Authors:          Glenn J. Smith and Matthew A. Sloan

On April 1, 2020, after a temporary suspension of elections, the National Labor Relations Board announced that the processing of NLRB-conducted elections would resume again. Since about then, an unprecedented 90% of representation elections conducted have been ordered by Regional directors to be conducted by mail due to the pandemic. This is despite the Board’s existing precedent strongly favoring in-person ballot elections.

After repeated challenges to Regional Directors’ mail-ballot directives, the Board recently issued guidelines for Regional Directors to consider when deciding whether an election should be conducted by mail ballot or in-person (manual) ballot. These guidelines are described in the Board’s November 9, 2020 opinion, Aspirus Keweenaw, 370 NLRB No. 45 (2020). In that case, the employer, an acute-care hospital located in the Upper Peninsula of Michigan, requested a manual ballot election based in part on the low level of COVID-19 cases in the area and its willingness to comply with the manual election protocols established in GC Memo 20-10. Instead, the Regional Director directed a mail ballot election “based on the extraordinary circumstances presented by the COVID-19 pandemic.” The hospital appealed, challenging the Regional Director’s finding of “extraordinary circumstances.”

In their majority opinion, Chairman John F. Ring, Member Marvin E. Kaplan and Member William J. Emanuel outline six circumstances, the existence of any which one would “normally suggest the propriety of using mail ballots under the extraordinary circumstances presented by this pandemic.” These circumstances include:

  1. The NLRB regional office conducting the election is operating under “mandatory telework” status.
  2. Either the 14-day trend in the number of new confirmed cases of COVID-19 in the county where the facility is located is increasing, or the 14-day testing positivity rate in the county where the facility is located is 5 percent or higher.
  3. The proposed manual election site cannot be established in a way that avoids violating mandatory state or local health orders relating to maximum gathering size.
  4. The employer fails or refuses to commit to abide by GC Memo 20-10, Suggested Manual Election Protocols.
  5. There is a current COVID-19 outbreak at the facility or the employer refuses to disclose and certify its current status.
  6. Other “similarly compelling circumstances.”

The NLRB remanded the case to the Regional Director to reconsider her decision after applying the Board’s new guidelines and in light of any changed circumstances.

Member McFerran, while commending her colleagues in her concurring opinion “for recognizing the reality of a public health emergency,” argues that the default presumption during the pandemic should be that mail-ballot elections are appropriate, instead of the case-by-case framework preferred by the majority writers. She writes, “a clear instruction to Regional Directors that the default assumption is to conduct elections via mail ballot during the pandemic provides a bright-line rule that would be efficient to administer, would further public health policy, and would be easy for employees, employers, and the public to understand.” More broadly, Member McFerran adds that the Board should “reevaluate both its preference for manual elections and its related antipathy toward manual voting,” highlighting the changing nature of the American workforce and the successes of other Federal labor agencies utilizing electronic voting.

For more information on this or any related topic, please contact the authors, your Seyfarth attorney, or any member of the Seyfarth Labor Management Relations Team.

By: Jason J. Silver and Glenn J. Smith

Seyfarth Synopsis: As the COVID-19 virus continues to surge throughout parts of the United States, the General Counsel’s office of the NLRB has issued certain “suggested” safety protocols to allow Regions to conduct manual elections in this unprecedented environment. The suggested safety protocols are likely to receive a high level of deference from the Regions.

On July 6, 2020, after discussions with Regional Directors, the NLRB Division of Operations-Management, NLRB COVID-19 Task Force Members, and the NLRB’s internal union, the Office of the General Counsel published suggested protocols that outline how to safely and efficiently conduct manual elections during the COVID-19 pandemic.

GC Memorandum 20-10 made perfectly clear that Regional Directors still have the authority to make decisions about how, when, and in what manner elections are to be conducted and that Regional Directors will continue to do so on a case-by-case basis considering numerous variables, including, but not limited to, the safety of Board Agents and participants when conducting the election, the size of the proposed bargaining unit, the location of the election, the staff required to operate the election, and the status of pandemic outbreak in the election locality.

Election Arrangements to Be Included in Election Agreement or Direction of Election

  • The Employer must provide:
    • Plexiglass barriers of sufficient size to separate observers, the Board Agent, and voters from each other;
    • Masks, hand sanitizer, gloves, and wipes for observers;
    • Markings on the floors to remind/reinforce social distancing;
    • Disposable pencils without erasers for each voter;
    • Glue sticks or tape to seal challenge ballot envelopes.
  • The NLRB must provide a mask, face shield, hand sanitizer, gloves, disinfectant wipes, and disposable clothes (if requested) to the Board Agent conducting the election.
  • The election location must:
    • Contain spacious polling areas sufficient to accommodate social distancing to ensure proper separation of observers, Board Agents, and voters;
    • Have a separate entrance and exit for voters in the polling area;
    • Have separate tables spaced six-feet apart for the Board Agent, observers, ballot booth, and ballot box.
  • All voters, observers, party representatives, and other participants should wear CDC-conforming masks in all phases of the election.

