By: Joshua M. Henderson

Seyfarth Synopsis:  Just when employers thought they were safe to restrict offensive speech and restore decorum in the workplace, a recent decision by the Board serves as a stark reminder that offensive workplace speech may still find protection under the National Labor Relations Act.

In Constellium Rolled Products Ravenswood, LLC, the Board decided that an employee who wrote the words “whore board” on an overtime sign-in sheet was engaged in protected activity by protesting unilateral employer changes to overtime scheduling.

Though the decision split 2-1 (with Member Emanuel dissenting), the Board hardly batted an eye at the use of the word “whore” by an employee in a labor dispute, other than to quote a passage from a prior decision that “the language of the shop is not the language of ‘polite society.’” In fact, the crux of the dispute between the majority and the dissenter was over employer property rights only, and whether employee defacement of an employer’s postings should be protected. Of course, “whore” can mean something other than a misogynistic epithet. Although the Board characterized this language as “harsh and arguably vulgar,” it also observed that the phrase “whore board” was “clearly implying that those who signed it were compromising their loyalty to the Union and their coworkers in order to benefit themselves and accommodate the [Employer].” Maybe. But the Board gives not a whit of concern to this gendered language and how the use of the word “whore” to describe those with whom one disagrees is ultimately corrosive and detrimental to the cause of women’s equality in the workplace.

Judge Millett of the D.C. Circuit issued a powerful opinion two years ago in which she admonished the Board for its casual indifference to the effects of racist and sexist speech while giving wide latitude to the emotional responses one sometimes finds in labor disputes, noting that the Board’s “repeated forbearance of sexually and racially degrading conduct in service of that admirable goal [of protecting section 7 rights] goes too far.”

Given the evidence in this case, however, Constellium is not the best vehicle to judge whether the Board has heeded Judge Millett’s call for greater sensitivity. According to the decision, even supervisors used the phrase “whore board” and vulgar language was otherwise tolerated. Nevertheless, it feels like the Board missed an opportunity to state clearly that language can wound, and that employees can express their fervent disagreement with management without using such language. This case is a practical reminder, too, that employers jeopardize their defense to restricting offensive language in the workplace when supervisors also casually use such language.

By: Kaitlyn F. Whiteside

Seyfarth Synopsis: Seattle has long been at the forefront of progressive labor policies.  Take, for example, its 2014 Minimum Wage Ordinance, which made it the first major city in the nation to increase wages to $15 an hour.  Since then, dozens of other cities have followed suit.  The same story is true of Seattle’s Paid Sick and Safe Time Ordinance, which when passed in 2012, made Seattle only the third city in the nation to implement protected sick leave.  Paid sick leave has spread since that time to more than nine states and countless local municipalities.

Seattle now has a new “first” to add to its resume, one which should cause employers nationwide to pay attention given its track record.  On Monday, July 23, 2018, Seattle became the first city to pass a domestic workers “Bill of Rights,” which extends the protections of its minimum wage ordinance to domestic workers (including independent contractors) and sets standards for meal breaks and rest periods. Seattle now joins other states like New York, California, and Hawaii in implementing domestic workers Bill of Rights.

The Seattle ordinance also establishes a nine-member Domestic Workers Standards Board charged with creating and recommending legislation to the City Council on wage standards, benefits, and worker protections, among other topics.

This body appears to be a de facto “wage board” or bargaining panel, reminiscent of European collective bargaining.  Wage boards operate as industry-wide bargaining groups, setting key threshold terms and conditions of employment.  While prominent in Europe, these industry-wide groups stand in stark contrast to the employer-based collective bargaining model in the United States.

Recently, a number of progressive policy advocates have argued in favor of the creation of national wage boards for the United States, particularly given the decline of unionization in the private sector along with the Supreme Court’s recent decision in Janus.

Whether Seattle’s experiment predicts a national trend remains to be seen.  At a minimum, other cities with progressive labor policies, such as Portland, are likely to follow suit.  Regardless of whether these policies catch on in other municipalities or states, unions and pro-labor advocates hope to replicate the model on the federal level.  The National Domestic Workers Alliance has announced that it will propose a federal Bill of Rights similar to Seattle’s later this year.  Employers should stay tuned and feel free to contact Seyfarth Shaw with any questions.

