Change is on the Way from the NLRB

The Obama-appointed NLRB has now issued its first significant batch of decisions1 serving notice, as is typical in the transition from one administration to the next, of a shift in the interpretation of the labor laws. The decisions include a new standard regarding secondary boycotts and union bannering; potential reconsideration of prior precedent; and a differing application of the law to facts than the predecessor NLRB. As a consequence of these decisions (and those anticipated in the future), employers should prepare to adapt to changes in the labor law environment.

The Bannering/Secondary Boycott Case

In a case of first impression, United Brotherhood of Carpenters and Joiners of America, Local Union No. 1506, 355 NLRB No. 159 (2010), the NLRB expanded the economic weapons available to a union and narrowed the protections available to a neutral caught in the middle of a labor dispute. The Carpenters’ Union had long running disputes with four specialty construction employers that were non-union and had allegedly failed to pay prevailing area standards. To protest, the Carpenters displayed 15 x 4 foot banners near the entrances of neutrals, including a hospital and a restaurant, that were customers of the construction employers. The banner did not name the construction employers but, instead, referred only to the neutral customers. For example, at Northwestern Hospital, where one of the contractors was working, the banners stated in large letters “Shame on Northwestern Hospital” and in smaller letters on the side “Labor Dispute.” In each instance, the banner was aimed outwardly at the public and was not accompanied by other conduct, such as carrying of signs, patrolling, or attempted blocking of ingress and egress. Based on these facts, the NLRB concluded that the display of the banner was not coercive—a requisite for violation of one of the law’s secondary boycott provisions. Had the Carpenters’ Union picketed at these locations, carrying picket signs with the same language, it likely would have been a violation of the Act. According to the Board, however, the display of the banner did not constitute picketing, but was more akin to lawful handbilling. Therefore, the secondary boycott provisions of the law were inapplicable. The potential ramifications of this decision are far reaching. Neutrals targeted by bannering may be without a remedy, even when the bannering interferes with their businesses. Moreover, contractors of the type involved here will likely face the prospect of not being able to continue with projects subject to bannering unless they meet union demands.2

Prior Decisions to be Reconsidered

The Board also granted review and invited interested parties to file briefs in two cases in which it will consider overruling precedent concerning a rival union or decertification petition challenge to an incumbent union’s support.

One of the cases, UGL-UNICCO, 355 NLRB No. 155 (2010), involves a new employer’s acquisition of a unionized business where it recognized the union, but did not assume the contract. The current rule, adopted by the Bush Board in MV Transport, 337 NLRB 770 (2002), is that the new employer’s recognition of the incumbent union will not bar an otherwise valid decertification petition or other challenges to the union’s majority status.

Before MV Transport, the successor bar rule, set forth in St. Elizabeth Manor, 329 NLRB 341 (1999), had governed. Under this rule, a voluntarily recognized union was granted a reasonable period of time for bargaining without challenge to its representative status. The Board, by granting review in UGL-UNICCO, will be considering whether the successor bar rule should be reinstated. In the second case, Rite Aid Store #673, 355 NLRB No. 157 (2010), the Board is considering whether precedent set by the Bush Board in Dana Corp., 351 NLRB 434 (2007), should be overturned. In Dana Corp., the Bush Board (over the vigorous dissent of Member, now Chairman, Liebman) overruled a nearly 40-year-old decision holding that a contract entered into after a union has been voluntarily recognized would bar the filing of a decertification petition. Under the rule in Dana, a decertification petition would not be barred (regardless of whether a contract had been entered into) for up to 45 days from the date of posting of an NLRB specified notice of voluntary recognition. Dana further required that the notice advise employees of their right to file a decertification petition within 45 days of the date of the NLRB notice, and specified that the failure to provide such notice would enable a challenge to the union’s majority status at any time.

The decision to grant review in these two cases is illustrative of the obvious willingness of the Obama Board to reconsider Bush Board decisions and to likely come down differently on purely policy grounds. In addition to these two decisions, the new Board will likely consider whether to reverse other precedents as well.3

Differing Application of Law to the Facts

Another observable shift in the Obama Board decisions concerns how the Obama Board views case facts and how it applies the law to those facts. Conduct that might have previously been considered lawful may now become unlawful in the Obama Board’s view, as represented by the following examples.

Unilateral Change Concerning Insurance Benefits After Expiration of a CBA:

The Bush Board held that an employer was permitted to make unilateral changes during a hiatus period between contracts where there was an established practice of making such changes. Thus, in Post Tribune, 337 NLRB 1279 (2002), it ruled that an employer had not altered the status quo by unilaterally increasing employees’ share of health insurance premiums where there was an established practice of allocating insurance premiums on an 80/20-percent and 60/40-percent basis. In similar circumstances, however, the Obama Board ruled otherwise. It held that an employer that had annually made adjustments in its health insurance plan during the life of the CBA violated the Act by making a unilateral change in employee premiums during a hiatus period between contracts, even though the health insurance plan, which was incorporated into the expired CBA, contained reservation of rights language permitting such changes. The Board reasoned that because the established practice had only occurred when a contract was in effect and not during a hiatus period, it could not be relied on as an established practice permitting unilateral change during the hiatus period. E.I. DuPont de Nemours, 355 NLRB No. 177 (2010); and 355 NLRB No. 176 (2010).