Election Mechanics

  • Polling times and procedures for releasing voters must be sufficient to accommodate social distancing and cleaning requirements. Tables and voting booths must maintain proper social distancing.
  • Any Election Agreement or Direction of Election should specify the maximum number of representatives who can attend the pre-election conference, whether there will be a voter release schedule, the number of voter lists, and the number of observers per party (which should be limited to one where feasible).
  • Only one voter is allowed to approach voter booth at a time. After clearance by the observer, the Board Agent will place an individual ballot on the table for the voter.

Certifications Required

  • Each party or party representative participating in the pre-election conference, serving as an observer, or participating in the ballot count must certify in writing that within the preceding 14 days:
    • They have not tested positive for COVID-19 (or have been directed by a medical professional to proceed as if they have tested positive for COVID-19);
    • Are not awaiting results of a COVID-19 test;
    • Have not had any direct contact with anyone who has tested positive for COVID-19 in the preceding 14 days.

* Individuals who do not provide such certification will not be permitted to be physically present at the pre-election conference, to serve as an observer, or be present at the ballot count*

**Individuals who are not a party, party representative, or an observer must stay at least 15 feet away from the Board Agent at the pre-election conference or ballot count**

  • 24-48 hours prior to the election, the Employer must certify in writing:
    • That the polling area has been cleaned in accordance with CDC hygiene and safety standards.
    • How many individuals present at the facility within the preceding 14 days have:
      • Tested positive for COVID-19 (or have been directed by a medical professional to proceed as if they have tested positive for COVID-19);
      • Are awaiting results of a COVID-19 test;
      • Are exhibiting symptoms of COVID-19;
      • Had any direct contact with anyone who has tested positive for COVID-19 in the preceding 14 days.

* The Regional Director will consider whether the election should be held as scheduled if the appropriate certification is provided*

**If the appropriate certification is not timely provided the Regional Director has the discretion to cancel the election**

  • All parties must agree in writing to notify the Regional Director within 14 days after the election if any individuals who were present at the facility on the day of the election have:
    • Tested positive for COVID-19 (or have been directed by a medical professional to proceed as if they have tested positive for COVID-19);
    • Are awaiting results of a COVID-19 test;
    • Are exhibiting symptoms of COVID-19;
    • Had any direct contact with anyone who has tested positive for COVID-19 in the preceding 14 days.


This latest GC memorandum suggests that if certain safety and hygiene protocols are met, Regions may begin to return to the more regular method of conducting in-person manual elections. Although the protocols are “suggestions,” the expectation is for Regions to adopt some if not all of the protocols for in-person manual elections on a case-by-case basis. If any of the suggested safety protocols are challenged in the future, the NLRB will ultimately have to decide the matter.

By:  Jennifer L. Mora

Seyfarth Synopsis: In Circus Circus Casinos Inc. v. NLRB, No. 18-1201 (June 12, 2020), the US Court of Appeals for the DC Circuit denied the National Labor Relations Board’s cross-application for enforcement of its decision, where the Court found, among other things, that the Board had “significantly alter[ed] the test for valid Weingarten requests to cover the facts of this case.”

The employee was a journeyman carpenter represented by the United Brotherhood of Carpenters and Joiners of America (“Union”). During a safety meeting, the employee and others raised concerns that secondhand exposure to marijuana smoke in guest rooms could cause employees to test positive for illegal drugs. Several weeks later, the casino initiated an investigation into whether the employee violated company policy with respect to a medical exam mandated by the Occupational Safety and Health Administration. The employee refused to submit to the examination, which the casino considered a violation of company policy. The casino suspended him pending investigation. When a human resources representative contacted the employee to set up the interview, she provided a phone number for the Union in the event the employee desired to have a Union representative present at the meeting. The employee attempted to contact the Union twice by phone, but to no avail.

The employee returned to the facility for the interview. The department head and two human resources representatives attended on behalf of the casino. According to the employee, he looked around the hallway for a Union representative before entering the meeting and began by stating: “I called the Union three times [and] nobody showed up, I’m here without representation.” The casino’s witnesses denied the employee made this statement at the beginning of the meeting but acknowledged continuing the interview without offering him union representation. At the termination meeting held the same month, a Union steward was present with the employee. At that time, the casino advised the employee that it was terminating him for insubordination and refusing to submit to mandatory testing.

The NLRB found the casino violated the Act by, among other things, denying him a Weingarten representative during the investigatory interview. According to the Board, the employee triggered Weingarten by stating at the beginning of the meeting: “I called the Union three times [and] nobody showed up, I’m here without representation.” As the Board explained, “[s]ubsumed in the statement is a reasonably understood request to have someone present at the meeting.” Further, the Board concluded the casino unlawfully compelled the employee to attend the meeting when it failed to offer him the choice between continuing unassisted or foregoing the interview altogether.

