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Labor & Collective Bargaining

NLRB Precedent Not Binding after Noel Canning, Labor Board Judge Declares, Rejecting Claimed Dues Deduction Violation

In an unusual move, an NLRB administrative law judge has disregarded Board law and held that an employer that stopped dues deductions after the expiration of its collective bargaining agreement did not commit an unfair labor practice, dismissing an unfair labor practice complaint.  Lincoln Lutheran of Racine, 30-CA-11099 (JD-49-14 August 11, 2014) Relying on the United States Supreme Court’s decision in NLRB v. Noel Canning, which held the Board lacked the quorum necessary for the issuance of decisions from January 4, 2012 through August 4, 2013, the judge concluded he could not follow the Board’s precedent-setting dues check-off decision in WKYC-TV, 359 NLRB No. 30 (issued in December 2012), and instead should rely on Board  law as it existed previously.

While NLRB administrative law judges normally must adhere to existing Board law, the Judge in Lincoln Lutheran of Racine  refused to apply WKYC-TV.  In that case, the Board found that “an employer’s obligation to check-off union dues continues after expiration of a collective bargaining agreement that establishes such an arrangement.”    However, since WKYC-TV was issued during the quorum-less period, when the NLRB was without authority to render decisions under Noel Canning, the Judge decided the decision was not “valid precedent.”   Instead, the Judge applied Bethlehem Steel, the decision that WKYC-TV overruled.  Bethlehem Steel held that an employer does not violate the NLRA by ceasing to follow the dues check-off provision after expiration of the collective bargaining agreement.  Bethlehem Steel, 136 NLRB 1500 (1962).  Accordingly, the Judge dismissed the complaint.

It remains to be seen whether other ALJs will follow suit when faced with the question of whether or not to follow Board decisions invalidated by Noel Canning.

It’s Basic: Party Desiring Termination or Modification of CBA Must Notify FMCS and All Applicable State Agencies

The National Labor Relations Act requires an employer that wants to terminate or modify an existing union contract to provide at least 30 days’ notice to the Federal Mediation and Conciliation Service (FMCS) and all the relevant state mediation agencies before terminating or modifying the contract.  The possible consequences of failing to fully comply with the notice requirement has been underscored by a recent Labor Board decision. American Water Works Service Company, Inc., 361 NLRB No. 3 (2014).

In this case, the employer participated in  a National Benefits Agreement with several unions covering employees in four states.  More than one year before the contract termination date of July 31, 2010, the employer called a union representative to meet “to get the ball rolling” on early negotiations.  The first meeting occurred on June 17, 2009, followed by a meeting in December and a series of subsequent meetings in the spring and summer of 2010.  The parties failed to reach an agreement and the employer implemented its final offer effective January 1, 2011.

It is the responsibility of the “initiating party” to give the required notices to the FMCS and state agencies.  If the employer is the initiating party, it cannot lawfully implement the terms of its offer unless it has given these notices.

Here, contrary to the employer’s argument, the Labor Board found the employer was the initiating party because it “took the lead” in contacting the union.  As the initiating party, the employer satisfied its obligation to notify the FMCS — the Board found the employer’s oral notice was sufficient.  However, the NLRB decided the employer failed to notify the mediation and conciliation agencies in the states in which the employees covered by the negotiations worked.  Therefore, it ruled the employer violated the NLRA when it implemented its final offer without also having given the required notice to all four state agencies.

The Board also noted Section 8(d)(1) of the NLRA requires the initiating party to serve upon the other parties a written notice of proposed contract modification 60 days prior to the expiration of the agreement.  The NLRB decided that while the employer had not complied with that provision, that finding did not affect the outcome of the case.

For failing to comply with the notice requirement, the employer was ordered to restore the status quo and to make all of the employees whole for a period of three-and-one-half years, to the date the employer implemented its final offer.

