On September 29, 2007, the National Labor Relations Board ("The Board") overturned 40 years of precedent when it ruled that an employer's voluntary recognition of a union will no longer immediately bar employees from filing a decertification petition or supporting a representative petition from another union. The Board's joint ruling in Dana Corporation and Metaldyne Corporation, 351 NLRB No. 28 (2007) is a significant departure from existing law and is important for employers that are presented with a union demand to enter into a card-check agreement, whereby an employer recognizes a union upon the showing of a card majority. Under the Board's decision, no election bar will be imposed after a card-based recognition unless (1) bargaining-unit employees receive notice of the recognition and of their right, within 45 days of the notice, to file a decertification petition or to support the filing of a petition by a rival union, and (2) 45 days pass from the date of the notice without the filing of a valid petition.

Factual Background

In September 2002 and August 2003 respectively, two different employers - Metaldyne Corporation and Dana Corporation (the "Employers") - entered into separate neutrality/card-check agreements with the United Auto Workers Union (the "Union"). Following the Union's solicitation of authorization cards and the verification of majority representation by a neutral third party, the Employers recognized the Union as the exclusive bargaining representative of their employees. Shortly after recognition, however, employees at each company filed a petition seeking decertification.

The Regional Directors for the respective regions dismissed the employees' petitions based on an application of the Board's recognition bar doctrine. Under this long-standing doctrine, announced by the Board in Keller Plastics Eastern, Inc., 157 NLRB 583 (1966), an employer's voluntary recognition of a union, in good faith and based on a demonstrated majority status, immediately bars an election petition filed by an employee or a rival union for a reasonable period of time. In its request for review, the employees argued that the voluntary recognition process is a far less reliable indicator of actual employee preference than a secret ballot election and "places too much unchecked power in the hands of an employer and its chosen partner union, threatens employee free choice, and eliminates the Board from the process." For these reasons, the employees requested that the Board abolish or, alternatively, modify the recognition bar to allow decertification petitions to proceed following voluntary recognition.

The Board granted the employees' requests for review in order to re-examine the recognition bar doctrine and to strike the proper balance between "two important but often competing interests under the National Labor Relations Act" - protecting employees' right to exercise their choice of a collective bargaining representative and promoting stability of bargaining relationships.

Rationale for Modification of the Recognition Bar

At the outset of its decision, the Board made clear that its ruling sought to provide greater protection for employees' statutory right of free choice and to give proper effect to the Board's preference for resolving representation questions through a secret ballot election as opposed to the "admittedly inferior" authorization card process. In contrast to secret ballot elections conducted under the watchful eye of a neutral board and the parties' observers, card signings are public acts, susceptible to group pressure and often accompanied by misinformation about the employees' representational options. The Board expressed concern that the voluntary recognition process is devoid of many of the procedural safeguards inherent in the election process, including prohibitions against improper electioneering tactics. The Board concluded that, although there was reasonable rationale for imposing an immediate bar in circumstances involving a Board election certification, such rationale was far less persuasive where there is only voluntary recognition. Accordingly, the Board determined that imposing certain notice and window-period requirements in the voluntary recognition process would afford greater protection for employees' statutory right of free choice.

The Board recognized that unions are increasingly and successfully turning to card checks as their preferred method of achieving recognition and made clear that its ruling did not seek to interfere with that process. Rather, its decision was intended to improve upon the process by better assuring that employee free choice is not impaired. In that regard, the Board held that a higher standard of notice to employees that recognition has been extended, and a post-recognition opportunity for employees to petition for an election, must be met before an election bar is imposed. The new notice obligations require the employer and/or the union to promptly notify the Regional Office, in writing, of the grant of voluntary recognition. Upon receipt, the Regional Office will send an official Board notice to be posted in conspicuous places at the workplace throughout the 45-day period, advising employees of the recognition and informing them of their right to file, within 45 days, a decertification petition supported by at least 30 percent of the unit employees or to show support for another union's filing of a petition to represent them.

The Board's Ruling Is Prospective

Although the Board's current practice is to apply new standards to "all pending cases in whatever stage," the Board determined that retroactivity here would destabilize established bargaining relationships. The Board thus ruled that it will apply the modified recognition bar doctrine prospectively to voluntary recognition agreements that postdate its decision.

What This Means for Employers

The Board's decision in Dana Corporation is a significant departure from existing law since, unlike Board certifications, employees will have 45 days to file for decertification or to support an election petition by a rival union, measured from the date they are formally notified.