IRI Intelligence Briefing

News and Developments Affecting the Workplace

Volume Number & Date: 
Vol. 3 No. 4 - October 2011

New Board Decisions Impact Employers, Create Backlash

On the eve of Chairman Wilma Liebman’s August 27 term expiration, the National Labor Relations Board (NLRB) released several decisions friendly to labor but hostile to employers, generating a series of lawsuits from groups including the National Association of Manufacturers (NAM) and U.S. Chamber of Commerce.

“Recent actions from the NLRB such as the ‘quick snap elections’ rule, its consideration of the Specialty Healthcare case and its complaint against Boeing are having a chilling effect on our nation’s job creators,” said NAM president and CEO Jay Timmons.1

The U.S. Chamber argued, “At a time when the private sector is striving to create desperately needed new jobs, it is disappointing to see that the NLRB is imposing new and unnecessary regulations on employers.”2

The Board’s actions also prompted the House Committee on Education and the Workforce to conduct an investigatory hearing based in part on the outcry from employers worried about the economic impact on business and jobs. Much of the reaction on Capitol Hill was typically partisan, with Republicans calling the NLRB “a sycophant” for big labor and some even calling for the NLRB’s dissolution.

While the “NLRB’s campaign against Boeing,” as The Wall Street Journal characterized the case, certainly garnered the most media coverage, several other NLRB actions warrant close attention by employers and human resources executives.

Recent Board Decisions

Specialty Healthcare and Rehabilitation Center of Mobile may be one of the most significant Board decisions in recent history. Chairman Liebman and Members Craig Becker and Pearce ruled that Certified Nursing Assistants at a nursing home may comprise an appropriate bargaining unit without including all other non-professional employees. This overrules the Board’s 1991 decision in Park Manor, which had adopted a special test for bargaining unit determinations in nursing homes, rehabilitation centers and other non-acute health care facilities. In his dissent, NLRB Member Hayes said the “decision fundamentally changes the standard for determining whether a petitioned-for unit is appropriate in any industry subject to the Board’s jurisdiction.”3

Employees at these facilities will now be subject to an “overwhelming community-of-interest” standard, easing the way for unions to organize small, distinct units that are easier to unionize and indirectly result in quicker elections. The Board determined that a petitioned-for bargaining unit need only be an appropriate unit, not necessarily the most appropriate unit. Further, the Board did not limit this decision to non-acute healthcare employers, so the impact may be seen across all industries.

As shown in the chart below, there is a negative correlation between unit size and unionization rate in bargaining units with fewer than 250 employees. This decision grants greater rights for “micro-units” of employees and, in some cases, could mean each job description is a separate bargaining unit. An employer could argue that a proposed unit inappropriately excludes certain employees, but will be required to prove that the excluded employees share “an overwhelming community of interest” with employees in the proposed unit.
Bargaining Unit Size Compared to Union Win Rate

In a case involving a daily newspaper in Eugene, Oregon (The Guard Publishing Co. d/b/a The Register-Guard), Board Chairman Liebman and Members Mark Pearce and Brian Hayes accepted an earlier court opinion that the employer improperly disciplined an employee (who also was the union local’s president) for sending union-related emails via company email. This overturned a portion of its 2007 initial ruling that made a distinction between an email sent to correct a misstatement about a union rally (permissible under Register-Guard 2007) and two emails sent soliciting participation in a union parade and asking employees to “wear green to support the Union’s contract negotiations.”4

The Court found that the employer was inconsistent in enforcing its email policy by disciplining the employee while permitting other employees to use company email for personal reasons and causes not related to the union.

The decision results in a broader interpretation of discriminatory application as it applies to email policies. Employers should be cautious of maintaining overly-broad email policies and should consistently apply email policies in a nondiscriminatory manner, and we advise clients to review their policy and seek legal counsel.

In Lamons Gasket Co., a manufacturing case, Chairman Liebman and Members Becker and Pearce overruled the decision in Dana Corp. (2007). Prior to Dana Corp., case law barred challenges to a union’s representative status for a “reasonable period” following voluntary recognition to give the new bargaining relationship a chance to succeed.