The lessons:

  1.  Employers that go on record first as seeking a change in the collective bargaining agreement, even informally, should assume they have the responsibility of providing 8(d) mediation notices.
  2.  Employers that have that responsibility should notify all state agencies in states which the collective bargaining agreement, as well as FMCS.
  3. Notify all of the mediation agencies in writing.  Although an oral notification will suffice, it is better practice to notify in writing so you can easily prove that you gave the required notification.  Inability to prove you gave notification could result in liability for substantial back pay.

NLRB’s Sobering Decision Permits Union Representation Before Employee Drug Test

The National Labor Relations Board has held that a supermarket chain violated the National Labor Relations Act by terminating an employee who refused to submit to a drug test without first consulting a union representative, affirming an April 2013 decision by its Administrative Law Judge.  Ralphs Grocery Co., 361 NLRB No. 9 (July 31, 2014).  For more on this important decision, read here.

Federal Contractors Concerned about President Obama’s Newest Executive Order

President Barack Obama’s “Fair Pay and Safe Workplaces” Executive Order creates new self-reporting requirements for federal contractors, an apparent effort to shame these employers (and appeal to the Administration’s labor constituency) by having them disclose an array of labor- and employment-related violations, including adverse arbitration awards, regardless of their relationship to the actual performance of the federal contract.

Federal contractors and subcontractors will be required to disclose violations of federal and state labor and employment laws for the previous three years, including, but not limited to, violations of the National Labor Relations Act, Fair Labor Standards Act, Title VII of the Civil Rights Act of 1964, Americans with Disabilities Act, and Family and Medical Leave Act. These disclosures must be made pre-award, and contractors will be required to update their violation information every six months during the performance of a contract.  This information then will be evaluated and considered for purposes of determining a contract award and for evaluating whether remedial measures may be necessary to punish contractors that are “serious, repeated, willful or pervasive violat[ors]” of the law.  A new government apparatchik, called a “Labor Compliance Advisor,” will help agency contracting officers decide whether a prospective contractor “is a responsible source that has a satisfactory record of integrity and business ethics,” among other decisions under the Executive Order.

Contractors — still adjusting to President Obama’s other recent executive orders, including Executive Order 13658 (raising the minimum wage for contractors to $10.10 per hour, effective January 1, 2015) and recent amendments to Executive Order 11246 (barring discrimination on the basis of sexual orientation or gender identity) — are concerned the new Order goes too far.  Rather than competing on traditional factors such as price, quality of work and reputation, contractors now also will be evaluated by labor compliance advisors within each agency for their past missteps, even if those missteps have been previously remedied.

Further, it is unclear how this Order will be implemented and when remedial measures, such as potential debarment, will be implemented.  Contractors  worry  that these uncertainties may impact significantly their ability to compete for contracts.  Although the White House has stated that further regulations and guidance will be forthcoming, this has not eased growing  apprehensions that President Obama’s penchant for  executive orders aimed at tightening regulation of  federal contractors will  hurt market competition and each contractor’s ability to be judged on its merits.

NLRB and Department of Labor: One Hand Washes the Other to Promote Cross-Filed Complaints

Our colleagues at Jackson Lewis’ OSHA Law Blog recently reported that the Occupational Safety and Health Administration of the Department of Labor (DOL) and the NLRB had entered into an agreement whereby OSHA would notify complainants who file untimely OSHA retaliation charges of their right to file an unfair labor practice charge with the NLRB.  NLRB GC MEMORANDUM OM 14-60, May 21, 2014.  (See OSHA Law Blog, OSHA and NLRB Update Referral Agreement.)

Now comes word that the NLRB intends to reciprocate. Supplementing its earlier memorandum, the Board’s General Counsel’s Office reminds the agency’s regional directors that “there may be occasions during the processing of an NLRB charge when it may be appropriate to apprise the Charging Party or a witness of his or her right to contact OSHA and/or the Wage and Hour Division [WHD] of the … [DOL] to discuss the filing of a complaint with those agencies.” (OM 14_77 OSHA Wage and Hour Referral Procedures).  This may occur at any stage of the case intake or investigative process, the Memorandum instructs, whenever the regional office believes an employer may have violated a substantive or anti-retaliation provision of the OSH Act or the Fair Labor Standards Act.

