NLRB Signals More Trouble Ahead For Employers That Misclassify Employees

For a variety of reasons, employers may prefer to treat those who provide services to them as independent contractors rather than employees. However, when employers exercise a sufficient level of control over the ostensible independent contractors (as outlined in various “factor” tests), they may be considered employees under the law. If that happens, employers can face significant legal consequences. For example, the newly reclassified employees could sue for unpaid minimum and overtime wages, and the employer could face fines, penalties, and other liability under state workers’ compensation statutes. The IRS and state and local taxing authorities might seek income and employment tax withholdings that were not, but should have been, made.

Now, the General Counsel of the National Labor Relations Board has weighed in, giving employers one more reason to worry about employee misclassifications. On August 26, 2016, the General Counsel issued an advice memorandum directing the Regional Director for Region 9 of the NLRB to treat employee misclassifications as a violation of the National Labor Relations Act. The General Counsel explained that informing “employees” they are not employees, but rather independent contractors, has the effect of interfering with their rights under Section 7 of the NLRA to organize a union and engage in other concerted activities for mutual aid and protection. In other words, if they are not employees, they are not covered by the NLRA and, therefore, have no rights under that statute. If they are in fact employees, they are covered. Pacific 9 Transp., Inc., 21-CA-150875 (decided Dec. 18, 2015; issued Aug. 26, 2016).

The memorandum discussed a fairly typical case. A trucking company employed a number of drivers directly, but also engaged a number of independent contractors under contracts containing many typical provisions that might support a finding of an independent contract relationship. For example, the agreement recited that these drivers were free to accept or reject any loads, could use their own trucks or rent trucks from the employer, would be compensated by the load and not by the hour, and were required to maintain insurance on the trucks.

In reality, the employer apparently exerted more control than spelled out in the contract. If they were offered and rejected a load, the drivers were passed over for other loads. Because of the employer’s schedule and the loads offered, they practically were excluded from accepting loads from other carriers. Ninety percent of the drivers rented their trucks from the employer, and, despite what the contract said, the employer maintained the insurance on the trucks. When drivers first signed the agreement, they were given an employee handbook spelling out performance expectations and discipline that would be issued for traffic infractions. Thus, the General Counsel concluded, because of the actual day-to-day control exercised over the drivers, they were in fact statutory employees under the NLRA.

This new advice memorandum adds to the many good reasons for employers to consider carefully whether to classify individuals who perform services for them as independent contractors. The potential risks are substantial and the likelihood the individual will be found to be an actual independent contractor very low.

An agreement like the one discussed in the advice memorandum is critical, but should not be considered a panacea. No matter what words are used, it is more important to ensure that on a day-to-day basis, the individual performing services is truly an independent contractor. If it is necessary to exercise any significant control over the day-to-day work activities of individuals performing services, the prudent course often is to classify and treat these individuals as employees and avoid potentially substantial liability in the future.



Non-Union, Specialty Lights Maker Must Return Work from Mexico, Federal Appeals Court Rules

The NLRB properly found a non-union employer unlawfully retaliated against striking employees and violated the National Labor Relations Act by transferring work from Illinois to Mexico, the federal appeals court in Chicago has ruled. Amglo Kemlite Labs., Inc. v. NLRB, 2016 U.S. App. LEXIS 15100 (7th Cir. Aug. 17, 2016). The Court enforced the Board’s order requiring the employer to return the transferred work to Illinois, among other things.

Amglo, a non-union company, makes specialty lights, such as those on airplane wings. In 2011, several employees complained to their supervisor about low wages. Thereafter, during a visit to the plant, Amglo’s president informed employees that Amglo would not raise wages.

