• A federal district court in Indiana has upheld the state’s controversial right-to-work law. The law prohibits collective bargaining agreements from requiring workers to become or remain union members or from requiring non-members to pay union dues. The court found that the law does not violate the Constitution’s contract clause because it does not apply to contracts in existence when the law took effect. The court also held that the law does not violate the equal protection clause because it does not make a distinction between public and private employees. Finally, the court ruled that the state legislature had a plausible policy reason for passing the law. Sweeney v. Daniels.
  • The U.S. Attorney’s Office and U-Haul have reached an agreement to settle a case arising from an NLRB attorney’s alleged affair with a paralegal working for a firm that unsuccessfully defended U-Haul in an unfair labor practice trial. U-Haul alleged that the paralegal gave the attorney for NLRB Region 28 privileged information and attorney work product disclosing the defense firm’s trial strategy. Under the settlement, the United States will not admit liability or fault, but will make a $75,000 payment to U-Haul. The government has also agreed that in the event of new unfair labor practices charge against U-Haul, the NLRB will staff the case with personnel not employed by Region 28. The special case-handling procedures will be in place for at least 10 years. U-Haul Co. of Nevada v. United States.
  • The U.S. Court of Appeals for the Seventh Circuit reinstated provisions of Wisconsin’s Act 10 legislation that curbed collective bargaining rights for most of the state’s public-sector workers. Seven of the state’s largest public unions asserted constitutional challenges to the law, all of which the Seventh Circuit rejected. The court held that the law did not violate equal protection by requiring an annual absolute majority union recertification, did not violate the First Amendment by banning paycheck deductions, and that the legislature’s decision to exclude public safety employees from the law’s restrictions was a rational decision aimed at promoting labor peace. Other provisions of the law continue to face ongoing challenges in Wisconsin state courts. Wisconsin Education Assoc. v. Walker.
  • The U.S. Court of Appeals for the Second Circuit, affirming the NLRB, held that a union did not waive its bargaining rights and that the employer engaged in unfair labor practices. In 2005, Rochester Gas & Electric Corp. failed to consult with International Brotherhood of Electrical Workers Local 26 before deciding to discontinue a company policy that allowed certain union members to take company vehicles home at night. Both the union and the company appealed an earlier NLRB decision holding that the company engaged in unfair labor practices by refusing to give the union information related to the policy change and that the union had not clearly and unmistakably waived its right to bargain over a company employment decision. The Second Circuit held that the union had a right to information related to the policy change because it was relevant to the bargaining process. It further held that although Rochester Gas has a general right to regulate its property, that right did not explicitly or implicitly include the right to alter the terms and conditions of employment even if the terms and conditions are related to the use of Rochester Gas’ property. The Court also enforced the NLRB’s award of the lost value to the employees of using company vehicles after work. Local 36, International Brotherhood. Of Electrical Workers v. NLRB.
  • A federal court in Indiana denied the United Steelworkers petition for an injunction against Cequent Towing Products’ plan to relocate some operations from Goshen, Ind., to Reynosa, Mexico. The union and its Local 9550 claimed that the 375 workers at the trailer hitch manufacturing plant are covered by a collective bargaining agreement that prohibits the move. Judge Robert L. Miller ordered the parties to arbitrate according to the terms of the agreement, but denied the request to enjoin the relocation. Although the court acknowledged that failing to enjoin the company from moving could lead to employment losses and that determining back pay for released employees could be difficult, it indicated that those factors did not support issuing an injunction. United Steelworkers v. Cequent Towing Products.
  • The U.S. Court of Appeals for the Fifth Circuit held that an arbitrator exceeded his authority to determine whether a company lacked just cause to fire an union-represented employee when the arbitrator held he was “not totally convinced” that the company was correct to treat some safety violations at the company more seriously than others. The company had fired an employee for committing a safety violation. The operative collective bargaining agreement gave the employer the right to discharge employees for just cause. It also limited the arbitrator to deciding whether the rule under which the company fired the employee was reasonable, and, if so, whether the employee violated the rule. The Fifth Circuit held that the arbitrator was bound to decide the grievance in the company’s favor after answering these two questions in the affirmative. Further, the court held that the arbitrator had exceeded his authority by further finding that the company lacked just cause to discharge the employee because he believed there was a question as to whether the company applied discipline consistently to similar employees. The court also instructed that the collective bargaining agreement’s reference to “just cause” as opposed to simply “for cause” was irrelevant, as circuit precedent held that the terms are interchangeable in the context of labor arbitration. Horton Automatics v. Indus. Div. of Comm’ns Workers of Am.