Furthermore, if the NLRB learns during the processing of an unfair labor practice charge that OSHA or the WHD “is handling a parallel investigation into a violation of their statutes, the Region should coordinate case processing with the DOL” by contacting the local DOL Regional Solicitor (not the Labor Department office investigating the alleged DOL violation).

The General Counsel’s Office cautions that Regional personnel are not expected to become experts on the construction of the DOL statutes, and that a referral is appropriate only where the regional officials “believe that a possible violation of the OSH Act or the FLSA present themselves,” but encourages referring to DOL website informational pages and even suggests that NLRB regional offices “develop training vehicles” for their personnel.

NLRB Continues To Apply And Expand Specialty Healthcare

The NLRB has issued a long-awaited decision in Macy’s, Inc., 361 NLRB No. 4 (July 22, 2014).  In the case, the Board considered the application of its “micro-unit Specialty Healthcare decision in a retail setting.  The Board found appropriate a unit of only those employees working in Macy’s cosmetics and fragrance departments, excluding all other salespeople.  For more on the decision, click here and here.

NLRB Ratifies Agency Actions Taken When Board Members Were Not Validly Appointed

While maintaining that “all the administrative, personnel and procurement matters taken by the Board [from January 4, 2012 to August 5, 2013] were timely and appropriate,” the National Labor Relations Board nevertheless has announced, “in an abundance of caution,” that it has unanimously ratified all administrative, personnel, and procurement matters taken by the Board during that period.

The Board’s action comes as a result of the Supreme Court’s decision in NLRB v. Noel Canning, in which the Court held the three Board Members (Richard Griffin, Sharon Block and Terence Flynn) recess-appointed by President Barack Obama on January 4, 2012, were not validly appointed.  On August 5, 2013, the Board regained a quorum with the Senate confirmations and appointments of Nancy Schiffer, Philip Miscimarra, Harry Johnson, and Kent Hirozawa.

According to the August 4, 2014, announcement, from January 4, 2012 to August 5, 2013, the Board took a number of actions, including the appointment of various Regional Directors, Administrative Law Judges, and restructurings of regional and headquarters offices.  By virtue of its ratification, the Board believes it has“remove[d] any question concerning the validity of actions undertaken during that period.”

The Board stated that it has “expressly authorized” the following actions:

  • The selection of Dennis Walsh as Regional Director for  Region 4 (Philadelphia);
  • The selection of Margaret Diaz as Regional Director for  Region 12 (Tampa);
  • The selection of Mori Rubin as Regional Director for  Region 31 (Los Angeles);
  • The selection of Kenneth Chu, Christine Dibble, Melissa  Olivero, Susan Flynn, and Donna Dawson as Administrative Law Judges;
  • The restructuring of various Field Offices; and
  • The restructuring of Headquarters’ Offices.

The Board also noted that, on July 30, 2014, following the Board’s authorization, Regional Directors Walsh, Diaz, and Rubin ratified all actions taken by them or on their behalf from the dates of their initial appointments to July 18, 2014.  These ratifications include all personnel and administrative decisions, all actions in representation case matters, and all actions in unfair labor practice cases.

Congressman Wants to Make Unionization a Civil Right

The Employee Empowerment Act, introduced in Congress on July 30, would make the right to unionize a federally protected civil right, allowing aggrieved employees to file private lawsuits against their employers, similar to protections currently available under federal law against discrimination on the basis of protected characteristics such national origin, sex, race, religion and color.

The measure appears to be intended to offer individual employees such significant damage and injunctive remedies in court (with attorney fees for their lawyers) that it might drive the nation’s long-established labor relations law into desuetude.   Under the National Labor Relations Act, an employee who believes he or she was discriminated against on the basis of union membership or activity (or even certain “concerted” activity in the absence of a union) may file an unfair labor practice charge against his employer.

