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Labor & Collective Bargaining

NLRB Begins Public Hearings on Proposed New Election Rules

The National Labor Relations Board yesterday began public hearings on proposed changes to its rules  governing representation elections.  The proposed rules were published in the Federal Register on February 6, 2014. See Notice of Proposed Rulemaking Representation-Case Procedures.

The deadline for initial public comments on the rules ended on April 7; reply comments are due on April 14. The proposed rules, commonly referred to as the “quickie” or “ambush” election rules, because they seek, among other things, to significantly shorten the period between the date a union files a representation petition and the date of the election, essentially are the same rules that were proposed by the NLRB in June, 2011.  Those rules were modified, and made final in December that year.  The rules were struck down by a federal district court in July 2012 on the ground the Board lacked a quorum when they were issued. See Chamber of Commerce of the U.S. v. NLRB, Civil Action No. 11-2262 (2012). The Board’s appeal of that ruling was dismissed, pursuant to a joint stipulation, on December 9, 2013.

Thursday’s public hearing in Washington was streamed live on the internet and featured a full day of testimony.  According to the speakers schedule for the “Public Meeting: R-Case Procedures,” seven topics were addressed by representatives of business groups, labor organizations and  law firms. These topics included: (1) whether electronic signatures should be permitted to satisfy the showing of interest requirement; (2) the setting of a pre-election hearing within seven days after the petition is filed, absent special circumstances; (3) the requirement of a written statement of position; (4) the types of issues that should be litigated at the pre-election hearing; (5) issues related to concluding statements, arguments and briefs following the pre-election hearing, as well as  the issuance of a Direction of Election before the pre-election hearing decision is issued; (6) changes to the process of NLRB review of the Decision and Direction of Election and changes to post-election Board review procedures; and (7) the NLRB’s “blocking charge” policy causing  elections to be held in abeyance until unfair labor practice charges are resolved.

Business groups and labor organizations represented at Thursday’s hearing  included the SEIU, Associated Builders & Contractors, Coalition for a Democratic Workplace, United Nurses Association of California, AFL-CIO, U.S. Chamber of Commerce, IUOE Local 150, IBB, National Grocers Association, Council on Labor Law Equality, Universal Health Systems, Inc., UFCW, NFIB, IBEW, Tennessee Chamber of Commerce, Retail Industry Leaders Association, International Franchise Association, CWA, SHRM, and LIUNA.

The second day of public hearings began at 9:30 a.m. on April 11 and also is being streamed live on the internet.  According to the speakers schedule, the NLRB will hear testimony on several additional topics, including: (1) the standards for setting an election date; (2) whether the proposed rules adequately protect free speech interests; (3) whether or how the rules should address voter lists; (4) whether or how the Board can assist unrepresented local unions and small employers in complying with election procedures; and (5) whether the Board’s rule making procedures demonstrates that the Board values the comments of the public.

NLRB GC Memo Sheds Light on 2013 and the Future

National Labor Relations Board General Counsel Richard Griffin’s 18-page General Counsel Memorandum (GC 14-02), “Report on the Midwinter Meeting of the ABA Practice and Procedure Committee of the Labor and Employment Law Section,” issued March 26, 2014, covers a wide-range of topics, including unfair labor practice statistics and Agency plans for guidance memoranda regarding employer work rules and handbooks.

As has been the case for many years, the NLRB’s GC attended the annual midwinter meeting of the Practice and Procedure Committee of the American Bar Association’s Labor and Employment Law Section.  The primary purpose was to respond to and discuss concerns and questions raised by Committee members about NLRB-related issues.

According to the Memorandum, in fiscal year 2013, 21,394 unfair labor practice charges were filed; the vast majority (92.8%) of these was settled.  Only 1,272 unfair labor practice complaints were issued, and the NLRB’s litigation win rate was 85.7%.  In FY 2013, 559 of the charges filed were submitted to the Division of Advice, with a median case-processing time of 21 days. (The submitted cases involved novel or difficult legal issues, high-profile labor disputes, charges pending in multiple Regional Offices, or Section 10(j) injunction authorization requests.)

Despite confusion that appears to exists (even among some NLRB personnel) over the legality of handbook rules under the NLRA, the GC does not plan to issue any additional “guideline memoranda” on that subject.  (These Memoranda can be quite useful to employers and practitioners who are charged with determining the lawfulness of handbook rules under the NLRA.)  According to the GC, there also are no immediate plans for guideline memoranda about other issues, but since there are a number of significant issues pending before the NLRB, it is likely that guidance will be provided to the Regional offices once decisions are released in those cases. Also of note in the Memorandum is the revelation by the GC that no administrative rules (other than the proposed representation case rules) are being considered or drafted at this time by the NLRB.

