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LABOR BOARD ENDORSES DOUBLE STANDARD IN PRE-ELECTION CONDUCT


LABOR BOARD ENDORSES DOUBLE STANDARD IN UNION REPRESENTATION ELECTION CAMPAIGNS  

 

In the waning days of Member Becker’s term on the National Labor Relations Board, the Board majority decided a case based on the underlying proposition that unions and employers are to be held to different standards when assessing the legality of pre-election literature and tactics. Enterprise Leasing Company and Teamsters Local 391, December 29, 2011.  

 

Teamsters Local 391 was seeking to represent the employees of an Enterprise Leasing operation.  A union supporter took a photograph of another employee with seven other employees of Enterprise in a nearby food court.  Subsequently, the photograph was printed on a flyer surrounding the words “Yes. Everybody can make the right choice?”  The other side of the flyer said the employees should vote for the Union to be their voice for better pay, better benefits and better treatment.”  

 

After losing the election, 44 to 41, with two challenged ballots, Enterprise filed an objection which alleged that one of the employees in the photograph had not agreed to permit his picture to be used on the union flyer and, therefore, there was a misperception created that the Union had the support of the employee and that the employee had been unlawfully subjected to coercion by being publically identified as a union supporter.  This, the employer asserted, was enough to warrant a new election, especially in light of the closeness of the vote.  

 

In finding that the flyer, at most, implied that the Union had the employee’s permission to use the photograph, a majority of the Board majority consisting of Chairman Pearce and Member Becker held that the other employees could easily recognize the flyer as campaign propaganda and, therefore, the election process had not been tainted.  The employer was not entitled to a rerun election. Citing a 2001 case that was enforced by the Third Circuit Court of Appeals, Allegheny Ludlum, Member Hayes, in his dissent, argued that the established rule that an employer cannot use the image of an employee in campaign material without the employee’s consent should be applied equally to the union in this case.  Elemental fairness, he reasoned, required the equal application of the rule to both the employer and union. In response, the majority cited a 1969 Fifth Circuit Court of Appeals decision in which the court wrote: “An employer in an unorganized plant, with his almost absolute control over employment, wages, and working conditions, occupies a totally different position in a representation contest than a union, which is merely an outsider seeking entrance to the plant.”  

 

So, for this Labor Board, there are two standards.  Because one of the objectives of the National Labor Relations Act is to equalize power in the workplace and to achieve this objective of the law, according to the current majority, one side should be permitted to spread misperceptions of support and coerce employees while the other should not.  Machiavelli cheers.  

 

The lesson: Do what you can keep a union from gaining sufficient support to compel a representation election in the first place by having a well-crafted union-free strategy with specifically designed policies and training.  If a union gets the support necessary to have an election, this Labor Board will not judge the pre-election campaign conduct of an employer and a union by the same rules, to the disadvantage of the employer. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 

LABOR BOARD CASES ABOUT TO GET MORE EXPENSIVE TO DEFEND


Labor Board Cases About to Get More Expensive to Defend

 

On July 27, the National Labor Relations Board issued a press release announcing that it had hired a new “Lead Technology Counsel.”  This is a new position at the Board and a signal that the Obama Board is intent on making the cases before it more complex and expensive for employers to defend.

 

The office of the Technology Counsel will be expected to develop Board guidelines and training programs for agents and lawyers with regard to e-discovery and litigation holds.  E-discovery is the term being used in civil litigation to describe the retrieval and exchange of documents and electronically stored information, such as emails, during the investigation, discovery and litigation of particular matters.  “Litigation hold” is the term used to describe the process by which a prospective or actual litigant is required to preserve all documents, including those stored electronically, that may be relevant to a matter about which the prospective litigant has a reasonable belief may become the subject of litigation or is in actual litigation.

