On December 12, 2014, in a significant but expected victory for organized labor, a divided National Labor Relations Board ("NLRB" or the "Board") announced that it approved implementation of amendments to the Board's rules and regulations governing union elections ("Final Rule"). The Final Rule, which was approved by a 3–2 vote along partisan lines, will become effective on April 14, 2015, and substantially adopts the amendments proposed in February 2014. Unlike the Board's previous attempt in December 2011 to change the election rules, which was invalidated by a district court for being adopted without a necessary quorum, this time there appears to be no dispute that the Board's Final Rule was adopted with the participation of five confirmed Board Members. The Final Rule, however, is still likely to be challenged on other grounds, which could affect the effective date of the Final Rule.
Board Chairman Mark Gaston Pearce and Members Nancy Schiffer and Kent Hirozawa, all Democrats, voted in favor of adopting the Final Rule. In the Board's press release announcing the Final Rule, Chairman Pearce said the amendments "will modernize the representation case process" and that "[s]implifying and streamlining the process will result in improvements for all parties." In the summary of the Final Rule, the Board majority states the amendments "remove unnecessary barriers to the fair and expeditious resolution of representation cases." Final Rule, 79 Fed. Reg. 74308.
Members Philip Miscimarra and Harry Johnson, both Republicans, vigorously dissented from the Final Rule in its entirety, criticizing the "immense scope and highly technical nature" of the amendments and writing that "[t]he Final Rule has become the Mount Everest of regulations: massive in scale and unforgiving in its effect." Id. at 74430. The dissent noted the Final Rule "leaves unanswered" the question of "whether and why rulemaking is necessary," given that "the overwhelming majority of existing elections occur without any unreasonable delay…." Id. at 74431. (Emphasis in original). The dissent characterized the Final Rule's "primary purpose and effect" as being that "initial union representation elections must occur as soon as possible." Id. at 74430. The dissent also criticized the Final Rule's "election now, hearing later" and "vote now, understand later" approach, concluding that the Final Rule is "fundamentally unfair and will predictably deny parties due process…." Id. at 74430-31.
As discussed in our labor blog post on February 19, 2014, the now-adopted Final Rule substantially shortens the period between the date that a representation petition is filed with a Regional office of the NLRB and the date the election will be held, allowing for what many commentators have referred to as "quickie" or "ambush" elections. Almost all election-related disputed issues will now be resolved after the election. Also significant is the requirement that employers more quickly and more expansively provide unions with employees' contact information. In sum, the new rules will make it more difficult for employers to communicate effectively with employees before an election is held.
Below is a summary of the key changes in the Board's revised election rules:
- When a petition for a representation election is filed, the employer must post and distribute to employees a Board notice about the petition and the potential for an election. If the employer customarily communicates with its employees electronically, it must distribute all election notices to employees electronically in addition to paper postings in the workplace. This is not currently required.
- Pre-election hearings will be scheduled eight days after a hearing notice is served. Employers will have to produce a preliminary voter list, including names, work location, shift, and classification, no later than one day before the start of the pre-election hearing. This is sooner than under current practice.
- Employers will also have to submit a written position statement one day before the start of the pre-election hearing that sets forth the employer's position on election-related issues, including supporting offers of proof and identifying any disputes as to the composition of the bargaining unit sought by the union. Any issues not identified in the employer's position statement will be waived, with the exception that timely amendments to the statement may be made on a showing of good cause. This is not currently required.
- Parties will no longer have a right to file post-hearing briefs but must be granted leave to do so. As such, a decision and direction of election could issue anytime after the close of the hearing.
- Pre-election Board review of rulings by the Region are generally eliminated absent a compelling reason. A party can seek review of all rulings by the Region through a post-election request for Board review. However, post-election Board review will now be at the discretion of the Board and not as of right.
- The final voter eligibility list must be produced electronically to both the Region and the union within two business days after the Region issues the decision and direction of election (as opposed to seven days under current practice). In addition to names and addresses, the final voter list must include employees' phone numbers, email addresses (when available), shifts, and work locations.
- The automatic 25-day waiting period following the issuance of a decision and direction of election has been eliminated. There is still a 10-day waiting period after the final voter list is provided to the union. However, the union may waive this 10-day period, meaning that elections could be held as soon as two days after the decision and direction of election is issued (when the election notice posting period is completed).
The NLRB General Counsel's office will likely issue additional guidance to the Regional Directors regarding implementation before the Final Rule becomes effective. One issue we would expect to be addressed in such guidance is modification to the current target for stipulated elections. Under the current rules, approximately 90 percent of election petitions proceed to election without hearing pursuant to stipulated election agreements, which Regional Directors will approve provided the agreed-upon election date is scheduled within 42 days after the petition was filed. Under the streamlined election procedures adopted in the Final Rule, however, contested elections can be scheduled as soon as nine to 19 days after the petition is filed. As such, the current 42-day target will provide little incentive for unions to agree to stipulated election agreements as it represents a significantly slower vehicle to scheduling an election. While this 42-day target will almost certainly be revised downward by the General Counsel's office, it remains unclear what the new target will be. For example, a target of 10 days or less provides little or no incentive for employers to enter a stipulated election agreement as it provides too little time to communicate effectively with employees, and proceeding with a contested pre-election hearing may result in an election not being held until 20 days after the petition was filed.
The truncated procedures adopted by the Board's Final Rule raise a host of potential timing and due process concerns for employers and will no doubt be challenged in court under the Administrative Procedures Act and other grounds.
Employers should consult with legal counsel to prepare for increased union-organizing activity and a significantly compressed time schedule for responding to election campaigns, including making certain determinations in advance, such as appropriateness of potential bargaining units and the supervisory status of first-level supervisory and lead persons. The alternative may be having to hurriedly make crucial and often fact-intensive determinations after an election petition is filed, when faced with a NLRB hearing in eight days and a potential employee election in as little as 10 days.
Corey Clay, an associate in the Cleveland Office, assisted in the preparation of this Alert.