When an unfair labor practice charge is filed, the Regional Office of the Labor Board where it is filed will decide whether the charge should be pursued.  If a complaint is issued and if the employee prevails, the Labor Board may order “make whole” relief, such as reinstatement of the employee and back pay and benefits.  According to Representative Keith Ellison (D. Minn.), who introduced the new bill, these remedies are inadequate.

The proposed bill would not change the right of employees to file unfair labor practices with the NLRB.  However, it would add a new right by permitting employees to pursue their claims in individual private lawsuits in federal district court.  Thus, in addition to the “make whole” remedies available for unfair labor practices, employees who prevail in these private lawsuits would be eligible for damages for emotional distress, punitive damages and attorneys’ fees, as well as compensation for lost earnings and benefits.   It does not appear that filing a charge with the NLRB is a condition precedent to filing a civil action.  That could mean that, enticed by visions of a big payday, and egged on by a plaintiffs’ bar seeking a new source of fees, employees may abandon resort to the NLRB for the new, private remedy.

Although one never knows, it appears this bill ultimately may be chalked up as merely one more in a growing list of attempts by both political parties to express their displeasure with the state of labor organizing today.

Former Recess Appointee Block to be Renominated to NLRB

According to multiple reports, President Barack Obama has announced  his intention to renominate Sharon Block to the National Labor Relations Board.

Block was one of the Board Members whose recess appointment on January 4, 2012 was invalidated in the U.S. Supreme Court’s ruling in NLRB v. Noel Canning as unconstitutional.  Block, a former labor and employment counsel for the Senate Health, Education, Labor and Pensions Committee where she worked for the late Senator Edward M. Kennedy, served on the NLRB for 18 months.  Block’s subsequent April, 2013 nomination to the NLRB was withdrawn in July, 2013 as part of an agreement between the White House and Senate Republicans, who objected to her nomination.  Her new nomination could cause renewed objections.

Supreme Court Rules Home Health Care Workers in Illinois Not Required to Pay Nonmember Union Fees

In a significant blow to efforts to unionize health care workers who are privately employed by the aged, ill and/or frail in their homes, the U.S. Supreme Court has struck down an Illinois statute requiring these home-based personal care providers to financially support a union that has a collective bargaining agreement with the State on their behalf even where the care providers do not wish to join or support the union. The Court found the state statute’s requirement violated the personal care providers’ rights under the First Amendment. Harris v. Quinn, No. 12-861 (June 30, 2014). (For additional details about the case, see our previous blog post, “Supreme Court’s Decision on Compulsory Union Fees May Have Extensive Effect.”)

Assuming a similar statutory framework, the Supreme Court’s decision likely will have a significant financial impact on unions in Illinois and several other states, including California, Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Oregon, Vermont and Washington, that require home health care workers (who are employed by the individual and not the State) to financially support the labor union that represents them. However, the Court spared public sector unions a much greater setback by leaving intact its 1977 decision in Abood v. Detroit Board of Education. The Court did so by crafting a distinction between “full-fledged” public employees (those public employees who are actual employees of the State and over whom the State has most of the control) which existed in Abood and the “quasi-public employees” (those who are employees of the individual and not the State) in question in Harris. 

According to the Court, Abood is applicable only to full-fledged public employees, and therefore, unions may continue to require full-fledged public employee nonmembers to pay an agency fee.  Justice Samuel Alito, writing on behalf of the 5-4 majority, found that personal care providers “are quite different from full-fledged public employees….” “Abood itself has clear boundaries; it applies to public employees. Extending those boundaries to encompass partial-public employees, quasi-public employees, or simply private employees would invite problems,” Justice Alito wrote. Justice Elena Kagan authored an extensive dissent, joined by Justices Ginsburg, Breyer and Sotomayor.

We are analyzing the decision and will provide further details and commentary.