Nearly all of the plant’s 94 employees went on strike the next day. The president and the plant manager reaffirmed that Amglo would not raise wages and directed employees to return to work or get off the company’s property. When the striking employees asked to speak to Amglo’s owner, the plant manager told the employees, “I’ll tell you what he’s going to say. He will tell us to get rid of half of you. And you’re not going to do anything. You’re not going to scare him. You’re not going to threaten him. You’re going to lose.” Holding resignation forms, the plant manager told employees that if they did not like their wages, “they could quit.” The president also pointedly talked about globalization and observed that companies can move production to China and Mexico (two places where Amglo had plants).

Over the next week, some workers returned without raises, and, eventually, the remaining striking employees, more than 50, signed an unconditional offer to return to work without a raise. The president told them that she was uncertain about recalls because Amglo was transferring some work from Illinois to Mexico “because of the situation.” Amglo finally recalled all but 22 employees. These employees were told that, partly because of the transfer of work to Mexico, there were no jobs available for them, but they would be rehired on a preferential basis as jobs became available.

The employees filed an unfair labor practice charge with the NLRB. The NLRB concluded Amglo had engaged in unfair labor practices by: (1) threatening to fire employees for striking; and (2) transferring work from Illinois in retaliation for the strike. The Board ordered Amglo not to take such actions in the future, to bring the work transferred to Mexico back to Illinois, to offer full reinstatement to any employee who lost his or her job as a result of the transfer, and to make employees whole for earnings and benefits lost as a result of the transfer.

Amglo petitioned the Court of Appeals to set aside the part of the order concluding that it violated the Act by transferring work from Illinois to Mexico for the unlawful purpose of retaliating against striking employees and the Board moved to enforce it. (Amglo did not challenge the Board’s findings that the strike was protected activity under the Act or that it threatened to fire workers for striking.)

Noting that an “employer cannot punish a man by discharging him for engaging in concerted activities which § 7 of the Act protects,” the Court held “that substantial evidence supports the Board’s finding that the strike was a motivating factor in Amglo’s transfer of some work to Mexico,” including the following:

  • The president’s discussion of globalization implicitly warned employees that if they continued striking, Amglo would transfer work to a foreign plant.
  • Amglo showed hostility to the strike, including threatening to fire half of the employees the first day.
  • The president told striking employees that Amglo was moving work to Mexico “because of the situation.”
  • During the NLRB’s investigation, the supervisor admitted that Amglo “accelerated” existing plans to transfer work “because of the strike.”
  • Amglo had increased its workforce, from 85 to 94 employees, in the nine months prior to the strike, weakening its argument that the post-strike reduction was for economic reasons.
  • The timing of the transfer, so soon after the strike began, was suspicious.  Employees of non-union employers are protected by the NLRA and are legally entitled to engage in protected, concerted activity, including strikes. Once the protections of the Act are triggered, employers must be careful about what they do and say in response to the protected, concerted activity and must avoid conduct that can be characterized by the NLRB as retaliation or other unfair labor practices. Federal courts will support the Board’s authority to issue broad orders to remedy unfair labor practices – even, as here, ordering an employer to undo the transfer of work to another country.

The Court denied Amglo’s petition for review and enforced the Board’s order to move the transferred work back to Illinois.


SEIU Counters Own Employees’ Unionization Efforts

In a real-life “what’s good for the goose isn’t good for the gander” story, the Service Employees International Union is countering a unionization effort involving some of its own employees.

According to an editorial in the September 2, 2016, The Wall Street Journal, the employees whom the SEIU has hired to protest outside businesses and restaurants across the country as part of the “Fight for $15” movement want to unionize. According to the publication Working In These Times, the SEIU has told the approximately 100 Fight for $15 field organizers who might be eligible to join the existing staff union (Union of Union Representatives) that it does not employ them. The SEIU instead claims the employees are employed by individual organizing committees in each of the cities where a Fight for $15 campaign exists.

The SEIU’s position brings to mind the National Labor Relations Board’s landmark decision in Browning-Ferris Industries of California, 362 NLRB No. 186 (Aug. 27, 2015). In that case, the NLRB, at the urging of the union movement, greatly liberalized the “test” for finding an employer to be a joint employer of employees of the primary employer. The NLRB decided that “indirect control” over employees by the secondary employer is enough for a finding of joint employment. The UUR believes SEIU is, at least, a joint employer of the “Fight for $15” organizers.