 

Employers that have been the targets of federal or state investigations or parties to a civil rights complaints or other employment charges or lawsuits know what e-discovery and litigation holds has done to explode their costs of defense.  In a recent “routine” employment discrimination lawsuit, for example, the reported cost of e-discovery and litigation hold alone approached $750,000, by the time the cost not only of preserving and retrieving, but also reviewing the nearly 1.5 million documents, most of which were emails, that were identified as possibly relevant to the case.

 

Our experience to date has been that the Labor Board’s agents know very little about e-discovery and rarely, if ever, pursue it in either the investigation or trial of a representation petition or charge.  Further, many lawyers defending labor cases before the Board have not been sending litigation hold letters and procedures to their clients when new cases are filed or suspected.  All of that is about to come to an end. 

 

The Board’s new Lead Technology Counsel (P. Brian See of Seyfarth Shaw) will be expected to, as the Board stated in its press release, “assist Agency attorneys and staff in crafting policies and procedures relating to managing electronic information and litigation holds. 

 

What this means is that Labor Board investigations and trials will now take on all of the trappings of federal litigation, including extensive discovery demands and procedures.  What up to now has been a relatively speedy and less costly process will be neither. 

 

Employers that have active Board cases or a reasonable belief that a situation may result in a Labor Board action, either a question of representation or unfair labor practice charge, should issue litigation hold directives to managers and supervisors to preserve all potentially relevant documents, including those store electronically, such as emails.  In addition, any scheduled document destruction policy must anticipate and contain features that permit Employers to make exceptions.  Going forward, employers must anticipate that the Board’s investigating agents and trial lawyers will be issuing sophisticated demands for the production of broad classes of documents that, if ignored or handled poorly, may result in decisive negative inferences. 

 

Clearly, employers should instruct supervisors and managers that electronically stored documents, such as emails, may have to be produced to the Labor Board in the event of a representation or charge case and that conclusions, including those of union animus or interference with the exercise of rights protected by the NLRA, may be made by the Board and a Court based on what one of them may have written.  Nothing should ever be preserved or put into an email that the employer would not want to be produced to the Labor Board or Court.

 

The processing and defending of Labor Board cases has just become more complex and expensive to defend.

 

 
 
 
 

DOL and NLRB Propose Rule Changes to Silence Employers and Help Unions Organize Workers


BOTH THE OLMS AND NLRB PROPOSE SIGNIFICANT RULE CHANGES TO SILENCE EMPLOYERS AND HELP UNIONS ORGANIZE WORKERS

 

In a run-up to the 2012 election, organized labor will be pleased by two proposed rule changes, one by the Office of Labor-Management Standards of Department of Labor (OLMS)and one by the National Labor Relations Board, that will aid Unions in their organizing activities. 

 

OLMS proposes to narrow the advice exception to Section 203, LMRDA.

 

In 1959, Congress passed the Labor-Management Reporting and Disclosure Act (“LMRDA”).  Section 203(a) of the LMRDA requires employers to disclose in a public report filed with the OLMS any agreements or arrangements they may have with a labor relations consultant/lawyer to provide services that seek to directly or indirectly persuade workers in connection with a representation election or with regard, generally, to union organizing or bargaining.  Section 203(b) places a similar requirement on the consultant/lawyer.  Section 203(c), however, carves out an exception to the reporting obligation where the services rendered to the employer are for giving or agreeing to give “advice” to the employer regarding employee/employer rights with respect to union organizing or bargaining.

 

The extent and meaning of the advice exception has been hotly debated since the Acts passage.  Currently, and since 1962, OLMS’s interpretation and application of the exception has settled in to be that the only consultant/lawyer agreements and activities that have to be reported are those that involve direct contact with the employees…so-called “direct persuader” activities.  Advising an employer about union prevention and the engineering of a pre-election campaign, including the preparation of materials for use by the employer, are considered to be within the advice exception and not reportable, so long as the consultant/lawyer did not have direct contact with the employees and the employer had the right to accept or reject what the consultant/lawyer prepared.

