The National Labor Relations Board, now with four members, has begun the long-expected changes to major areas of its interpretation and enforcement of the National Labor Relations Act.

The Board Directs a Hearing in a Representation Case Concerning University Graduate Students

In 2000, the Board held, for the first time, that graduate teaching and research assistants were employees under the National Labor Relations Act and could be organized and represented in collective bargaining by a labor union. New York University, 332 NLRB 1205 (2000) (NYU I). Four years later, NYU I was overruled by the Board in Brown University, 342 NLRB 483 (2004). In Brown, the Board concluded that graduate assistants were not employees, because their relationship to the university was not primarily economic but instead primarily educational. Therefore, they could not be organized and represented by a union.

The Board now appears to be on the verge of reversing itself yet again. In a new case involving New York University graduate students, the Board stated that “there are compelling reasons for reconsideration of the Brown decision.” New York Univ., 356 NLRB No. 7 (October 25, 2010) (NYU II). Relying on Brown, an NLRB Regional Director had dismissed a petition seeking to represent NYU graduate students who performed teaching and research services. In granting review of the Region’s dismissal, the Board, in a 2-1 decision, remanded the petition to the Regional Director with instructions to conduct a hearing and establish a full factual record. Following that, the Board will make a determination whether Brown should be overruled and, once again, graduate students be considered employees subject to being organized and represented under the Act.

Board Rules That It Will Regularly Require Electronic Notice Posting

In a 3-1 decision (Member Hayes dissenting), the NLRB, in J. Picini Flooring, 352 NLRB No. 9 (October 22, 2010), announced that it will now require employers and unions to post remedial notices electronically where it is shown that the employer/union regularly communicates with its employees/members in such fashion. Thus, in addition to a traditional physical posting, remedial notices may now be required to be posted on intranet or Internet sites, emailed to employees, or through other electronic means, depending on whether or how the employer/union regularly communicates with its employees/ members.

The Board stated “We believe that the Board’s current notice posting language, which requires posting in ‘conspicuous’ places, including all places where notices to employees or members are customarily posted, is sufficiently broad to encompass new communication formats, including electronic distribution of remedial notices by email and/or posting on an intranet or Internet if a respondent customarily communicates with its employees or members by any of those means.” Id.

New language will be added to the Board’s traditional posting order indicating that electronic posting may be required. The issue of whether it will be required is to be taken up in compliance proceedings, in the same manner as physical posting issues are addressed.

The new rule will be applied to all pending cases. In addition, it is likely that this ruling will be extended by the General Counsel to the regular use of electronic postings in settlements of unfair labor practices — something that could significantly impact the ability to settle certain types of cases (such as bad faith bargaining cases) where the only remedy is a remedial posting, and could result in more matters being pursued to hearing.

Board Moves From Simple to Daily Compounded Interest on Monetary Awards

In a unanimous decision, the Board, in Kentucky River Medical Center, 356 NLRB No. 8 (2010), announced that it would no longer make back pay calculations based on simple interest and instead would use a daily compound interest formula. The Board held “compound interest better effectuates the remedial policies of the Act than does the Board’s traditional practice of ordering only simple interest and that, for the same reasons, interest should be compounded on a daily basis, rather than annually or quarterly.” Id. This change will apply to all pending cases.

The rate used to calculate interest on back pay and other monetary remedies is the “short-term Federal rate” plus three percent, as determined quarterly. This is the same rate assessed (or paid) by the Internal Revenue Service on the underpayment (or overpayment) of taxes. New Horizons for the Retarded, 283 NLRB 1173 (1987).

Such a change in calculating interest greatly increases the employer’s liability, particularly given the lengthy amount of time that it can take to reach a final decision in an unfair labor practice case. For example, an employee making $50,000.00 a year that receives three year's back pay would receive, under the Board’s traditional simple interest calculations, a total of $162,000.00. Under the new daily compounded interest formula, the same award would now be $165,962.90.

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We fully expect that more changes are on the way as the Board continues to consider a range of issues such as employee use of company e-mail, the ability of employees to require a decertification vote after an employer has voluntarily recognized a union, and the rights to file representation or decertification petitions in successorship situations.