Notwithstanding the D.C. Circuit’s widely reported decision last month in Noel Canning v. the National Labor Relations Board, this is not a time for nonunion employers to rejoice. The technical, constitutional appointments issue involving the NLRB is far from settled and inevitably will require the U.S. Supreme Court’s review.
With cases pending in several other circuits raising the same issue, the D.C. Circuit decision creates a conflict in the circuits. In 2004, the Eleventh Circuit held in Evans v. Stephens that intrasessional recess appointments are constitutional.
Moreover, the D.C. Circuit acknowledges the existence of such a practice by both parties since 1867, and concurring Judge Thomas Griffith acknowledges a practice of recess appointments to fill vacancies occurring prior to an intercession of Congress going back to "at least the 1820s."
The White House has called the D.C. Circuit decision "novel and unprecedented," and NLRB Chairman Mark Gaston Pearce has predicted that "the president’s position in the matter ultimately will be upheld." The chairman said simply, "the board has important work to do ... [and] we will continue to issue decisions."
Under these circumstances, including union politics, it would be risky for employers to mimic the ostrich with its head in the sand in hopes that nothing the NLRB is doing right now will matter much in the end. Even if all the appealed NLRB decisions going back to August 2011 (the expiration of Wilma Liebman’s term, making Craig Becker’s intrasessional appointment imperative for a quorum) ultimately are vacated or perhaps remanded, presumably, the same or similar decisions would be rubber-stamped or reissued by a new majority-Democrat board sometime in the next four years.
Indeed, after New Process Steel v. NLRB—the 2010 case in which the Supreme Court ruled that it was illegal for the board to act without a quorum of three members—a valid quorum had to revisit and resolve nearly 600 cases. With only a few exceptions, the results were not materially different than before.
Although this could be expected, given that most of the invalid decisions had been issued by a Democrat, Wilma Liebman, and a Republican, Peter Schaumber, it seems reasonable to assume that there will be a valid board of Democrats and Republicans in the next year or two, with the Democratic majority continuing on the same path toward enhancing the opportunity and power of unions to organize workers that the NLRB has followed for the last four years.
As the constitutionality of the recess appointees issue is sorted out in the courts, there is no reason to think that the acting NLRB general counsel will issue guidance or prosecute complaints differently than he has for the last two or three years, or that the administrative law judges will not decide the facts within the framework of decision-making established by the current board.
During his first term, President Obama was committed to appointing majorities favorable to organized labor at the NLRB. This political commitment will not change due to the recess-appointments dispute. This reality, coupled with the tenor of the NLRB’s decisionmaking within the past two or three years, could cause major problems for American employers over the next four years.
While a couple of NLRB initiatives during the president’s first term have been halted by the federal courts for the present, now is the time for employers to prepare to meet and resolve the problems they face. Even if some of the volleys of the first term are struck down by the federal courts as appeals proceed, the record of the Obama board shows that the pro-union majority and the general counsel’s office at the NLRB will do everything possible to expand union organizing.
Indeed, the NLRB’s record in the last year alone has been replete with decisions enhancing an expansive view of nonunion employees’ rights to engage in protected, concerted activity.
- Some noteworthy recent decisions:
- Reversed the board’s longstanding position, allowing employers to instruct employees to keep ongoing internal investigations confidential (the Banner Estrella Medical Center decision);
- Reversed a board position existing since the 1930s to, for the first time, require a newly organized employer without a first contract to immediately bargain with the new union over every discretionary discipline decision pertaining to any employee, even before a contract has been reached to govern the discipline and grievance process (the Allen Ritchey Inc. decision);
- Reversed a 34-year-old precedent exempting witness statements given as part of an employer’s internal investigation from disclosure to unions as part of a response to a union information request (the Piedmont Gardens decision);
- Reversed a 50-year-old precedent that a "dues check-off" provision in a collective bargaining does not require the employer to continue to withhold employee dues for the union after the collective bargaining agreement has expired (the WKYC-TV decision);
- Found unlawful an employer’s policy requiring employees "to be courteous, polite and friendly" and that no one "should be disrespectful or use profanity or any other language which injures the image or reputation" of the employer (the Karl Knauz Motors decision);
- Ruled that an employer’s mandatory dispute resolution program violated the National Labor Relations Act because employees could reasonably interpret the program as preventing them from filing unfair labor practice charges, even though the program expressly said that employees could still file charges with government agencies (the Supply Technologies decision).
