Employers, to form a union. The team appealed to its referee, the NLRB, claiming that the crewmembers where independent contractors under the Act and, therefore could not unionize. The Regional Director, whistled the crewmembers’ play dead, holding that they were not employees. The crewmembers sought a booth review from the Board.

Board’s Ruling

The Board has long applied common law agency principals to decide if an employee-employer relationship exists. It considers eleven “non-exclusive” factors, none of which is “decisive:” (1) the extent of control by the employer; (2) whether the individual is engaged in a distinct business; (3) the level of supervision from the employer; (4) skills required in the occupation; (5) who provides the tools, equipment, and work place; (6) the length of employees’ employment; (7) method of payment; (8) whether the work is part of the employer’s regular business; (9) whether the parties believe an independent contractor relationship exists; (10) whether the principal is in business; and (11) whether the employee renders services as part of an entrepreneurial business with opportunity for gain or loss.

Two of the Board’s pro-union members used these sprawling factors to overturn the Regional Director’s decision. They acknowledged that crewmembers exhibited some characteristics of independent contractors. The crew retained control over which games they worked, did not receive Timberwolves’ credentials, handbooks or written guidelines, and completed W-9 and 1099 forms for tax purposes. But the majority held that the amount of control the team exerted over the crewmembers, along with the “essential component” crewmembers provided to the team’s business, rendered the crew employees under the Act. The majority emphasized that the team provided guidance to the crew prior to and sometimes during games, and characterized running the video board as “plainly among the [Team’s] central business concerns.” It also noted other things, like the team-dictated start time of each member’s shift, the team-set pay for each game, and the team-provided tools necessary to perform the crewmembers’ jobs.

Chairman Miscimarra cried foul. Also emphasizing the control factor, he noted that the relevant issue was not whether the Timberwolves helped shape the final product that was displayed on the video board by providing a broad outline to the crew; such high level control is a hallmark of any independent contractor relationship. Instead, what should matter is the control over the details of the work. And in this case, he would have held the possession arrow pointed decidedly toward independent contractor status. During each game, crewmembers determine things like which video feeds to broadcast, what shots to capture, and other aspects of the live coverage. Chairman Miscimarra also rejected the majority’s view that the crewmembers’ function was central to the team’s business; without the crew, the team would still play basketball in the arena and the television broadcast would proceed uninterrupted. In Chairman Miscimarra’s opinion, these facts, when combined with things like the crew’s ability to choose their schedules, their per-game payment structure, and lack of any meaningful supervision from the team, “substantially outweighed” any factor supporting employee status.

Employer Takeaways

The decision does not dramatically change the Board’s employee/independent contractor jurisprudence. Instead, it highlights the perils of asking any referee, whether basketball or judicial, to apply an eleven factor test to anything. It is inherently unpredictable and open to the whims of hometown (for Basketball) or political party (for the Board) biases. Nevertheless, it is unlikely that even a more reasonable Board will completely abandon a multi-factor employee test. Therefore, the Timberwolves decision should act as a reminder to employers to carefully analyze their independent contractor relationships and ensure that the contractors retain as much control over the terms and conditions of their employment as business necessity permits.

 

Cellular Phones By: Andrew R. Cockroft, Esq.

Seyfarth Synopsis: On June 7, 2017, the Board held that in order to comply with the Board’s Election Rules, an employer may need to search the phones of supervisors to identify the phone numbers of eligible voters, even if said supervisors have not been deemed “supervisors” within the meaning of the NLRA.

Under the Board’s Election Rules employers are now required to supply a plethora of information to a union prior to a representation election, including “available home and personal cellular (‘cell’) telephone numbers of all eligible voters.” For some employers, this information may be readily accessible and it can be produced to the union with ease. For others, finding the cellular phone numbers of eligible voters may not be so easy.

The Board’s recent ruling in RHCG Safety Corp., 365 NLRB No. 88 (2017), makes that process even more difficult. The Board held that if the employer does not maintain a database containing the cellular phone numbers of eligible voters, but knows that a workplace supervisor maintains the contact information of eligible voters on his cellular phone, the employer is required to ask and (if that fails) search the supervisor’s phone.