According to The Wall Street Journal, the Union of Union Representatives, which is seeking to represent the organizers, has filed an unfair labor practice charge against the SEIU with the NLRB. According to Working In These Times, Conor Hanlon, the UUR’s president, said, “[W]e are disappointed that SEIU chose to escalate and create divisions between workers and organizers rather than act on our shared principles and beliefs about the fair treatment workers deserve. Nonetheless, the Fight for $15 workers will not be silenced and UUR will continue to fight with them until they are recognized as SEIU employees and getting the treatment they deserve.”

NLRB Finds Joint Employers Despite Speculative Future Relationship

Taking its new joint employer standard to new heights, the NLRB found that Retro, a construction company, and Green JobWorks, a temporary staffing agency, are joint employers based on speculative future projects. Retro Environmental, Inc./Green JobWorks, LLC, 364 NLRB No. 70 (Aug. 16, 2016).

A year ago, in Browning-Ferris, 362 NLRB No. 186 (Aug. 27, 2015), the Board adopted a new joint employer standard involving a broad two-part test: (1) whether a common law employment relationship exists; and (2) whether the potential joint employer “possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful bargaining.”

During the summer of 2015, Green JobWorks provided temporary employees to Retro for work on two public school projects set to conclude before the end of August. Once the projects concluded, Retro had no pending requests for additional employees from Green JobWorks.

The Construction and Master Laborers’ Local 11, a/w Laborers’ International Union of North America filed a petition to represent full-time and part-time laborers, including workers jointly employed by Retro and Green JobWorks.

Relying on Davey McKee Corp., 308 NLRB 839 (1992), the Regional Director dismissed the representation petition, finding an imminent cessation of operations and insufficient evidence the petitioned-for unit would exist beyond mid-July.

The Regional Director also noted that there was no evidence that Retro contemplated using Green JobWorks for temporary labor in the future. This was reinforced by the fact that the parties had no future projects (or bids for projects) in the works and because Retro regularly used at least three other temporary staffing agencies for similar projects.

The Regional Director did not make a formal determination on joint employment; however, he noted “[t]he evidence in the record presents a colorable claim of a joint employer relationship” under two cases the Board subsequently overruled in Browning-Ferris. The Regional Director explained that Green JobWorks is “responsible for matters such as recruiting, hiring, disciplining, terminating, setting employee wage rates, paying employees’ wages, determining which projects employees are assigned to, and transferring employees to different projects.” Further, he noted there was evidence “that Retro determines how workers perform their duties” and both employers provided certain equipment to the employees.

The Board disagreed with the Regional Director. It stressed that Retro imposed conditions on the type of employees Green JobWorks could hire, including requirements that employees be prescreened, drug-tested, and qualified to perform services. In addition, Retro insisted that employees assigned to its worksite complete safety training, have certain certifications, and have passed a physical exam.

Similarly, while Green JobWorks essentially controlled the hiring/firing/discipline of its employees, Retro was consulted in the assignment of specific workers to its sites, retained the right to request replacement workers if it was unsatisfied with a temporary employee, determined the number of workers supplied to a particular project, determined employee hours/scheduling, and provided direct day-to-day supervision on the job site.

These indicators of control led the Board to find Retro made core staffing and operational decisions that defined all employees’ work days. The Board also found that each employer was able to influence and control some of the other’s decisions and that between them, Retro and Green JobWorks controlled all of the employment terms.

Surprisingly, the Board found there was not an imminent cessation of operations because Retro and Green JobWorks did not cease to operate, fundamentally change the nature of their businesses, or move. Likewise, the Board found no evidence the employers intended to discontinue their working relationship in the future.

The Board reinstated the petition and remanded the matter to the Regional Director for action.