AFL-CIO Membership Stats Mostly Flat or Declining

The AFL-CIO’s membership numbers were stagnant in 2013, despite the fact the union added more than one million members.  According to a “Membership Report” prepared by AFL-CIO, almost all of that increase was attributable to the 2013 re-affiliation of the United Food and Commercial Workers Union with the AFL-CIO.  [The UFCW left the AFL-CIO in 2005 to join the Change to Win Federation (CTW).]  The other unions affiliated with the AFL-CIO suffered a net loss of slightly more than 18,000 members.

The report also notes that six unions affiliated with the AFL-CIO grew by more than 5,000 members in 2013 – UNITE HERE, SAG-AFTRA, National Nurses United (NNU), American Federation of Teachers, United Auto Workers, and American Federation of Government Employees (AFGE).  More unions lost membership than gained — 14 parent (international) unions had membership increases in 2013, and 24 lost members.  The most successful AFL-CIO unions during the past five years are AFGE and National Nurses United.

The average membership of the AFL-CIO in 1955 was 12,622,000; by 2013, the union had lost more than four million members.   (Many of those who departed were members of unions that left the AFL-CIO to go to CTW and have not returned.)

 

Congressional Leaders Seek More Time for Comments on New Election Rule

Representatives John Kline (R-Minn.) and Phil Roe (R-Tenn.) have written to National Labor Relations Board Chairman Mark Pearce requesting a 30-day extension to the comment period to the NLRB’s re-issued proposed representation petition rule changes.  The comment and reply comment period ends on April 14, 2014.  While expressing general opposition to significant changes in pre-election procedure as unnecessary, the Republican Representatives focused on the impact the new rules would have on employers in light of the Board’s 2011 Specialty Healthcare decision (357 NLRB No. 83).

As reported in this blog, on February 5, 2014, the NLRB, now duly and fully staffed, essentially re-issued its failed 2011 proposed representation petition rule changes.  Widely called the “quickie” or “ambush” election rule, the original rule was withdrawn as a result of successful legal challenges arising from the Board’s lack of a quorum (less than three members) when the original final rule was promulgated in December, 2011.  The current proposal raises the same concerns as the original – concerns which have been exacerbated by the ensuing years of Board activism.

A public hearing about the new proposed rule has been announced for April 10th and 11th.  Many observers expect the Board to issue its final rule some time in June.

Specialty Healthcare, often called the “micro-unit” case, heightened the legal standard for employer challenges to a union’s petitioned-for unit.  In short, it enables a union to seek certification for small, easier-to-organize, units of employees while imposing greater burdens on contesting employers to prove those units are not appropriate.  Not only is establishing the employer’s case more difficult under Specialty Healthcare, say Representatives Kline and Roe, but the accelerated rules would worsen the problem by requiring a company to locate and retain counsel, analyze the petition, investigate the pertinent facts, determine and formally state its legal position on relevant issues, and prepare for a hearing in even less time than it has now.

Reps. Roe and Kline apparently are not satisfied with a mere lengthening of the comment period.  They also are sponsoring a House bill to prevent implementation of all elements of the Board’s proposed rule.  Passage of any such bill is unlikely in the Senate and, even then, would face a probable veto by the White House.

At this writing, it is not known whether the NLRB will grant any more time for comments, or if it does, whether the additional time will bring facts and arguments to the Board’s attention adequate to affect the content of the final rule. The Board has announced it will consider the voluminous comments received when the 2011 rule was first proposed as part of the record for the present rule.

Keep reading this blog for updates.  For a more comprehensive review of the proposed rule, employers may access our recent webinar on the subject here.

Northwestern Scholarship Football Players Found to be Employees Eligible for Union Representation

In a decision that has wide-ranging implications for college and university athletics programs, the Regional Director for Region 13 of the National Labor Relations Board has found that scholarship football players at Northwestern University are “employees” within the meaning of the National Labor Relations Act and eligible for union representation. The Regional Director found appropriate a bargaining unit composed of “all football players receiving grant-in-aid football scholarship [sic] and not having exhausted their playing eligibility.”