 

It is this currently settled interpretation of the advice exception that OLMS seeks to change.  Under the proposed rule, any agreement with any consultant/lawyer for activities that include actions, conduct or communications on behalf of an employer that would directly or indirectly persuade workers concerning the employees’ rights to organize and bargain, regardless of whether or not the consultant/lawyer has direct contact with the employees or the employer has the right to reject the materials and activities provided by the consultant/lawyer, must be reported to the OLMS within 30 days from the date of the agreement.  The reports would be in the public domain and available on the OLMS’s website. 

 

OLMS, in a 160 page tirade against employers who seek to remain union-free, cites to numerous union-sponsored and academic studies that detail employer abuses as justification for the draconian narrowing of the advice exception it is proposing.  The premise underlying the entire report is the myopic view of organized labor that any effort by an employer through the use of external advice to remain union-free is an “interference” with the right of employees to engage in union or other concerted activity.  In reading the report, I was unable to find any recognition that many consultants/lawyers assist employers to create workplaces that are good places to work where employees feel no need for third party representation.  Further, I was unable to find any recognition that one of the services provided by the consultants/lawyers is to educate employees regarding what unions are, what unions can do and what unions cannot do as a counter weight to the propaganda and misstatements by union organizers. 

 

One of the most alarming aspects of the proposed expanded reporting requirement is that its application is not limited to consultants/lawyers who plan or orchestrate a campaign in response to active union organizing.  As is clear from the explanation, even such things as the cost of union-free training seminars, the development of personnel policies, and design of personnel systems at times when there is no active union organizing would be reportable as programs to avoid union organizing.  Only specific advice with regard to whether an identifiable course of conduct or employer-drafted policy/system comports with the law would be within the exception to the reporting rule.  The preparation of any document or speech intended in any form to be given to employees, together with the fees charged for such service or product, would have to be reported by both the employer and the consultant/lawyer, identifying each other. 

 

The Department of Labor OLMS takes particular aim at lawyers who engage in activities calculated to increase employee resistance to unions and specifically rejects the notion that an attorney’s business relationship with a client, as well as the identity of the attorney’s clients, is not covered by the attorney-client privilege. 

 

The stated justification for the need to change the OLMS’s interpretation of the statute is that the amount paid by an employer in union prevention activities and the source of the advice purchased by the employer will assist employees to assess the credibility/sincerity of the information, policy, or system and will enable the employees to make better and more informed decisions about union representation. 

 

If the proposed rule becomes a reality, unions will be able to publicize to the employees and the public any union avoidance efforts that an employer may undertake with the advice of a consultant/lawyer, the identity of both the employer and consultant/lawyer, and the amounts paid to the consultant/lawyer for his/her services in an effort to impugn the employer’s, the system’s and the material’s credibility.  Further, unions will be able to identify which consultant/lawyers are being used by which employers and seek, through publicity attacks, to interfere with what both the employer and the consultant/lawyer are seeking to accomplish.  By identifying the clients of specific consultant/lawyers, unions may launch negative campaigns against employers who use them for no better reason than that the consultant/lawyer has been effective and should be “shut down.”  By tracking the activities of specific consultant/lawyers, unions will gain information regarding employers that are engaged in activities that seek to neutralize the appeal of union representation.  Being thus “branded” as a “union-busting” employer, employers can be intimidated into ceasing such efforts and exposing their workforces to unopposed union organizing.

 

Of particular note is OLMS’s estimated cost of their proposed revision of the rule.  Currently, 191 employers file reports.  This number is estimated to swell to 2,601 employers.  930 consultants/lawyers file reports.  This number is estimated to become 3,414.  The time for completing the new and more involved report is estimated for employers to increase from 22 minutes to one hour and for consultants/lawyers from 35 minutes to 2 hours.  The cost to all employers is estimated to grow from $24,378 to $825,866.  Most staggering, however, is the increased cost to the government.  Currently, the Office of Labor-Management Standards spends about $6.5 million administering the collection and dissemination of all forms, including those filed by unions.  The cost of the new regulation for just the collection and dissemination of employer and consultant/lawyer forms is $185,719,212 due primarily to an increase in employee hours 4,420,458 hours, an FTE of 2,125 employees!

