Hunton Employment & Labor Law Perspectives : Employment Lawyers & Attorneys : Hunton & Williams Law Firm : Labor Law Legislative Updates

Proposed Changes

Timing of Elections.  As indicated, one of the most notable proposed changes is the timing of the election itself.  The Board’s proposed amendments would reduce the time between the filing of a petition and the election, with elections being held as early as 10 days after a petition is filed.  In 2010 the median timing of an election was 38 days after the filing of a petition.

Litigation Limitations.  One reason quickie elections would be possible is because of the numerous proposals made regarding litigation related to elections.  First, the amendments would require that any pre-election hearing disputing the right of the union to hold the election, be held within seven days of when the hearing notice is served.  Currently, Regional Directors have flexibility in scheduling the pre-election hearing and can consider special circumstances.  Second, at the hearing employers would be required to file a Statement of Position explaining all of their legal objections to the elections.  Notably, failure to object to an issue would be fatal because the objection would be deemed waived.  Third, prior to an election the hearing officer will only rule on disputes that would affect more than twenty percent of the bargaining unit.  Fourth, if the hearing officer does rule prior to the election, parties cannot request review of the ruling by the NLRB until after the election. 

Access to Employee Information.  The changes would require employers to provide unions access to employee information within two days of approval of an election agreement or issuance of a direction of election.  Currently employers have seven days to provide this information.  The proposals would also require employers to provide employees’ available phone numbers and email addresses, information employers do not currently provide.  Finally, the amendments further propose that employers must provide this information electronically.

Potential Impact

In its fact sheet that compares its proposals to the current procedures in place, the NLRB claims that it periodically reviews and revises its procedures to improve its service to the public and that the proposed amendments would help it carry out its duties under the National Labor Relations Act (“NLRA”).  Furthermore, the NLRB claims that the motivation for the proposed rules is to streamline the election process, reduce unnecessary litigation and facilitate the use of electronic communications and document fillings.  Unfortunately, while the proposed amendments may do exactly that, they do so to the detriment of employers. 

The Board’s proposed changes will clearly provide significant benefits to unions and as noted by former NLRB Chairman Peter Schaumber, hurt employers and lead to uninformed voters.  Because of the quickie elections, employers will have less time to respond to organizing campaigns.  Employers will have a short amount of time to educate employees about their views on unionization and additionally limited time to review and determine their legal positions on the elections.  Calling it “a seismic shift in Board law and procedures,” Schaumber explains that the proposals will “eviscerate employers’ chance to respond” and “employees will only hear one side of the story.” 

What You Can Do

The Board is accepting comments on its proposed rules through August 22, 2011.  Your comments can be submitted through regulations.gov.  In addition to commenting on these proposals, one strategy is for employers to be proactive regarding unions.  If the amendments are accepted, employers will clearly be facing an uphill battle when elections occur.  As a result, employers should educate employees about unionization as soon as they are aware of the potential of any election.

In the recent New Star case, the Unions initiated a strike against two general contractors -- the so-called “primary” employers. During the strike, the Unions displayed banners referencing its “labor dispute” with the two general contractors at 19 different construction worksites associated with “secondary” employers, i.e., worksites that were using the general contractors being struck by the Unions. At two non-public job sites, the Unions did not confine their banners to the immediate proximity of the entry gates that were reserved for non-neutral employees. Instead, at one worksite, the banners were displayed 10-15 feet from the gate reserved for neutral employees, and at a second worksite, the banners were 300-350 feet away from the neutral employee gate. At the work sites, the Unions also distributed handbills that explained the connection between the “secondary” employer and the two general contractors (or “primary” employers) with which the Unions had a dispute.
 
Siding with management, the NLRB’s General Counsel had argued that the banners constituted unlawful common situs picketing and that the term “labor dispute” on the banners impermissibly signaled to employees of the “secondary” employers that they should cease working. Disagreeing with the General Counsel, the NLRB pointed out that:

(i) it has considered ten cases involving bannering at fifty-four locations; 

(ii) in each case, the General Counsel argued that the banners were in actuality a “signal” to employees of the “secondary” employer to cease work; and 

(iii) yet, there was no evidence in any case that “any employee [of the “secondary” employer], in fact, ceased work.” 