The Court disagreed and held that the Board “acted in an arbitrary and capricious manner by significantly altering the test for valid Weingarten requests to cover the facts of this case.” According to the Court, to invoke the Weingarten right, an employee’s utterance must be “reasonably calculated” to put the employer “on notice of the employee’s desire for union representation.” Under the “reasonably calculated” notice standard, the Board has long required an employee to affirmatively request representation in order to invoke the protections of the Act. The Court gave examples of valid requests: a straightforward demand (“I need a Union Steward.”); questions about the need for assistance (“[S]hould [I] have a union representative present[?]”); or requests for delay or an alternative representative. In the case before it, the Court wrote:

[The employee] merely recited facts about his past communication with the Union and the circumstances of his attendance at the meeting: “I called the Union three times [and] nobody showed up, I’m here without representation.” Any affirmative request by [the employee] was made to the Union rather than to a [company] representative—there was no valid request here to trigger Weingarten’s requirements.

As a result, according to the Court, “[t]he Weingarten allegation should have been dismissed because [the employee] did not make an affirmative request for union representation.” It concluded its discussion about the Weingarten violation with a reminder as to the applicable standard: “Weingarten requires an employee to affirmatively request union representation in a manner reasonably calculated to put the employer on notice,” which can take the form of demands, questions, or related requests for delay or for a specific representative. (The Court also denied enforcement of the Board’s finding that the casino terminated the employee in retaliation for exercising protected union activities.)

The decision serves as a reminder to employers that the validity of an employee’s request for Weingarten assistance often turns on the nature of the request and the factual circumstances surrounding it. Given the broad remedies available if an employee fails to grant a Weingarten request, employers must exercise caution and carefully weigh the adequacy of an employee’s request. After receiving any type of notice that an employee desires representation, employers should consider delaying or terminating the interview until a union representative or alternative representative can be identified, or simply canceling the interview and proceeding with discipline consistent with any existing labor agreements.

By: Jennifer L. Mora

Seyfarth Synopsis: On June 23, 2020, the National Labor Relations Board reversed precedent and held in Care One at New Milford, 369 NLRB No. 109 (2020), that during negotiations for a first collective bargaining agreement, employers do not have a duty to bargain with a union over discipline for newly organized employees if the discipline is issued consistent with established disciplinary policies or practices. The decision is retroactive to any case currently pending before the NLRB.

For almost 80 years, the National Labor Relations Board had in place a longstanding rule that employers had no obligation to give a union notice of or an opportunity to bargain over discipline before reaching agreement with a newly elected union on a first contract. That all changed, however, when the NLRB held in Total Security Management Illinois 1, LLC, 362 NLRB No. 106 (2016), that an employer, with limited exceptions, was required to provide a union with notice and an opportunity to bargain about discretionary elements of an existing disciplinary policy before imposing serious discipline on any newly represented employees while bargaining for a first contract. Notably, the NLRB had reached a similar conclusion in Alan Ritchey, Inc., 359 NLRB 396 (2012). That decision, however, was invalidated by the U.S. Supreme Court’s holding in NLRB v. Noel Canning, 134 S.Ct. 2550 (2014), because the Board’s composition at the time of Alan Ritchey included two individuals whose appointments violated the United States Constitution.

As is often the case with the NLRB, the pendulum has swung back, with the current NLRB blasting the Total Security decision for going to great lengths to “devise a contorted bargaining scheme at odds with traditional bargaining practices” and having “shredded longstanding principles governing the duty to bargain.” On June 23, 2020, the NLRB overturned Total Security and held in Care One at New Milford, 369 NLRB No. 109 (2020), that employers have no duty to bargain over serious employee discipline imposed before the negotiation of a collective bargaining agreement so long as the employer acts consistent with a pre-existing disciplinary policy.

According to the Board, Total Security had conflicted with prior Board precedent and the Supreme Court’s statements in NLRB v. Weingarten, 420 U.S. 251 (1975), that a labor organization does not have “any particular rights with respect to pre-disciplinary discussion which it otherwise was not able to secure during collective-bargaining negotiations.” Second, the Board found that Total Security misconstrued the general unilateral-change doctrine announced in the Supreme Court’s decision in NLRB v. Katz, 369 U.S. 736 (1962), with respect to what constitutes a material change in working conditions. Finally, the Care One NLRB concluded that Total Security had imposed a complicated and burdensome bargaining scheme that was irreconcilable with the general body of law governing statutory bargaining practices. According to the Board in Care One:

[T]he correct analysis … must focus on whether an employer’s individual disciplinary action is similar in kind and degree to what the employer did in the past within the structure of established policy or practice …. As such, in order to maintain the status quo, an employer must continue to make decisions materially consistent with its established policy or practice, including its use of discretion, after the certification or recognition of a union.

Negotiating with a labor organization for a first contract can be stressful and time-consuming, which makes the Board’s decision a welcome sigh of relief for employers. In fact, it applies retroactively to any case currently pending before the NLRB. That said, employers with new collective bargaining relationships with labor organizations still must be mindful of the obligation to ensure that any pre-contract discipline is imposed in accordance with their existing disciplinary policies or practices.