A failure to file the required reports carries criminal penalties and may subject the employer to civil enforcement.

A payback that keeps paying.

 

Public comments can be filed with the OLMS online at http://www.regulations.gov by August 22, 2011.

 

 

NLRB proposes rule to “streamline” and shorten union representation process:

 

On June 21, 2011, the majority of the National Labor Relations Board (Member Brian Hayes dissented) proposed what were termed “reforms” to the Board processes that are used to determine through a secret ballot election whether employees wish to be represented by a union.  The proposed reforms are intended to reduce “unnecessary” litigation, streamline procedures and facilitate efficiency by the wider use of electronic communications and filings.  What these reforms actually do is shorten the time between the filing of a petition for an election and the hearing to determine if an election should be held, increase the amount of information about the employees that an employer must give a petitioning union, shorten the time by which the employer must provide the information, limit the ability of employers to have issues resolved prior to the election and restrict access to the Board to review the issues decided prior to and after the election.

 

Electronic filings and transmittal of documents:  While we have found the practice of accepting documents electronically varies by Regions, the Board make the electronic acceptance of notices and documents, such as voter lists, to be standard at all Regions.  The most significant change here is with the filing of petitions and other notices.  Currently, petitions from unions seeking representation rights cannot be transmitted and filed electronically, although faxes may be used to send new petitions to employers.  Also, notices of hearings, both pre and post election, can be sent to the parties electronically.  Compelling electronic communications, the Board argues, will speed the process. 

 

Time for initial hearing on the election petition is shortened dramatically:  Currently, the initial hearing concerning the petition must be conducted within 12 days from the date of the service of the petition, absent highly unusual circumstances.  The proposal is to reduce that time period to 7 days (5 business days, assuming no holidays).  This shortening of the time to have the initial hearing is significant because of the importance of the issues that may be raised and resolved in that forum.  The union’s petition will identify the unit of employees it wishes to represent.  The employer may believe that the requested unit is inappropriate.  At the hearing, the employer must put on the record for decision of the Regional Director the reasons why it believes the requested unit is inappropriate and the evidence that supports that position.  The description of the employee unit may spell the difference between winning or losing an election.  In the time between the petition and hearing, therefore, the employer must decide whether the requested unit is appropriate for bargaining, whether the correct employees are included or excluded from the requested unit, assemble the evidence to support its various positions and prepare exhibits and witnesses for litigation.  If, at the time of the receipt of the petition, an employer has yet to identify its lawyer or other representative for the hearing, the time to define the issues and positions and trial strategy may be so short that the employer may find it impossible to advance its legitimate positions effectively at the hearing.  For the unsuspecting, unprepared and untutored employer, the short time between receipt of a petition and the establishment of when critical issues are resolved and an election date is set will probably mean that the employer will not have an effective voice and the process will be driven almost exclusively by the Board and the union.  This is not surprising since Board Member Becker is already on the record saying that he does not believe an employer has any place at the table when the definition of the voting group and date and time of the election are decided. 

 

 

Date specified for post-election hearing:  As noted later, the Board is pushing as many issues that require resolution, particularly the identity of eligible voters and determination of who is who is not a supervisor, to after the election is over.  While objections and challenged ballots are now handled routinely post election, it is noteworthy that objections need not be filed for seven calendar days after the election.  Hearings on the objections are often delayed for weeks to permit the Board to investigate the charges and the parties prepare for the hearing.  The Board proposes to require post-election hearings on all unresolved issues, including challenged ballots and objections to the conduct of the election, within fourteen days after the election, significantly hindering an employer’s ability to do investigations, discover evidence and prepare witnesses to testify.