By:  Bradford L. Livingston

On July 17, 2018, the DOL rescinded its 2016 “persuader rule” — a controversial reinterpretation of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) that would have required employers and their consultants (including lawyers) to report their relationships and the fees paid related to persuading employees “to exercise or not to exercise… the right to organize and bargain collectively… .”

The 2016 rule effectively eviscerated the LMRDA’s exemption for reporting advice, including legal advice, if the DOL concluded that an object of the advice — directly or indirectly — was persuading employees about whether or not to form or join a union.  Activities that would have triggered reporting included indirect consultant activity undertaken with a potential object to persuade employees, such as planning, directing, or coordinating activities undertaken by supervisors; providing material or communications for dissemination to employees; conducting positive employee relations seminars for supervisors or other employer representatives; and developing or implementing personnel policies, practices or actions for the employer.  The reporting would have included any agreements between the employer and third party, and both fees paid to and received by the third party.

Employers and their consultants believed that such reporting would have a chilling effect on employers’ willingness to seek legal advice during union organizing campaigns — a time when obtaining such advice is critical.  Several lawsuits challenged the DOL’s 2016 reinterpretation, and a federal district court entered a nationwide injunction to prevent it from being implemented.  An appeal is pending before the Fifth Circuit Court of Appeals.

After President Trump was inaugurated, the DOL sought public comments as to whether it should rescind the 2016 rule.  Among several other employer groups, Seyfarth Shaw filed comments on our and our clients’ behalf where we argued that the DOL’s 2016 interpretation was contrary to the LMRDA, inherently vague and ambiguous, and would inhibit employers from seeking needed and proper legal advice.

In its final pronouncement yesterday, the DOL specifically cited Seyfarth Shaw’s comments in explaining why the 2016 rule was being rescinded.  The DOL is reverting to the longstanding prior interpretation of the LMRDA and its advice exemption, whereby neither employers nor their consultants or lawyers are required to report advice so long as the consultant or lawyer is not directly persuading employees.

But in Washington, no bad idea ever dies.  Democrats in Congress are looking to pass legislation that would codify the now-rescinded rule.  And who knows what the mid-term elections will bring this November, or what the 2020 elections will bring.  So stay tuned.

By: Glenn J. Smith and Jason J. Silver

Seyfarth Synopsis: Public-sector labor unions were dealt a heavy, but not unexpected, blow as the Supreme Court of the United States issued a landmark decision in Janus v. AFSCME. By a vote of 5 to 4, the Court held that fair share fees for public-sector unions are unconstitutional.   Whether the actual fallout from the decision will match the level of the pre-decision rhetoric remains to be seen. 

Janus v. AFSCME was brought by Mark Janus, a child support worker in Illinois who opted not to join the union, the American Federation of State, County and Municipal Employees (“AFSCME”), that represents Illinois state government employees. The primary issue in the case was the propriety of the $45 “agency” or “fair share” fee that was automatically deducted from Janus’ paycheck on a monthly basis. AFSCME assessed this monthly fee to Janus (and other Illinois government employees who opted out of membership in AFSCME), allegedly for services that nonunion members, like Janus, benefit from, such as negotiating and administering a collective bargaining agreement, and handling grievance procedures.

The decision overrules the prior position of the Court that a public-sector union may collect agency or fair share fees, which has been the law since the Supreme Court’s 1977 Abood v. Detroit Board of Education decision. The Janus v. AFSCME case revisited Abood and examined whether public-sector unions can continue to compel nonunion members to pay agency or fair share fees, or whether they constitute compelled speech and therefore violate First Amendment rights given that the money may also be utilized to support the union’s political speech and legislative agenda.