In RHCG Safety Corp., when a representation election resulted in a loss for the union, the union objected to the results of the election on the grounds that the employer failed to provide eligible voters’ cellular phone numbers as part of the voter list.  The employer argued that it had no obligation to include the phone numbers because it did not maintain its employees’ phone numbers in its computer database. Consequently, the phone numbers were not “available” to the employer within the meaning of the Board’s rules.

The Board, without citing to any precedent for support, rejected this argument. According to the Board, the phone numbers were “available” to the employer because it knew that its workplace supervisors maintained those numbers on their own phones.

Chairman Miscimarra dissented and elaborated on several problems with the Board’s newfound interpretation of “available” and the obligations imposed on employers.

First, he explained that such a rule would be nearly impossible to comply with given that employers have two days after entering into a stipulated election agreement to provide the list.

Second, under the new Election Rules, an employer might not know who constitutes a supervisor under the Act, because the Rules require the parties to wait until after the election to resolve most questions of voter eligibility and supervisory status. Accordingly, employers won’t know whether they can ask certain individuals to provide it with the phone numbers of the bargaining unit employees.

Chairman Miscimarra explained how employers are placed in a Catch-22:

  • If an employer believes that an employee is not a supervisor and therefore refrains from demanding a search of his or her phones for coworkers’ personal phone numbers, and if the union loses the election, the union is likely to object to the election results by contending that the employee is a supervisor and that the voter list erroneously omitted employees’ personal phone numbers stored on the supervisor’s phones.
  • If the employer believes that the employee is a supervisor and requires a search of his phones resulting in the discovery of numerous coworker personal phone numbers, and if the union loses the election, the union is likely to object to the election results by contending that the employee is not a supervisor, and the compelled search of the employee’s phones and forced disclosure of coworkers’ personal phone numbers constituted unlawful surveillance or other unlawful interference under Section 7 of the Act.
  • Employer Takeaway: This decision highlights how difficult it is to comply with the Election Rules, and in particular, with providing a complete list of all phone numbers. An employer faced with an upcoming election and the possibility of asking its supervisors to search their phones (or any other devices) for eligible voters’ contact information, should seek legal advice before doing so.
39425213v.2

 

NLRB (Logo)By: Joshua M. Henderson, Esq.

Seyfarth SynopsisA recent federal appeals court decision makes it even more difficult for an employer to withdraw recognition from a union that has lost majority support.  Employers need to be aware of the possibility of union “gamesmanship” when deciding how to proceed.

An employer that withdraws recognition from a union as the exclusive bargaining agent of its employees does so, as the Board and Courts say, “at its peril.” It’s a risky move, one that requires objective evidence that a union has actually lost the majority support among the employees it represents.  And the employer must be correct about the actual loss of majority support or it will face an unfair labor practice charge for refusing to bargain with a union.  Consider it a form of strict liability in the labor-relations context.  But what if the employer has objective evidence that a union has lost majority support, and then the union regains the majority support before the employer withdraws recognition?  Also, if an employer is found to have violated the law under those circumstances, what is the remedy when the union deliberately did not disclose to the employer it had regained majority status?

In Scomas of Sausalito v. NLRB (March 7, 2017), the D.C. Circuit considered these two questions.  The Court upheld the unfair labor practice charge against the employer that withdrew recognition without knowing that the union had regained majority status.  The Court observed that the employees had suffered from “an extended period of Union neglect.”  Thus, the union had not sought to bargain with the employer for over a year, and held no meetings and provided no information to its members for more than a year, but continued to collect dues from them all the while.  Perhaps not surprisingly, a majority of employees notified the employer in writing that they no longer wanted the union to represent them.  Two days after being confronted with this news, a union representative notified the employer that the union wanted to negotiate a new collective bargaining agreement, and worked behind the scenes to persuade six employees to revoke their signatures on the decertification notice that had been given to the employer.  Yet the union never told the employer that these signatures had been revoked, or that (in light of the size of the bargaining unit) this meant the union had in fact not lost majority support.  The Court decried the union’s “gamesmanship” in not informing the employer, but held that under the Board’s Levitz Furniture test (which the Court had approved of in an earlier case), the employer assumed the risk that it was wrong in evaluating majority support.  Because the employer was wrong, it could not lawfully withdraw recognition.