By: Kyllan B. Kershaw

Portions of the NLRB’s expansive new representation election rules–scheduled to go into effect on May 31, 2020 following a COVID-19 related delay–were struck down by court order one day prior to becoming effective.  On May 30, 2020, a judge for the U.S. District Court for the District of Columbia ruled that certain portions of the NLRB rules that were challenged by the AFL-CIO were substantive in nature and not implemented in accordance with the Administrative Procedure Act, which requires that any rules that are not merely procedural in nature be subject to a notice-and-comment period.  This late-game decision follows numerous public information sessions held by the NLRB in anticipation of the rollout of the new rules.

In her ruling, Judge Ketanji Brown Jackson overturned elements of the rules challenged by the AFL-CIO, including:

  • Providing employers an increased ability to challenge and litigate certain issues prior to an election;
  • Increasing the length of time between the filing of the petition and the date of the election;
  • Adding to the time period for an employer to serve a voter list;
  • Limiting who can serve as an election observer; and
  • Delaying certification of election results if a request for review is pending or may still be timely filed.

The remainder of the rules were not overturned by the Court; however, the Court remanded the entire set of rules to the NLRB for reconsideration following the court’s ruling. On June 1, 2020, the NLRB announced that all unaffected rules would be implemented immediately, and those now effective changes include the following:

  • Scheduling the hearing at least 14 days from issuance of the notice of hearing;
  • Posting the notice of election within 5 days instead of 2 days;
  • Changes in timeline for serving the non-petitioning party’s statement of position;
  • Requiring petitioner to serve a responsive statement of position;
  • Reinstatement of Post-Hearing Briefs;
  • Reinstating Regional Director discretion on the timing of a notice of election after the direction of an election;
  • Ballot impoundment procedures when a request for review is pending;
  • Prohibition on bifurcated requests for review;
  • Certain changes in formatting for pleadings and other documents; and
  • Terminology changes and defining days as “business” days.

The Court’s order is not yet final and a full Memorandum Opinion is still forthcoming, at which point the NLRB insists it will appeal.

In the interim, the 2014 rules regarding R-case procedures remain in effect as modified above.  This decision is a disappointment to those that were anticipating a completely revised set of election rules to replace the so-called ambush election rules.  A process that provides the parties with a more reasonable time line is particularly important given the difficulties in campaigning during the current COVID-19 pandemic.  Having said that, there are some significant modifications to the prior election rules now in effect that will provide for more meaningful analysis, including an opportunity to understand the petitioner’s legal position before the hearing.

Employers should continue to be proactive to maintain positive employee relations, stay in front of workplace issues, and have plans in place for union-organizing efforts.  We are here to help.

By: Bryan M. O’Keefe, Charles M. Guzak, and Samuel I. Rubinstein

Seyfarth Synopsis: In a move that will provide clarity to both unions and employers, the National Labor Relations Board in Providence Health & Services – Oregon d/b/a Providence Portland Medical Center, 369 N.L.R.B. No. 78 (May 13, 2020) held that dual-marked ballots in a NLRB supervised secret ballot election should be voided in the election tally. This new standard applies retroactively. Employers should ensure that their instructions to employees on how to mark ballots in NLRB supervised secret ballot elections are updated to take account of this important procedural rule change.


One ballot out of 767 was the difference in determining whether the union would represent the employees. The ballot in question contained a diagonal line in the “No” square and an “X” in the “Yes” square.   With the conflicting marks, did the voter intend to vote for Union representation or against it?  Since Board elections are conducted by secret ballot, the Regional Director could not use voter testimony to ascertain what the intent of the two marks was. However, applying extant case law, the Regional Director concluded that “it [was] possible to discern a clear expression of the voter’s intent based on the ballot’s irregular markings.” On that basis, the ballot was counted as a vote in favor of the union, resulting in a tally of 384 votes for the union and 383 votes against it. In light of this narrow loss hinging entirely on a single, questionable ballot, the Employer filed a timely request for review, which was granted by the Board.

The Board’s Holding

Prior to this case, the Board evaluated dual-marked ballots by determining whether the voter’s intent could be “ascertained from other markings on the ballot,” such as an attempt to erase one of the two marks or one mark being crossed out. Under that standard, a dual-marked ballot was considered void if there was no other marking to indicate the voter’s intent.

Noting the inconsistencies in past adjudications of dual-marked ballot cases, the Board modified its standard. Finding that it has “no special expertise in judging whether stray marks represent attempted erasures or obliterations,” the Board concluded that such an exercise risked becoming an inquiry rested on speculation, and it was not an efficient use of agency resources. Thus, the Board adopted an objective, bright-line rule pertaining to dual-marked ballots: “where a ballot includes markings in more than one square or box, it is void.” Furthermore, the Board found that the standard would apply retroactively.