Member Philip Miscimarra dissented, noting the majority’s decision, based on nothing more than speculation regarding the parties’ future endeavors, rendered the Browning-Ferris case-by-case fact-intensive analysis moot.

An appeal of Browning-Ferris is pending in the U.S. Court of Appeals for the District of Columbia and the upcoming Presidential election may temper or amend how the standard is applied in the future. We will continue to keep you apprised as these two matters progress.




Overruling Brown University, NLRB Finds Private College And University Student Assistants Are Employees Under the NLRA

The National Labor Relations Board today decided that student assistants working at private colleges and universities are statutory employees covered by the National Labor Relations Act. Columbia University, 364 NLRB No. 90 (August 23, 2016). The 3-1 decision reversed Brown University, 342 NLRB 483 (2004). We will have a detailed analysis of this landmark decision shortly.

NLRB: Failure to Bargain Over Non-Compete Agreement Violated NLRA, But Confidentiality Provision Lawful (Surprise!)

A company’s requirement that new employees represented by a union sign a non-compete and confidentiality agreement (NCCA) as a condition of employment violated the National Labor Relations Act because the NCCA is a mandatory subject of bargaining that could not be unilaterally implemented, the NLRB has held. Minteq International, Inc., 364 NLRB No. 63 (July 29, 2016). However, contrary to its recent inclinations, the Board also found that an individual provisions of the NCCA – concerning confidential information – was lawful.

The collective bargaining agreement between Minteq and the union provided that new hires are probationary employees for the first six months of their employment and that any discipline, layoff, or discharge of a probationary employee “shall not be a violation of this Agreement.” After concluding their six-month probation, new hires may be disciplined, suspended, or discharged only if the employer has “just cause” to do so.

Shortly after the parties’ collective bargaining agreement went into effect, and without the union’s knowledge, Minteq unilaterally implemented a policy requiring new hires to sign the NCCA. The NLRB held the NCCA was a mandatory subject of bargaining and the union did not waive its right to bargain over its implementation. Accordingly, the Board held that Minteq violated the Act when it unilaterally implemented the NCCA policy.

The Board explained, among other reasons, that the NCCA “includes rules governing employees’ conduct that have the potential to affect the employees’ continued employment” since “agreeing to comply with the requirements of the NCCA is a term of employment, implicit in the NCCA is the threat of discipline or discharge for failing to comply with its provisions.” The Board also found that the provisions of the NCCA “have a clear and direct economic impact on employees – and thus represent precisely the sort of matters suitable for collective bargaining.” As another example, the Board stated the non-compete provision “prohibits an employee from working for another company that might have any connection to the Respondent’s business for 18 months afterward, effectively imposing a cost of lost economic opportunities on employees as a consequence of working for Respondent.”

Surprisingly, however, the Board held that the “Confidential Information” provision of the NCCA was lawful. The provision read as follows:

Confidential Information. [Employee agrees not to disclose Confidential Information] Confidential Information refers to any information not generally known in the relevant trade or industry which was obtained from the Company, or which was learned, discovered, developed, conceived, originated, or prepared by me in the scope of my employment. Such Confidential Information includes, but is not limited to, software, technical, and business information relating to the Company inventions or products, research and development, production processes, manufacturing and engineering processes, machines and equipment, finances, customers, marketing, and production and future business plans and any other information which is identified as confidential by the Company. …

The Board explained that the language of the provision must not be read “in isolation” and that the phrase cited by the ALJ “does not stand alone and must be read in context.” The Board observed that the provision “defines ‘confidential information’ as ‘any proprietary or confidential information or know-how belonging to the company,’ that is ‘not generally known in the relevant trade or industry,’ and which the employee ‘obtained from the Company … in the scope of [his or her] employment.’” The Board also noted this definition “is followed by examples of confidential information which illustrate its scope and meaning.” Thus, the Board held that “employees reading the concluding phrase, ‘any other information which is identified as confidential by the Company,’ would reasonably understand it to refer to the preceding examples of proprietary information and trade secrets, not information related to employees’ wages or working conditions.”