The Regional Director used the common law definition of employee in making his decision. Under that test, a person is an employee if he performs a service for another, under a contract of hire, for compensation, and is subject to the other’s right of control. He found the following:

  • The scholarship football players perform a service (playing football) for compensation (a scholarship)
  • The scholarship players’ commitments to play football in exchange for the scholarship constitutes a contract for hire
  • The scholarship players are under the control of the University for the entire year, including in-season and out-of-season workouts, restrictions on their entire personal life and detailed regulations players must follow at the risk of losing their scholarship

The Regional Director decided the NLRB’s 2004 Brown University decision, in which the NLRB found graduate assistants not to be employees of the university, to be inapplicable here because playing football is not part of the players’ academic degree program. However, he wrote that even if the Brown University test was applied, the scholarship football players would be found to be employees. He noted:

  • The scholarship players are not primarily students due to the 50-60 hours a week during the season that they devote to football
  • The scholarship players’ football “duties” do not constitute a part of their academic degree requirements
  • The academic faculty does not supervise the players’ football duties; rather, coaches who are not part of the faculty do so
  • The grant-in-aid football scholarship is not need-based like the financial aid other students receive but is given solely in exchange for playing football

The Regional Director rejected two additional arguments by the University:

  • He decided the scholarship football players are not “temporary employees” (who are generally ineligible to participate in collective bargaining) because they work more than 40 hours a week during the season, work year round, expect to work for 4-5 years and play football as their prime consideration
  • He did not include the “walk-on” players in the bargaining unit. He found that they are not employees within the meaning of the NLRA because they do not receive a scholarship and are not subject to the conditions for its receipt

The University now has until April 9, 2014 to seek to appeal the Regional Director’s ruling to the NLRB in Washington, D.C.  We anticipate the University will do so, and we will keep you updated.

DOL Persuader Rule Undermines Attorney-Client Privilege, AGs Say

Fourteen state attorneys general have written to Secretary of Labor Thomas Perez complaining that the  Department of Labor’s proposed “persuader” rule would undermine attorney-client privilege and have requested the rule “be withdrawn as drafted.”

The Labor-Management Reporting and Disclosure Act (LMRDA) requires reporting to the DOL of “[a]ny agreement or arrangement with a labor relations consultant or other independent contractor or organization pursuant to which such person undertakes activities where an object thereof, directly or indirectly, is to persuade employees to exercise or not to exercise, or persuade employees as to the manner of exercising, the right to organize and bargain collectively through representatives of their own choosing….”  Attorneys may be considered consultants under the law.  Exempt from this reporting requirement are situations where the consultant gives or agrees to give “advice” to an employer.  This is the “advice exception.”

The proposed rule, among other things, would severely curtail the advice exception to the reporting requirement, and therefore, limit much of the legal advice now provided by attorneys.  That advice will become reportable if the rule is implemented.

The attorneys general expressed concern that the rule is overly broad and  may discourage employers from seeking legal representation.  They wrote,

“[t]his new rule…would dramatically change well-established precedent by requiring the reporting of advice related to persuasion of employees, regardless of whether the lawyers who provide the advice communicate with anyone other than their employer-clients.”

The letter echoes similar concerns raised by the American Bar Association in 2011.

The rule was scheduled to take effect in March 2014, but the effective date has been postponed indefinitely. See U.S. Department of Labor Delays Implementation of the Revised ‘Persuader’ Rule.

 

U.S. Department of Labor Delays Implementation of Revised ‘Persuader’ Rule

The Department of Labor’s proposed final revisions to its rule requiring employers and others to report arrangements, receipts, and expenditures derived from providing services defined as persuasive activities will not be implemented by the March 2014 target date.  A new implementation date was not announced.  This is the second delay for the revisions, which originally were slated to be released in November, 2013.  The DOL is issuing the rule under the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), which was concerned fundamentally with union corruption and lack of transparency.

The proposed revisions would increase reporting obligations (to the DOL) significantly for companies and their law firms  that advise employers in connection with union organizing and provide collective bargaining “advice”.  Under the revised regulations, where an object of the advice is to persuade employees to exercise or not to exercise, or persuade employees as to the manner of exercising, their right to organize and bargain collectively, a reporting obligation would arise.  For a detailed explanation of the revised rule and its possible implications, see DOL’s Rule Redefining LMRDA ‘Advice Exception’ and Expanding Types of Activities Considered Persuasive and Reportable Expected in March 2014.

We will inform you when the DOL announces a new implementation date.

 

NLRB Gets Increase In Proposed Budget

President Obama has requested a funding increase for the National Labor Relations Board of 1.3% over existing levels in his just-released proposed budget for fiscal year 2015.

The proposed budget assumes more than 1,000 more unfair labor practice cases and 140 representation cases will be filed in the next fiscal year than were filed in FY 2014.  The Board’s fiscal year runs from October 1 through September 30.