Applying this new standard to the case at hand, the Board voided the ballot in question; thus, the tally was tied at 383 votes. Since the union did not receive a majority of the valid votes cast, the union did not become the exclusive representative for the bargaining unit.

Impact on Employers

This new standard may benefit employers, unions, and the Board alike by making it clear how dual-marked ballots will be counted. To be sure, however, the new standard is a double-edged sword for employers: after all, it is just likely that a dual-marked ballot on which the voter intended to vote “No” will now be voided as well. For that reason, employers should make sure that their instructions to employees on how to vote in an election are updated to take account of the new voided ballot rule. Voters should know ahead of time that in order to be counted as a “No” vote, the ballot must only be marked once.

By Ashley K. Cano

Seyfarth Synopsis: The COVID-19 crisis is creating fertile ground for union organizing efforts, and labor unions are aiming to capitalize on this.  Non-union employers should be attuned to this reality, and to the extent they want to remain union-free, they should consider developing and implementing lawful employee relations strategies now, before it’s too late.

As we all continue to endure the Coronavirus pandemic and everything that comes along with it, it is becoming increasingly clear that labor unions are seeing the pandemic as an opportunity to organize new groups of workers.  Unions have been losing market share in the United States for decades, and not surprisingly, they are always on the lookout for the chance to bring in new members, with a corresponding increase in their revenue streams.  This includes efforts to organize employees in industries and areas that traditionally have not been unionized.

Because of COVID-19, worker concerns about safety, job security, and transparency on work issues have become front and center in recent months.  This is true for employees working in industries that have been designated as “essential,” but also for employees in many other industries.  Concerns like these are often ones that unions use to appeal to workers who they are trying to organize, and when employees feel as though their employer is not listening to their concerns or adequately communicating with them, they may turn to labor unions for help.

Unions are already taking steps to capitalize on the organizing opportunity presented by COVID-19.  Many have become adept at organizing employees virtually, using social media, text messages, and Zoom meetings to connect with groups of employees.  And some have even set up websites where employees who are “concerned about working during this Coronavirus Pandemic” can fill out a form to have a union organizer contact them.

As businesses start to reopen their doors or return more employees back to work, the potential for unions to gain traction among employees will almost certainly increase, with worker concerns about issues related to COVID-19 precautions taking center stage.  Employees may be asking themselves whether their employer is doing enough to promote their safety and well-being, and unions will likely be telling them that their employer should be doing more.

This all means that employers proactively should be addressing and anticipating employee concerns, not just as a means to create a better worker environment, but also to eliminate risks of union organizing.  Employers must also be careful not to run afoul of any applicable laws when instituting such programs and plans.  The principal law in this arena is the National Labor Relations Act.  Section 7 of the NLRA protects employees’ right to join together to advance their interests as employees, and to refrain from such activity.  In that same vein, the NLRA makes it unlawful for an employer to “interfere with, restrain, or coerce employees” in the exercise of those rights.

Non-union employers should also be aware that under the National Labor Relations Board’s election rules, the time between when a union files a petition for an election and when the election takes place is very short, averaging around only 3-3.5 weeks at present.  This means that for an employer who has not previously been communicating with its employees about the facts surrounding unionization, the window of time that it has to do so is very limited.  Moreover, due to current social distancing guidelines, many employers are finding themselves hamstrung in these campaigns.  Those guidelines are making it difficult, if not impossible, for employers to conduct in-person meetings with their employees, and employers are also being denied in-person elections, with the NLRB instead conducting elections by mail ballot.

While many employers recognize some of the negative aspects or complications that can accompany unionization, many employees (including managers and supervisors) might not.  For example, they may not realize that union representation can and often does result in a loss of flexibility to address employee issues, and that having an outside third-party placed between management and employees often creates a counterproductive “us versus them” attitude.  Many also do not understand the rigors and requirements of collective bargaining.

Takeaway for Employers

Although we are living in uncertain times, it is virtually certain that unions are going to continue their efforts to organize new groups of employees, and the Coronavirus pandemic is providing them with a unique opportunity to try to do so.  Although employers are dealing with countless other issues related to the pandemic, the possibility of union organizing activity among their employees as a result of this crisis is one issue they should not neglect to consider.

Employers who think there is any possibility that their employees might be susceptible to union organizing efforts should consider developing a plan now for lessening and/or responding to union organizing activity within the confines of the law.  Such a plan might include providing training to managers and supervisors on how to recognize and respond lawfully to union organizing activity.  The plan might also include providing positive employee relations training to managers and supervisors, which could head off union organizing activity before it starts.  Many Seyfarth lawyers have vast experience in this area, and are more than happy to help.

By:  Charles M. Guzak, Ronald J. Kramer and Bryan M. O’Keefe

Seyfarth Synopsis: In these uncertain economic times, temporary furloughs and longer-term layoffs have become the norm.  One concern expressed by numerous unionized employers contributing to multiemployer pension plans is whether temporary furloughs or long-term layoffs may result in complete or partial withdrawal liability.