Janus v. AFSCME has garnered significant national interest and attention, including the filing of over fifty (50) amici briefs, including many from industry groups and labor unions. The primary legal arguments on the issue were as follows:

Janus – Janus argued that the fair share fee constitutes a violation of his First Amendment rights for two primary reasons. First, Janus argued that collectively bargaining with a government employer is akin to lobbying the government. Second, Janus argued that fair share fees are a form of compelled speech and association that deserve strict constitutional scrutiny. Janus further argued that the use of fair share fees for purposes of labor stability and to discourage “free riders” should be found unconstitutional.

AFSCME – AFSCME argued that Janus misconstrues the intent behind the First Amendment, how the Supreme Court has previously applied the First Amendment and the nature and idiosyncrasies of collective bargaining. AFSCME further argued that the Supreme Court has articulated a narrower view of First Amendment rights for public employees, limiting those rights speaking as both a citizen and on matters of public concern. AFSCME highlighted that the Supreme Court has always balanced a public-sector employee’s rights in speech with the government’s interests, as outlined in Abood. AFSCME also argued that collective bargaining primarily concerns terms and conditions of employment, are non-political in nature and have nothing to do with lobbying. AFSCME contended that if the Supreme Court accepts Janus’ arguments, it has the potential to deprive the government from making basic personnel decisions, a managerial cornerstone of collective bargaining.

The Court held that Illinois’ extraction of agency fees from nonconsenting public-sector employees violates the First Amendment. The Court concluded that forcing free and independent individuals to endorse ideas they may find objectionable raises serious First Amendment issues, which includes compelling a person to subsidize the speech of other private speakers.

In rejecting and overturning Abood, the Court reasoned that exclusive representation of all the employees in a bargaining unit and the extraction of fair share fees is not inextricably linked. The Court reasoned that the risk of free riders (nonmembers that benefit from the union’s efforts) is not a compelling state interest sufficient to overcome First Amendment rights. Importantly, the Court held that “States and public-sector unions may no longer extract agency fees from nonconsenting employees.” Specifically, the Frist Amendment is violated when money is taken from nonconsenting employees for a public-sector union. This means that “employees must affirmatively consent before fees can be withheld from their paychecks – the system must be opt-in, not opt-out.[1]

The Court also rejected AFSCME’s argument that public employees have no free speech rights as a position that would have required “overturning decades of landmark precedent.” In determining that Abood must be overruled, the Court primarily considered five factors: “the quality of Abood’s reasoning, the workability of the rule it established, its consistency with other related decisions, developments since the decision was handed down, and reliance on the decision.” Each factor favored establishing new precedent.

The decision in Janus serves to further explain the current Court’s view on the treatment of compelled state speech. In NIFLA v. Beceera, decided the day before Janus, the Court found that the California Reproductive Freedom, Accountability, Comprehensive Care, and Transparency Act (“FACT ACT”) was unconstitutional. The FACT ACT required clinics that serve pregnant women to provide certain notices related to free or low-cost medical services, including abortions. The Court found the FACT ACT to be an unconstitutional content based law that that was not narrowly tailored to serve compelling state interests. In other words, the Court found that the FACT ACT impermissibly mandated speech on a political agenda (i.e. pro-choice), much like the holding in Janus finds that fair share fees used by a union for lobbying impermissibly compels a certain political agenda not narrowly tailored to serve compelling state interests.

Practically, the outcome will necessarily have some impact on the financial statements of unions that are heavily engaged in public sector representation.  Surely, there will be employees who do not work in a right-to-work state (an employee in a right-to-work state does not have to pay fair share fees if not a member of the union), and who will resign their membership based solely on the financial implications. This assumes that reclaiming $540 a year in fees that are no longer required will be meaningful to some state workers.  The magnitude of the defection could potentially determine the fate of some unions, but whether the predicted landslide of members will occur remains anyone’s guess. As noted by the Court, one also must consider the “billions of dollars” received from non-members in the past 41 years.   According to the Bureau of Labor Statistics, 10.7% of U.S. workers were union members in 2017 – down from 20.1% in 1983. Nearly a third of U.S. government employees are members of a public-sector union.

Organized labor will most certainly bemoan the potential impacts, of this decision, particularly following another recent blow to organized labor: the Supreme Court’s decision in Epic Systems holding that the maintenance of individual arbitration agreements containing class-action waivers does not violate the National Labor Relations Act.

