Law360, New York (January 23, 2014, 1:01 PM ET) -- The next few months are critical for employers who wish to stay union-free in 2014 and beyond. The Obama administration’s quest to make union organizing easier and more difficult for employers resist is on track to come to fruition in the first half of this year. As a result, employers will have to reinvent their union-free strategies to meet these game- changing challenges. Employers that do not change and retool their union-free strategies dramatically will find that organized labor has been dealt all of the winning cards.
Increasing the complexity of creating and implementing a union-free strategy beyond what Big Labor has and is doing, the U.S. Department of Labor is poise to deal another ace.
New Persuader Rules
The Labor Management Reporting Act of 1959 requires that any third-party hired by an employer to persuade employees with regard to union representation must report the nature of the activities and the amount paid to them by the employer. Employers have a similar reporting requirement.
The reports must be filed with the DOL and are available to the public on the department's website. The law contains an exception for “advice” and, historically, the DOL has defined advice as not including strategic, training and campaign-related services if those services were not rendered in direct contact with employees. Services that are only indirect in that they involve only working with managers and supervisors of the employer who would then have direct contact with the employees would not have to be reported. This is a bright-line rule that has prevailed for the last 40 years.
The DOL has announced that in March of this year it will issue a new interpretation of the law so that now only strictly legal advice will be considered to be within the advice exception and not reportable. That is, if an employer sends a document to a lawyer for advice concerning its compliance with the law (as distinguished from its effectiveness or advisability), the activity and fee paid would not have to be reported. However, if the employer asks the lawyer for advice concerning whether it would be a good thing to use the document in a campaign or for modifications that do not relate directly to the law, that advice would fall outside the advice exception and have to be reported. Services that consist of the creation of a union-free strategy, training supervisors with regard to union organizing or creating documents or speeches for use during a campaign and the fees charged for those services would have to be reported by both the employer and the service provider. As noted above, those reports would be published on the DOL website for viewing by an interested union or any other person.
Under the rule as it was proposed first in 2012 (and it is likely that the rule that will be published will be at least as far-reaching as the proposed rule, regardless of the numerous objections from employers and employer representatives), if a consultant or lawyer engages in any reportable activity, all labor services provided by that consultant or lawyer (and all others in the firm with which the consultant or lawyer is associated) to the employer, even if not directly related to a union-free strategic plan or a union campaign, would have to be reported along with the amounts paid. This would include the development of or advice concerning policies, reviews of handbooks and training. Only actual work in connection with litigation and other direct legal advice would be excluded from the mandate.
The bottom line is that, unless enjoined (there is likely to be a court challenge at least on the issue of whether the new rules violate attorney-client privilege), any employer using any third-party consultant or lawyer to assist it to remain or to become union-free will have to make public that it is doing so, what it is doing and how much it is paying for the service. Once reported, the information can be republished by a union to employees in an effort to discredit the employer or impugn the employer’s motives.
Since most employers do not have the resources to have strategic union-free specialists on staff, the new persuader rules may diminish the use of third-party specialists. Since studies historically confirm that employers who use third-party union free specialists are significantly more successful than those who don’t, the persuader rules are viewed by some labor commentators as a way to clear the field for union organizers. This consequence would be exacerbated if unions turn the reports into the moral equivalent of Megan’s Law — and they very well may. Thus, employers that may be reluctant to obtain the services they need to combat union organizers, would be left to deal with the guile of professional organizers alone.
Unstacking the Deck
In spite of the Obama administration’s apparent determination to do everything possible — short of legislation — to assist unions to obtain new members, employers are still in control of their own destiny when it comes to remaining union-free, if they are willing to make the effort. In addition, if these employers act before the new persuader rules are promulgated in March, they may keep their strategic planning confidential.
While not an exhaustive list, here are some things that employers should be doing now to stay union- free:
- Neutralize the desire for third-party representation — it will be too late after organizing begins.
- Have wages and benefits that are competitive with unionized companies in the area. The value of being union-free lies elsewhere and if you are significantly under market you will likely fail.
- Enable employees to have a stake in the organization’s success. When the company’s success is everyone's success outsiders are not welcome.
- Have an effective communication program. Employee security often depends on their knowledge of how you and they are doing and why things are happening that change, or may change, their lives.
- Make safety and equal and fair treatment important. Besides keeping you on the right side of the law, it communicates that you care.
- Have a credible legal problem solving system. Employees with unresolved problems beg for help.
- Provide employees with due process. If you provide protections from unfair treatment, employees do not need to find it elsewhere.
- Train supervisors how to manage employees and employee performance. Supervisory failings in performance management frequently stimulates looking to the outside for help.
- Give supervisors time to supervise. If supervisors do not have time to see and solve employee problems, employees have nowhere to turn but out. Lean operations are sometimes anorexic .
- Have a strong and communicated union-free philosophy — you may not have time after a petition is filed.
- Communicate that you think it is important for the company to be union-free and why while avoiding reasons that can be twisted to appear exploitive. (E.g., “We don’t need a union because we need flexibility” can be heard as “we don’t want a union because we want to jerk you around.”)
- Communicate what you are doing to make unions unnecessary. If someone does not make the connections for them, employees may not see or appreciate it.
Educate Supervisors, They Need to Know
- Reasons why employees seek union representation and how to avoid or eliminate them. How unions organize employees.
- What unions are and can and can’t do.
- What supervisors can and can’t do with regard to protected activity.
- What their responsibilities are to recognize, report and respond to suspected union organizing without violating the law.
Structure Operations to Have Desired Employee Units
- Know what you need to show to have the employee units you desire and then adjust your operation, if necessary, to create overwhelming evidence that make undesirable and micro- units inappropriate.
- Collect and have easily retrievable documentary evidence to assure that you will be able to present within seven calendar days all that is necessary to carry your burden of overwhelming evidence.
Make Sure Those You Want to be Supervisors Will Meet the NLRB's New Definition
- Prepare job descriptions that contain the indicia of supervisory status.
- Establish wage, evaluation and other policies and systems that establish that your supervisors are, under the law, supervisors.
Have a Rapid Response Plan
- Be prepared to respond effectively and quickly — within 24 hours — to credible union organizing.
- Be prepared to prove what is necessary to be proven at a post-petition hearing.
The reality is that the agencies of the Obama administration are stacking the deck in favor of unions and making it easier for unions to organize employees. They are doing this by:
- Depriving employers of the time to educate employees effectively once a petition is filed. Limiting the rights of employers to challenge and avoid election and bargaining units chosen by unions solely on the basis that they will be the easiest to organize.
- Restricting the definition of supervisor and denying employers the ability to have that issue resolved pre-election.
- Encouraging card-check strategies that include coerced or purchased neutrality and cooperation agreements.
- Expanding the public reporting of the nature and cost of union-free services provided to employers who use nonemployee experts, encouraging employers without on-staff union-free specialists to remain vulnerable.
As a result of these administrative actions, keeping your workplace union-free in 2014 and for the foreseeable future will require more urgency and very specialized efforts. Hopefully, this list of things you must do will be a guide.
Another word to the wise, if you do not feel you have the in-house capability of meeting the challenge and wish to create your strategies within the confidentialities of your own company, you should consider seriously doing, at the very least, the most important strategic work prior to the March publication of the new rules for nonemployee specialists who will then be required, as will you, to file public reports for inclusion on organized labor’s version of its own Megan’s Law type list of despicable offenders.