Employers are dealing with a number of immediate and challenging decisions due to COVID-19 and the respective state and local government closure orders. Unfortunately, in these uncertain economic times, temporary furloughs and long-term layoffs have become the norm.

One concern expressed by numerous unionized employers contributing to multiemployer pension plans is whether temporary furloughs or long-term layoffs may result in complete or partial withdrawal liability.

The short answer is that temporary furloughs or long-term layoffs in the wake of COVID-19 are not likely to trigger withdrawal liability of any type.   But as with most legal issues, the devil can be in the details.   Let’s examine the three principal types of withdrawal liability—partial withdrawal, complete withdrawal, and mass withdrawal—and consider how temporary furloughs or long-term layoffs triggered by COVID-19 may implicate each.

Partial Withdrawals

Partial withdrawal liability is the most relevant consideration to furloughs or layoffs.   A partial withdrawal occurs where there is (1) a “70-percent contribution decline” or (2) a “partial cessation of the employer’s contribution obligation.”

  1. 70% Contribution Decline

A 70% contribution decline at the end of a given fund plan year triggers withdrawal liability if the employer’s “contribution base units,” which are contributions based on employees’ hours worked, have declined by 70% for three consecutive plan years. Obviously, if employees are subject to a temporary furlough or even a layoff, the number of hours worked will decline.

But every year begins a new three-year testing period looking at participation levels compared to a “base year,” which is the average of the two highest years in the five plan years before the testing period. As such, an employer would have to already have had 70%+ declines in the past two consecutive years—during flush economic times—for a 70% contribution decline to trigger withdrawal liability now. Moreover, the 70% rule is a clear line in the sand.   For example, two years of a 75% decline and one year of a 69% decline will not trigger a partial withdrawal. So it would be very difficult to trigger a 70% decline partial withdrawal due to temporary reductions in contributions.

To be sure, some employers that were already struggling before COVID-19 and whose contributions over the last two years have dropped by more than 70% as compared to the established based year may have difficulty avoiding another 70% decline this year. And even for employers who were not suffering significant contribution declines before COVID-19, there is no guarantee that the recovery following the pandemic will be swift. Any employer suffering significant (50% plus) contribution declines due to lost business for any reason should closely monitor their prior, current and projected contributions using the statutory 70% decline testing methodology. Employers skirting the edge may wish to work hard to keep contributions high enough to avoid triggering a partial withdrawal.

  1. Partial Cessation of the Employer’s Contribution Obligation

A partial cessation of the employer’s contribution obligation has two further subtypes: so-called “facility take-outs” and “bargaining unit take-outs.”

A bargaining unit take-out occurs where an employer permanently ceases to have an obligation to contribute to one or more, but not all of the collective bargaining agreements under which it is required to contribute to the fund. And at the same time, the employer continues to perform work in the jurisdiction of the type for which it was making contributions were previously required under its collective bargaining agreement. A bargaining unit take-out may also occur where an employer transfers any bargaining unit work to workers not participating in the same fund at another or the same location it owns or controls. Importantly, a bargaining unit take-out will not occur where one operation is closed and the work is transferred to another location where it is still being performed by employees participating in the same fund.

A facility take-out occurs where an employer permanently ceases having an obligation to contribute to the plan for work performed at one or more, but not all, of its facilities covered under the CBA, but continues to perform the same type of work at the facilities. Put differently, if an employer ceased all operations covered by a collective bargaining agreement at one location and then continues to have any of that work done by employees not participating in the fund at a different facility, a partial withdrawal is triggered.

Triggering facility take-outs or bargaining unit take-outs through temporary furloughs or layoffs is unlikely to occur. However, to avoid these traps, employers should ensure that their obligations to contribute to funds under their CBAs and at each of their facilities continue. This can be achieved by continuing or merely temporarily suspending operations at all facilities covered by the plan, and by remaining a party to and complying with all CBAs covered by the plan. Also, it would be advisable to at least make sure the Union is aware that any reductions or suspension of operations at such facilities are temporary in nature. An employer may want to advise the fund as well, especially if all fund participating operations are temporarily suspended.

Complete Withdrawal

The second type of withdrawal is a complete withdrawal, which occurs when an employer permanently ceases all fund-covered operations or permanently ceases having an obligation to contribute to the fund. To that end, as long as the employer still has some fund participating employees actively employed somewhere under a contract, you cannot have a complete withdrawal from that fund. And, even if you lay off all employees that participated in a particular fund, if the layoffs are not intended to be permanent, you have likely not permanently ceased operations. Although ERISA does not specifically define “permanent,” Section 4218(b) of ERISA provides that “an employer shall not be considered to have withdrawn from a plan solely because…an employer suspends contributions under the plan during a labor dispute.” Based on this language, temporary cessation in contributions with planned or foreseeable end dates due to furloughs or layoffs, even of the entire workforce, should not constitute permanent cessations of contributions to a plan if they do not go on for so long they seem permanent.