[1] It is essential to highlight that the Court’s holding is limited to public-sector unions. It is not unlawful for private-sector unions and employers to negotiate and agree upon agency and fair share fees in collective bargaining agreements, subject to the existence of any right to work laws governing their jurisdiction.

By: Rashal G. Baz

Seyfarth Synopsis: On June 20, 2018, Peter B. Robb, General Counsel for the NLRB, directed regional offices to continue aggressively pursue temporary injunctions to stop categories of potentially unfair labor practices

In a newly released memorandum, National Labor Relations Board (“NLRB”) general counsel, Peter B. Robb (“Robb”) urged regional offices to continue to pursue Section 10(j) relief as an “important tool” for effective enforcement of the National Labor Relations Act (“NLRA”).

Section 10(j) of the NLRA authorizes the NLRB to seek temporary injunctions in federal district courts against employers and unions while a case is being litigated before the administrative law judges and the Board.  Robb touts that “in [his] first six months in office, [he] sent 11 cases to the Board for 10(j) authorization, receiving authorization to proceed” in all of them.

The General Counsel urges regional offices to submit recommendations to the Injunction Litigation Branch of the Board to ask whether or not to seek an injunction for certain types of cases that will most likely warrant a 10(j) injunction. Robb described them as unfair labor practices that may lead to “remedial failure,” including:

  • Discharges that occur during an organization campaign;
  • Violations that occur during the period following certification when parties should be attempting to negotiate their first collective-bargaining agreement; and
  • Cases involving a successor’s refusal to bargain and/or refusal to hire.

Ultimately, Robb notes that “[o]f upmost importance” is that regions expedite the processing of any potential 10(j) case that raises a threat of irreparable harm or remedial failure. The memo explains that the “threshold for proving a violation to a district court is very low” and in light of the highly deferential standard, it doesn’t serve the NLRB’s purposes to delay seeking an injunction solely to strength the theory of violation or merit within the case.

Employers should be mindful of this initiative and, as always, prepared to defend against a possible 10(j) injunction, especially in those categories of cases identified by Robb as appropriate for such extraordinary relief.

By: Glenn J. Smith and Samuel Sverdlov

Seyfarth Synopsis: Given the Ninth Circuit’s recent holding that successor withdrawal liability is governed by a constructive notice standard, private equity companies and other businesses seeking to acquire other enterprises should be hyper-diligent in determining whether the transaction will expose their organizations to withdrawal liability triggered by the seller.

Under the Employee Retirement Income Security Act (“ERISA”), as amended by the Multiemployer Pension Plan Amendment Act (“MPPAA”), generally, an employer may face withdrawal liability when withdrawing from, or ceasing to make payments to, a multiemployer pension plan. If a successor employer acquires an entity that has unpaid withdrawal liability, then the purchasing entity is potentially responsible for that withdrawal liability if it has notice of the liability. Existing precedent provides that to be liable, the purchaser must “(1) be a successor, and (2) have notice of the withdrawal liability.” Withdrawal liability can sometimes be overlooked by successor employers that assume the operations of their predecessor because, broadly speaking, withdrawal liability is an unperfected liability that does not necessarily appear on the seller’s financial statements. Said otherwise, purchasing entities must be completely certain of that which they are assuming.

New case law makes clear that acquirers can no longer simply rely on a seller’s representation that no withdrawal liability exists. On June 1, 2018, in Heavenly Hana, LLC v. Hotel Union & Hotel Industry of Hawaii Pension Plant, the Ninth Circuit held that a private equity company that purchased a hotel in Hawaii was liable for the seller’s unpaid withdrawal liability under the MPPAA. In doing so, the Court overruled the lower District Court’s holding that no withdrawal liability was assumed because “actual notice” was missing. The Ninth Circuit held that the private equity company had “constructive notice” of the selling entity’s unpaid withdrawal liability, which is a sufficient basis upon which to impose successor withdrawal liability “because a reasonable purchaser would have discovered their predecessor’s withdrawal liability.” The Court determined that the purchasing entity had constructive notice of the liability because:

(1) the private equity company had experience with other acquisitions involving multiemployer pension plans, and was familiar with withdrawal liability;

(2) the private equity company was on notice that the employees at the hotel were unionized and that the seller had previously contributed to a multiemployer plan; and

(3) the multiemployer pension plan’s funding notices were publically available, and clearly demonstrated that the plan was underfunded.