In Dana Corp. the Board allowed for an immediate challenge (within 45 days) to the union’s status, either by a petition of at least 30 percent of employees or through a rival union. The new precedent bars challenges to a union’s representative status for a “reasonable period” following voluntary recognition or card check. This period of “protection” ranges from six months to one year, depending on the circumstances. Member Hayes, in his dissent, said his colleagues’ decision was “a purely ideological policy choice, lacking any real empirical support and uninformed by agency expertise.”5

So while employees already had voted in a NLRB-conducted secret ballot election to decide union decertification, the ballots were impounded while the Board ruled on the case. The Board effectively determined the outcome through rule-making by overruling the Dana Corp. decision. Lamons Gasket Co. employees’ ability to determine for themselves whether or not they wanted union representation was lost, and their ballots were never counted.

Like the Lamons Gasket Co. and Specialty Healthcare cases, the Board was split along party lines in another case on union status. In UGL-UNICCO Service Company, Members Becker and Pearce, Chairman Liebman wrote the majority opinion that restored the “successor bar” that was in place prior to MV Transportation (2002). MV Transportation created an immediate window after a sale or merger to challenge the union’s status, again through a showing of at least 30 percent of employees, a rival union or the new employer. The decision returns the Board to a (slightly modified) doctrine in St. Elizabeth Manor, Inc. (1999) under which the bargaining relationship between the incumbent union and the new employer is protected for a reasonable period of time without challenge. Therefore, in a purchase, acquisition or other successorship, the bargaining relationship would be protected for six months only if the new employer adheres to the existing contract and for up to a year if the new employer imposes new terms and conditions of work.

Member Hayes, in his dissent, wrote that other Board members failed to provide reasonable explanation why the precedent should be overruled. “They demonstrate even less reason for overruling precedent here, because their opinion is inconsistent with, and an attack on, Supreme Court precedent.”6

Both Lamons Gasket Co. and UGLUNICCO Service Co. result in “a presumption of the incumbent union’s majority status” in cases of voluntary recognition and successorship that could last as much as four years if a contract is agreed to within the initial bar period.7

In Virginia Mason Hospital, Chairman Liebman and Member Pearce ruled that the hospital violated the NLRA by unilaterally implementing a flu-prevention policy for its RNs without bargaining with the union. The hospital had argued that it was exempt from bargaining because the policy was within the hospital’s “core purpose of the enterprise” under Peerless Publications (1987). The Board limited the Peerless deci- sion and its three-step test for determin- ing bargainability to that specific case and overturned the administrative law judge’s decision that was favorable to the employer. In his dissent, Member Hayes said that the Board did not limit its decision to the facts of the [Peerless] case or the particular industry in the Peerless case. Therefore, a healthcare employer cannot unilaterally require unionized employees to be vaccinated. The policy must be negotiated and agreed to by both parties unless impasse is reached and terms and conditions of employment are subsequently implemented.

Finally, in a decision that will affect most employers, the Board ruled that all NLRA-covered private businesses must post employee rights notices—similar to the postings required for federal contractors—beginning November 14, 2011. In October, the NLRB announced that the compliance deadline had been moved to January 31, 2012.

The decision means employers must inform employees of their right to support a union with postings wherever the employer typically posts personnel rules or policies. Employers that put this information on their intranet must, therefore, also include the “union rights” posting there in addition to posters on walls or bulletin boards. The notice also must be posted in languages other than English if at least 20 percent of employees communicate primarily in another language. The NLRB will provide postings in various languages.

Employers that fail to post this notice face unfair labor practice charges, but the Board does not have the authority to levy fines for failure to comply.8

What’s Next?