The permanent cessation of an obligation to contribute to the fund typically only occurs where an employer is somehow able to get out of its collective bargaining agreement or negotiates an exit from the fund, the employees decertify, or the union disclaims interest. Employers cannot control what the employees or union does, but by far most withdrawals due to a cessation of an obligation to contribute are triggered by employers. One warning: There are special withdrawal rules for construction industry employers, under which a withdrawal is only triggered if an employer ceases having an obligation to contribute yet continues to perform work within the jurisdiction of the contract or resumes such work within five years without renewing its contractual obligation to contribute. Given most construction contracts are entered into pursuant to Section 8(f) of the NLRA, the expiration of such an agreement ends the bargaining relationship and any ongoing obligation to contribute. In this scenario, a construction union can trigger a withdrawal by ending the contract while the employer is in the midst of work it cannot immediately cease.

Mass Withdrawal

The final and least relevant type of withdrawal in this context is mass withdrawal. A mass withdrawal occurs when all employers or, pursuant to an agreement or arrangement, substantially all employers (the assumption is 85%) withdraw from a fund. Of course, by its very nature, a mass withdrawal is not in any one individual employer’s control. It also is very rare, especially outside of funds with very few participating employers. The risk of mass withdrawal, while very slight, arguably increases in bad economic times — in particular for funds in critical and declining status. Regardless of the hypothetical risk, this does not seem to be the type of consideration which should drive an individual employer’s furlough or layoff decision-making.


Employer contributions will of course decline during periods of temporary furloughs and layoffs, but unless that decline has been ongoing, or a permanent partial or complete withdrawal occurs, no withdrawal should be triggered. Employers should carefully monitor their participation in funds, and the potential withdrawal risks that may be triggered by permanent closures and layoffs, and avoid accidentally turning temporary reductions into permanent reductions without knowing the consequences.

By: John P. Phillips

Seyfarth Synopsis: In a continuation of its push to protect employee free choice, the NLRB issued a final rule on April 1 that returns to the Board’s previous Dana Corp. rule. Under Dana Corp., employees may petition the Board for a secret-ballot election within 45 days of an employer’s voluntary recognition of a union. In 2011, the Board overruled Dana Corp. and set out a procedure under which an election could be barred for up to four years. The new final rule permitting employees a 45-day window to petition for an election will go into effect on July 31, 2020.

As we previously reported, in August 2019 the National Labor Relations Board published several Notices of Proposed Rule Making (“NPRM”) regarding amendments to the Board’s union representation procedures. The proposed amendments consisted of: (1) a change from the current election blocking charge policy to a vote-and-impound procedure; (2) a reversion to the rule of Dana Corp. with respect to voluntary recognition agreements; and (3) a modification of the evidentiary requirements for § 9(a) recognition in the construction industry. On April 1, 2020, the Board issued its final rule on these matters. The final rule was set to go into effect on June 1, 2020, but the Board recently announced that the rule would be delayed to July 31, 2020, due to the COVID-19 pandemic.

This blog post explores the return to the procedures originally set forth in the Board’s 2007 Dana Corp. decision.

Voluntary Recognition

Under the NLRA, employers may voluntarily recognize a union based on the union’s showing of majority support. In these circumstances, a Board-conducted election is not required.  Furthermore, once a union demonstrates majority support and has been recognized by an employer, an election bar goes into effect. Voluntary recognition would bar the filing of an election petition for a reasonable period of time, and, if the parties then reached a collective bargaining agreement, the contract-bar doctrine would continue to bar elections for the duration of the agreement, up to a maximum of three years.

Dana Corp.

In 2007, the Board issued its opinion in Dana Corp. The Board concluded that the voluntary recognition bar policy “should be modified to provide greater protection for employees’ statutory right of free choice and to give proper effect to the court- and Board-recognized statutory preference for resolving questions concerning representation through a Board secret-ballot election.” Dana Corp. held that voluntary recognition does not bar an election unless (1) bargaining-unit employees received adequate notice of the recognition and of their opportunity to file a Board election petition within 45 days and (2) 45 days had passed from the date of the notice without the filing of a petition.

Lamons Gasket Co.

In 2011, the NLRB overruled Dana Corp. In its ruling, the Board defined the reasonable period of time during which a voluntary recognition bars an election to be at least 6 months after the date of the parties’ first bargaining session and no more than one year after the first bargaining session. As a result, when the contract bar also applies, an election may be barred for as many as four years after voluntary recognition—without employees ever having a chance to vote on whether or not they want union representation.

The Return to Dana Corp.

In the final rule, the NLRB returns to the practice set forth in Dana Corp. Once the rule takes effect, an employer who voluntarily recognizes a union must post a notice to its employees about the voluntary recognition. Affected employees then have 45 days in which to petition for a secret-ballot election. The petition must be supported by at least 30-percent of the bargaining unit. If a valid petition is not filed in that period, the voluntary recognition bar would preclude an election for “a reasonable period of time.”

