America’s National Labor Relations Board (NLRB), the agency responsible for conducting elections for union representation and with investigating and remedying unfair labor practices, faces new opposition in its effort to overhaul the union election process and reduce what it deems are “unnecessary” delays. On May 14, 2012, the controversial “ambush” election rule was deemed invalid by the U.S. District Court for the District of Columbia, which held that “no quorum ever existed for the pivotal vote”. The Judge said that in all but limited circumstances, three NLRB members must be “present” to constitute a quorum necessary to adopt a final rule and in this case only two members voted in favour of the new rule while a third did not cast a vote.
Based on the District Court’s decision, the NLRB has temporarily suspended the changes to its representation case process and election procedures which went into effect on April 30, 2012. Likewise, its Acting General Counsel has withdrawn the 24-page guidance that was issued prior to that date and has advised directors to revert to their previous practices for election petitions starting May 15, 2012.
The ruling follows a setback in April 2012, when the U.S. Senate failed to pass a resolution seeking to overturn the new regulation by a narrow vote of 54 to 45. Parties attribute the result to President Barack Obama’s last minute threat to veto any legislation which attempted to override the rule.
The contested “ambush” election rule “approved” in December 2011 was designed to reduce unnecessary litigation in union representation cases and thereby enable the NLRB to better fulfill its duty to resolve expeditiously questions concerning union representation. In reality, it significantly altered the playing field, “ambushing” employers with faster elections, truncated campaigns and lost appeal rights. Key changes that would have resulted from the NLRB’s election rule include:
- Pre-Election Hearings: The new rule virtually eliminates pre-election hearings as a means of resolving issues like the supervisory status of individuals and the composition of the voting unit. For employers, this would have meant that there was little or no means of challenging the make-up of the voting pool until after the election had occurred and the results were publicised.
- Hearing Officer discretion:When a pre-election hearing is permitted, the new rule would grant Hearing Officers enormous discretion on the exclusion of evidence at hearings and the ability to file post-hearing briefs. For employers, this would have meant that there was no guarantee that they would have any ability to provide additional argument or information after the close of the hearing.
- Timeliness: Although the new rule did not specify how soon a pre-election hearing should be held, most Regions issue the Notice of Representation Hearing on the day the petition is filed and schedule the initial hearing for 7-10 days thereafter. Employers would therefore only have had a seven-day window under the new rule in which to prepare for a pre-election hearing once they had received notice. This would have given them little time to prepare for an election and next to no time to communicate necessary information to eligible voters in order to ensure that employees were making informed choices.
- Appeals: The new rule would limit an employer’s right to request special appeals to “extraordinary circumstances” or when the “issue will otherwise evade review.” Likewise, parties may not directly appeal the rulings of the Hearing Officer except by special permission of the regional director.
NLRB's first step in challenging the District Court's decision came in the form of a June 11, 2012 Motion to Amend or Alter Judgment, asserting that Member Hayes "abstained" from the vote but was "present and participating in the very same room [electronic voting room] and at the very same time that this vote was held," providing a quorum and giving the Board the authority to pass the new election rules. The Motion also asks that the new election rules be reinstated pending final judgment.
While it remains to be seen whether these new facts will carry the day, the NLRB Chairman confirms, “[w]e continue to believe that the amendments represent a significant improvement in our process and serve the public interest by eliminating unnecessary litigation” and that “we are determined to move forward.” This time the NLRB will be composed of five members, likely, three Democrats and two Republicans. However, litigation is currently pending on the constitutionality of President Obama’s three Board appointments, which were made in January 2012 while Congress was in recess. Similarly, controversy surrounding the alleged ethical violations of Board Member Terence F. Flynn were resolved on May 26, 2012 when he submitted his resignation, which will become effective July 24, 2012. Interestingly, Flynn previously served as Chief Counsel to former Board Member Brian Hayes, the lone Republican commissioner whose "vote" forms the crux of the District Court's decision to invalidate the controversial rule.
As the fate of the “ambush” election rule continues to unravel, employers should be mindful and educate themselves about the potential impact of the new rule on union election procedures. In addition, employers are best advised to determine who is and is not a supervisor, as defined by Section 2(11) of the National Labor Relations Act, and to adequately train supervisors on how to lawfully respond to employee questions regarding unions in light of the increased media attention.