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

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, the NLRB has four sitting members.  This number will reduce to three when Republican Member Schaumber's term runs out in August, 2010.   All three remaining Board members are Democratic appointees. Typically, a fully constituted Board decides 300 to 400 cases per year and there was already a backlog of several hundred cases to be decided prior to the re-arrival of the 600 cases affected by the Supreme Court's decision.  Thus, the log jam of cases at the Board may continue as the Members wrestle with re-deciding the remanded cases.  It is unlikely that the current Board will overturn those decisions which favored unions or employees and there may be occasion for the new Board to change the law or Board's policy in the reconsideration of some of the cases.

We previously predicted that the new Board will overturn a significant number of decisions rendered in favor of employers during the preceding administration.  The agenda to consider those cases will be directed by the NLRB's General Counsel who has the authority to prioritize the cases coming before the Board.  With the departure of General Counsel Ron Meisburg, the President now has the opportunity to appoint his replacement.  However, even with the appointment of a new general counsel, the remand of these 600 cases may affect the Board's timetable in working through the predicted pro-labor agenda.

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.