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DID THE BOARD BLINK?


DID THE BOARD BLINK?

 

On June 22, the National Labor Relations Board published a Notice of Proposed Rulemaking as the first step in its massive overhaul of election procedures.  This overhaul was obviously calculated to advantage organized labor’s organizing and disadvantage employers who wish to remain union free.

 

Between June 22 and August 22, the Board received over 65,000 comments and heard testimony from 65 witnesses, many, if not most, objecting to the proposed rule changes.

 

On August 23, then Chairman of the Board, Wilma Liebman’s term expired, leaving the Board with only three members, Democrats Becker and Pearce and Republican Hayes.  At the end of the current legislative session, Becker, a recess appointment, will have his term expire.  Upon the expiration of Becker’s term, the Board will lose the quorum (three) required for decisions and other official actions.  In short, the Board will be out of business.

 

Two weeks ago, the Board gave notice that it would issue a modified set of new rules governing election procedures on November 30, to beat the deadline before it loses its ability to act due to a loss of quorum. 

 

Hayes threatened to resign before November 30, claiming that the contemplated action was without his knowledge or participation in the process of determining what the new rules would be.  His resignation would deny the Board the legal ability to adopt the new rules because it would cease to have the necessary quorum.

 

Today the Chairman of the Board, Pearce, released the details of the rule changes that will be presented for final adoption tomorrow.  Hayes has not resigned and, in light of the lateness of the hour, it is unlikely that he will resign.  Consequently, the Board will have a quorum and the proposed rule changes in the Chairman’s Resolution will become final with Pearce and Becker passing them over the expected dissent by Hayes. 

 

In short, they rule changes that will be made final tomorrow are of only minor moment, especially when compared to what Becker, Pearce (and previously Liebman) and organized labor really wanted.  It appears that Becker and Pearce blinked in the face of Hayes’s threatened resignation and have deleted almost all of the most controversial changes that were proposed in June. 

 

The new rules will:

 

1.   Give the Board’s hearing officer the authority to limit evidence introduced at a representation hearing only to what the officer believes is material to whether a question of representation exists.  Issues ancillary to that question, such as those having to do with supervisory status or other questions challenging the eligibility of some employees to vote may not be permitted and certainly will not be allowed to delay the process.

 

2.   Give the hearing officer the authority to deny requests to file a brief on an issue raised at a representation hearing where the officer believes that a brief is not necessary to assist in making a decision on whether a question of representation exists.

 

3.   Delay the review of issues that are excluded by the hearing officer at a representation hearing until the post-election hearing, when, presumably, most would have been rendered moot by the election.

 

4.   Delete from the existing Rules the provision that provides for additional time between a representation hearing and an election to permit petitions to the Board to review decisions by the hearing officer.

 

5.   Permit appeals to the Board from decisions made at a representation hearing only in extraordinary situations where the appeal would otherwise evade review.

 

6.   Give the Board discretion to hear appeals in representation cases, regardless of whether the decision from which the appeal is taken is pre or post-election.

 

Not included in the rule changes to be finalized tomorrow (November 30) are the most controversial changes proposed on June 22:

 

·                     Electronic filing of petitions

 

·                     Requirement that representation hearings must be held within 7 days from the date of the notice of the hearing

 

·                     Requirement of a position statement at the outset of a hearing

 

·                     Preclusion of issues for trial post-election that were not included in the position statement filed at the representation hearing

 

·                     Inclusion of email addresses and phone numbers on voter lists

 

·                     Reduction in time for providing the voter list to the union from the current 7 work days to 2 work days

 

 

Chairman Pearce emphasized in his press release today, however, that the additional changes are still on the table and “remain under consideration by the Board for possible future action.”  Stay tuned. 

 

While the Board can be criticized for making decisions that do not reflect the real world, this much we now know – they have learned the definition of “hard bargaining,” thanks to Brian Hayes.

 

Even though the threat of the Board using its rule-making authority to tilt the field favorably in the direction of organized labor apparently has subsided for the time-being, we should be keeping a wary eye on Lafe Solomon, the General Counsel, and other actions the Board may take that do not rise to the level of formal rulemaking.  For example, the current guideline for Regional directors that elections must be held within 42 days from the date of a petition, absence extraordinary circumstances, is not part of any formal rule.  It is a guideline that can be changed without a lengthy hearing or comment process. 

 

Because of the continuing threat that the Board, either through its members or General Counsel, will take some action that will prejudice the ability of employers to combat union organizing, employers who wish to remain union-free should be doing those things now that are designed to neutralize and combat any appeal that a union may have to its employees.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 

IN THE WAKE OF THE DREAMLINER: THE LABOR BOARD PREPARES TO CHANGE THE RULES ON BARGAINING OVER DECISIONS TO RELOCATE WORK


IN THE WAKE OF THE DREAMLINER

 

THE LABOR BOARD PREPARES TO CHANGE THE RULES ON BARGAINING OVER DECISIONS TO RELOCATE WORK

 

On May 10, 2011, the Acting General Counsel of the National Labor Relations Board sent a memo to all of the Board’s Regional Offices telling them to submit all pending cases involving the issue of whether the employer had a duty to bargain with the union representing its employees about a decision to relocate work.  In a speech given by Solomon on June 9, he stated the reason for the Memo: he wants to find an appropriate vehicle for the Board to reconsider the Board’s long established rules governing bargaining over decisions about taking work out of unionized plants and moving it to more friendly environs.  Apparently, the fire-storm Mr. Solomon caused by the complaint against Boeing for its decision to place work in a new, non-union South Carolina plant rather than in a strike-plagued unionized plant in Washington was not enough for him. 