This is not to mention the significant holdover problems for employers from the Obama board’s first term. Those initiatives have raised the specter of employees banding together via the likes of Facebook to form unions under the government’s so-called "ambush election" rule and may boost the likelihood of ad hoc, gerrymandered union representation elections. They include a requirement that employers tack up prominently placed posters notifying workers of their organizing rights — and the board even created an NLRB website that aims to use the power of the Internet to boost union organizing.
Ambush Elections. To understand the consequences of the board’s pro-union bent, one need only to look closely at some of its most significant first-term decisions and initiatives. Most prominent among these is the so-called "ambush elections" rule change, which would mean that balloting for union-forming elections would occur 15 to 30 days after a petition is filed, thereby giving employers far less time to respond to union-organizing campaigns.
For now, this proposal is in a holding pattern: In May 2012, a federal judge invalidated the new election procedures, noting that the NLRB did not have a quorum when the rule was finalized last December (this quorum issue is separate and apart from the constitutional issue addressed by the new D.C. Circuit decision in Noel Canning v. NLRB).
But this means that the rule has been delayed by a mere procedural technicality. The NLRB has appealed the lower court decision to the U.S. Court of Appeals for the District of Columbia, and briefing is complete. Even if the Court of Appeals upholds the lower court’s decision that the rule is technically invalid, NLRB Chairman Mark Pearce has promised that the rule will be reissued.
If the new or a similar rule becomes law sometime in the next year or two, as seems quite possible, the blow to employers will be significant. "Make no mistake, the principal purpose for this radical manipulation of our election process is to minimize, or rather, to effectively eviscerate an employer’s legitimate opportunity to express its views about collective bargaining," wrote Republican member Brian Hayes when the rule was first proposed.
In fighting union drives, after all, employers have historically had approximately six weeks to make their cases. If forced to rush messages and meetings without full deliberation and planning with an attorney, they may not communicate clearly and effectively and could also easily commit flagrant legal violations. If so, even if the union loses the election, the NLRB may order the employer to bargain with the union, based on NLRB v. Gissel Packing Co. Inc., 395 U.S. 575 (1969).
Required Notice and Information. Another change, stayed for now due to conflict in the federal courts, would require employers to post notice of union-organizing rights, spell out actions that would illegally interfere with such rights and provide contact information for the NLRB. These posters would have to be placed in conspicuous locations in the workplace.
While this might sound like a trivial matter, it is nothing of the kind: If they ignore the rule, employers who get dragged into unfair labor practice cases could be vulnerable to charges of unlawful motive.
Also established last year was a board-operated website designed to promote concerted activity among nonunion employees. The site educates workers about their legal rights to engage in "protected concerted activity" under Section 7 of the NLRA—i.e., to communicate with one another and band together to present issues to employers concerning wages, benefits and working conditions.
The examples chosen by the NLRB for the website are presented in a partisan way. They show workers how they might team up at the worksite and contain quotes from the workers themselves suggesting that they must take such concerted actions in order to prevent employers from riding roughshod on employees’ protected rights to band together.
Defining Units. Also of critical importance are the "microunions" decisions. In August 2011, in Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83, the board ruled that certified nursing assistants at nursing homes could vote without the inclusion of other nonprofessional employees—even though the latter (larger) group clearly shared a community of interest with the union’s handpicked voting unit.
For the larger unit to exercise control, the NLRB said, the employer must show that the larger unit has "an overwhelming community of interest" with employees in the would-be microunion. In effect, this allows ad hoc gerrymandering in virtually every union election. This decision is now before the U.S. Court of Appeals for the Sixth Circuit in Cincinnati, and amicus briefs abound.
Meanwhile, in January 2012, the NLRB ruled that 31 Thrifty car rental service agents at Denver’s airport could vote without the 78 other bus drivers, mechanics, shuttle operators and back-office staff assistants working there. And also last year, the NLRB’s New York City regional director permitted an election at Manhattan’s Bergdorf Goodman department store that would include only the "regular and part-time women’s shoes associates on the second floor to vote with the fifth-floor contemporary shoes department" employees, while excluding other employees.
Social Media. Finally, the NLRB’s views (including the three sets of guidance issued by the acting general counsel) on social media should give any employer pause. The board has suggested that workplace- related conversations via these communications vehicles are covered under Section 7 of the NLRA.