The Court rejected the private equity company’s argument that it relied upon the representation of the seller that no withdrawal liability existed. Further, the Court noted that the purchasing entity, rather than the seller or the pension plan, was in the best position to determine whether it will face withdrawal liability because: (1) the seller is incentivized to under-represent any potential withdrawal liability; and (2) the pension plan should not be tasked with keeping track of every sales rumor and identifying all potential purchasers. As the Court stated: “[p]urchasers .. have the incentive to inquire about potential withdrawal liability in order to avoid unexpected post-transaction liabilities.”

This decision serves as a helpful reminder to purchasing entities that in the world of acquisitions, acquirers must push deeply on their inquiries into labor agreements and potential withdrawal liability that frequently accompanies a collective bargaining relationship. As made evident by the Court’s decision in Heavenly Hana, LLC, a purchasing entity cannot simply claim ignorance as an excuse to be absolved of successor withdrawal liability. Rather, purchasing entities should retain experienced transactional counsel, including traditional labor and benefits counsel, to make sure there are no hidden landmines in the transaction.

If you have any questions regarding withdrawal liability, please contact your local Seyfarth Shaw attorney. Glenn J. Smith is a Partner in Seyfarth’s New York office whose practice focuses on management-side traditional labor law. Samuel Sverdlov is an Associate in Seyfarth’s New York office.

The 2018 edition of The Legal 500 United States recommends Seyfarth Shaw’s Labor & Employee Relations group as one of the best in the country. Nationally, for the second consecutive year, our Labor practice earned Top Tier.

Based on feedback from corporate counsel, Seyfarth partner Brad Livingston was ranked in the editorial’s “Leading Lawyers” list, and 4 other Seyfarth Labor attorneys were also recommended in the editorial.

The Legal 500 United States is an independent guide providing comprehensive coverage on legal services and is widely referenced for its definitive judgment of law firm capabilities. The Legal 500 United States recognizes and rewards the best in-house and private practice teams and individuals over the past 12 months. The awards are given to the elite legal practitioners, based on comprehensive research into the U.S. legal market.

By:  Monica Rodriguez

Seyfarth Synopsis: The ALJ found that the employer did not violate the Act where it terminated an employee for using vulgar language during a staff meeting in efforts to undermine the general manager’s managerial authority.

Disciplining employees can sometimes be a challenge when attempting to comply with the National Labor Relations Act (the “Act”). Fortunately for the employer, the Administrative Law Judge (the “ALJ”) in Buds Woodfire Oven LLC d/b/a Avas Pizzeria & Ralph D. Groves, 2018 WL 2298221 (May 18, 2018), found that the termination of the employee who used vulgar language when criticizing the general manager during a staff meeting did not result in protected activity so as to violate the Act.

Background Facts

The general manager of a pizza restaurant had called a staff meeting to make a broad critique of the staff’s performance, and requested feedback from the employees of how they could do better. The general manager set the tone of the meeting by stating that he “didn’t want to come to work to be anybody’s f*cking babysitter.” In response, the charging party employee criticized the general manager and said: “how do you know you don’t do sh*t around here”.

The employee had been frustrated that the general manager did not assist with the kitchen operations like the other managers. The employee had previously expressed his frustration about the general manager to his co-workers. At the hearing, the other employees testified that they joked about the general manager’s actions or inaction, or that they’d ask the general manager to help out in certain cases.

After the staff meeting, the employee went back to work to finish his shift. The general manager terminated the employee after the employee completed his shift. The employee then filed an unfair labor practice claiming that the general manager violated section 8(a)(1) of the Act.

