The Obama National Labor Relations Board (“NLRB”)1 has started to make its mark on the labor laws through a series of changes that collectively may have a significant impact on the labor law environment.
Recently, it issued a proposed rule requiring employers to post notices informing employees of their rights to unionize; signaled an intention to revisit circumstances where an employer may lose the right to bar non-employee union organizers from its property; and upheld the lawfulness of entering into a collective bargaining agreement where the employer had pledged neutrality while the union sought to secure representational status by a card check.
In addition, the NLRB’s General Counsel has directed regional offices to expand the use of injunctions in organizing cases and require new default language in settlement agreements. He also recommended a change in the rules on deferral to arbitration and announced plans to sue four states whose citizens adopted ballot measures mandating secret ballot elections as the only proper path to union representation.
Enhanced Remedies in Back Pay and “Nip-in-the-Bud” Cases
Consistent with the NLRB’s approach to enhance available remedies2 for unfair labor practices, General Counsel Solomon announced, in late December 2010, his intention to pursue enhanced remedies in union organizing situations in order to “nip-in-the-bud” any employer interference with employee free choice.
The General Counsel’s announcement in Memorandum GC 11-01 follows Memorandum GC 10-07, which announced that the Board will strongly consider injunctive relief for discriminatory discharges during organizing campaigns. The GC Memorandum lists threats, solicitation of grievances, promises or grants of benefits, interrogations and surveillance as “serious” violations warranting enhanced relief. If an employer is charged with any of these practices during an organizing campaign, the NLRB’s regional offices will seek injunctive relief in the appropriate United States District Court. Furthermore, depending on the facts, the following remedies may be sought from the district court:
- • Requiring management officials to read the Board’s cease-and-desist notice to employees
- Requiring management officials to read the Board’s cease-and-desist notice to employees Requiring employers to give the union access to employer bulletin boards, and, if appropriate, electronic bulletin boards, e-mail, or intranet postings
- Requiring employers to give the union access to an updated list of employees’ names and addresses, for a longer and earlier time period than would be required under Excelsior Underwear (which does not require such a list until shortly before a union election is scheduled).3
Additionally, if Regional Directors determine that an employer’s practices have a severe enough impact on the union’s ability to communicate with employees, greater relief may be authorized, including: granting the union access to non-work areas during employees’ non-work time; giving the union notice and opportunity to respond to any company addresses regarding union representation; and allowing the union to address employees at an appropriate time prior to a Board election. These extreme remedies may also be deemed appropriate if an employer makes multiple captive audience speeches or if the employer has repeatedly violated the Act.
Board Authorizes Lawsuits Against State Secret Ballot Requirements
In letters dated January 13, 2011, Solomon notified the attorneys general in four states – South Dakota, Arizona, Utah and South Carolina – that the Board had authorized him to seek injunctions in federal court to prevent enforcement of their recently passed constitutional amendments requiring secret ballots in union elections. These amendments are more restrictive than federal law, which allows employees to authorize union representation either by secret ballot or voluntary recognition based on authorization cards signed by a majority of employees. Solomon argues that these amendments are preempted by the U.S. Constitution’s Supremacy Clause because they do not permit, as provided for by current federal law, determination of union representation by authorization cards. Litigation appears likely, as all four attorneys general have publicly indicated their willingness to resist the General Counsel’s actions rather than ignore their voters’ will by bypassing the amendments.
Expanded Use of Default Language in Settlement Agreements
Also in January, Solomon issued Memorandum GC 11-04, which expands the use of default language in settlement agreements. In it, he instructs Regional Directors to include default language in informal settlement agreements and compliance settlement agreements, potentially increasing liability for employers who settle, rather than litigate, NLRA claims.
Under the required default language, an employer’s alleged breach of a settlement agreement allows the Regional Director to issue or reissue the original complaint or compliance specification within 14 days. Furthermore, the default language provides that the original complaint or compliance specification will be deemed admitted, and the employer’s answer deemed withdrawn. After the Regional Director takes action, the employer may challenge only the alleged failure to comply with the settlement agreement. The default language will also allow the Board, without a hearing, to find all allegations relating to the original complaint or compliance specification to be true, make findings of fact and conclusions of law accordingly, and issue an order providing a remedy for the alleged violations.
Whether this default language has shifted the cost-benefit balance in favor of litigating claims rather than settling them remains to be seen.
Proposed New Limits on Arbitration Deferral Process
In Memorandum GC 11-05, issued January 20, 2011, Solomon also urged the Board to limit its deferral to parties’ resolution of NLRA rights through the grievance/arbitration process. As articulated in Olin Corp., the Board currently considers an arbitration award a final resolution of an NLRA dispute if the related contractual and statutory issues were “factually parallel,” and the parties presented to the arbitrator the “facts relevant to resolving the unfair labor practice charge.”4
Solomon, however, has urged the Board to take a less deferential approach to Section 8(a)(1) and 8(a)(3) cases alleging discrimination against or interference with protected concerted activity. Specifically, Solomon requested that the Board not defer unless the party urging deferral demonstrates that: (1) the contract incorporated the statutory right or the parties presented the statutory issue to the arbitrator; and (2) the arbitrator correctly enunciated the applicable statutory principles and applied them. Even then, Solomon requests that the Board not defer if the arbitrator’s award is “palpably wrong” and would be “clearly repugnant” to the Act. Solomon also urged the Board to cease deferring to pre-arbitral award grievance settlements unless the parties themselves intended the settlement to also resolve the unfair labor practice issues.