In answer to the second question, however, the Court reversed the Board’s decision that a “bargaining order” was the appropriate remedy. Bargaining orders are reserved for flagrant, deliberate unfair labor practices.  In the Court’s view, the employer was not acting in bad faith when it withdrew recognition from the union.  The evidence showed that the employer did not act in haste.  Rather, it took steps to ensure that the signatures on the petition delivered to it matched those on the employees’ payroll records.  Moreover, the signatures that remained on the petition after the revocation comprised 42 percent of the bargaining unit.  That exceeds the 30 percent threshold for directing an election, whether filed by a union, an employer, or an employee.  The disaffected employees also had filed a decertification election petition with the Board, but withdrew it after their employer withdrew recognition from the union.  Under the circumstances, the Court rejected the Board’s argument that an election was not an appropriate alternative remedy.

Takeaway for Employers:  Under the Board’s current test (which may or may not be reconsidered by a new Republican-majority Board), an employer may withdraw recognition from the union only when there is an actual loss of majority support for the union; as a practical matter, the employer must be absolutely certain that more than half of the employees in the bargaining unit no longer want the union to represent them.  Even then, the union may be able to undermine the employer’s basis for withdrawal and place the employer’s decision in jeopardy.  When faced with an apparent loss of majority support for a union, an employer should seriously consider choosing the safer option of filing an RM petition (a management election petition) with the NLRB to allow the employees an opportunity to vote on whether to oust the union in a formal election overseen by the Board.  [Good-faith uncertainty of majority status could, in some circumstances and under the Board’s current standard, support an internal poll of employees as to their support for the union, but polling requires fastidious attention to procedural safeguards and is fraught with legal risk as well.]

 

Striking  By: Bryan R. Bienias, Esq.

Seyfarth Synopsis: Court of Appeals for the First Circuit reversed the NLRB, holding that the Board lacked substantial evidence to find that the hospital group unfairly preferred nonunion workers when filling nonunion positions.

The National Labor Relations Board may not invalidate employment policies that accomplish legitimate goals in a nondiscriminatory manner “merely because the Board might see other ways to do it.” Such was the message the U.S. Court of Appeals for the First Circuit delivered to the Board in Southcoast Hospitals Group v. NLRB, No. 15-2146 (1st Cir. 2017).

The Court ruled that the Board lacked substantial evidence in finding that the hospital group discriminated against union members by giving nonunion workers a hiring preference for nonunion positions. The union’s contract granted union employees a similar preference when applying for union positions. According to Southcoast, the policy was intended to “level the playing field” and stave off staffing complaints by its nonunion workforce.

The Board argued that the policy tilted the playing field too far in favor of nonunion employees, claiming the number of nonunion positions “pales in comparison” to the number of positions covered by the union hiring policy and that nonunion hiring preference covered two facilities, as opposed to the single facility covered by the union policy.

This was not enough, the Court ruled. While the Court acknowledged that the nonunion policy covered more positions than the union hiring policy, union workers were not disproportionately harmed, given that the ratio of covered positions to covered employees was substantially the same under both policies. Likewise, nonunion employees had to compete with workers from two hospitals, as opposed to union workers’ need to compete only with workers from one hospital.

The Court also noted that the Board ignored other aspects of the hiring policies that still leave union members at a comparative advantage, namely that union seniority trumps qualifications for open union positions, while Southcoast is required to choose “the best qualified” candidate for a nonunion position, regardless of seniority.

Employer Takeaway

Employers must often walk a fine line in order to apply different policies to union and nonunion employees in a non-discriminatory manner. However, as the Court in Southcoast makes clear, this does not handcuff employers from attempting to “level the playing field” by giving certain advantages to nonunion employees, so long as the policy does not disproportionately harm union employees and is supported by a legitimate and substantial business justification.

NLRB 2By: Marjorie C. Soto, Esq., Jeffrey A. Berman, Esq., and Mary Kay Klimesh, Esq.

Seyfarth Synopsis: Congressional Committee Head Virginia Foxx (R-NC) and Subcommittee Chair Tim Walberg (R-MI) ask NLRB General Counsel Griffin to either immediately rescind his January 31 report regarding the purported rights of faculty, students and scholarship athletes, or “step aside as general counsel.”