Changes from the Proposed Rule to the Final Rule

As mentioned above, the Board proposed these changes in August 2019. Although the final rule is substantially similar to the proposed rule, there are some differences:

  • The final rule clarifies that it will only apply to an employer’s voluntary recognition after the effective date of the rule (e., July 31, 2020), and will only apply to the first collective bargaining agreement reached after voluntary recognition.
  • The final rule clarifies that either the employer or the union must notify the Regional Office that voluntary recognition has been granted (the proposed rule required both parties to notify the Regional Office).
  • The final rules makes clear that the notice must be posted “in conspicuous places, including all places where notices to employees are customarily posted.”
  • The final rule refers only to an employee’s right to file “a petition,” rather than the right to file “a decertification or rival union petition.”
  • The final rule requires an employer to distribute the notice to unit employees electronically if the employer customarily communicates with its employees by such means.
  • The final rule contains the wording for the required notice as shown here (on pages 34-35 of the final rule).

The Board’s reversion to the Dana Corp. standard provides employees with greater freedom in choosing whether or not they want to be represented by a union. The Board’s promulgation of the final rule also shows its continued commitment to advance the rulemaking agenda that it set out last year.

By Jack Toner and Jeff Berman

Seyfarth Synopsis: During the COVID-19 crisis, the NLRB (for the most part) has truncated its operations to those operations and functions that can proceed without threatening the health of its employees or the  public. In a sense, and as we have seen over the last few months, “neither snow, nor rain, nor heat”, nor pandemic stays the NLRB from “the swift completion of most of its appointed rounds.” Below, we detail the developments at the Board during this time of the crisis, which demonstrates the NLRB’s desire to move forward where this reasonably can occur.

Like many companies and government agencies, and for the safety of NLRB employees and the public,  the National Labor Relations Board (“NLRB”) has cut back on its operations in response to the COVID-19 pandemic. Offices were closed and, for the most part, agency employees performed their duties via teleworking unless critically essential. The NLRB also suspended all representation elections scheduled through April 3, 2020.[1]

The NLRB delayed implementation of the new rule designed to modify the NLRB’s representation case procedures by allowing a fairer and more efficient election process.  According to the NLRB’s press release, the delay was designed to facilitate the resolution of legal challenges against the rule.

NLRB Moving Forward

But, even during these trying times, the NLRB continued to complete its “appointed rounds.” On February 26, it released its long-awaited joint-employer final rule. The rule making process had commenced on September 14, 2018, when the NLRB issued its Notice of Proposed Rule Making. A little over a month after issuing the joint-employer rule, the NLRB issued a new rule designed to better protect employee free choice in connection with its election process. This new rule is discussed in greater detail below.

Guidance on Bargaining During the Pandemic

Not to be outdone by the NLRB, its General Counsel issued a Memorandum designed to summarize cases pertaining to the duty to bargain in emergency situations. GC Memo 20-04. Case Summaries Pertaining to the Duty to Bargain in Emergency Situations The Memorandum was designed to bring the prior decisions of the NLRB into a single place.

Approval of Savings Clause for Otherwise Invalid Policies

During the period that the NLRB curtailed some of its activates, it proceeded to issue decisions.  One of the more important decisions issued during this period is Maine Coast Regional Health Facilities369 NLRB No. 51 (2020). This case involved a media policy that the Board found to be unlawful because it was overly broad, even under the NLRB’s recent Boeing, Inc. analysis. According to the NLRB, the policy improperly prohibited employees from communicating about work-related disputes to third parties, including the media.

However, disagreeing with the Administrative Law Judge, the NLRB concluded that a subsequent amendment to the media policy rendered the revised policy lawful.  Although Maine Coast did not change the prohibitory language in its media policy, it added a “savings clause” that told employees that the policy did not apply to issues covered by the National Labor Relations Act.

Specifically, the savings clause stated that the policy did not apply to employee communications “concerning a labor dispute or other concerted communications for the purpose of mutual aid or protection protected by the National Labor Relations Act.” Since the days of the Obama Board, employers have wondered what types of savings clauses would be useful in the context of common employment policies that raised legal issues under the Act. They now have their answer.

Employee Free Choice Rules

As noted above, on April 1, 2020, the NLRB issued a final rule intended to better protect the free choice of employees regarding questions of union representation. The new rule will:

  1. Prevent or at least substantially minimize the use of so called “blocking” charges to delay the processing of petitions for elections
  2. Provide employees with notice and ability to challenge an employer’s decision to voluntarily  recognize a union as the representative of the employees without providing the employees an opportunity to have a secret ballot election regarding the issue, and
  3. Require unions in the construction industry to demonstrate that they represent a majority of employees in order to block an election petition by either a rival union or by employees challenging the union’s status as the representative of the employees.

* * *

For guidance on these and other traditional labor topics, please contact the authors or your Seyfarth attorney in the Labor Management Relations practice group.


[1] Pending at this time is an apparent NLRB effort to restart elections as early as April 6, 2020, but many are questioning the propriety of this.  (See our alert here.)