Union Requests for Information:

Generally, employers have an obligation to supply information requested by a union that is relevant and necessary to collective bargaining. Previously it had been held that an employer was not required to respond to a premature information request, namely, one made well in advance of the date for commencement of contract negotiations. See General Electric Co. v. NLRB, 916 F.2d 1163, 1170-71 (7th Cir. 1990). The Obama Board has essentially rejected this analysis, holding that an employer was required to answer a local Union’s request (concerning a bargaining unit of 300 employees at one location) for company-wide benefits and health insurance information (covering 60,000 employees, both union and non-union, located at approximately 80 plants across the country) made 15 months in advance of negotiations for a successor contract. The Board ruled that the information was properly disclosable given the bargaining history between the parties, the relevance of the information to the Union’s role as bargaining representative,and because comparative benefit costs between the local union and other company locations had been an issue in two prior sets of negotiation.4 Kraft Foods North America, Inc. 355 NLRB No. 156 (2010).

Employee Behavior Crossing the Line into Unprotected Activity:

An employee who objects to employer practices is typically protected under the Act, but an employee may lose that protection and therefore be terminated/disciplined where the employee’s behavior exceeds certain behavioral limitations. Under this standard, the Bush Board held that an employee’s behavior crossed the line into unprotected activity where he called a manager “a liar and a lying bastard” and a “prostitute to [another] manager” during a discussion of his supervisor’s employment termination. Trus Joist MacMillan, 341 NLRB 369 (2004). In contrast, the Obama Board ruled that employees had not lost the protections of the Act notwithstanding their likely threats directed at management. For example, in one case, an employee was unlawfully terminated even though he responded to a warning by saying: “I’ve been out of work for a year if I get laid off it’s going to get ugly and you better bring your boxing gloves” and “[I have] been out of work for 8 months and it is going to get ugly.” Kiewit Power, 355 NLRB No. 150 (2010). In another case, an employee was held to have been unlawfully terminated despite calling the company’s owner a “f****** m********** and f****** crook and a*******,” and also saying that, if he was fired, “the owner would regret it.” In Plaza Auto Center, 355 NLRB No. 85 (2010).

Pleas of Poverty or Inability to Pay in Bargaining:

Under prior precedent, an employer’s statements that it was in “distress” and “fighting to keep the business alive” did not prove that the employer was pleading an inability to pay Union demands and, thus, failed to trigger financial information disclosure obligations. AMF Trucking & Warehousing, 342 NLRB 1125, 1126 (2004). In contrast, an investment fund’s statement that concessions were needed for the company to become profitable—such as “[the Company is] a bleeding, distressed asset—a losing proposition” and it required savings in its labor costs or it would “not be going forward with the business”—was deemed a plea of poverty triggering disclosure obligations. Stella D’Oro Biscuit Company, Inc., 355 NLRB No. 158 (2010).

Dress Codes and Union T-Shirts:

Absent special circumstances, employers may not impose a dress code limitation on the display of union buttons, pins, stickers or other insignia. Previously, the Board has distinguished buttons and other paraphernalia from rules regarding uniforms, holding that an employer could lawfully enforce its policy requiring employees to wear company T-shirts. Noah’s New York Bagels, 324 NLRB 266 (1997). In Stabilus, Inc., 355 NLRB No. 161 (2010), however, the Obama Board found a union T-shirt equivalent to a union pin or button. Thus, the Company’s uniform policy could not be lawfully enforced to prevent an employee from wearing a union T-shirt, particularly since the employer had made exceptions to its uniform policy on certain occasions, such as Halloween, the Superbowl, and the anniversary of 9/11.

Low-Level Supervisors’ Comments as Evidence of Unlawful Motive:

Under prior precedent, a low-level supervisor’s antiunion sentiments did not provide evidence of an employer’s discriminatory motive. See Wild Oats Markets, 339 NLRB 81, 88 n. 10 (2003) (“Because [the supervisor had] no involvement in the decision to sell the store, his statements to the employees do not establish an unlawful motive”); Detroit Newspaper Agency v. NLRB, 435 F.3d 302, 310 [178 LRRM 2961] (D.C. Cir. 2006) (alleged antiunion statements of a supervisor did not support a finding of animus where the supervisor “was not directly involved in the final decision to terminate [the employee], so any potential impact he had on that decision was necessarily circumscribed”). However, under the Obama Board, antiunion comments from a low-level supervisor—who was not personally involved in the employer’s decision not to hire certain employees—could be used to infer that the employer had an unlawful motive. TCB Systems, Inc., 355 NLRB No. 162 (2010).  

Harassment Policies:

Under the Bush Board, an employer’s anti-harassment policy prohibiting harassment of “other employees, supervisors, and any other individuals in any way” was lawful, as there was no reason to believe that employees would interpret the rule to prohibit conduct that did not rise to harassment, or that the employer would apply it in that manner. Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004) (emphasis added). However, in that decision, now Chairman Liebman (and Member Walsh) dissented and stated that the employer’s anti-harassment policy was unlawfully overbroad and could “reasonably be understood to include an employee’s repetition of an unwelcome message (for example, “Vote Yes”) to an unsympathetic coworker.” Id. at 651. Recently, Chairman Liebman was in the majority in finding unlawful an employer’s posting that: (a) reminded employees of the “hospital wide policy … addressing illegal harassment … ; (b) stated that “harassment or threatening behavior in any degree by or between employees will not be tolerated”; and (c) stated that employees who feel harassed “in any way” have the right to talk to Human Resources. Boulder City Hospital, Inc., 355 NLRB No. 203 (2010) (emphasis added). While the unlawfulness in this case stemmed from the employer’s posting a memo about its policy, rather than the policy itself, the majority made clear that it disapproved of the posting’s “broad, general language” that “invoked the subjective reactions of employees in inviting them to report coworkers’ conduct.” Id.

Conclusion

It is evident that the Obama Board will not hesitate to overturn legal doctrine it disagrees with or to apply the law to a set of facts different from the predecessor Board. Regardless of whether legal doctrines are changed or the Board merely tweaks and applies the law to the facts differently, employers are sure to be affected by such changes and, thus, should stay tuned to monitor any future developments.