Recently and just prior to the expiration of National Labor Relations Board Chairman Wilma Liebman’s term, the Board issued two decisions that reverse the rights of employees to challenge the majority status of their unions following a voluntary recognition of the union by the employer or a sale or merger involving their employer. These decisions represent yet another example of the Board’s ideological shift towards creating a more union-friendly legal environment under President Obama’s administration. 

In Lamons Gasket Co., 357 NLRB No. 72 (August 26, 2011) the Board reversed its 2007 decision in Dana Corp.  Under Dana Corp., 351 NLRB 434 (2007), the Board required employers who voluntarily recognized unions to post a notice to their employees for 45 days informing them of the voluntary recognition. The notice had to contain employee rights and options regarding that voluntary recognition such as challenging that recognition. During that 45-day period, for instance, employees could file a decertification petition to reverse the employer’s voluntary recognition and vote to expressly reject union representation. Alternatively, another union could file a petition seeking to represent the same employees.

As a result of the Board’s decision in Lamons Gasket, however, neither the employees nor a rival union may challenge the recognized union’s status until a “reasonable period of time” after the voluntary recognition. This reasonable period of time ranges from six months to a year, depending on the circumstances.

In UGL-UNICCO Service Company, 357 NLRB No. 76 (August 26, 2011), the Board overruled another of its prior decisions, MV Transportation, 337 NLRB 770 (2002). Under MV Transportation, after a sale or merger of a unionized company, the bargaining unit employees or a rival union had the option to immediately challenge the union’s representative status in a Board-conducted secret ballot election. As a result of UGL-UNICCO, however, the incumbent union’s status as the employees’ bargaining representative is only subject to challenge after a “reasonable period of time” following the sale or merger. If the employer agrees to follow the existing collective bargaining agreement, this period is six months. If. Instead, the employer exercises its right to set new initial terms and conditions of employment, the bar to challenging the union’s status can be extended to a year.

Employers need to consider the impact of these cases when contemplating mergers or acquisitions and in deciding whether to adopt an existing collective bargaining agreement or unilaterally set initial terms and conditions of employment.