Yesterday, we reported that Richard F. Griffith, Jr., the General Counsel of the National Labor Relations Board, issued a report titled “General Counsel’s Report on the Statutory Rights of University Faculty and Students in the Unfair Labor Practice Context.” A copy of  yesterday’s Management Alert can be found here.

It did not take long for Griffin’s Report to catch the attention of Congress. Yesterday, Representative Virginia Foxx (R-NC), Chairwoman of the House Committee on Education and the Workforce, and Representative Tim Walberg (R-MI), Chairman of the House Subcommittee on Health, Employment, Labor, and Pensions, jointly issued a response to the Report, calling for Griffin to “rescind his memorandum immediately” or  “step aside as general counsel.”   In support of their request, the Representatives jointly stated that the “memorandum puts the interests of union leaders over America’s students, and it has the potential to create significant confusion at college campuses across the nation.”

Even if Griffin refuses to withdraw the Report, it reasonably can be anticipated that the General Counsel appointed by President Trump at the conclusion of Griffin’s appointment in November, or the soon-to-be Trump appointed Board majority, will revisit not only the Report but also the underlying decisions in Pacific Lutheran, Columbia and Northwestern.

NLRB By: Marjorie C. Soto, Esq., Jeffrey A. Berman, Esq., and Mary Kay Klimesh, Esq. 

Seyfarth Synopsis:  In a last minute attempt to leave his mark on the NLRB, the Board’s outgoing General Counsel issued a report attempting to expand the rights of university faculty and students, including scholarship athletes under the National Labor Relations Act.

Just months before the conclusion of his four-year term, Richard F. Griffin, Jr., the General Counsel (“GC”) of the National Labor Relations Board (“Board”), issued a report titled “General Counsel’s Report on the Statutory Rights of University Faculty and Students in the Unfair Labor Practice Context.”

The January 31, 2017 Report was issued with the stated intent to serve as a “guide for employers, labor unions, and employees that summarizes Board law regarding NLRA employee status in the university setting and explains how the Office of the General Counsel will apply these representational decisions in the unfair labor practice arena.” The decisions covered by the Report – – Pacific Lutheran University, Columbia University, and Northwestern University–all involved efforts of individuals to obtain representation by a union.

University Faculty

In Pacific Lutheran, the Board established a new test for determining when it would take jurisdiction over religious colleges and universities.  According to the GC, the Board “will…seek redress for unfair labor practices committed by religious schools against individual faculty member discriminatees who the university does not hold out as performing a specific role in creating and maintaining the university’s religious and educational environment.”

As a practical matter, this means that the GC believes that the faculty who are able to seek union representation because they were “not hired to advance the school’s religious purposes,” also are protected by the Act’s prohibition against discrimination for engaging in protected concerted activities. By implication, this may mean that faculty who are hired to advance a school’s religious purposes are not protected.

The GC also provided his analysis of the standard articulated in Pacific Lutheran regarding the managerial status of faculty members.  Specifically, the GC distinguished between managerial faculty (those who “formulate and effectuate management policies by expressing and making operative the decisions of their employer”) and non-managerial faculty (those whose decision-making is limited to “routine discharge of professional duties in projects to which they have been assigned…”).

The GC concluded that, in the unfair labor practice context, a “complaint will not issue against a university if [the Board] determine[s] that an asserted discriminatee is a managerial employee under the Board’s Pacific Lutheran test.”  He added, however, that even when the Board refuses to process a certification petition, it will still conduct an individualized analysis of the discriminatee’s employment position to determine whether that individual exercised sufficient managerial authority to exempt him from the NLRA.

University Students

Student Assistants. Here, the GC briefly summarized the Columbia University decision, stating that the Board “applied the statutory language of the [NLRA] and longstanding common-law principles to settle the issue of statutory coverage for graduate student employees, determining that student assistants are employees under the NLRA.” The GC relied on the 2000 NYU decision to conclude that graduate students met the common-law test of agency because they “‘perform their duties for, and under the control of’ their university, which in turn pays them for those services…” Similarly, the GC applied this precedent to the unfair labor practices context, concluding that, in his opinion, student assistants are well within the ambit of the NLRA and can therefore organize and receive its protections.