The Board ruled that, for conduct to be in violation of the secondary boycott provisions of federal labor law, two key elements must be satisfied:

(1) the Union’s activity induced or encouraged the “secondary” employer’s workers to cease working; and

(2) one of the goals of the Union’s activity was to in fact compel the “secondary” employer to cease doing business with the struck or “primary” employer. 

Ultimately, the NLRB found “no evidence” to suggest that the Unions’ banners were a “‘prearranged or generally understood signal’ to any employees to cease work.” The Board also noted that:

(i) the Unions did not discuss their protest with passersby; 

(ii) the banners were not timed to coincide with the “secondary” employees’ reporting times; 

(iii) handbills explicitly stated that the Unions were not urging anyone to refuse to work or deliver goods; and 

(iv) the banners faced well-traveled public roads and could be observed by the public.

Dissenting Board Member Brian E. Hayes, the only Republican NLRB member, observed the lack of a practical difference between picketing and bannering and pointed out that “‘every form of influence and persuasion’ is equally prohibited, regardless of the method used.” Hayes accused the majority of the NLRB of “undoing through administrative adjudication the restrictions imposed by Congress on unions’ ability to involve neutral employers and employees in a labor dispute.” Hayes opined that the display of a banner announcing a “labor dispute” at a neutral gate to a non-public job site “plainly sought to ‘create the impression that this was an unfair job, and that the Union was requesting neutral employees . . . not to enter the site.’” 

While the Democratic NLRB majority seems to remain consistent in its stance that bannering is distinguishable from unlawful picketing, it is still unclear how a federal appellate court will view the issue. Unless and until a federal appellate court reverses the NLRB’s determinations on this issue, employers may find themselves stuck enduring this type of activity. In order to ensure that business is not disrupted and that Union activity is contained as much as possible, employers should continue to use the reserved gate system. 

In the recently issued decision, consolidated cases Rite Aid Store #6473 and Lamons Gasket Company, 355 NLRB 157 (2010), the Board announced that it will revisit its holding in Dana Corp., 351 NLRB 434 (2007).  In Dana, the Board acknowledged the need to protect employees’ freedom of choice and established an employee’s right to challenge immediately their employer’s voluntary card-based union recognition by demanding a secret ballot election.  Specifically, the Board held in Dana that when an employer voluntarily recognizes a union based on card-check, it must post a notice advising its employees that they have the right to file a petition for an election to decertify the union or in support of a rival union within 45 days of the notice.  Prior to Dana, an employer’s voluntary card-based recognition of a union barred an election petition filed by an employee or a rival union for a “reasonable period of time,” which could be up to one year (or up to 3 years in the event a collective bargaining contract had been reached). 

The Board in Rite Aid and Lamons Gasket  found “substantial issues concerning voluntary recognition arising under the Board’s decision in Dana.”  The Board also issued a Notice and Invitation to File Briefs, inviting interested parties to file briefs by November 1, 2010, to address “the issues raised in these cases, including whether the Board should modify or overrule Dana.”  Specifically, the Board stated that parties and amici should answer some or all of the following questions in their briefs:

(1) What has been their experience under Dana and what have other parties to voluntary recognition agreements experienced under Dana?
(2) In what ways has the application of Dana furthered or hindered employees’ choice of whether to be represented?
(3) In what ways has the application of Dana destabilized or furthered collective bargaining? (4) What is the appropriate scope of application of the rule announced in Dana, specifically, should the rule apply in situations governed by the Board’s decision regarding after-acquired clauses in Kroger Co., 219 NLRB 388 (1975), or in mergers such as the one presented in Green-Wood Cemetery, 280 NLRB 1359 (1986)?
(5) Under what circumstances should substantial compliance be sufficient to satisfy the notice-posting requirements established in Dana?
(6) If the Board modifies or overrules Dana, should it do so retroactively or prospectively only?

The Board further invited the parties and amici to “submit empirical data and factual descriptions of their experience under Dana.”  However, the dissent, consisting of Members Schaumber and Hayes, argued that the Board already possesses the only relevant, and also telling, empirical evidence.  The dissent noted that since the Board’s decision in Dana, the Agency has received 1,111 requests for voluntary recognition, resulting in 54 secret ballot elections.  In approximately 25% of these elections, the employees have voted to reject the union.  Citing these statistics, the dissent asserted that “Dana has served its purpose of protecting employees’ free choice without discouraging voluntary recognition or the overall process of collective bargaining.”  The dissent further predicted that the Board’s action in Rite Aid and Lamons Gasket  is a “prelude to what will most likely result in the overruling of Dana, in derogation of employees’ Section 7 free choice rights.”

