Over the last 70 years, recognition of a union as the exclusive representative of employees has generally been the result of a secret ballot election conducted by the National Labor Relations Board (“NLRB”) in accordance with procedures under the National Labor Relations Act (“NLRA”). But in the last several years, organized labor has pushed hard for employers to sign neutrality pacts and agree to recognize a union based on checking authorization cards signed by the employees. In the hospitality industry, for example, UNITE HERE! (the principal union representing hotel and restaurant workers) has pushed for – and obtained – written commitments from the larger hotels in many cities (including Chicago) to remain neutral in any union organizing attempt and to recognize the union based upon an independent third party reviewing signed authorization cards obtained by the union.

But the NLRB, which is responsible for enforcing federal labor law, apparently does not see the issue the same way as the unions. In a September 29 decision involving a petition to decertify a union that had obtained bargaining rights as a result of a card check agreement, a 3-2 majority of the NLRB noted: “both the [NLRB] and courts have long recognized that the freedom of choice guaranteed employees by Section 7 is better realized by a secret election than a card-check.” Dana Corporation, 351 NLRB No. 28.

The case involved two employers, Dana Corporation and the Metaldyne Corporation, that had signed neutrality and card check agreements with the UAW. Both companies recognized the UAW based on the union showing that a majority of employees had signed authorization cards. Shortly after this recognition, however, employees at both companies filed decertification petitions with the NLRB. A decertification petition involves a secret ballot election to get rid of a union. The Regional Director for the NLRB dismissed the petitions, based upon a long-held doctrine that a decertification petition is barred for a “reasonable period of time” following an employer’s voluntary recognition of a union (in contrast to the one year bar imposed when the union is elected through an NLRBconducted secret ballot election).

Finding that a decertification petition should not be barred where an employer has entered into a neutrality pact and recognized the union through a card check, the NLRB majority set out new rules for such a situation. Effective September 29, 2007 (i.e., the date of the decision), there will be no bar to a decertification petition following card-check recognition unless: (1) the employees receive notice of the union recognition and of their right to file a decertification petition or to support the filing of a petition by another union within 45 days of the notice; and (2) 45 days pass from the posting date of the notice without the filing of a valid petition. In changing the rules, the NLRB not only noted the preference for a secret ballot election conducted by the NLRB, it specifically noted that card check arrangements “are public actions, susceptible to group pressure” and that “union card-solicitation campaigns have been accompanied by misinformation or a lack of information about employees representational options.”

It is likely that the unions will appeal this decision to a federal court of appeals. Even if the ruling in Dana is upheld, however, it leaves a number of issues still open – which will undoubtedly result in even more NLRB proceedings dealing with the effectiveness of union recognition when compelled by neutrality and card-check arrangements. Of course, this can become moot if Congress passes (and a new President signs) the “Employee Free Choice Act” that would amend the NLRA to provide a preference for card-check agreements. See Labor and Employment Law Newsletter, Vol. XIV, Issue 2 (April 2007).