It will be interesting to see the estimated representation case filings for FY 2016 in the next proposed budget if the NLRB’s proposed “quickie” election rule becomes final and effective this year.

 

NLRB Precedents under GC Focus

The National Labor Relations Board’s General Counsel appears intent on convincing the Board to change its precedent in at least two key areas.   According to the General Counsel’s February 25, 2014, Operations Management Memorandum, “Mandatory Submissions to Advice,” unfair labor practice charges involving the Board’s Register Guard decision and charges involving applicability of Weingarten principles in non-unionized settings must be submitted to the General Counsel’s Division of Advice in Washington, D.C., by the NLRB’s Regional offices. (See General Counsel’s February 25, 2014, Operations Management Memorandum, “Mandatory Submissions to Advice“.)

The GC’s insistence on mandatory submissions of cases involving Register Guard or non-union Weingarten facts suggests the General Counsel may be ready to argue for reversal of the law in such cases.  The 2007 Register Guard decision (351 NLRB 1110) held that employers could bar employees from using company e-mail systems for union organizing.   (The Board also provided a new employer-friendly framework for analyzing whether an employer has discriminated against union activity.)  The Supreme Court’s 1975 decision in NLRB v. J. Weingarten, Inc., 420 U.S. 251, held that unionized employees were entitled to the assistance of their union representative during investigative interviews by their employer that the employee reasonably believed might lead to his discipline.  However, the Board has seesawed on the issue of whether Weingarten also should apply in non-union settings.  The Board held Weingarten applicable in non-union settings in Epilepsy Foundation, 331 NLRB 676 (2000), but subsequently reversed itself in IBM Corp., 341 NLRB 1288 (2004).

The GC evidently believes the time is ripe to persuade a sympathetic Board to change the law to make it less favorable to employers.  Once the right cases are identified from those submitted, an agency “complaint” can be issued and the cases brought to hearing, ultimately reaching the NLRB for decision.   The GC’s memorandum is a way of finding the right cases to accomplish this.

Register Guard and Weingarten cases may not be the General Counsel’s only targets. The Operations Management Memorandum lists a total of 27 categories of cases that must be submitted to the Division of Advice.  The GC has mandated that cases involving “at-will” provisions in employer handbooks and mandatory arbitration agreements with a class action prohibition be submitted also.

In light of the Board’s proposed rulemaking in representation cases, the Northwestern University football players’ attempt to be considered employees covered by the NLRA, and the GC’s memorandum, 2014 should prove to be a very interesting year in labor law.

NLRB Sets Hearing, and Topics, for Representation Case Procedures

Having scheduled a public hearing (April 10 and 11, 2014) on its  resurrected proposal for  accelerated representation case procedures,    the National Labor Relations Board has published a list of “issues” it wants addressed at the hearing.  Many of these issues indicate the Board’s overhaul of its representation case procedures may be even more radical than previously reported.

On February 26, 2014, the NLRB announced that “the purpose of the meeting will be to allow interested persons to participate in the rulemaking through oral presentation on the proposed amendments to the Board’s rules governing representation-case procedures and to make any other proposals for improving representation case procedures.”  The Board’s instructions   require individuals wanting to speak  to designate the  issues they want to address from a list prepared  by the NLRB.  The list of issues is extensive and includes the following:

  • Whether electronic signatures should be permitted to satisfy the showing of interest.
  • Whether, upon service of the petition, the employer should be required to post an initial Board notice to the employees describing the petition and procedures.
  • Whether the notice should be distributed electronically, either by the region or by the employer. 
  • What information the voter lists should contain, whether Excelsior should be updated with modern forms of contact information and how to strike the correct balance of NLRA, privacy, and other interests. 
  • Whether employees might be able to opt-out of or opt-in to the inclusion of certain information on voter lists. 
  • Whether other means of communication might be created, such as government-hosted electronic forums or e-mails. 
  • Whether the election should be scheduled “as soon as practicable.” 
  • If the election should not be scheduled “as soon as practicable,” whether the rules should contain a minimum or maximum time between the filing of the petition and the election, and if so, how long. 
  • Whether the proposed rules adequately protect free speech interests. 
  • If the proposed rules do not adequately protect free speech interests, how should the rules be amended to accommodate those interests. 
  • Whether or how the rules should address “blocking charge” policy and the procedures used for placing a representation case in abeyance pending the outcome of unfair labor practice charges. 

These and other issues identified in the notice  indicate that the changes proposed  by the Board for its  representation case procedures may be only a prelude to further agency efforts aimed at shoring  up unions while diminishing employee free choice.