Whether or not the Board adopts Solomon’s recommendation, the proposed changes demonstrate Solomon’s intent to restrict employers’ ability to resolve NLRA disputes outside of the formal hearing process.
NLRB Adopts New E-Posting Requirement and Proposes Rule Mandating Poster Explaining Right to Unionize
The Board also recently enhanced employers’ and unions’ obligations to post remedial notices electronically in J. Picini Flooring, 356 NLRB No. 9 (2010). In Picini, the Board held that employers or union respondents who customarily communicate electronically with their employees or members must post remedial notices in the same fashion.
The Board followed up on Picini by issuing a Notice of Proposed Rulemaking regarding NLRA notice posting. The proposed rule, if adopted, would require employers to physically display a notice of employees’ rights under the NLRA in all workplaces covered by the Act.5 The proposed rule, similar to Picini, would also require employers that customarily use e-mail to communicate with employees to prominently post the required notice on their websites or intranet pages, or to distribute the notice via e-mail. The required notice would inform employees of their rights to act collectively, discuss the terms and conditions of their employment with each other or a union, or form a union for the purpose of collective bargaining. The required notice would also state that employers may not lawfully question employees about union activities, stop them from soliciting for a union during non-work time, or prohibit employees from displaying union insignia absent special circumstances.
The proposed rule’s potential to increase employers’ vulnerability to unfair labor practice charges makes it especially noteworthy. Not only would the rule make a failure to post the required notice an unfair labor practice, it would also allow the Board to find that the six-month period for filing any charge did not begin until the employer posts the notice or the employee acquires actual or constructive notice that the employer may have acted unlawfully. Finally, failure to post the required notice would also impede an employer’s ability to defend itself against other charges because the Board may interpret a failure to comply with the posting requirement as establishing an unlawful motive for other alleged NLRA violations.
In a Limited Holding, the Board Upholds Employer’s Negotiations with an Unrecognized Union
It has long been the rule that it is unlawful for an employer and a union to negotiate or enter into a collective bargaining agreement before the union has been recognized as the employees’ representative. However, in Dana Corp., a decision issued on December 6, 2010, the Board found that an employer’s negotiations with an unrecognized union did not violate the Act.6
The union in Dana had begun an organizing campaign, but had not yet secured the employees’ approval to act as their representative. The employer and the union entered into an agreement in which the employer promised to remain neutral and to recognize the union if a card check revealed a majority of employees favored representation by the union. The agreement also established a framework for future bargaining if the employees approved the union. In a 2-1 decision, the Board held that neither party violated the Act because their agreement did not prematurely recognize the union as the employees’ exclusive bargaining representative. Further, the agreement did not limit employees’ freedom to approve or disapprove the union, and specified that employee approval was not a foregone conclusion.
While this decision could be read as the latest move by the Obama Board to encourage union organization, the reach of the Dana decision is more limited than it initially appears. The Board noted that every case must be evaluated on its own facts, and it “[left] for another day the adoption of a general standard for regulating prerecognition negotiations between unions and employer[s].”7
Further, the decision may actually benefit some employers. Included in this category are those employers who have adopted a labor relations strategy of neutrality and voluntary recognition based on card check who want certainty about what may be contained in a collective bargaining agreement. Also in this category would be those employers who are seeking to purchase a unionized business. While not every prerecognition agreement will be lawful, this decision rejects the argument that an employer and an unrecognized union commit a per se violation by engaging in negotiations over substantive terms and conditions of employment. Thus, employers may be able to negotiate with the union representatives of the employees of businesses they are considering purchasing without running afoul of the law.
The Board Invites Briefing Regarding Union Communications by Non-Employees
In a case addressing whether an employer had lost the right to bar non-employee union organizers from its property, the Board declined to issue an opinion regarding whether a business can lawfully exclude a union that does not represent its employees. Rather, the Board invited briefing on the topic. Roundy’s Inc., 356 NLRB No. 27 (2010). Whatever the final outcome, the NLRB’s decision will impact employers’ ability to regulate solicitations and communications by outsiders on their property.
The case arose when local construction unions – who did not represent employees at the employer’s grocery stores – began handbilling at the Company’s stores. The handbills asked customers to boycott the employer, accusing it of failing to pass savings from its cheap (non-union) labor on to consumers. After the employer removed the union handbillers from the property, the unions filed unfair labor practice charges alleging that the Company unlawfully interfered with their protected activity by excluding them where the Company previously permitted others (such as the Salvation Army, Red Cross, Second Harvest, Boy Scouts, Girl Scouts, etc.) to make various civic and charitable solicitations.
The ALJ found that the Company had unlawfully discriminated against the union handbillers.8 However, the Board hesitated to affirm the ALJ’s decision without examining the impact of Register Guard — a 2007 decision narrowing the definition of discrimination to apply only to similar types of employee communications — in non-employee communications cases such as Roundy’s.9 As the NLRB reviews briefing on this issue, many employers are fearful that the Obama Board will expand union communication rights at the cost of their property rights.
By its recent actions, the Obama Board has started to put its gloss on the labor laws. While no one change may be significant, the cumulative effect can make a difference for employers, particularly those faced with union organizing. Further, the General Counsel’s announced intentions to more actively pursue injunctive relief in “nip-in-the-bud” cases increases the likelihood that alleged unlawful employer actions will be more frequently litigated in district court injunction proceedings, as well as before the NLRB. We expect even more developments in the coming months.