 

Creation of a “statement of position form:”  The proposed rule would require both the union and the employer to file with the Board a written statement of their positions on issues that may be in dispute, presumably appropriateness of target unit, who is and who is not a supervisor, voter eligibility and date/time/place of an election.  This statement of positions must be filed with the Board no later than the start of the hearing, prior to the presentation of any evidence.  The failure to raise an issue in the statement of position would, in all likelihood, preclude the employer from raising it earlier or, at least, prejudice the employer in raising the issue after the election.

 

Delay of voter eligibility issues to post-election determination:  At the initial hearing, employers currently will seek to have issues of voter eligibility resolved, particularly those concerning the supervisory status of questionable classifications of workers, such as leads and head nurses.  Whether an individual is or is not a supervisor is critical to an employer at the outset of a campaign because the employer needs to know how to converse with and treat the individuals.  If the workers are employees under the law, there are significant restrictions in what and how things can be said to or asked of them.  If supervisors are not employees under the law, these restrictions do not exist.  The wrong choice by an employer and treatment of an employee as if he/she were a supervisor may invalidate an election that had been won.  Further, dealing with workers as supervisors may result in their not voting and the loss of “No” votes.  Under the new rule, questions of voter eligibility involving 20% or fewer of the proposed unit would be deferred until after the election and then in the context of challenged ballots.  Ballots not cast, of course, cannot be challenged.  By doing this, the Board places on the employer the greatest risk.  Employers faced with this risk often choose not to treat any of the individuals at issue as supervisors, thereby hampering the employer’s ability to campaign effectively.

 

Requests for review of Regional Director decisions:  Currently, if a Regional Director makes a decision at the initial hearing, for example a decision about the appropriateness of a unit for voting, the employer may appeal to the Board for a review.  Typically, an election will be delayed for a short time to permit the Board to rule on the appeal, even though an election date is set.  Under the proposed rule, all requests for review of Regional Director decisions would have to be delayed until post-election proceedings.  Consequently, employers will be denied certainty on important issues before employees vote on the question of representation. 

 

Board will have discretion not to review post-election decisions:  Not only would employers be required to wait until after an election to have Regional Director decisions reviewed, under the proposed rule the Board will have the discretion to refuse to review all pre and post election decisions by a Regional Director, effectively denying employers recourse to a review on the merits and leaving the only method of challenge to the expensive unfair labor practice process following a refusal to bargain.

 

The Excelsior List must include employee phone numbers and, when available, email addresses and must be supplied electronically within two days:  Currently, employers are obligated to provide to the Regional Office within seven days from the date of the direction of an election (or stipulation for a consent election) a list of employees in the proposed unit with their mailing addresses.  This list is then communicated by the Board to the union to enable the union to contact employees in their homes.  The proposed rule will not only require the employer to include in the list the employees’ telephone numbers and, when available, email addresses, but also require that the list be transmitted electronically to the Region within two days from the direction of an election (or stipulation to have an election).  The effect of this rule change is obvious: unions will have the list of employees earlier and be given an enhanced ability to campaign to employees in their homes. 

 

*******

 

The take-away from both the OLMS and the NLRB proposed rule changes for employers is that both government agencies are intent on making union avoidance harder and union organizing easier.  What is most alarming, especially with the OLMS proposal and supporting material, is this apparently philosophical underpinning that any effort by an employer to create policies, systems or materials in an effort to educate employees about unions and to make unions unnecessary is, at its core, an effort to interfere with the right of employees to engage in union activity.  This apparent belief is not only wrong, but also is an outrageous denigration of the good faith and honest activities of employers who wish to build workplaces free of the economic drain and adversarialism that often accompanies unionization. 

 

Employers and employer organizations need to be vigilant and vocal about the further erosion of employer rights and the continuing interference in the way they choose to do business within the law.  Clearly, it is incumbent on employers to redouble their efforts to create personnel systems to educate employees about and to neutralize any interest employees may have in union representation.  If the employees see no value to union representation, the OLMS and Board processes are rendered irrelevant. 

 

 
 
 
 
 

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.