ALJ’s Analysis

The ALJ’s central focus when determining whether the termination constituted a violation section 8(a)(1) of the Act was whether the employee had engaged in concerted protected activity.  The ALJ acknowledged that individual action could rise to the level of concerted activity if those activities were linked to the actions of his co-workers. Just about two years ago, the National Labor Relations Board (the “Board”) reminded that even conduct personal in nature could be enough to constitute concerted activity.[i] The ALJ recognized, however, that the coworkers’ “jokes” about the general manager’s actions and inactions, where none of the coworkers shared the charging party’s concerns,  “falls short of concerted activity.”

The ALJ further noted that it is “difficult to imagine how lashing out at a manager who asks employees for feedback by asking, ‘how do you know you don’t do sh*t around here,’ even begins to lay the foundation for meaningful dialogue about employees’ terms and conditions of employment.” The ALJ found that the employee’s conduct did not entail the nature of his work conditions, but rather, was calculated to undermine the general manager’s managerial authority.

This decision is a pleasant reminder that not all vulgar comments and acts of insubordination need to be tolerated. And while this decision ended favorably for the employer as to this allegation, employers should be mindful that where more than one employee is sharing a similar concern, a vulgar comment seeking to improve employees’ terms and conditions of employment will likely be protected. In these situations, employers should exercise caution before terminating an employee based on the fact that the employee undermined the manager, or the employer might find itself undermined by the Board.

[i] M.D.V.L., Inc., d/b/a Denny’s Transmission Service, 363 NLRB No. 190 (2016) (finding that the employer violated the Act because employee discussed a demand letter for overtime pay with another employee and rejecting employer’s argument that conduct was personal in nature and not concerted protected activity).

 

 

 

 

By Ron Kramer

Seyfarth Synopsis:  While an employer can bargain to impasse and exit a critical status multiemployer pension fund, under the Pension Protection Act it cannot bargain to impasse and implement a proposal that would have it remain in the fund, but under different terms than the rehabilitation plan schedule the parties had previously adopted.

In a case of first impression, the Fourth Circuit held that the Pension Protection Act’s (“PPA”) obligation on bargaining parties to continue to follow a multiemployer pension fund’s rehabilitation plan schedule trumps an employer’s right, upon lawful impasse, to unilaterally implement a proposal to move new hires to a 401(k) plan.  Bakery & Confectionary Union & Industry International Pension Fund v. Just Born II, Inc., Case No. 17-1369 (4th Cir., decided April 26, 2018).

Just Born, the maker of Peeps, participated in the Bakery & Confectionary Union & Industry International Pension Fund (“Pension Fund”).  The Pension Fund is in critical and declining status, and had adopted a rehabilitation plan under the PPA which included a preferred schedule adopted by the Company and its Union pursuant to which Just Born was required to contribute hourly for every bargaining unit employee.

The Company proposed during its 2015 union negotiations that it remain in the Pension Fund for existing employees, but move new hires to a 401(k) plan.  The parties bargained to impasse, and the Company implemented its pension proposal.  The Pension Fund sued.  The Pension Fund relied on a PPA provision (as amended by the Multiemployer Pension Reform Act), 29 U.S.C. § 1085(e)(3)(C)(ii) (“the “Provision”), that the bargaining parties to an expired contract remain obligated to contribute under the rehabilitation plan schedule, which under the Pension Fund’s schedule included all employees, until such time as they reached an agreement.  Indeed, the Provision expressly provides that if the parties cannot reach an agreement within 180 days after contract expiration, the Pension Fund must apply the schedule, as updated, upon which the parties had previously agreed.

The Fourth Circuit ruled for the Pension Fund.  In addition to rejecting various affirmative defenses, the Court rejected the Company’s claim that it ceased being a “bargaining party” governed by the Provision once it reached a lawful impasse because it was no longer a party to an operative collective bargaining agreement.  The Court found that a plain reading of the Provision makes clear that a contract’s expiration cannot alter the employer’s status as a bargaining party.  Indeed, the Provision only applies to parties whose contracts have expired.