  • A federal court in Hawaii held that a state statute restricting employers with collective bargaining agreements from disciplining employees for taking sick leave when they may not be ill is preempted by the National Labor Relations Act (NLRA or Act) and violates the equal protection clause of the Fourteenth Amendment. Hawaii’s sick leave law provides that employers with 100 or more employees and a collective bargaining agreement could only require written verification of an illness if an employee used three or more consecutive days of sick leave. The federal court held that Hawaii’s law effectively provided a benefit that was not successfully bargained, and thus intruded on substantive aspects of collective bargaining—an area that Congress intended to leave unregulated. The court further held that the law violated the equal protection clause because it distinguished between employers with collective bargaining agreements and those without them; a distinction not rationally related to the state’s identified interests in protecting the employment relationship and employees who use sick leave from retaliation by employers. If Hawaii had intended to protect all employees, the court said that the state could have restricted retaliatory actions by all employers whether or not they had collective bargaining agreements. Hawaii Pacific Health v. Takamine.
  • An agreement setting organizing rules between dog-track owner Mardi Gras Gaming and Unite Here Local 335 has drawn two separate petitions for review before the U.S. Supreme Court. In the agreement, the track owner agreed not to oppose union representation for track employees, as well as to allow union organizers onto its property, to provide on-site space for organizers to meet with employees, and to provide the union with employees’ names and addresses. In exchange, Local 335 promised to forgo picketing, boycotting, or otherwise pressuring the track’s business. The Supreme Court has asked the U.S. Solicitor General’s Office for its view on the petitions after the Eleventh Circuit held that the agreement violated a Labor-Management Relations Act provision prohibiting employers from paying or lending anything of value to labor organizations. Unite Here Local 355 v. Mulhall and Mulhall v. Unite Here Local 355.
  • A NLRB administrative law judge (ALJ) continued a line of administrative decisions holding that certain workplace confidentiality and civility rules violate the NLRA by potentially chilling the exercise of employee rights under Section 7 of the NLRA. A Quicken Loans employee, who had been sued by the company for an alleged violation of no contact/no raiding and non-compete provisions of her employment agreement, filed an unfair labor practice charge based on the proprietary/confidential information and non-disparagement provisions in the same employment agreement. Quicken Loans defended these provisions as necessary to both protect its investment—time and expense—in educating and training its mortgage bankers and protect the confidential and proprietary information with which such employees are entrusted. Though the provision did not explicitly restrict Section 7 activity, the ALJ found “no doubt” that the restrictions would “substantially hinder” the exercise of Section 7 rights because employees would be unable to discuss either their own wages and benefits or the personal information of other employees with coworkers or with union representatives. The judge further held that a separate non-disparagement rule barring employees from publicly criticizing, ridiculing, disparaging, or defaming the company or its products was likewise invalid because a reasonable employee could read the rule as restricting their rights to engage in protected concerted activities. Quicken Loans, Inc.
  • A unanimous NLRB found that provisions of DirecTV’s employee handbook violated the NLRA because reasonable employees would read some provisions in the handbook as barring them from engaging in NLRA-protected activities. The unlawful provisions included two regulating employee communications with the media: one prohibiting employees from contacting the media and the other requiring advance approval before employees could comment to the media. The Board disapproved of other handbook policies, including the company’s confidentiality policy, a policy requiring employees to contact company security if they received a request to be interviewed by law enforcement about another employee, and a rule restricting employees from disclosing non-public information about DirecTV on blogs, in chat rooms, or on other public websites. DirecTV had earlier repudiated its handbook in an attempt to avoid liability for unfair labor practices, but the Board rejected its efforts because the repudiation came a year after DirecTV promulgated the handbook and the company never acknowledged that its policies were unlawful. DirecTV U.S. DirecTV Holdings LLC.
  • The NLRB overruled 36-years of precedent that established a bright-line rule denying union representatives access to witness statements obtained by unionized employers, finding no basis to assume all witness statements should be categorically excluded. Instead, the Board adopted the balancing test approach it utilizes for requests for witness names. Under the new test, if requested information is relevant, the party resisting disclosure must show that a ‘legitimate and substantial confidentiality interest’ outweighs the union’s need for the information. The Board indicated that unionized employers have a general obligation under the NLRA to provide information relevant to a union’s performance of its bargaining duties, including information the union needs to determine whether to pursue a grievance to arbitration. The Board found that the balancing approach, which will apply prospectively, would protect both the employer and the witnesses while also safeguarding the union’s statutory right to obtain information relevant to grievance processing. American Baptist Homes of the West.