Minteq is another in a series of Board decisions attacking employer policies on the grounds that employees might interpret them to bar or restrict their right to engage in protected concerted activities. However, it also teaches that policy language must be read in context, not in isolation. Clear drafting, including illustrations and limiting or clarifying language, can avoid unintended unfavorable interpretations.


Sour Note – Musicians Are Employees, Not Independent Contractors, NLRB Tells Theater Company

A Regional Director of the National Labor Relations Board has ruled that a group of musicians were statutory employees under the National Labor Relations Act and, therefore, entitled to vote in an NLRB-conducted union representation election. In the Matter of Fiddlehead Theatre Company, Inc. and Boston Musicians Association et al., Case Number 01-RC-179597 (July 26, 2016).  The decision comes on the heels of a holding by the U.S. Court of Appeals for the District of Columbia Circuit granting enforcement of an NLRB Order that musicians with the Lancaster Symphony Orchestra were employees, not independent contractors, and entitled to join the union. Lancaster Symphony Orchestra v. NLRB, No. 14-1247 (D.C. Cir. 2016).

Whether individuals performing services for an entity are employees, who are protected by the NLRA, or independent contractors, who are not, is determined by 11 well-established factors in the Restatement (Second) of Agency § 220 (1958), the NLRB held in 2014 and 2015. FedEx Home Delivery, 361 NLRB No. 55 (2014) and Sisters’ Camelot, 363 NLRB No. 13 (Sept. 25, 2015).

The factors are:

  1. Extent of control by the employer
  2. Whether or not the individual is engaged in a distinct occupation or business
  3. Whether the work is usually done under the direction of the employer or by a specialist without supervision
  4. Skill required in the occupation
  5. Who provides the supplies, tools, and place of work
  6. Length of time for which individual is employed
  7. Method of payment
  8. Whether or not the work is part of the regular business of the employer
  9. Whether or not the parties believe they are creating an independent contractor relationship
  10. Whether the principal is or is not in the business
  11. Whether the evidence tends to show that the individual is, in fact, rendering services as an independent business 

In Lancaster, the NLRB and the Circuit Court relied heavily on the orchestra’s control over the manner of the musicians’ performance, including limiting their conversations during rehearsals and performances. In Fiddlehead, the Regional Director ruled the musicians were employees despite the employer’s having established the existence of several factors tending to show the musicians were independent contractors: (1) they worked on a show-by-show basis, (2) they were highly skilled workers, (3) they supplied their own instruments, and (4) they were paid a flat fee. However, the Regional Director relied on several other factors in finding employee status, including that (1) the employer exercised substantial control over the details of the musicians’ work, (2) the musicians had very limited input into scheduling of performances, (3) the musicians were instructed to follow the company’s dress code, and (4) the musicians did not have the potential for entrepreneurial gain. Regional Director’s decision is appealable to the NLRB in Washington, D. C.

In a related development, the Board’s General Counsel has announced that he will seek to convince the five-member NLRB that misclassification of individuals as independent contractors instead of employees independently violates the NLRA because it restricts those misclassified employees from exercising their Section 7 (of the NLRA) rights to engage in protected concerted activity. Employers that utilize individuals whom they believe are independent contractors rather than employees should scrutinize carefully the relationship with a keen understanding of the factors deemed relevant by the NLRB. As is the case under many other federal and state laws, proving independent contractor status is likely to be an uphill battle.

Overruling Precedent, Board Finds Violation May Be Established Without Specific Unfair Labor Practice Complaint Allegation

In a decision having far-reaching implications, a National Labor Relations Board panel  consisting of Chairman Mark Gaston Pierce and Members Kent Hirozawa and Lauren McFerran, (Member Miscimarra dissented) has overruled almost 10 years of NLRB precedent, deciding  that a violation of the National Labor Relations Act could be found based on an employer’s failure to inform the union that it did not possess information the union requested, despite the absence of a specific unfair labor practice complaint allegation to that effect.