Currently, there are two NLRB members sitting by virtue of Senate confirmation, including Member Schaumber, a Republican appointee whose term expires in August.  Members Pearce and Becker are recess appointees appointed by the President in March, 2010.  A procedural maneuver by Senator Harkin to slip Member Becker, the most controversial of the Obama appointees, into a full term was blocked on the Senate floor late last week.  Republican Brian Hayes, who had been nominated by the administration for a full term, failed to receive a recess appointment from the President when he gave such appointments to Democrats Pearce and Becker.  Thus, without additional Board appointments or confirmations, there will be three sitting Democrats and no Republicans on the five-member NLRB by September 1, as well as a new General Counsel appointed by the White House.  Meisburg's resignation is also likely to fuel speculation that some sort of deal can be worked out between Democrats and Republicans to re-staff the full Board and the General Counsel's office at the same time. From the employer's perspective, such an agreement is hoped for but difficult to envision.

The employer community is expecting a shift in Board policy, rules and decisions toward the interests of labor. The fact that at or about the time of the recess appointments the Board hired an outside expert in the field of "rulemaking" has lead to enormous speculation that the NLRB intends to actively change its rules going forward. Many have also recognized that the Board does not have to undertake a formal process to change many of its current rules relating to elections.
 
The General Counsel can heavily influence the agenda and timing of cases that come before the full Board. There are a host of cases that can be lined up for decision, many of which can serve to overturn Bush era precedents unpopular with organized labor. One can expect the Board to revisit issues relating to the definitions of supervisors and independent contractors; whether employees have the right to call for an election after voluntary card check recognition; whether temporary employees can be organized; the use of email; whether non-union employees have Weingarten rights; pre-recognition bargaining; bannering; cessation of dues checkoff after contract expiration; whether "salts" must have a genuine interest in the job, and many more issues.

Even without the Employee Free Choice Act, the passage of which now appears unlikely, these developments should create greater opportunities for labor and a more challenging environment for business.

Becker Appointed To NLRB

The President filled two of the three vacant seats on the NLRB with Democratic nominees Craig Becker and Mark Pearce.  The President cited the need to promote "the basic functioning of government" as the reason for issuing the appointments.  However, he chose not to appoint Republican Brian Hayes, whose uncontroversial nomination has been pending along with those of Becker and Pearce, to fill the remaining vacancy.  As a result, the NLRB is still not fully constituted.
 
By statute the NLRB is to have five members.  Traditionally, three of the members come from the sitting president's political party and the other two are from the other party.  However, the Board has been functioning for more than two years with only two members--its Chairperson Wilma Liebman (Democrat) and member Peter Schaumber (Republican).  The two have decided more than 500 cases.  The authority of the NLRB to decide cases with only two members was the subject of an argument before the U.S. Supreme Court just last week.  All parties to the case agreed that the Board had the statutory authority to act if it had three or more sitting members.

Before leaving Washington for a two-week, post-healthcare debate recess, 41 Senators, all Republicans, wrote the President requesting that he not issue a recess appointment to Mr. Becker.  Twenty business groups, including the U.S. Chamber of Commerce, echoed the sentiments of the Senate Republicans.

Becker's nomination has been hotly contested since it was announced last fall, as a result of what some call his "extreme" views about the union selection process.  Because of that controversy, just before the Christmas 2009 recess, Senator McCain exercised his Senatorial privilege to put Becker's nomination on hold, although Republicans and Democrats indicated that the nominations of both Pearce and Hayes would be approved without significant debate.  However, the President did not seek a vote on Pearce or Hayes at that time.

Mr. Becker will leave his post as counsel for the Service Employees International Union (“SEIU”) to take his seat on the NLRB; he will remain a Board member until his recess appointment runs out at the end of 2011. With a 3-to-1 pro-labor majority and with no particular timetable for action on Mr. Hayes' nomination, the NLRB is poised to reverse numerous decisions made by the Bush appointed Board on a number of controversial issues.

As we have written in this column on several occasions, Mr. Becker's views are of grave concern to many in the business community.  For example, Mr. Becker opposes participation by employers in the process by which employees decide whether to choose union representation.  Becker does not believe that employers should be allowed to express an opinion, provide any relevant information to their employees, or otherwise participate in the process in any way.