These rights apply to both union workers and the 93 percent of American workers in private enterprise who are nonunion. Thus, as the NLRB seeks to monitor and regulate employee use of Facebook, Twitter and the like, unwitting, nonunion employers could easily get hit with charges of unfair labor practices. Section 7 of the NLRA broadly covers speech that deals with the terms and conditions of employment—most commonly, wages and benefits, treatment by supervisors, work assignments and disciplinary measures.
Under today’s NLRB, however, these protections extend to precisely the type of speech that would prompt many employers to terminate an employee. It has been determined that calling a supervisor things like an "an egotistical fuck" is protected! Even as they try to protect the image and reputation of the company, its managers and employees, employers must take great care to avoid violating employees’ Section 7 rights.
When it comes to countering union social media tactics during union organizing, best practices include monitoring and, if necessary, responding to union websites, Twitter feeds, public Facebook pages, blogs and forums.
However, employers should steer clear of password-protected sites, including employees’ Facebook and Twitter accounts. Because of the potentially coercive effect and other legal issues, management should also not "friend" hourly employees.
Surveillance is a key issue here. It is a good idea to understand and study analogous violations of Section 8(a)(1) of the NLRA—cases in which employers were found guilty of violating the NLRA by, say, spying on parking-lot union meetings or confronting employees passing out handbills on the property.
In its 2001 decision in U.S. Coachworks (334 NLRB 955), the board ruled that creating the impression of surveillance violates Section 8(a)(1). Employers should not use any website to question or interrogate employees.
Best Practices. In working to maintain nonunion status, employers should consider adopting certain pre-petition best practices. The easiest strategy is to work hard to communicate that the company’s business success is fairly shared with each employee, incrementally over time. Other basic tactics include respectful communication at all levels and messaging that helps employees grasp the importance of their stake in the business.
Smart companies often hold semiannual senior management meetings with all employees at every location. The goal is not only to share progress toward the common vision but also to answer questions. If needed, this can include addressing the positives of nonunion status, the disadvantages of unionization and the meaning of signing union authorization cards. Details can be provided on incremental wage and benefit improvements.
It is a very good idea to train or retrain all supervisors concerning union organizing. The materials should cover why employees join unions; the company’s position on this; details about the election process and union-organizing tactics; warning signs of union-organizing and card-signing; tips on skillful communication about unions; lists of management actions prohibited by labor laws and more.
In advance, prepare legally defensible PowerPoint presentations for employee meetings, as well as training materials for the management response team. These might include "Did You Know?" mailings, emails and handouts for use in prepetition campaigns and during 15- to 30-day election campaigns. These counsel-prepared materials should be set up on a password-protected internet site for easy access by the campaign team.
Such efforts might also include union-vulnerability "assessments" or "audits" of employee attitudes and concerns. Legally-trained management teams of ombudspersons, for example, might fan out to interview all employees individually at each location at least once a year to take the "pulse" of any employee concerns.
They should file written reports and recommend action to senior management on issues such as morale, management relations, safety, equipment and facility conditions. Based on this information, senior management should hold field management accountable during monthly conference calls. The object is the best possible employee satisfaction.
Every company should be prepared to address things such as union wage and benefit differentials and whether contracts would make the company uncompetitive. Meanwhile, it makes sense to require human resources and/or legal review and advise on every final warning, suspension or discharge decision. This protects morale and can help lessen interest in union organizing.
The process should include standard lists of questions asked by the local manager each time such a decision is made and possibly, peer-review boards to vet such decisions. Handled correctly, these processes will build trust.
The company should establish open doors to management at all levels for both suggestions and the rapid resolution of complaints. Most nonunion shops claim to have such a policy, but many fail to truly open their doors at all levels or to ensure that responses are delivered within a set number of days.
Research on communication also shows that repetition is helpful. Say the same thing in more than one medium. Letters, emails, magazines, newsletters and newspapers can all be enlisted to reinforce key messages. And when it comes to building a people-centric culture, make liberal use of stories about employees, pictures of families and outings, kudos for employee milestones and the like. All of this can help build a "family spirit."
Lastly, employee handbooks and/or written policies should cover things such as the company’s preference for union-free operations, its procedures to ensure diversity and its vision of fair and progressive discipline. Details should be provided on how the company manages absenteeism, promotions, transfers, seniority (if desired) and other important facets of the employee-employer relationship. A viable social media policy drafted by counsel may also be included.
After all, transparency and clear communication do not undermine company "flexibility." But unions, on the other hand, certainly can.
Note: The article first appeared in Law360.