The Board concluded the employer had violated the NLRA by not informing the union representing its employees in a timely manner that it  did not possess information the union had requested about rule and policy changes despite the fact that the agency’s administrative  complaint did not include an unfair labor practice allegation to that effect. Graymont PA, Inc., 364 NLRB No. 37 (June 29, 2016). In so doing, the Board overruled Raley’s Supermarkets & Drug Centers, 349 NLRB 26 (2007).

In Raley’s, the Board majority (Member Liebman dissented) ruled that, although the unfair labor practice complaint alleged the employer had unlawfully failed and refused to provide the union with a copy of an investigative report into possible supervisor inappropriate behavior toward two female employees (or a summary of the pertinent findings) the union had sought, “at no time, even after learning that such a report did not exist, did the General Counsel amend the complaint to allege that the employer violated the Act by failing to timely inform the Union that there were no such reports.” (The dissent had argued that the employer violated the Act by failing to timely inform the union that it did not have reports the union had requested.) 

In Graymont, an NLRB administrative law judge found that the employer had violated the NLRA by unilaterally changing its work rules, absenteeism policy, and progressive discipline policy. Based on Raley’s, the judge also found that the employer did not violate the NLRA by failing to timely inform the union that the information the union had requested about these changes did not exist because it had not been asserted as an unfair labor practice in the complaint.

The Board reversed. It held instead that the “test” in Pergament United Sales, Inc., 296 NLRB 333 (1989), enfd., 920 F2d 130 (2d Cir 1990), should apply. (Interestingly, the NLRB did not cite or mention Pergament in Raley’s.) In Pergament, the NLRB decided that an unalleged violation may be considered where it is so closely connected to the subject matter of the complaint that a finding of violation would not cause “manifest injustice,” would not constitute a denial of due process, and therefore, would not be prejudicial. The Board held that “Raley’s Supermarkets should be overruled to the extent that it precludes the Board from considering [as in Graymont], an unalleged failure to timely disclose that requested information does not exist when, as here, the unalleged issue is closely connected to the subject matter of the complaint and has been fully litigated.”  The Board further explained the complaint “is not the exclusive source of notice of the material issues to be addressed in a Board proceeding” and “notice may also be provided by the General Counsel’s representations at the hearing, or it might be evident from the respondent’s conduct in the proceeding.”

Whether an unasserted violation is so “closely related” to the subject matter of a complaint as to place the employer on notice for purposes of due process has been the subject of Board litigation under Section 10(b) of the Act. In Redd-I, Inc., 290 NLRB 1115 (1988), the Board held that in deciding whether complaint amendments are closely related to charge allegations, it would apply a “closely related” test, comprised of the following factors. First, the Board will look at whether the otherwise untimely allegations involve the same legal theory as the allegations in the pending timely charge. Second, the Board will look at whether the otherwise untimely allegations arise from the same factual circumstances or sequence of events as the pending timely charge. Finally, the Board may look at whether a respondent would raise similar defenses to both allegations.

It is not clear why the Board chose not to apply a Redd-I approach in Graymont. The Pergament standards   arguably are more subjective ( “manifest injustice”, “closely connected”, “respondent’s conduct at the hearing”)  and may indicate that the Board wants more flexibility than Redd-I accords. Whatever the Board’s motivation, we can expect to see more litigation on this subject in the future.

Labor Unions Use Technology to Grow and Maintain Membership

Labor unions today are “tech” savvy, using mobile app and other technology to grow and maintain their memberships.

According to a report in the Bloomberg Bureau of National Affairs Daily Labor Report (136 DLR C-1 July 18, 2016), a number of labor unions, including the International Association of Machinists, Communication Workers of America, and Service Employees International Union, are using app technology to inform members of union news, sign political action petitions, access video clips and pictures, read press releases, view union social media accounts, and report workplace violations, all with the goal of reaching and growing their memberships.