It is difficult to tell whether Becker's appointment signals the President's intent to defer action on the so-called Employee Free Choice Act (“EFCA”).  Some will speculate that the appointment indicates a compromise between the President and Andy Stern, who runs the SEIU and has visited the White House more than anyone else in the last year.  Stern is a staunch supporter of both EFCA and his employee, Mr. Becker.  The President and Secretary of Labor Hilda Solis have repeated their support for passage of EFCA.  However, the proposed law, which would eliminate the right of employees to vote on the question of union representation, has been mired in controversy since the President took office.  Like health care reform legislation, it may require the President to muster all forces at his command to get it passed.

Becker has made clear his view that the NLRB can engage in both rule making and rule changing, which could accomplish much of what EFCA is designed to do without Congressional action.  By failing to appoint Hayes, the NLRB now has a decidedly pro-labor majority which could enact sufficient changes to the union selection process to allow the President to avoid the firestorm which would accompany the debate over EFCA. 

Feldblum Appointed To EEOC

The President also announced that he would use recess appointments to fill slots on the EEOC with controversial Georgetown University law professor Chai Feldblum, Jacqueline A. Berrien, Victoria A. Lipnic, and David Lopez. 

The appointment of Feldblum drew immediate criticism from conservative Republicans.  Feldblum, who will be the first openly gay member of the EEOC, is best known for her support of the rights movement for lesbian, gay, bisexual, and transgender (“LGBT”) persons.  She helped craft the Employment Non-Discrimination Act (“ENDA”), which would prohibit discrimination against employees on the basis of sexual orientation or gender identity by civilian non-religious employers with 15 or more employees. 

The EEOC nominees were approved by a Senate committee in early December, but their confirmation vote was put on indefinite hold by Senate Republicans who viewed Feldblum and other Obama nominees as too extreme.  Supporters of the President’s move to exercise the recess appointment option cite the EEOC’s backlog of discrimination claims and the current absence of a quorum needed to effectively address claims.  In a statement issued with the recess appointments, President Obama said, “The United States Senate has the responsibility to approve or disapprove of my nominees.  But if, in the interest of scoring political points, Republicans in the Senate refuse to exercise that responsibility, I must act in the interest of the American people and exercise my authority to fill these positions on an interim basis.”

Recess appointments last until the end of the next session of Congress.  The White House announced, however, that the nominees will remain in the Senate for confirmation by regular procedures. 

Becker could still be appointed to the NLRB if the President makes a recess appointment. Currently, the Board has only two of its five seats filled, and requires a third to meet the quorum requirement.  However, given the controversy surrounding the Becker nomination, it would be a bold move for the President to fill the quorum by giving Becker the seat.  Two other current nominees, Mark Gaston Pearce (D.) and Brian Hayes (R.) are less controversial than Becker and their nominations are also before the Senate for consideration. The controversy surrounding the Becker nomination is due principally to Becker’s background, which many believe displays an anti-free-market and pro-union bent.  Becker is a labor lawyer who has served as associate general counsel to the Service Employees International Union (SEIU) and the AFL-CIO.  For the past 27 years, Becker has taught and practiced labor law and written articles expressing extremely pro-union, anti-business views.

It appears that the Senate can confirm both Pearce and Hayes at any time. However, should  the Senate attempt  to confirm Pearce (the Democrat) without Hayes (the Republican), it is predicted that Senate Republicans will object or resist.
  
As for a recess appointment, it is unclear whether there will be a recess next week, given the blizzards this week that have resulted in snow days in Washington, D.C.  If the Senate takes off three (3) days or more next week, as originally planned, the President will have the opportunity to use his recess appointment power.  If so, the President could appoint Becker, Pearce, or Hayes, or any combination, including all three nominees to the NLRB.  If any of them receives the recess appointment, the appointment must be approved by the Senate by the end of the next session (which in current practice would likely be some time in December of 2011, although it is not certain), or the position becomes vacant again.
 
It is not clear why Senate Majority Leader Reid pushed the cloture vote when he knew last week that it would fail after Senators Enzi (R. Wyo.) and Murkowski (R. Alaska) of the Senate Health, Education, Labor, and Pensions Committee changed their votes to oppose Becker’s nomination. However, after the cloture vote, labor organizations are now more informed about who it should support, with Senators Lincoln and Nelson likely no longer on its list of supportive candidates.