In UGL-UNICCO Serv. Co., the National Labor Relations Board (“NLRB”) held that an employer must recognize an incumbent union for “a reasonable period” after a successor employer begins operations of a unionized business, before the new employer can challenge the union’s majority status (the “successor bar”).

The decision reversed a 2002 NLRB ruling that an incumbent union in a successorship situation was entitled to only a rebuttable presumption of majority status that would not bar decertification of the union or another valid challenge (such as a rival union) to the union’s majority status.

In situations involving a sale or acquisition of a business, the purchasing company is a “successor employer” if there is substantial continuity between the operations of the new company and the predecessor company. A successor employer is generally not required to adopt the predecessor’s collective bargaining agreement with the union, unless the new company has made it “perfectly clear” that the new company intends to retain all of the predecessor’s bargaining unit employees. But a successor employer is required to recognize and bargain with the union that represents the predecessor’s workforce.

In UGL-UNICCO, the majority returned to the pre-2002 bar doctrine, but also went further and provided specific guidance on how much time would be a “reasonable period” in the successor-employer context. The NLRB held that a reasonable period could vary from no less than six months after the parties’ first negotiating session to no more than one year after bargaining had started as follows:

  • Where a successor employer expressly adopts the existing terms and conditions of employment of unit employees as the starting point for negotiations, the successor bar would apply during a reasonable period of bargaining of six months, calculated from the date of the first bargaining session.
  • Where a successor employer unilaterally announces initial terms and conditions of employment before bargaining, the successor bar would apply during a reasonable period of bargaining for a minimum of six months and a maximum of one year; the Board would apply a multi-factor test to set the “reasonable time” within the six months to one year parameter.

In the Lamons Gasket Co. decision, issued August 30, 2011, the NLRB reversed the 2007 Dana Corp. decision, which allowed immediate challenge to a union’s status by 30 percent of the employees or a rival union. In Lamons Gasket Co., Lamons had voluntarily recognized a union for collective bargaining purposes at its Texas facility based upon a showing of support for the union by a majority of employees signing union authorization cards. The company’s voluntary recognition meant that employees did not participate in an election to cast a yes or no vote: rather, the company relied upon the number of signed authorization cards in favor of the union as indicating majority support for the proposed bargaining unit to be represented by the steelworkers’ union.

One month after the voluntary recognition, a Lamons employee filed a decertification petition with the NLRB indicating the petition had the support of 30 percent of the employees in the bargaining unit. Under the precedent set by the NLRB’s 2007 Dana Corp. decision, employees could seek a new election if at least 30 percent of them filed a decertification petition within 45 days of the company’s voluntary recognition of the union. The decertification petition was timely filed and the union appealed.

Overruling Dana Corp., the NLRB held that the employer’s voluntary recognition of a union barred the NLRB from processing a decertification petition for a “reasonable period of time.” The NLRB defined the “reasonable period” during which the voluntarily recognized union will have protection as a period ranging from 6-12 months, depending on the circumstances.

Traditionally, most employers do not agree to voluntarily recognize a union upon the showing of a majority of signed union authorization cards. After this decision, employers are even less likely to do so as the employees who are not supportive of the union will be hand-tied with the Board’s “reasonable period of time” standard before a decertification petition may be filed.

These decisions underscore the current NLRB’s commitment to reverse decisions rendered during President George W. Bush’s presidency (and earlier) that were friendly to business. But more importantly, these decisions are proof-positive of the current NLRB’s agenda to eliminate perceived “obstacles” to union organizing and promote collective bargaining. Given the failure of the pro-union enthusiasts to achieve passage of the Employee Free Choice Act, the NLRB appears to be the engine that is driving an expansion of union horsepower.