The General Counsel of the National Labor Relations Board ("Labor Board") recently issued Memorandum GC 16-03 (May 9, 2016) which has wide-ranging implications for companies whose employees are represented by a union. Under the National Labor Relations Act ("Labor Act"), a company has a legal obligation to recognize and bargain with a union when the union has obtained the majority support of the employees in a group (the "unit") within the company. For example, a union may represent a unit of warehouse workers at a company. If a union has won an election to represent the employees, the company has the obligation to recognize the union as the exclusive collective bargaining representative of the employees and the legal obligation to bargain with the union for a collective bargaining agreement setting forth the unit employees' wages, hours and terms and conditions of employment. After a company and union sign a collective bargaining agreement, the company has the additional contractual obligation to comply with the provisions of the agreement.

However, a union may lose its majority support. If a union loses its majority support, a company no longer has the legal obligation to recognize and bargain with the union. The three most common ways for a company to end its legal obligations to recognize and bargain with the union are by withdrawing recognition from the union (1) without a vote by the employees, (2) with a vote by the employees after the employees have filed a decertification ("RD") petition, or (3) with a vote by the employees after a company files a representative ("RM") petition. When a company withdraws recognition without a vote, the union may test the company's action by filing an unfair labor practice charge with the Labor Board. The Labor Board will investigate the union's charge and either dismiss the charge or issue a complaint and hold a hearing at which the company can present evidence that indicates that the union had lost majority support.

The General Counsel of the Labor Board is the chief prosecuting attorney for the agency. He directs the regional directors throughout the country regarding litigation strategy and the arguments to make in hearings. Administrative law judges hear the cases and issue recommended decisions, which could be appealed to the five-member Labor Board. Its members are appointed by the President with the advice and consent of the Senate.

In the recently-issued Memorandum GC 16-03, the General Counsel is now directing the regional directors to argue that a company has violated the obligation to bargain if the company withdraws recognition of a union without obtaining the results of an election either through an RD or RM voting procedure. The General Counsel correctly notes that a withdrawal of recognition could result in unnecessary litigation. In addition, the General Counsel recognizes the importance of letting the employees decide for themselves whether they want to continue to be represented by the union.

However, the General Counsel's desire to have either an RD or RM election can work to a company's advantage in ending its legal obligations to recognize and bargain with a union by filing a RM petition. Under the Labor Act, a company may not unlawfully interfere with the employees' solicitation of their co-workers to sign an RD petition. A company may not encourage the employees to sign an RD petition or solicit the employees' signatures on the RD petition. Whether the employees vote to decertify the union is the employees' decision. Although a company has the right to truthfully inform the employees about the union and share with them information, 29 U.S.C. §158(c), a company may not interfere with, coerce or restrain the employees in their right to have a fair and secret ballot.

However, in the RM process, it is the employer – and not the employees – who files a petition for an election. The election is still fair and by secret ballot. A company begins the RM process by listening to its employees, determining whether there is evidence to show that there is a "reasonable uncertainty" of the union's majority support, and, if so, filling a petition for an election with that evidence. The supporting evidence may be affidavits from supervisors who have heard or seen evidence of the "reasonable uncertainty." The Labor Board's investigator will then investigate whether there is sufficient evidence, and the regional director may order an election.

Interestingly, the Labor Board's new, so-called Quickie Election Rules, issued in early 2015, may facilitate the filing of an RM petition. Although many decry the new rules because they help unions organize employees and proceed to elections easier and faster, the Labor Board's processing of RM and RD petitions will be easier and having an election will occur faster under the Quickie Election Rules. An election under RM and RD petitions may take place within 14-21 days, rather than 40 days under the previous election rules. Therefore, the union will have less time to campaign on its own behalf. A company has its own rights under Section 8(c) of the Labor Act to express "any views, argument, or opinion…, if such expression contains no threat of reprisal, or threat, or promise of benefit." 29 U.S.C. §158(c). In addition, if a regional director dismisses an RM petition, the employees may file an RD petition and start the election process all over again. In the meantime, the union is weakened by the employees' disaffections. Of course, a union may file an unfair labor practice to block an RM or RD petition. However, the Labor Board's own Quickie Election Rules make it more difficult to block an election.

What actions should companies with unionized employees take? First, companies should become aware of the RM and RD procedures and the new regulations issued by the Labor Board last year. Second, a company should listen to its employees and comply with the Labor Act when utilizing the RM procedure. Since 1935 when President Roosevelt signed the Labor Act into law, the foundation of the Labor Act has been the employees' right to choose for themselves whether to be represented by a union. Section 1 of the Labor Act states that it is the policy of the United States to protect "the exercise by workers of full freedom of association, self-organization and designation of representatives of their own choosing." 29 U.S.C. §151. Section 7 states that employees have both "the right…to form, join or assist labor organizations" and "also have the right to refrain from any or all such activities." 29 U.S.C. §157. Companies should take care to effectuate the policies and purposes of the Labor Act, while making strategic decisions to de-unionize.