Member Pearce, who replaces Liebman as Chairman, defended the Board’s decisions in a statement to Congress noting the Board’s “obligation to enforce the law...in a fair and even-handed way.”9

“To my mind,” he said, “these actions represent pursuit of the mission that Congress gave this agency—to protect worker free choice, promote collective bargaining and preserve labor peace.”10

At this time, the future direction of the Board is uncertain because Member Becker’s recess appointment expires on December 31, 2011, and it is generally believed that he will not be confirmed by the Senate. In 2010, the U.S. Supreme Court ruled that the Board needs a quorum of three members to make rulings, so until Member Becker’s position is filled, the Board could not legally operate. While the Board’s sharpest critics applaud that possibility—Sen. Lindsey Graham (R-SC) told The Wall Street Journal that “inoperable is progress”11 — the situation could burden many companies with open cases before the NLRB.

Congressional supporters all but abandoned their efforts to pass the Employee Free Choice Act — even when Democrats controlled Congress and the White House —encouraged that the NLRB could promote the labor movement’s agenda through its rules and decisions. But with the 2012 election cycle gearing into full swing, unions may again look to Congress for help.

With the controversies involving public sector unions in cash-strapped states and municipalities not yet over and little sign of economic recovery, both sides will try to use jobs and living standards in the debate over the role of organized labor in the workforce. Employers are well advised to be cautious and conservative in their employee policies and practices.

The NLRB, as required by law, opened a 60-day public comment period and a 14-day reply period after it issued its Notice of Proposed Rulemaking in June to revise representation election procedures. The Board received nearly 66,000 comments and replies to comments during this time. Between now and the end of the year, the Obama Board will not allow the Board to get stuck until the next presidential election.

Employers should be aware that, given recent precedent, the Board may issue a series of other decisions and rules before Member Becker’s term expires at the end of this year. We believe they will implement rules before they go back to two members. Employers also can anticipate additional activity in Congress as unions put pressure on their political allies to seek legislation favorable to labor.

Getting Prepared

With the Board’s decision regarding micro-units in place and the prospect of quicker elections on the horizon— potentially in as few as 10 days—unions will have new tools to push beyond their 70-plus percent representation election win rate. Now is the time for employers to prepare their readiness systems. The safest way to navigate the uncharted territory ahead is by being proactive.

Because they’ve been organizing for months, talking to employees and getting petitions signed, unions are ready to hold an election as soon as they file a petition. Employers, who generally are unaware of what the union has been up to until late in the game, can be caught flat-footed. To maintain a direct working relationship with your employees, the safest assumption is that a union will take a run at your workplace; with union finances badly in need of replenishment, no employer is immune. With the assumption “it CAN happen here” in mind, build a readiness system around these five elements:

  • Vulnerability assessment
    You need to know your organization’s vulnerability on such key issues as supervision/management, working conditions, employee voice, dignity and respect and communications.
  • Education
    Your entire organization, from top to bottom, must understand how unionization would affect it.
  • Employee engagement
    The more engaged employees are, the less likely they’ll want a union.
  • Leadership training & development
    Your leadership will need training in the skills required to maintain a direct working relationship with your employees.
  • Communications
    Your organization’s ability to communicate quickly, effectively and legally about unionization is critical.

FOOTNOTES:

1. Press release. “Manufacturers: NLRB Actions Will Hinder Job Creation. 21 July 2011.
2. Press release. “U.S. Chamber Sues NLRB to Block Notification Rule.” 20 Sept. 2011.
3. Specialty Healthcare & Rehabilitation Center of Mobile (August 26, 2011), opinion of Member Hayes dissenting.
4. The Guard Publishing Co. d/b/a The Register-Guard (July 26, 2011), background from Supplemental Decision and Order of Chairman Liebman and Members Pearce and Hayes.
5. Lamons Gasket Company (August 26, 2011), opinion of Member Hayes dissenting.
6. UGL-UNICCO Service Company (August 26, 2011), opinion of Member Hayes dissenting.
7. IBID.
8. Frequently Asked Questions – Poster. National Labor Relations Board. Accessed Sept. 20, 2011. http://www.nlrb.gov/faq/poster
9. Press release. “NLRB Chairman Pearce issues statement on Congressional hearing about Board actions.” 22 Sept. 2011.
10. IBID.
11. Trottman, Melanie. “Labor Board Races to Make Rulings.” The Wall Street Journal. 10 Aug. 2011.
Go to top