The Court further rejected the Company’s Hotel California argument that such an interpretation would mean that once an employer found itself in a critical status plan it would never be able to exit.  The Company argued that Trustees of the Local 138 Pension Trust Fund v. F.W. Honerkamp Co., 692 F.3d 127 (2d Cir. 2012), which upheld an employer’s right to bargain to impasse and implement a proposal to exit a critical status fund, gave it the Company the right to implement its proposal.  The Court distinguished Honerkamp, for it did not provide that an employer could implement a proposal to remain in the fund under different rules than provided for in the rehabilitation plan.

Last but not least, the Company argued that the Pension Fund’s interpretation undermined the Company’s right under the National Labor Relations Act (“NLRA”) to implement its last, best proposal upon impasse.  The Court disagreed, noting that although the right to implement a final offer applies to the Company’s bargaining rights and obligations, the Company’s statutory obligations under the PPA are separate and independent from its rights and obligations under the NLRA.  Just Born was free to bargain to impasse and implement its proposals provided, however, the Company could not implement proposals contrary to the PPA.

Just Born sets an important limit on an employer’s right to bargain to impasse over its participation in a critical or endangered status fund.  An employer is free under the PPA to bargain out and pay the resulting withdrawal liability, even if it has to reach lawful impasse and unilaterally implement.  What it cannot do, according to Just Born, is to remain in the fund but negotiate to impasse and implement conditions on participation different from the rehabilitation or funding improvement plan schedule to which it is a party.  Just Born does not address whether an employer can negotiate to impasse and implement a different schedule provided for in a rehabilitation plan — although it is doubtful since there would still be no agreement as required by the Provision.  Nor does it provide that the bargaining parties can just agree to terms different from a rehabilitation plan schedule.  While a fund may agree to different schedules, it is under no obligation to do so.  Employers beware.

 

  By: Paul Galligan, Esq. and Samuel Sverdlov, Esq.

Last month, the National Labor Relations Board (“NLRB”) vacated election results from a representation election because the Board agent opened the polling for a voting session 7 minutes late. The employer lost the election by a vote of 14-12, with one challenged ballot. However, there were 4 eligible voters (who were present in the polling location during the 7-minute delay) who did not vote in the election. Following the election, the employer filed two objections, one of which challenged the election results because the delay in voting resulted in potential disenfranchisement of a dispositive number of voters. At a hearing before a Hearing Officer, there was no evidence presented regarding either the reasons why the employees did not vote or whether any employees complained that they were prevented from voting due to the delay. Thus, the Hearing Officer overruled the employer’s objection, and the Regional Director adopted the Hearing Officer’s decision.

The employer thereafter appealed the Regional Director’s decision to the Board. In the 2-1 decision, in which Board Members William Emanuel, a Trump-appointee, and Lauren McFerran, an Obama appointee, participated in the majority, together, the Board applied the “potential disenfranchisement test” rather than the “actual disenfranchisement test” to determine whether to set aside the election. The Board majority cited Pea Ridge Iron Ore Co., 355 NLRB 161 (2001) in holding that the key issue in deciding whether to vacate the election is whether the late opening of the polls results in the “possible disenfranchisement of potentially dispositive voters.” As the Board in Pea Ridge stated:

When election polls are not opened at their scheduled times, the proper standard for determining whether a new election should be held is whether the number of employees possibly disenfranchised thereby is sufficient to affect the election outcome, not whether those voters, or any voters at all, were actually disenfranchised.

The Board rejected dissenting Board Member and Obama appointee Mark Pearce’s contention that setting aside an election requires proof of actual-disenfranchisement. Accordingly, the NLRB vacated the results of the election and remanded the case to the Regional Director to conduct a second election.

OUTLOOK

In an era when bipartisan politics appears to be as forgotten as the film, A Bronx Tale, the Bronx Lobster decision reminds us that Republicans and Democrats can still find common ground applying hyper-technical interpretations of union election rules. Specifically, the NLRB is willing to vacate a union election when the polling began 7 minutes late! This decision serves as a valuable lesson to employers that any deviation from the union election rules could result in an election being set aside. Thus, employers should consult with experienced counsel when preparing for a union election to understand the applicable rules, select appropriate observers, and remain vigilant during the election for any irregularities.

If you have any questions please contact your local Seyfarth Shaw attorney.