Non-Academic University Workers. The GC stated that, as to university students who are performing non-academic university work (e.g. maintenance or cafeteria workers, lifeguards, campus tour guides, etc.), they are “clearly covered by the NLRA and, as with student assistants, [the Board] will analyze unfair labor practice charges involving non-academic student employees accordingly.” In reaching this conclusion, the GC reasoned that the non-academic university worker category presented an easier question than the student assistants in Columbia as, in his opinion, under the common law agency test, there is no issue of whether or not the work performed by the student employee is “primarily educational work.”

Hospital House Staff. With respect to “hospital house staff” (medical interns, residents, and fellows), the GC concluded that they would “continue to be protected as employees under the NLRA, and [the Board] will continue to process unfair labor practice charges involving those employees.”  In reaching this conclusion, the GC reasoned that, just because certain hospital house staff members also happened to be students did not mean that they were exempt from the coverage of the NLRA. He cited the Boston Medical decision, which held that “nothing in the [NLRA] suggests that persons who are students but also employees should be exempted from the coverage and protection of the [NLRA].”

University Football Players. Here, the GC admittedly limits his analysis to the application of the statutory definition of employee and the common-law agency test to find that Division I FBS scholarship football players are employees under the NLRA, and therefore have the rights and protections of that Act. Referring to the Board’s decision in Northwestern, the GC expressly stated that it would be inappropriate for the Report to attempt resolve the sometimes “divisive” questions relating to whether student athletes may organize under the Act.

Conclusion

With Mr. Griffin’s four-year term ending later this year, it is likely that the new GC will want to revisit some or all of the Report. The soon to be Trump-appointed  majority of the Board likely will revisit not only the Report, but also the decisions in Pacific Lutheran, Columbia and Northwestern.

Gavel

By: Ronald J. Kramer, Esq.

Seyfarth Synopsis: Seventh Circuit  finds employer still obligated to contribute to benefit funds for the life of the CBA even though the employees decertified the union.

Employers often assume that when their employees decertify a union, that any obligations an employer had under the operative collective bargaining agreement would disappear. No union, no contract.  Right?

Wrong! In Midwest Operating Engineers Welfare Fund v. Cleveland Quarry, Case Nos. 15-2628, -3221, -3861, 16-1870 (7th Cir. Dec. 20, 2016), employees in three separate IUOE bargaining units of the Company voted to decertify in 2013.  At the time, the Union and the Company were party to five year collective bargaining agreements expiring in 2015.  The Company assumed the decertification of the Union, which allowed it to set its own terms and conditions of employment, and ended any contractual obligation to contribute to the multiemployer welfare and pension funds (“Funds”).

The Funds sued, and after they were successful in district court the Company appealed. The Seventh Circuit recognized that the collective bargaining agreements were unenforceable as to the Union, but found nevertheless that the Funds had the right under ERISA to bring a suit for delinquent contributions under 29 U.S.C. § 1145.  The Court based its decision on the idea that when the Funds promised to provide a level of benefits to the employees (presumably by allowing the employer to participate in the Funds under the terms of the CBAs), that created a binding contractual promise.  The Court also recognized that the Funds were third-party beneficiaries to the CBAs and thus entitled to enforce them even if the Union could no longer do so.  “[S]o far as benefit law is concerned the employees were still working ‘under the terms of’ the collective bargaining agreement.”

The Seventh Circuit is not alone in finding that an employer’s contractual obligations to participate in multiemployer funds can survive decertification, withdrawals of recognition, and disclaimers of interest. But there is a competing view.  The Ninth Circuit has recognized that when a bargaining unit ceases to exist, be it by decertification or contract repudiation given the existence of a one person bargaining unit, any existing contract becomes void, not voidable, ending the employer’s obligation to contribute to employee benefit plans. Laborers Health & Welfare Trust Fund v. Westlake Development, 53 F.3d 979 (9th Cir. 1995) (contract repudiation); Sheet Metal Workers’ Int’l Ass’n v. West Coast Sheet Metal Co., 954 F.2d 1506 (9th Cir. 1992) (decertification case were the court held “that the renewal contract became void prospectively as of the decertification of the Union”).  Notably, the Seventh Circuit did not address the Circuit split.

Employers lucky enough to have employees decertify prior to contract expiration cannot assume their obligations to the funds necessarily end. Consult counsel before making any rash moves you may live to regret.