  • The NLRB held that it is unlawful to maintain and enforce a dispute resolution agreement that a reasonable employee would believe restricts his/her right to file an unfair labor practice charge under the NLRA. The agreement at issue required employees to bring “any kind of claim” through the company’s dispute resolution process, but expressly excluded three categories of claims that could be brought outside of the process. The agreement compelled employees to use the process for claims relating to their employment, including several expressly listed federal statutes. The NLRA, however, was not expressly listed. In promulgating the agreement, the employer allegedly threatened employees with termination for failure to sign and the Teamsters Local 120 brought an unfair labor practice charge. The Board held that the employer violated the NLRA by maintaining a work rule that employees would reasonably understand to prohibit NLRA-protected activity. The Board found that even where a work rule does not explicitly restrict the right of employees to engage in union or protected concerted activity, the rule will nevertheless violate the Act if: employees would reasonably construe the language to prohibit protected activity, the rule was promulgated in response to protected activity, or if the rule had been applied to restrict Section 7 activity. The Board held that reasonable employees would understand the agreement to restrict their right to file unfair labor practice charges or otherwise access the Board’s processes given the agreement’s broad scope, its limited exceptions, and its requirement that federal statutory claims be brought under the dispute resolution process. Board Member Brian E. Hayes, whose term ended December 16, 2012, dissented. Supply Techs LLC.
  • The NLRB held that a union may charge non-member dues objectors for union lobbying expenses germane to collective bargaining, contract administration, or grievance adjustment, if the union has a collective bargaining agreement that includes a union-security clause. The Board said that lobbying and legislative proposals often involve wages, hours, and working conditions, all of which “raise issues that relate to a union’s most essential representative functions.” The Board left open the question of how it would determine whether particular lobbying expenses satisfy the germaneness test, but found that “[s]o long as lobbying is used to pursue goals that are germane to collective bargaining, contract administration, or grievance adjustment, it is chargeable to objectors.” The Board further held that the union in question did not violate the NLRA by providing a letter stating its major expense categories had been audited by a certified public accountant but withholding the accountant’s certification letter, holding that a union does not have a per se obligation under the NLRA to give dues objectors an auditor’s verification letter. United Nurses and Allied Professionals.
  • The NLRB will hold in abeyance certain charges filed by Wal-Mart Stores, Inc., alleging various unfair labor practices by the UFCW and its affiliate OUR Walmart. Walmart’s charges allege that the UFCW engaged in picketing, mass demonstrations, and in-store flash mobs without first petitioning for a representation election. In a letter to NLRB Acting General Counsel Lafe E. Solomon, the UFCW and OUR Walmart stated that neither organization intends to have Walmart grant them recognition or bargaining rights and that neither will engage in picketing directed toward obtaining recognition or forcing employees to select either organization without filing a petition for an election within 30 days. The organizations also promised to notify their members of their commitments by posting notices on their websites and by mail. United Food and Commercial Workers Int’l Union (Wal-Mart Stores, Inc.)
  • The NLRB’s Acting General Counsel issued a guidance memorandum changing longstanding agency policy prohibiting Board settlements from including front pay in exchange for a waiver of reinstatement from wrongfully terminated employees. The new policy permits employers and employees to exchange front pay for a waiver, where previously such a deal could be reached only through a private settlement. The memorandum makes clear that the agency still favors reinstatement over front pay, but recognizes it is ultimately the employee who chooses whether to insist on reinstatement. Waivers must be in writing unless authorized by the Division of Operations Management.
  • According to the NLRB’s summary of its 2012 operations, total case intake fell nearly 3 percent in fiscal year 2012, accounting for a 2.5 percent decrease in unfair labor practice cases and a 6.5 decline in representation case filings. The Board’s regional offices also issued fewer unfair labor practice complaints than they had in 2011, and achieved a settlement in 91 percent of merit cases while winning 90 percent of cases prosecuted before administrative law judges. The regional offices also oversaw 13.2 percent more initial representation elections, 90 percent of which were held pursuant to voluntary election agreements.