 

Mr. Solomon’s instruction follows Chairman Leibman’s musings in a case published on March 31, 2011, that she believes it may be time to require employers to provide information to its union detailing the reasons why it may decide to relocate work, even where the decision could not be affected by anything a union might do.  See Embarq Corporation and IBEW, 356 NLRB No. 125 at page 2.  A change in the rule as suggested by Leibman (and now contemplated by the Acting General Counsel) would be a sea-change in the way unionized employers will be required do business..

 

The current rule was developed through numerous cases and finally settled in 1991 in Dubuque Packing Company, 303 NLRB 386, 1991, enfd. in pertinent part 1 F3d 24 (D.C. Cir 1993) review denied 511 U.S. 1138 (1994).  Broadly stated, the rule is that where company’s a decision to relocate work was for reasons that did not sufficiently implicate labor costs so that the Union could do nothing that would cause the reversal of the decision, the employer would not be required to bargain that decision with the union.  If, however, the Union could do something to keep the work (such as by reducing labor costs through concessions), the employer would be obligated to bargain about the decision and give the Union an opportunity to make the necessary changes.  Even if the employer would not be required to bargain about the decision to move work, it still would be required to bargain about the effects of the decision (e.g., severance).

 

Currently, if a Union believes that the decision was something they could have reversed by giving concessions, it can challenge the decision through a refusal to bargain charge against the employer.  In such a case, the Company would have to show that the Union could not or would not have made concessions sufficient to stop the work relocation.  The Labor Board, after a trial, would decide whether the Union could have made sufficient concessions and whether the Company violated the law by not bargaining about the decision.  The Board would have the equitable power to require a reversal of the decision, pending bargaining. 

 

Bargaining over a decision to relocate work would require the Company to give the Union the facts on which it based its decision and its conclusion that the Union could make no concession that would induce the Company to change the decision.  Because most Companies do not wish to subject the decision to relocate work to what could be protracted and contentious union negotiations, the preferred course of action is to analyze the factors within the confidential walls of the management offices, leaving it to the Union to challenge the decision in retrospect without interfering with the immediate flow of business.

 

The scenario and process that Leibman is considering is dramatically different:

 

To encourage more constructive good-faith bargaining, we might modify the Dubuque framework, for example, by requiring the employer to timely advise the union whether its contemplated relocation plan turns on labor costs.  If the relocation does not turn on labor costs, the employer would be required to so advise the union and explain the basis of its decision.  If it does turn on labor costs, the employer, upon timely request, would be required to provide the union with information about the labor-cost savings and advise whether, in its view, the union could make concessions that could change its decision.  If the employer provided the information, and the union failed to offer concessions, the union then would be precluded from arguing to the Board that it could have made concessions.  If the employer failed to honor information requests where labor costs are a factor, it would be precluded from arguing that the union could not have made concessions.

 

What is troubling about Leibman’s process is that, in cases where the employer, in good faith, has concluded that the Union could not offer concessions sufficient to keep the work from being transferred, it would still have to deliver to the Union the bases for its decision.  If the Union then seeks the information that backs up the reasons, the Employer would be obligated to provide that information, some of which may be competitively sensitive, or be subject to a refusal to bargain charge.  What would follow could be protracted negotiations. The drag on the ability to make timely decisions could be significant and further justify the unwillingness of companies to put new work into unionized facilities.  Also, the reasons for a decision may implicate other strategic plans of the Company that would, if revealed, endanger other competitive edges that the Company is seeking to achieve, the relocation of work being just a piece in a much larger puzzle.

 

Leibman’s “musings” are additional indications that she is on a drive to broaden the powers of the National Labor Relations Board from an enforcement agency into a policy-making body.  If unchecked, Leibman will inject the Labor Board into the process of doing business to an unprecedented degree and far beyond what Congress intended when it passed the NLRA. 

 

It is clear from the preamble of the NLRA that Congress’s intent was that the Act should be, in both purpose and structure, reactive and remedial, not policy-making.  Even in the portion of the preamble that speaks about “encouraging the practice and procedure of collective bargaining,” the means of doing so in the context of remedying violations of the law and not by making policies:

 

It is hereby declared to the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aide or protection.  29 U.S.C.A. Section 151 (emphasis added)

 

Seeming to acknowledge the statutory limitation on the Board’s power, Leibman stopped short of suggesting that the failure of an employer to submit information about its decision to relocate work to the Union in advance of making the decision would constitute an independent violation of the Act.  Rather, she would give the failure to do so (and likewise the failure of a Union to propose concessions to stop the transfer) a preclusive effect in any later challenge to the action before the Board. 

 

These devices of choosing to enforce or not to enforce or to accept or not to accept certain defenses in enforcement proceedings are, in my view, attempts to achieve by circumspection what the law does not permit directly.  As such, the effort is not only intellectually dishonest, but also is reprehensible.  Either way, Employers need to be aware of yet another possible push by the current Labor Board to reshape the way American companies do business.  Curiously, this single-minded drive to deliver more power to unions at the expense of productivity and competitiveness may have the unintended consequence of driving more work away from unionized plants.  At a minimum, companies are well advised to do those things necessary to remain non-union to avoid the dilemma that the current National Labor Relations Board is creating for companies that have to recognize and deal with unions. 

 

 
 
 
 
 

James Redeker

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.