Since labor unions are not generally permitted on an employer’s property to organize, labor unions are attempting to reach more and more workers through the use of their smartphones by mobile app technology and social media platforms, including Facebook, Snapchat, dedicated websites for blogging and reporting alleged workplace misconduct and the like. The use of technology by labor unions coupled with the National Labor Relations Board’s focus on broadening employee rights through the use of technology requires employers to stay ahead of the game.

In recent years, the NLRB also has developed a website to publicize employer labor violations, permitted the use of electronic union authorization cards in order to establish a “showing of interest” in support of the union representation petition, and allowed workers to use an employer’s email system on non-working time to engage in union organizing and other Section 7 (of the NLRA) concerted protected activities. The NLRB also has developed its own app. According to Bloomberg BNA, once it is free of its budget constraints, the NLRB has plans to upgrade the app to allow “workers, employers, and unions to take action from anywhere,” according to NLRB chairman Mark Gaston Pearce.

The use of technology by labor organizations to address labor issues and beef up declining memberships undoubtedly will increase regardless of the industry, labor climate, and overall workplace demographics.

Because of these new techniques, more and more organizing can be done by unions without face-to-face contact with employees. That could make it easier for unions to “meet with” many more employees in a shorter period of time and more effectively. To persuade employees to sign authorization cards who become star struck by the union’s glossy and upbeat electronic organizing tools. Employers should consider taking a preventive approach and informing their employees about these organizing techniques and cautioning employees not to be persuaded by glossy, upbeat organizing tools.








Ham-Handed Tactic? NLRB Says Union Giveaway Not Grounds for Setting Aside Election Victory

A union’s gift of free hams on the eve of an NLRB-conducted election did not influence the outcome, a union victory, the National Labor Relations Board has determined. Nuverra Environmental Solutions, Inc., 08-CA-164447 (July 8, 2016).

The union had distributed holiday hams to eligible voters five or six days prior to the election. After the union prevailed in the election, the employer filed “objections” with the NLRB’s Regional office, alleging the giveaway unlawfully influenced the results of the election and requesting the Regional Director to invalidate the election and conduct a rerun. The Regional Director denied the request and certified the union as the employees’ bargaining representative. The employer then filed an appeal (“request for review”) with the NLRB in Washington, D.C.

The NLRB denied the employer’s request for review, finding the union’s holiday giveaway did not interfere with the election. The Board noted that: the hams were of modest value ($10-$12); the stated purpose was to extend holiday greetings to the union’s members, their families, and friends; it was a yearly event; the union informed only one unit employee that unit employees were eligible after the employee inquired; attending the giveaway and accepting the hams was entirely voluntary; the union did not link the giveaway to the election and only unit employees who attended the giveaway received the hams.

The Board summarily dismissed the fact that “a potentially dispositive number of employees received free hams” or that the giveaway was so close to the election (the Board also noted that it had refused to overturn other elections where a giveaway occurred even closer, the day before, to the vote date). The Board cited the test articulated in B & D Plastics, Inc., 302 NLRB 245 (1991), for the proposition that the employer had not shown the union’s giveaway “tended to unlawfully influence the outcome of the election.”

Further, the Board concluded, even assuming the giveaway warranted an inference that the free hams were coercive, the union had rebutted that inference by its “uncontradicted” explanation for the timing of the giveaway, that is, the giveaway occurred yearly and was open to all current as well as prospective union members.

The Board did not address whether unit employees who actually received hams, rather than simply being aware of their eligibility to receive them, might have been influenced. The Board also did not consider whether the union had given away hams to other who were not union members and their families in the past or that the date of this giveaway was the same as in the past.

Nuverra likely will be a model for union giveaways in the future. However, more important, it also is a useful guide for employers, since many of the factors cited by the Board as insignificant also should be considered unimportant if similar election objections are raised by a union protesting an employer’s election victory: the voluntary nature of the giving, the fact that it had been done in the past (and not necessarily on the same date), the fact that $10-$12 is considered to be of “modest value,” and the timing of the giveaway.